The equity winter is well underway and has impacted tech ecosystems globally. The catalysts behind this funding drought – rising interest rates, economic uncertainty, and a recalibration of valuations – are well-documented. While hopes for an imminent thaw remain, investors and start-ups have adapted to the new reality of longer and more difficult fundraising rounds with many companies choosing instead to cut costs, preserve cash, and raise bridge rounds from insiders until the equity market returns.

How has venture debt fared during this time? Have lenders been able to plug the gap or have they experienced similar trends? How did the collapse of venture lender behemoth Silicon Valley Bank (SVB) in March 2023 impact the lending ecosystem? Will venture lending developments in the United States (the undisputed market leader for venture lenders and borrowers) signal what’s round the corner for the Southeast Asia ecosystem?

We consider these questions and in parallel highlight key observations from Dr Jeremy Loh’s attendance at the second annual Venture Debt Conference held in March 2024 in New York (where Genesis participated in discussions and networking opportunities with the likes of prominent banks with venture lending businesses such as Silicon Valley Bank, a division of First Citizens Bank, HSBC, Deutsche Bank, Comerica and a spectrum of private debt funds ranging from dedicated venture debt funds like Runway Growth, Vistara Growth, Bootstrap Europe to private credit players such as Horizon Tech Finance.

Surprising Early Resilience Despite Headwinds

Figure 1: Data aggregated from PitchBook and Deloitte Tech and Media Predictions


Market predictions following the SVB saga anticipated a significant decline in US venture debt financing for 2023. Forecasts suggested a potential drop exceeding 50%, ending a four-year streak of annual activity above $30 billion.

However, conference participants were bullish about venture debt pipeline opportunities. In fact, PitchBook data revealed a surprising resilience, with 2023 marking the fifth consecutive year surpassing the $30 billion threshold (Figure 1). Despite this positive development, a slowdown in capital availability within the venture sector is expected to impact 2024 figures. Estimates suggest a potential decline to a range of $14-16 billion but the outlier driving strong venture debt demand could push figures up to 2018 level of $27 billion.

A deeper analysis of venture debt deal count by startup stage sheds light on the allocation of venture debt capital (Figure 2, next page). PitchBook data indicates that seed and early-stage companies have experienced the most significant decline in deal volume. This aligns with the fact that SVB, which previously held a 50% market share in early-stage bank venture debt, has seen its lending shrink to roughly 20%. Conversely, late-stage loan activity has seen resilience and exhibited minimal decline, with 2023 emerging as the second-most active year in terms of deal count. Interestingly, PitchBook believes that there will be a continuation of the overall trend, predicting that venture debt in the US will exceed $30 billion for a fifth consecutive year in 2024. This optimistic outlook stands in contrast to the prevailing market sentiment, and only time will tell if it materialises when the first-quarter data of 2025 becomes available.

Figure 2: Venture debt loan count by stage


New Normal For Venture Debt: Proven Performers Welcome, VC Backing No Guarantee

The current economic climate has left many startups’ balance sheets in a less than ideal state compared to just a couple years ago. This tough environment has prompted investors and lenders to offer founders advice that may differ from what they’re accustomed to hearing. The message from Conference participants was clear: take the capital you can get – even if it’s at a down round with a liquidation preference – if that’s the only way to keep fighting.

Major venture and growth debt lenders are signalling a notable shift in their priorities. They are now open to financing established businesses with proven revenue models, even if they haven’t secured a recent equity round. In contrast, companies with dated equity rounds, limited traction, and a failure to reduce cash burn are the least preferred borrowers.

The focus for lenders has shifted to evaluating a company’s fundamentals – strong products, revenue generation, and a clear plan to bridge their funding gap. Profitability is seen as a major plus. Interestingly, the prestigious pedigree of a startup’s venture backers (e.g. Sequoia, Khosla Ventures) now carries less weight. As one lender put it, the key question used to be “Who’s backing you?”, but now a solid business case and financial runway are paramount in addition.

This evolving funding landscape requires startups to adapt their approach and messaging to appeal to the new priorities of investors and lenders. Those that can demonstrate financial discipline, revenue traction, and a clear path to profitability will be best positioned to secure the capital they need to weather the current economic storm.

Partnering With The Right Lender

When it comes to securing venture debt financing, the choice of lending partner is a crucial decision for startups. Considering that 76% of venture debt loans require amendments throughout their lifetime, startups must focus on finding a lender who can truly work alongside them as a strategic partner for the best possible outcome.

Lenders that take a “full platform approach”, tracking not only the financial performance of its portfolio, but also the holistic relationship and overall support provided to each company and founder are ideal partners. This level of commitment and consultative approach is key for startups navigating the complexities of the venture ecosystem.

Lenders with deep relationships within the venture capital community are also an important factor when choosing a reliable debt provider. These lenders are often involved in the debt raise conversation, providing valuable insights and alignment with the startup’s investors. Startups must be fully aware of the debt terms, such as meeting cash runway covenants, and understand the reporting requirements and third-party items demanded by the lender. The management team (and their key equity stakeholders) must be well-versed in navigating the positive and negative covenants.

Building trust and confidence in the counterparty relationship is paramount. Startups should seek lenders with a proven track record of working through challenging cycles and decisions alongside stable management teams. Forging these relationships proactively, and picking the lender’s brain on debt structure, can give startups an advantage. Creativity and sophistication in negotiations can also help bridge gaps, as the terms of warrants and other financing events can vary. Thorough due diligence is key, as startups can expect longer and more involved processes when selecting a venture debt partner.

Here’s a summary of the key points discussed by Conference participants:

  • Venture debt is more art than science – it’s crucial to find a lender that truly understands your business and the innovation economy;
  • Look for lenders with the right “Four Cs”: Capital, Commitment, Consultative approach, and Consistency through economic cycles;
  • Venture debt should be used judiciously, not as the sole source of runway – it needs to be part of a balanced financing strategy;
  • Startups must perform extensive due diligence on potential lenders, not just the other way around;
  • Venture debt can provide benefits like non-dilutive capital, runway extension, and acquisition/CAPEX funding – but the right lender partnership is key.

 Navigating Venture Debt In A Challenging Funding Climate

As startups navigate the current funding landscape, the consideration of venture debt has become increasingly important. However, startups must approach this financing option with strategic foresight, balancing the benefits with the potential risks. In the current climate, the priority should be on securing access to capital and maintaining flexibility, rather than getting too caught up in the mathematical details.

One key factor to consider is the interest rate environment. While most lenders anticipate that interest rates will start to fall towards the mid-to-late 2024 timeframe, this could affect the repayment burden if rates are kept flat or for unforeseen circumstances begin to rise. This shifting rate landscape should factor into a startup’s decision-making process when evaluating venture debt.

Overleveraging debt can lead to negative outcomes, so startups must take the appropriate amount of leverage and have a clear repayment plan. Lenders view a “Hail Mary” situation as a red flag, so startups should aim to have a clear path to new equity or an M&A term sheet to make the venture debt more viable.

Companies seeking large debt raises may be a concerning signal, as it could suggest limited equity availability. Combining equity and debt can provide working capital and growth capital, but the management team must carefully consider and align with their board on the best approach.

Building strong borrower-lender relationships is crucial, looking beyond just interest rates. Startups should prioritize choosing lenders with specialized expertise in their industry and focus on cultivating a strong partnership, rather than solely optimizing for the lowest rate. Preparing quality financial statements in advance is also key, as lenders have become more sophisticated in their scrutiny. Startups should aim for audited financials, if feasible, to streamline the due diligence process and potentially facilitate deal-making.

In summary, navigating venture debt in the current funding climate requires startups to be strategic, discerning, and proactive. By carefully considering the trade-offs, building strong lender relationships, and ensuring financial readiness, startups can leverage venture debt to fuel their growth while mitigating risks.

