Southeast Asia’s digital economy still a ‘hotbed’ for investments despite global headwinds slowing growth

A report from Google, Temasek and Bain & Company said Singapore and Indonesia remained red-hot investment destinations, with regional online spending economy set to hit US$200 billion this year

But it warned the momentum would likely slow in the second half of 2022 as macroeconomic challenges and rising interest rates dampen investor sentiment

3-MIN READ3-MIN

A GrabFood driver delivers an order in Jakarta, Indonesia. Southeast Asia’s e-commerce sector is expected to clock a slower growth this year. File photo: Bloomberg

Published: 5:45pm, 27 Oct 2022

Challenging macroeconomic conditions in the past year have prompted investors to be growingly cautious but Southeast Asia remained a “hotbed” for investments, according to an industry report.

Global venture capitalists pumped in US$13.2 billion in the first half of this year, a 13 per cent jump compared to the same period in 2021, research from Google, Singapore’s state investor Temasek and management consultancy Bain & Company showed.

The digital financial services sector drew the bulk of the capital, at 31 per cent, surpassing funds poured into the e-commerce market.

Singapore and Indonesia again emerged as leading investment destinations out of the six markets surveyed, said the e-Conomy SEA Report 2022, which tracks the region’s internet digital and tech landscape, released on Thursday.

Fock Wai Hoong, deputy head of technology and consumer at Temasek, noted that Indonesia’s large market continued to present ample opportunities for investment.

Singapore, meanwhile, was a “fertile ground” for entrepreneurs with regional and global ambitions, with deal value doubling compared to last year.