Dealing with Distress: Lenders’ Approach to Troubled Startup Borrowers

When dealing with distressed startups that have raised venture debt, lenders must take a collaborative and pragmatic approach to achieve the best possible outcome. Despite any initial dissatisfaction, a successful workout requires all parties – lenders, management, and other stakeholders – to work together transparently and recognize the inherent value in the company’s assets.

Lenders should be proactive in identifying signs of financial distress, such as a startup’s failure to meet key milestones or its inability to raise fresh equity. When these issues arise, lenders should be upfront about their concerns and work collaboratively with the startup’s management to find a mutually agreeable financial solution that supports the company’s growth and path to cash flow positivity.

Employees and the management team are the primary stakeholders in a distressed startup scenario. Ensuring their motivation and satisfaction is crucial, as they are the ones who will ultimately drive the company’s turnaround efforts. Creditors must be willing to take a collaborative approach with management, even if it means accepting a less-than-ideal outcome for equity holders.

The concept of “management carve-outs” can be a useful tool in guiding distressed startups through this challenging period. In these situations, management teams may be unfamiliar with the complexities of insolvency and financial distress. Experienced general partners from the venture capital world can play a valuable role in helping management navigate these uncharted waters and align their actions with their fiduciary obligations to all stakeholders.

The emphasis is on having sponsors with strong track records and a proven ability to navigate these complex distress scenarios effectively. A single sponsor may be more efficient and have a distinct risk perspective, while a syndicate may face greater challenges in reaching consensus, potentially carrying slightly more risk.

While lenders must adopt a cooperative and pragmatic mindset, the key outcome is to maximize recovery. By prioritizing the needs of key stakeholders, leveraging management carve-outs, and maintaining transparent communication, lenders can increase the chances of a successful turnaround and maximize the value of the company’s assets

The Golden Age Of Credit: The Landscape Of Venture Debt And Bank Capital

Private credit as a broad asset class continues to attract significant fundraising dollars, with the venture debt category following suit and resulting in an ever-growing lending landscape. In recent years, there has been a notable compression in the cost of capital across various types of lending, including traditional bank facilities and venture debt. The increase in overall interest rates has led to a narrower pricing spread between these financing options, making bank capital more competitive in the current environment.

The emergence of larger, traditional investors exploring venture debt as an asset class has further validated its importance. For example, BlackRock’s acquisition of Kreos Capital, a European venture debt platform, highlights the growing prominence of this financing avenue. Kreos Capital has invested more than €5.2 billion through nearly 750 transactions across 19 countries since 1998. Another notable acquisition is Monroe Capital’s purchase of Horizon Technology Finance (NASDAQ: HRZN), a non-banking leading specialty finance company that provides venture debt financing. Monroe Capital, a $18.4 billion private credit firm with a 20-year track record in direct lending, has directly originated and invested more than $3 billion in venture loans to over 315 growing companies. These high-profile acquisitions by major players like BlackRock and Monroe Capital underscore the increasing significance of the venture debt market. The influx of larger, traditional investors validates venture debt as an attractive asset class, ushering in a “golden age” of credit with favorable conditions for investors.

In the aftermath of SVB’s collapse, major global banks have been jockeying to position themselves as the new preferred lender for startups globally. Institutions like JPMorgan Chase, HSBC, and Deutsche Bank have all made concerted efforts to capture this lucrative market. JPMorgan, for example, has been actively expanding its venture banking division, seeking to leverage its deep pockets and extensive resources to attract startups. The bank has touted its ability to provide comprehensive financial services, from lending to treasury management, to cater to the unique needs of high-growth companies. This trend has been driven by the increased capital formation within the venture capital community, allowing companies to stay private and grow for longer. As this trend reversed, leading to greater need of venture debt, traditional lenders have improved their underwriting capabilities to facilitate larger transactions.

Mature venture debt markets, such as the US and Europe, have demonstrated that both private venture debt funds and venture debt banks can coexist harmoniously. This provides startups with access to different lender profiles, allowing them to choose the most suitable option – a private lender with more flexibility in their lending criteria or established venture banks that provide tailored banking solutions. The coexistence of private venture debt funds and venture debt banks has proven to be beneficial for startups, as it provides them with a diverse range of financing options to support their growth and expansion plans.

In the burgeoning venture debt markets of North Asia, excluding China and India, Japanese banks have been actively establishing a foothold to lend to Japanese startups. Major players such as MUFG, Mizuho Bank, Aozora Bank, and Tokyo Star Bank have been aggressively pursuing opportunities in this space, recognizing the growth potential of the local thriving startup ecosystem. Over in South and Southeast Asia, HSBC recently announced the launch of a $1 billion ASEAN growth fund and a $150 million venture debt fund dedicated to the Singapore market. This followed two other $100 million HSBC single market venture debt vehicles – a MYR$500 (~US$104) million fund for Malaysia, and AUD$227 (~US$147) million fund for Australia.

Venture Debt In Southeast Asia: Fueling Growth, Mitigating Risk, Embracing Sophistication

The venture debt landscape in Southeast Asia is undergoing a transformative phase, driven by several key factors regionally and globally. Firstly, the region is witnessing a surging demand for alternative financing options, fueled by the burgeoning startup ecosystem and the need for capital to fuel growth. This growing demand has attracted competition from traditional banks and specialized venture debt providers, giving rise to co-lending opportunities, enabling lenders to collaborate and share risk.

These factors are collectively shaping the trajectory of venture debt as an alternative financing option in Southeast Asia’s burgeoning startup ecosystem. Private lenders, such as Genesis Alternative Ventures, are well-positioned to capitalize on this evolving landscape. As startups adapt to challenging market conditions and prioritize profitability, private lenders can continue to grow alongside the ecosystem, deploying debt financing to support lean, efficient, and profitable ventures.

The venture debt landscape in Southeast Asia is dynamic and rapidly evolving, presenting both opportunities and challenges for lenders and borrowers alike. Those who can navigate this landscape adeptly, balancing risk and opportunity while embracing sophistication and collaboration, will be poised to thrive in this exciting and promising market.



  1. Early-stage startups seeking venture debt find investor prestige isn’t enough
  2.  Q4 2023 Public BDC Venture Lender Earnings
  3.  Spring thaws venture debt market, but not everyone is feeling the warmth
  4.  One year after SVB, the throne sits empty
  5.  Life after debt: Venture debt funding could grow again in 2024
  6. B Capital’s M&A adviser expects startup-to-startup M&A to heat up


Tough, challenging, economic headwinds, cautious optimism, interest rate hikes, downrounds, pay-to-play, layoffs – all these were words that startup entrepreneurs and venture investors became familiar with 2023. However, the year also saw several noteworthy developments that had a lasting impact on the venture capital landscape. We will address them in this quarter’s House View.

AI Ascending

2023 was a defining year for the Artificial Intelligence (AI) industry. AI became increasingly integrated into various industries, including healthcare, finance, manufacturing, and retail. Developments in machine learning, natural language processing, computer vision, and robotics were at the forefront of AI advancements. These technologies were driving innovation across sectors. Businesses leveraged AI to improve efficiency, customer experiences, and decision-making processes. Large tech companies continued to acquire AI startups to enhance their AI capabilities and expand their market presence. Microsoft became a leader in AI adoption with close integration of ChatGPT into its Bing search engine since announcing a $10 billion investment in OpenAI, the creator of the ChatGPT chatbot. What is exciting is the combination of the power of large language models (LLMs) with data in the Microsoft apps to turn words into the most powerful productivity tool on the planet. But as AI adoption grew, there was also a growing focus on ethics and regulations surrounding AI applications, particularly in areas like data privacy and algorithmic bias.

Silicon Valley Bank Collapse

One of the most notable events of 2023 was the sudden collapse of Silicon Valley Bank in March, a venerable institution that had long been synonymous with the technology and innovation hub of California. Its downfall sent shockwaves through the startup ecosystem, serving as a stark reminder of the fragility that can underlie even the most established financial institutions. In the aftermath of SVB’s failure, startups and venture capital funds faced not only the practical challenges of disrupted financial operations but also the psychological impact of shattered trust in financial institutions. This event served as a critical lesson in risk management and diversification, reinforcing the need for resilience and adaptability in the ever-evolving landscape of the startup and venture capital world. It also highlighted the importance of contingency planning and the necessity of spreading financial risks across multiple trusted partners to safeguard the interests of all stakeholders.

End of IPO Ice Age?

The IPO market remained frozen throughout 2023, save for a few iconic listings like Arm, Instacart, and Klaviyo, depriving startups of a traditional exit strategy and forcing them to reassess their growth trajectories. Courier startup J&T Global Express, which launched in Indonesia before expanding across Southeast Asia and China was valued at $13 billion in its Hong Kong IPO, below its last private round valuation of $20 billion as reported. Singapore’s first SPAC, VTAC, listed in January 2022 and backed by Vertex Venture Holdings, the venture capital arm of Singapore’s sovereign wealth fund, Temasek Holdings. VTAC merged with Asia’s live streaming app 17LIVE to take the startup public on Singapore’s stock exchange in December 2023.

What could be the catalyst that rekindles the interest in tech startup IPOs? First and foremost, a resurgence of confidence in market stability is essential. Renewed assurance that market volatility could be normalizing may set the stage for increased IPO activity. Furthermore, decisions made by the US Federal Reserve and other central banks concerning interest rates will wield considerable influence. These decisions ripple through the technology sector, impacting future cash flows of companies, driving valuation rebounds, and shaping investor sentiment. The current challenging capital market conditions present an opportune moment to lay the groundwork for an IPO, especially considering that the preparation process typically spans 12 to 18 months. Commencing preparations today positions companies to be fully prepared when favorable market conditions eventually return. On the 2024 IPO pipeline watchlist are some exciting candidates, including OpenAI which saw a leadership drama cutting its valuation down to $50B, Stripe – the Fintech payment darling that played a key role in disrupting the payments world with an estimated $50B valuation and Canva, the Adobe competitor with a potential $10B valuation.

From Setbacks to Comebacks

As we navigated the year, venture capital funds found themselves closing the books on a tough and transformative period. VC deals, exits, and fundraising all experienced a dramatic downturn, challenging the industry’s resilience and adaptability.

Global VC funding plummeted to approximately $345 billion, a substantial decline from the robust $531 billion recorded in 2022. This was reflected in both declining global VC deal count and dollars as illustrated below.

Source: PitchBook Q4 2023 Global Venture First Look


Southeast Asia observed a near identical trend. According to DealStreet Asia’s Singapore Venture Funding Landscape 2023 report, the region registered a 30% year-on-year decline in deal volume in 2023 (9 months) with total deal value down by 50%. While Singapore continues to be the region’s top tech investment destination (64% of total deal volume), deal value (-49%) and deal volume (-21%) both registered declines in 2023. Seen in context however, funding activity has reverted to levels last seen in 2019 which is an encouraging sign given that “the subsequent funding surge during 2021-2022 was an anomaly fuelled by a global liquidity glut”. Further, we note that “Seed to Series B” deals garnered a larger share in 2023 “indicating a growing investor preference for moving upstream”.

Facing a capital crunch and a prolonged fundraising runway that typically stalled on the topic of valuation, startups have had to trim their operations to achieve financial sustainability. Those that were able to achieve this newfound cashflow breakeven were in a unique position to capitalize on a changing business landscape. Founders started to experiment with marketing strategies that increase ROI (return on investment) – for example, optimizing marketing spend by adjusting social media campaigns to reduce burn and drive outcomes, reducing product SKUs, negotiating and extending payment terms extending working capital cycles. With healthy cash reserves in bank accounts, these lean and financially positive startups were not just weathering the challenging market conditions but actively seeking opportunities to expand their influence and market share.

Founders also recognized that a tumultuous year had created fertile ground for strategic acquisitions and talent acquisition through acqui-hiring. One notable example was turnaround fund Turn Capital acquisition of Flash Coffee’s business in Thailand. This strategic move aimed at revitalising Flash’s coffee business and aims to open over 100 new stores within the next two years. Another compelling instance unfolded in the acquisition of Loom, a video messaging startup that had once achieved unicorn status. Collaborative software giant Atlassian recognized the potential and value in Loom and acquired the San Francisco-based startup for a substantial $975 million. Notably, Loom had recently raised $130 million in a Series C funding round in May 2021, at a valuation of $1.5 billion. Atlassian’s acquisition represented a strategic move to leverage Loom’s capabilities, and despite the 35% decline in valuation from the previous round, it underlined the significance of acquiring talent and technology to drive future growth in the rapidly evolving landscape of tech startups.

In the current global startup landscape, a positive and healthy recalibration period is underway, exemplified by success stories like Lenskart’s recent achievement. Securing a substantial $500 million investment from the Abu Dhabi Investment Authority at a solid $4.5 billion valuation, Lenskart’s remarkable journey showcases the potential for startups to thrive when pursuing profitability and strategic excellence. With a network spanning 2000 stores across India, Southeast Asia, and the Middle East, Lenskart not only highlights its impressive scale but also underscores its claim to profitability—a rare feat in the startup world. This milestone serves as a valuable lesson for all emerging companies, emphasizing the need to reevaluate their strategies. Startups are now encouraged to shift their focus towards profitability, exercise prudent expense management, and prioritize establishing a strong market position. However, Lenskart was not alone in its impressive feats. Other startups also closed spectacular funding rounds in the final weeks of 2023, solidifying the industry’s positive momentum. Klook, a trailblazer in the travel technology sector, secured an impressive $210 million in Series E+ funding. Simultaneously, Silicon Box, a key player in the semiconductor arena, raised a significant $200 million in Series B funding.

Fundraising Gains Momentum

Venture funds witnessed a decline in fundraising, reflecting a stark contrast to the previous year’s numbers. VC firms managed to collect only $161 billion, a considerable drop from the impressive $307 billion raised in the preceding year. Notably, New Enterprise Associates (NEA) stood out as a fundraising leader, securing slightly over $6.2 billion for two new funds, and with NEA announcing its first Indonesia investment into Gravel, an Indonesia-based construction tech startup raising $14m Series A to extend its capacity to help anyone build, renovate, and repair living, working, and recreational spaces efficiently by using technology to connect customers to not only qualified construction workers, but also tools, building materials, and experts. Meanwhile, Bain Capital Ventures, a San Francisco-based multi-stage venture capital firm, successfully closed two funds, amassing a total of $1.9 billion in commitments.

Vertex Ventures also made headlines by finalizing Fund V with $541 million, adding to the growing momentum of venture capital in the region. Meanwhile, Singapore-based Northstar Group achieved a significant milestone by completing the fundraising for Northstar Ventures (NSV) I, its first-ever early-stage fund, garnering a remarkable $140 million in capital commitments. Korea Investment Partners entered the Southeast Asia scene with a bang, announcing its inaugural $60 million Southeast Asia Fund. United States venture capital firm In-Q-Tel, Inc. (IQT) has announced the opening of a new office in Singapore.

These developments in VC fundraising underscore the evolving landscape of venture capital, reflecting a range of strategies and niches being explored by firms worldwide as they navigate the changing dynamics of the startup and investment ecosystem.

Stepping into 2024, it’s against the backdrop of remarkable resilience and adaptability that a series of transformative developments and a shifting mindset have left an indelible mark on the world of startups and venture capital. Positive signals of tailwinds are propelling startups toward profitability while refining sustainable business models with a focus on capital efficiency. Abundant VC PE dry powder has reignited dealflow, instilling hope among venture capitalists for increased investment in both emerging and established startups, poised to redefine the technology industry.

Kickstarting 2024: AI + HealthCare

In January 2024, the tech world geared up for two major events that promise to set the stage for an exciting year of technological innovations.

The first is the renowned J.P. Morgan Healthcare Conference (JPMHC), now in its 42nd year, which stands as the industry’s largest and most informative healthcare investment symposium. Held annually in San Francisco, it serves as a pivotal platform for showcasing groundbreaking healthcare technologies and trends.

In San Francisco, the JPMHC spotlighted 2023 as a robust year for mergers and acquisitions (M&A), driven by a flurry of nine M&A deals valued at over US$1 billion each that were announced towards the end of the year. The pharmaceutical giants, often referred to as Big Pharma, have been actively seeking strategic acquisitions to replenish their pipelines in response to drugs nearing patent expiration. These high-value M&A transactions primarily focused on target companies boasting late-stage assets, including marketed drugs and products with clinical proof of concept in phase 3 trials.

Meanwhile, venture capitalists (VCs) in the healthcare and life sciences sector remain well-positioned with significant capital reserves ready for deployment. Notably, new funds like Goldman Sachs’ impressive US$650 million fund, West Street Life Sciences I, have emerged with a specific focus on early- to mid-stage therapeutic companies. These companies are characterized by multi-asset portfolios and encompass tools and diagnostics firms within their investment scope, signaling a dynamic and active investment landscape within the healthcare and life sciences sectors.

The data indeed reflects a notable trend: Seed stage and modest Series A financings continue to thrive in the investment landscape. However, when it comes to larger Series A and subsequent funding rounds, a clear division persists between the ‘haves’ and the ‘have nots.’ For the fortunate few, particularly those operating in hot therapeutic areas or are armed with recent data readouts that significantly de-risk their programs, capital remains readily accessible.

A striking example of this phenomenon is demonstrated by Aiolos Bio, which secured an impressive US$250 million in a Series A round for its Phase II-ready asthma/anti-inflammatory antibody targeting the TSLP pathway—technology in-licensed from Hengrui. Aiolos Bio later astounded the market by announcing its acquisition by GSK for a staggering US$1 billion upfront, with the potential for an additional US$400 million in milestones, underscoring the value of strong data and de-risked programs.

Meanwhile, Indonesia’s leading health-tech platform, Halodoc, which offers a range of healthcare services through telemedicine, medicine delivery, lab tests, and doctor appointments via smartphones, secured a substantial $100 million in Series D funding, highlighting the continued interest in health-tech innovations.

Consumer Electronics Show (CES), originating in 1967 with 250 exhibitors and 17,500 attendees in New York City, has since evolved into a global tech extravaganza. CES not only presents the latest technological advancements but also offers a glimpse into the future of the tech world. Notably, both events share a common theme: the pervasive presence of artificial intelligence (AI). AI’s influence is palpable, whether it’s in drug development, robotics, or consumer products, reaffirming its pivotal role in shaping the future of technology. 

Source: Mobilesyrup

Among the groundbreaking innovations showcased at the event, Betavolt, a startup hailing from China, introduced a truly revolutionary nuclear battery technology that promises to generate electricity continuously for an astounding 50 years without the need for recharging or maintenance. 



What sets Betavolt’s creation apart is its groundbreaking integration of 63 different isotopes into a module that’s smaller than a standard coin, marking a significant leap in the field of atomic energy. This achievement challenges conventional wisdom associated with nuclear technology by achieving the remarkable feat of miniaturizing atomic energy. The battery’s compact dimensions measure just 15 x 15 x 5 millimeters, constructed from delicate layers of nuclear isotopes and diamond semiconductors. It is envisioned as a remarkable technological marvel that holds the promise of keeping electronic devices charged and fully operational for an astonishing half-century. This breakthrough ushers in a transformative era of sustainability and unprecedented longevity in the realm of portable power solutions.

ChatGPT will be shoe-horned into everything. Teamwork between Volkswagen and Cerence to harness its Chat Pro “automotive grade” artificial intelligence platform, which enables the ChatGPT integration. This expands the German marque’s existing IDA voice assistant so it can now deal with natural speech prompts for both control of the vehicle’s functionality and broader queries.


Motion Pillow revealed a self-inflating, AI-powered smart pillow designed to curb snoring. Once the system identifies snoring, the pillow gently inflates to subtly adjust the sleeper’s head position. Through the movement of 7 airbags, it dynamically adjusts the positions of the head and back, creating a comfortable breathing environment and reducing snoring. The product has been further enhanced with an increased number of airbags, the vital ring for oxygen saturation measurement, circadian rhythm lighting, and a space-saving charging system, all contributing to improved performance, usability, and adding a touch of sophistication. This side-lying posture is known to be less conducive to snoring, as it helps keep airways open. The inflation mechanism is designed to be both quiet and gradual, ensuring minimal disturbance to the sleeper.

Source: CES Tech

ElliQ, the innovative care companion robot introduced by Intuition Robotics, plays a vital role in addressing the growing sense of isolation experienced by older adults in our increasingly technology-driven world. This is particularly crucial in an era when staying digitally connected is paramount due to the limitations on physical interactions. With approximately 50% of adults grappling with concerns related to social alienation and declining health, ElliQ emerges as a solution designed to bridge this gap.

Photo credit: Striworld

ElliQ serves as an interactive tabletop health companion, thoughtfully crafted to assist older adults in maintaining their mental and social well-being. By engaging in various activities and providing companionship, ElliQ not only alleviates feelings of isolation but also encourages essential mental and social interactions. It represents a compassionate response to the challenges faced by older individuals in our technology-centric society, reaffirming the potential for technology to enhance the quality of life for all generations.



The term “funding winter” has permeated discussions from panels at tech conferences to casual cafe conversations over the last twelve months. The fundamental question pertains to venture capital liquidity constraints induced by prevailing macroeconomic and political challenges. Will these constraints persist in Southeast Asia, or can we anticipate a resurgence in funding levels to reach heights achieved in 2021? During that year, the tech sector in the region witnessed a historic high, with investments exceeding the unprecedented milestone of US$20 billion.

Let’s review the global funding trend over the past decade, encompassing venture capital investments into startups across the Americas, Europe, the Middle East, Africa, and Asia, including Southeast Asia. The chart below illustrates a consistent upward trajectory in funding from 2012 through 2022. Notably, 2021 emerged as an exceptional year, marked by an unprecedented surge in capital deployment with investments nearly 1.5 to 2 times higher compared to the preceding and subsequent years. As we approach the conclusion of 2023, it is important to acknowledge that the full-year funding figure is still awaiting final tallying. However, a preliminary estimate, based on a rough calculation, suggests that approximately US$340 billion may have been invested during this year. This would represent a dip from 2021-22 but on par with 2018 through to 2020 funding levels.

In retrospect, the venture capital landscape witnessed an unprecedented bull run in 2021, characterized by a substantial influx of investment dollars from both corporate and venture tourist investors into the startup sector. If we were to eliminate the 2021 funding spike from the chart above and draw a trendline across the past ten years as shown in the chart below, a compelling narrative emerges. Over this period, invested capital has displayed a consistent and progressive growth pattern, expanding by a noteworthy factor of 5 to 7 times.

What sets this trend apart is the discernible shift in capital allocation, with an increasing proportion being directed towards the Asia and EMEA (Europe, Middle East, and Africa) regions. This transformation in the funding landscape signifies a fundamental reorientation of global investment priorities within the tech and venture sectors. The significant surge in investment activity in 2021, driven by both corporate and venture investors, underscores the industry’s dynamic evolution and its resilience in the face of economic challenges.

In the context of venture funding in Southeast Asia, the second quarter of 2023 saw a notable increase, reaching a total of $2.1 billion. It’s worth observing that despite the increase in total funding, the deal count was lower during this period. According to CB Insights, Indonesia emerged as the leading recipient of funding in the region during 2Q 2023, with its startups securing $1 billion, an extraordinary 233% surge compared to the preceding quarter. Singapore (a base for Southeast Asia startups) closely followed with $914 million in funding, although this represented a 15% decline quarter-over-quarter.

Source: CBInsights

The past quarters also witnessed an uptick in exits within the Southeast Asian startup ecosystem. This was particularly evident in the increased number of M&A exits for the second consecutive quarter. In this evolving economic landscape, more tech companies are grappling with the challenge of managing their liabilities and raising funding. As a result, an increasing number of these companies are opting to pursue mergers with larger competitors as a strategic move to sustain their operations and keep their businesses afloat. Startups are adapting to the challenges posed by evolving market conditions, which may include increased competition, funding constraints, or changing investor sentiment. Mergers and acquisitions can offer a viable path forward for startups seeking stability and growth, while also presenting opportunities for larger companies to expand their market presence and capabilities in the region.

Sources: CBInsights

In the current funding landscape startups are facing the imperative of planning for an extended runway as the process of closing financing rounds has become considerably protracted. Notably, earlier-stage companies, ranging from Seed to Series A, are finding it necessary to allocate up to 2 years for fundraising, representing an increase from the 16-month average observed just a year ago. Meanwhile, statistics reveal that later-stage companies, specifically those at the Series B stage and beyond, experience even more extended timelines, with fundraising cycles stretching to as long as 34 months.

Several factors contribute to these extended timelines, with one significant reason being the heightened focus of global VCs nursing their existing portfolio companies. Many VCs have slowed down their pace of new investments, with some openly admitting that they have not committed to new deals over the past 12 months. This trend has particularly impacted fund deployment, which has contracted by 25-30% in the current year, especially in regions like Indonesia and at the Series B+ stage. However, VCs remain active in earlier-stage cycles, notably at the Seed and Series A stages.

Despite these challenges, there exists a prevailing sentiment of cautious optimism regarding the future. VCs believe they will gradually increase their investment activities toward the latter part of 2023 and into 2024, provided that macroeconomic conditions continue to improve and unforeseen disruptive events are avoided. In the midst of this downturn, industry insiders, like Oswald Yeo, CEO of recruitment startup Glints, underscore the resilience and growth potential of the Southeast Asian startup ecosystem. Across various industries and verticals, a positive outlook toward sustainable growth persists, with a significant percentage of surveyed companies (86%) expressing their intentions to continue hiring in 2023. This challenging period is also expected to cultivate the emergence of strong founders who can weather such adversity, building businesses that can withstand even the most challenging circumstances.


Tech IPO Window Resumes Business, But Not Wide Open

Despite these challenges, there are positive offshoots returning to the public markets with several high-profile IPO listings leading the charge, which hopefully would trickle down to the private markets. The month of September 2023 witnessed a series of notable IPOs, underscoring the enduring interest in technology-driven firms seeking public equity. Among these, Arm Holdings plc, a Softbank-backed entity, stands out, with an IPO that initially valued the company at approximately $54.5 billion and at one point surging to nearly $72 billion. Arm Holdings specializes in the architecture, development, and licensing of high-performance, energy-efficient IP chip solutions, integral to the functioning of over 260 technology companies worldwide, including major smartphone manufacturers such as Samsung, Huawei, and Apple.

Another prominent tech IPO in the same period featured Instacart, a grocery delivery service, which, having been previously valued at $39 billion, debuted on the NASDAQ with a fully diluted valuation just surpassing $11 billion. Concurrently, Klaviyo, a marketing automation firm under the umbrella of Shopify, made its debut on the New York Stock Exchange, achieving profitability and obtaining a $9 billion valuation, substantiated by $345 million in raised capital.

Conversely, some startups have opted to defer their IPO plans. VNG Ltd, a Vietnamese internet company with backing from Tencent, chose to delay its $150 million U.S. IPO until 2024, citing the prevailing volatile market conditions. VNG was established in 2004 and hailed as Vietnam’s inaugural unicorn, operates across diverse sectors encompassing online gaming, payments, cloud services, and the preeminent Vietnamese messaging application, Zalo.

Singapore-based cancer diagnostics firm Mirxes has submitted an application to the Hong Kong Stock Exchange for an initial public offering, potentially becoming the first non-Chinese and non-Hong Kong-based biotech company to list under a specialized provision. This decision follows a $50 million Series D funding round, which ascribed a post-money valuation of approximately $600 million to Mirxes.

Industry analysis by PitchBook indicates a queue of nearly 80 IPO candidates including TikTok, Stripe, Discord and more who are lining up to go public. While there exists a discernible opening in the IPO window, investors are currently leaning toward a cautious stance for the remainder of 2023. Venture capitalists are advising their startups to consider deferring their IPO plans until interest rates have stabilized. The possibility of further interest rate hikes in the year, coupled with reduced expectations for rate cuts in 2024, could further influence market sentiment. Moreover, volatility in share prices for both Arm Holdings and Instacart underscore the necessity for prudence in the prevailing listing environment.


More Dry Powder Reason For Optimism In Thawing Of Equity Winter

In 2022, while the number of newly established funds experienced a decline, the total capital amassed by global funds reached an unprecedented pinnacle, totaling a staggering $162.6 billion. This achievement marked the second consecutive year in which capital inflows surpassed the significant milestone of $100 billion, defying challenging economic conditions. 

According to DealStreetAsia’s 2Q 2023 report, Southeast Asian investors successfully raised an impressive US$3.72 billion in the first half of the year. Notably, the recent announcements have catapulted Southeast Asian venture capital firms beyond last year’s fundraising record of $4.14 billion. Pitchbook reported that the US largest public pension scheme, Calpers, which manages some $444 billion in capital, intends to increase its venture capital allocation  by more than sixfold, from $800 million to $5 billion. These developments highlight a robust investor sentiment in the region.

Vertex Ventures, for instance, substantially exceeded its expectations by closing its fifth fund at a substantial US$541 million, surpassing its initial target of US$450 million. This achievement notably exceeded the US$305 million garnered for the firm’s previous fund, which concluded in 2019. Similarly, Monk’s Hill Ventures concluded its second fund at a remarkable US$200 million. Additionally, Singapore’s Temasek announced its strategic collaboration with the National University of Singapore and Nanyang Technological University Singapore, committing US$55 million to foster the commercialization of deep-tech ventures emerging from the research pipelines of these esteemed institutions.

The VC market landscape has undergone a notable transformation, shifting away from its traditional startup and founder-centric ethos to one that is more favorably inclined toward investors. Several key drivers underpinning this transformation include the widening gap between capital demand and supply, coupled with a discernible decrease in valuation upticks across various developmental stages. 

In light of this evolving landscape, VCs are poised to continue deploying their capital; however, the terms of these deals are expected to skew more positively towards investors. Consequently, entrepreneurs are faced with the imperative to refine their business models and present a meticulously delineated roadmap toward achieving cash breakeven and profitability. Those entrepreneurs who can exhibit robust unit economics and pragmatic growth projections will find themselves in the most advantageous position when competing for coveted VC investments.


Developments In The Venture And Private Debt Sector

Smart money continues to flow into private debt, drawn to the favorable risk-adjusted returns and with plenty of headroom for future growth. The collapse of Silicon Valley Bank (SVB) in March 2023 did not dampen the appetite for venture debt, a subset of private debt. Banks across the world have jumped into direct lending to startups, seizing opportunities in a post-SVB era. HSBC picked up some of SVB’s assets and its team and went on an aspirational strategy to become the next SVB. HSBC announced a $3 billion Hong Kong/China fund and separately a $105 million (RM500 million) Malaysia New Economy fund that will be dedicated to providing high-growth, innovative companies with a suite of tailored debt solutions in their respective jurisdictions. In Japan, Aozora Bank announced its third $60 million (¥9 billion) venture debt fund for local start-ups, while MUFG launched two new venture debt funds worth $400 million for Japanese and European startups, reflecting strong funding demand as the market for initial public offerings remains dull.

BlackRock Inc estimates that between the end of 2018 and the end of 2022, the private credit market doubled in size from roughly $750 billion to $1.5 trillion. To further deepen its private credit offerings, BlackRock acquired Kreos, a provider of growth and venture debt in technology and healthcare in Europe and Israel who has committed around $5.6 billion in over 750 debt transactions, demonstrating strengthening investor demand for exposure to venture debt and private credit.


Venture Debt Dealflow

In the US across all stages, startups closed $6.34 billion across 931 venture debt deals in the first half of 2023, compared to $20.07 billion across 1,513 deals in the same period last year. The diagram below shows the debt committed to startups across different stage of development. While the debt commitment has reduced across all stages, it is more evident for early-stage startups. One possible reason could be the collapse of SVB who primarily operated in the early-stage market, sometimes lending to pre-revenue companies, while its new owner, First Citizen Bank, does not expect to step up to fill that void.


Source: CBInsights

Debt capital remains in high demand among startups as companies turn to alternative financing. The number of new and repeat debt financing conversations has certainly increased. Lenders are however becoming pickier and seek more favourable covenant packages and warrant coverage, in addition to higher interest rates. Lenders also wants additional comfort that startups are on track to receive future investment and that their investors remain committed to the company. While lenders can benefit from a rise in interest rates, the converse is an increased loan repayment risk as increased cost of borrowing and tighter covenants means that borrowers need to operate within their means. 


Funding Outlook For The Next Six To Twelve Months

The million-dollar question is how the rest of 2023 and 2024 looks like for the venture and tech sectors? Not to oversimplify things, there seem to be two groups of startups in the market currently: those that have raised funding in 2021/2022 (albeit at a high valuation) but that have adapted to the volatile market, conserved cash and growing sustainably; and another group that has continued to trailblaze growth but that has run out of funding and struggled to raise capital. Valuation expectation will need to be moderated and lenders are certainly witnessing an increase of queries for debt financing with or without new equity injection. In all certainty, entrepreneurs will need to start funding conversations much earlier in anticipation of the longer process.

Venture investors that take the brakes off and continue to invest in startups that have undergone business and capital rationalisation at an attractive entry point valuation may be capitalizing on being ahead of the herd with significant de-risking as the company has demonstrated added traction. The revival of startup funding over the next 6-12 months is intrinsically linked to several key factors reshaping the entrepreneurial landscape. As venture capital firms find themselves flush with more dry powder, they are eager to channel these resources into startups that have proven their ability to survive a major down cycle. This surge in available funding, combined with a slowly opening IPO market, creates a symbiotic relationship where startups have a clear path to exit strategies that appeal to investors. Moreover, startups are emerging from recent challenges as leaner and more efficient entities, well-equipped to maximize the capital they receive. This newfound efficiency not only instills confidence in investors but also ensures that the funding received is utilized effectively, ultimately fuelling the remarkable resurgence of the startup ecosystem.


In this issue of our House View, we shine the spotlight on an extremely talented individual within the Genesis ecosystem, Tom Kim, founder and CEO of Deliveree

Deliveree was established in 2015 with a core focus on the efficient transportation of commercial goods and large items across Indonesia, the Philippines, and Thailand. The company set out to address the challenges associated with transportation inefficiencies and the high cost of logistics. The company is projected to exceed $100 million in GTV this year. Deliveree has a team of 550 dedicated employees and a robust network of 100,000 drivers operating on its platform. Deliveree has successfully raised $109 million in capital to date.

The problem Deliveree is solving is the prevalence of one-way deliveries leading to empty return trips. In short, Deliveree devised a dynamic marketplace that connects independent drivers and trucking companies on the supply side, with tens of thousands of customers driving the demand. Matching supply to demand in this manner is no easy task, yet Deliveree managed to overcome this challenge and achieve a utilisation rate of nearly 70%, which surpasses the industry average that sits at under 50%. This accomplishment has direct positive effects on both the environment and productivity, as fuel and time are optimized. Moreover, it benefits independent truckers who rely on commission-based earnings, thereby allowing them to earn more. Notably, customers such as UPS, DHL, Philip Morris, Suntory, and Lotus’s (formerly Tesco) can now leverage an asset-light approach, booking trucks as and when necessary, which helps streamline their balance sheets.

The Genesis team first engaged with Deliveree in 2016 for discussions around debt financing and then again in April 2020. Deliveree stood out to Genesis for several reasons, including healthy, mid-teen gross margins, a dedicated and experienced management team, with a strong commitment to resolving logistical challenges. Genesis and Deliveree shook hands on a first debt facility soon after and Genesis subsequently participated in an additional round that saw Deliveree complete a massive $70 million Series C funding in June 2022.

Genesis’ investment philosophy includes a dedication to supporting startups with meaningful impact objectives. We work closely with our portfolio companies, assisting them in identifying and implementing essential impact and environmental, social, and governance (ESG) concepts throughout Southeast Asia. Deliveree is amongst the first of our portfolio companies to demonstrate a bold commitment to these principles. In May 2023, Deliveree published its inaugural report detailing its ESG and impact achievements. We are proud to have played a small part in Deliveree’s journey in this regard.

Please enjoy this Q&A with Tom.


Tell us more about your declaration of war against empty trucks and how far has Deliveree’s technology and marketplace come?

Tom Kim [TK]: Deliveree connects thousands of truck drivers and cargo shippers through its dynamic marketplace where they can find and fulfil orders every day. We are constantly upgrading our tech stack which is now third generation and going onto its fourth evolution. These improvements are based on the feedback of our loyal business customers.

Our drivers use our proprietary mobile app that shows them the live bid price and lets them accept delivery orders on the go, even while they are on a specific route. The app also helps Deliveree to track the trucks’ location and offer a hyper-local view of truck capacity for route planning.

Using our Big Data and predictive analytics, we “smart assign” bookings to drivers, which enables them to create optimised routes and schedules. On average, our drivers achieve utilisation rates ranging from 60% to 80%, with an average of 70%, as they criss-cross the map every day picking up and dropping off loads for a diverse range of customers.

In turn, this allows customers of all sizes to access affordable, flexible, and scalable trucking and cargo shipping solutions in a way that significantly increases efficiency and reduces cost. We can achieve these utilisation rates within metropolitan areas and even across larger areas such as Java Island in Indonesia, Luzon Island in the Philippines, and the Bangkok Metropolitan Area in Thailand.


Please elaborate on Deliveree’s “smart assignments” technology and how that sets you apart from traditional logistics providers?

TK: Deliveree’s “smart assignments” technology sets it apart from traditional logistics providers. This technology, driven by intelligent algorithms applying massive historical data sets, assigns trucks to bookings in the most optimal locations and times. This maximises truck utilisation and minimises empty driving distances, resulting in higher efficiency.

We believe that Big Data is the key to logistics evolution in Southeast Asia. Our success hinges on the ability to gather, combine, and effectively use data sets to tackle the region’s logistics efficiency challenges. In contrast, many competitors are still in the early stages of their first or second-generation tech, lagging behind Deliveree in user experience, features, integration capabilities, toolsets, and most importantly, Big Data and predictive analytics.

A key feature of smart assignments is the ability to estimate the duration of each booking based on massive historical data sets from seven years of operations. This allows the algorithm to help drivers build booking schedules with routes and timing that fit and flow together from one booking to the next, further streamlining logistics operations. By leveraging the power of Big Data, Deliveree aims to precisely predict booking durations, resulting in fully optimised truck schedules. This innovative approach not only solves the problem of empty trucks on the road but also addresses the elusive issue of empty backhauls (the holy grail of logistics). Moreover, it helps to reduce traffic congestion, minimise environmental emissions, increase driver earnings, and lower customer shipping costs. While it may seem too good to be true, Deliveree is working towards this future every day through significant investments in Big Data sets.


What was your motivation for setting up a formal ESG reporting process?

TK: Deliveree’s solution benefits various stakeholders, including truck drivers, businesses with goods to deliver, and even the environment. Our latest ESG report is available here.

We address the challenges faced by independent owner-operator drivers and small family trucking companies with unstable income and limited job opportunities. Through onboarding and continuous training, drivers qualify for jobs with larger enterprises that have strict requirements, such as certifications for occupational health and safety (OSHA) to enter warehouses and logistics facilities. Additional certifications, like defensive driving for energy clients and perishable goods handling for FMCG clients, are also provided.

Our comprehensive training and certification program prepares drivers for the new gig economy. Together with our mobile app, they secure delivery jobs that significantly boost their earnings, often up to 2.3 times more. This empowers businesses to connect with reliable and qualified drivers for their transportation needs while contributing to better route optimisation and environmental sustainability.

In our ESG sustainability report, you will see how our smart algorithms optimise delivery routes, providing bookings to trucks in the right place at the right time.

This increases their utilisation and decreases the distances those trucks drive while empty. Additionally, businesses can leverage Deliveree’s partial loading services, enabling them to send goods, cargo, and packages without needing to rent a full vehicle. Our algorithm calculates the most optimal and efficient route by combining cargo from multiple businesses, ensuring efficient deliveries.


Who helped you with the process and the thinking behind your ESG initiative?

TK: As part of Genesis’ venture debt to Deliveree back in January 2021, we made a commitment to Genesis Impact and E&S framework where we will start to develop a basic idea around impact development goals and objectives. However, at that time we were focusing on growth and not ready to devote resources to a deep dive to evaluate our potential ESG impact.

This changed in 2023 when our database and data science resources became substantially more sophisticated. Deliveree’s servers process vast amounts of data related to our millions of transactions and core operational functions. So the data was already there, but the hard part was building the right queries to extract, clean, and draw conclusions from the data to tell the ESG story along the main themes we outlined.

With guidance and support from Genesis who made introductions to experts and consultants in this field, we identified four key ESG impact themes that align with UN Sustainability Development Goals. Then we pursued the data extraction and analysis to validate our achievements along these themes.

We started by delving into the essence of Deliveree’s core business. While the impact was already evident, the challenge was quantifying and measuring this impact in a tangible manner. Genesis and Deliveree held several discussions, engaging in informative and collaborative discussions on quantifying impact using our existing data.

By documenting our ESG and impact achievements, we aim to strengthen our credibility in the eyes of investors, partners, clients, and vendors. This commitment to ESG impact reflects Deliveree’s dedication to sustainability and responsible business practices.


What are some key highlights of Deliveree’s ESG sustainability report for 2022/2023? 

TK: At a high level, I am very proud to share the following achievements:

  • Emissions Reduction: Deliveree’s “smart assignments” has reduced CO2 emissions by over 3 million kilograms, equivalent to planting 143,000 trees (UNSDG: Climate Action).
  • Road Traffic Reduction: Through efficient truck assignments, Deliveree has decreased truck road usage by 5.3 million kilometres, equivalent to 7 return trips between Earth and the Moon. (UNSDG: Infrastructure and Sustainable Cities).
  • Income Acceleration: Independent drivers and small trucking businesses on Deliveree’s platform experienced significant earnings growth, with average hourly earnings increasing by 2.8 times for 73% of vendors and total earnings increasing by 2.3 times for 82% of vendors. (UNSDG: No Poverty and Decent Work).
  • New Economy Education: We provided extensive education to drivers, offering an average of 44 instructional hours per vendor, enabling them to thrive in the mobile app and gig economy. (UNSDG: Decent Work and Reduced Inequalities).

We have gained a strong reputation for our customer-oriented services. However, we also want to recognise the unsung heroes behind our success: the countless truck drivers who own and operate their own vehicles, as well as the small family businesses that own and manage their own fleets. Our platform empowers them to control their financial futures, leading to a positive impact on their respective communities.


What was the response to your report?

TK: Unfortunately, the response from the media and investment community was not as warm as we had hoped. From this, we realised that ESG and impact investing are still relatively young fields, and there is a limited track record of long-term performance data. In this respect, I am proud that Deliveree is ahead of the pack when it comes to monitoring our ESG and impact.


What are your business plans for the next few years?

TK: We are commencing our last private fundraising in the second half of 2023 with plans to IPO in Indonesia in late 2025/early 2026. To coincide with these capital markets plans, our consolidated group will reach EPS break-even by 4Q 2025.


Follow Deliveree on LinkedIn for more updates.


The first quarter of 2023 was not pretty for the tech ecosystem globally – a continued venture capital reset, repeated rounds of tech layoffs, the failure of Silicon Valley Bank (SVB) and Signature Bank followed by the distressed sale of Credit Suisse, a near -60% decline in startup funding across all stages. ​

The dreaded “C(ontagion)” word raised its ugly head in early March when the bank run on SVB came to light. With $175.4 billion in assets, serving an estimated 20,000 startups and 1,000 venture capital firms, and impacting the livelihoods of countless individuals, the stakes were high when the fate of SVB hung in the balance. The potential collapse of SVB, a historic and trusted financial institution for the startup ecosystem, caused widespread confusion and anxiety. As the go-to bank for founders and venture capital backers in Silicon Valley, SVB had long been regarded as the cornerstone of the financing universe for the tech industry. The unfolding events posed a grave danger that could potentially cripple the tech world, making timely resolution crucial for all those involved.​

So, just how important is SVB to Silicon Valley? At the end of 2022, SVB was the 16th largest bank in the United States and the largest by deposits in Silicon Valley, solidifying its position as the go-to bank for venture-backed tech startups. Legendary venture capitalist, Michael Moritz, a longtime partner at Sequoia Capital calls SVB “the most important business partner” in Silicon Valley over the past 40 years. According to Steve Papa, the founder and CEO of Parallel Wireless, a startup specialising in cellular communications systems, SVB’s collapse has left a significant void in the innovation economy that may take a decade for someone else to fill. As a serial entrepreneur with successive exits such as Endeca, an enterprise software company that was acquired by Oracle for $1 billion in 2011, and Toast, a restaurant-industry point-of-sale system developer that went public in 2021, Papa attests to the pivotal role SVB played in his startups’ success. SVB’s extensive network of venture investors, financing options, payment accounts for overseas customers, and other services were a driving force behind his ventures, underscoring the significant impact of SVB’s downfall on the startup ecosystem.


Lending Into the Tech Ecosystem Key to SVB’s Dominance as a Tech Bank

With over 40 years of experience, SVB has established itself as a key player in the Silicon Valley financing landscape through its venture debt offerings. Its comprehensive product suite, tailored to the unique needs of the tech industry, includes mortgages for executives, credit lines for VC funds to maintain capital flow, and venture debt for startups that may be considered uncreditworthy by larger lenders. Moreover, SVB’s global offices enable it to serve VCs and startups worldwide, extending its reach beyond the US where it has been a trusted banking partner for over half of all tech and life sciences startups.

As of December 31, 2022, SVB’s loan book was valued at $74 billion, encompassing a diverse portfolio of loans. Approximately 56% of its loan portfolio was dedicated to venture capital and private equity firms, secured by limited partner commitments and used for investments in private companies. Mortgages for high-net-worth individuals accounted for 14% of its loans, while 24% were allocated to technology and healthcare companies, including 9% for early and growth-stage startups. Notably, Bloomberg reports that SVB’s loan portfolio comprises primarily lower-risk and lower-yield loans and strong credit performance overall.

Genesis’ Jeremy Loh, who previously worked alongside SVB in a venture equity investor role during his time in the US, witnessed firsthand how SVB served as a supportive banker and venture lender to startups in their early stages. This approach created a sense of loyalty between founders and their capital backers. In fact, SVB’s wealth management arm, “SVB Private,” identifies potential private clients early on, providing liquidity for founders whose net worth is tied to their company’s valuation, particularly those who have exited their businesses and are flush with cash.


Credit Crisis or Opportunity post-SVB?

The surge in venture lending in recent years has been driven by startups’ increasing need to diversify their funding sources and reduce reliance on equity raises. PitchBook’s data shows that in the second quarter of 2022, the venture debt market saw the second-largest total value of loans in the past decade. Despite rising interest rates, over $30 billion in loans were provided to US-based VC-backed companies in 2022 (Figure 1), indicating a continued appetite for debt. SVB, being one of the largest venture lenders, exiting the market will create a gap for technology companies seeking to raise debt. It remains uncertain if other venture lenders will step forward to fill this void, especially for companies with undrawn SVB lines.

Figure 1: US venture debt activity – fourth consecutive year venture debt surpasses $30 billion in value. (Source: PitchBook)

So, who is stepping up to fill this gap left by SVB? In the US, First Citizens BancShares (Nasdaq: FCNCA) based in Raleigh has agreed to acquire SVB. This acquisition will position First Citizens as one of the top 15 banks in the US, and the 17 SVB branches will operate as “Silicon Valley Bank, a division of First Citizens Bank.” In Europe, HSBC has acquired SVB UK, which reported a profit before tax of £88 million for the financial year ending December 31, 2022. With this acquisition, HSBC aims to strengthen its commercial banking franchise and enhance its ability to serve innovative and fast-growing firms, including those in the technology and life science sectors, in the UK and internationally. This acquisition is part of HSBC’s ambition to become the tech bank of choice, as evidenced by its announcement in June 2019 to set up an $880 million technology fund to identify promising companies in southern China’s Greater Bay Area.

Reports indicate that former SVB employees have joined JPMorgan Chase, the largest bank in the US, in recent years, attempting to transplant their Silicon Valley network and investment expertise. During the SVB crisis, JPMorgan was seen as the biggest and safest bank in America by tech investors and entrepreneurs, and it is estimated that up to 90% of those who previously banked with SVB have since moved part or all of their accounts to JPMorgan, according to informal tallies shared by US VCs.

Additionally, there are existing US private credit players such as Hercules and TriplePoint, well-known names in growth and venture debt financing, that can potentially benefit from the SVB void to increase their market dominance. Hercules, with a track record of 18 years in venture and growth stage lending, has committed over $16 billion in capital to venture and institutionally-backed growth companies. Similarly, TriplePoint, an experienced venture lender, has overseen more than $9 billion in leases and loans to over 3,000 leading venture capital-backed companies.

With the increasing demand for venture debt, the venture debt market has become more lender-friendly. Overall, rates have risen and spreads have widened, allowing lenders to negotiate better covenants, and warrants have returned to debt term sheets as well. In the past, some lenders held back from warrants when company valuations were inflated and investors competed fiercely for deals, but the circumstances have changed. Lenders now see opportunities in recapitalization rounds, where having new equity is advantageous, and penny warrants do matter due to the longer timespan. 

However, the repercussions of SVB’s decline could result in higher capital costs and tighter cash flows for startups, particularly those based in the US that have relied on SVB’s credit lifeline. As the largest and one of the most experienced venture debt lenders offering attractive rates to startups, it remains to be seen if the likes of First Citizen Bank and HSBC, or even JP Morgan can rise to the occasion.

In fact, recent insights from the Venture Debt Conference (March 2023, New York) via Pitchbook (reproduced below) confirm that while there have been no fundamental shifts where venture debt is concerned, the continued liquidity crunch coupled with the increased demand for venture debt will impact positively lending terms amidst a more realistic fundraising environment.


Pitchbook Analyst Note from the Venture Debt Conference (10 April 2023)

  • The use of venture debt has gained in popularity as many startups look to remain private longer and seek creative forms of financing that minimize dilution.
  • The collapse of SVB highlighted the importance of liquidity and the need to have cash on hand.
  • A frozen exit environment observed since the start of 2022, along with cooling fundraising figures, has created a liquidity crunch in private markets. This liquidity crunch and the exit of SVB creates a unique opportunity for smaller private credit players to take up market share.
  • Increasing levels of capital demand relative to supply will allow venture debt lenders to increase debt pricing.
  • While credit underwriting has not changed much fundamentally, shifting valuation paradigms will renew the importance of taking a hard, realistic look at growth and profitability outlooks.


Impact of SVB’s Collapse on Venture Debt in Asia

Over the last decade, there were two major forays into India and China as SVB sought to expand its overseas footprint. In 2008, SVB formally launched a venture lending operation after having opened offices in Bangalore in 2004 and Mumbai in 2007. However, 7 years later, SVB sold its venture debt arm to Singapore’s Temasek who renamed the entity Innoven Capital India, part of the Innoven Capital Group.

While SVB retreated from India, it subsequently set up a joint venture in China with Shanghai Pudong Development Bank. SPD-SVB was launched in 2012 to help Chinese startups do cross-border business with the US and facilitate capital raising across both shores. This JV was jointly owned by both banks but operating with its independent balance sheet. It is reported that SPD is now considering acquiring the SVB subsidiary in China.

In Southeast Asia, while market talk was that SVB was keen to understand the venture debt landscape in the region, no concrete expansion or lending took-off here. Taking a leaf out of its China and India expansion challenges, SVB perhaps recognized that it might have been a relatively large undertaking for it to attempt to build an organic venture debt business in Southeast Asia and instead chose to mostly co-lend with reputable venture lenders active in the region.

Given its lack of presence in the region, SVB’s collapse has not had a significant impact in Asia as Asian start-ups did not have any real direct exposure to SVB. On the flip side, the collapse did spur many parties to reconsider their corporate and personal banking relationships. At its 1Q’2023 AGM, DBS CEO Piyush Gupta mentioned that Singapore’s largest bank has benefited from inflows amounting to a “few hundred million” in the aftermath of the collapse of SVB given the perception that DBS and Singapore were perceived to be “safer” banking havens.

Figure 2: US VC deal activity (Source: Pitchbook)

Startup valuations are also retreating with mid to late-stage companies facing mounting pressure to justify high valuations while seed-stage deals have seen valuation moderately increase. ‘Tourist’ investors who joined the flurry of VC investing and injected capital into startups at eye-popping valuations are taking a more cautious view of deploying more capital into this sector.

The recent funding trend should not be used as a yardstick to measure the demand for innovative solutions to the world’s pressing challenges. Technology remains critical in addressing issues such as climate change, financial inequality, aging populations, and healthcare, which are projected to worsen in the coming years. As a result, sustained investment in innovative technologies is essential. Long-term venture investors with multiple funds can breathe a sigh of relief, knowing that the demand for their expertise and resources will remain high in addressing these challenges.

Going forward, startups will also need to recalibrate expectations. The liquidity crunch will add another layer of difficulty for venture-backed startups looking to raise equity rounds amid the ongoing macroeconomic headwinds. The days of limitless capital to fund “growth-at-all-cost” are no longer there. Venture investors are actively seeking out startups that can demonstrate profitability, and startups must adjust their strategies accordingly. Today’s startup pitches highlight a low burn with a long cash runway – redefining the metrics of an attractive startup to a venture investor.


The House View is reproduced from Genesis’ Limited Partners Quarterly Update. The content in this article is meant to be informative and for general purposes only. It is not and shall not be construed as investment advice.


The technology industry has been one of the most dynamic and fastest-growing sectors of the global economy in recent years. 2022 was a tale of two halves. The first half of the year (and even into Q3) continued on a positive note and benefited greatly from the COVID-induced growth on the user and innovation front. Globally, startups benefitted from the preceding year of funding strength which saw investors plough $621 billion into startups globally, including $20+ billion record funding for Southeast Asia startups. 

Towards the second quarter of 2022, we surveyed our portfolio founders on the fundraising environment and business outlook. A clear majority of them were optimistic about the future, observed business growth but were already noticing the slowdown in fundraising. Amidst these uncertainties, three of our portfolio companies Deliveree, Believe, and Trusting Social raised approximately $180 million of funding (April to June 2022).

Source: CB Insights State of Venture 2022 Report


As we rolled Into the second half of 2022, and certainly more towards Q4, a new reality set in for the tech industry clouded by an array of challenges ranging from economic uncertainty, market volatility, geopolitical tensions and reverberating ripples from the pandemic. Venture investors slowed their pace of investing, due diligence took longer, valuations retreated, and we started seeing signed term sheets being delayed or even revoked. Round sizes also began shrinking and later stage startups struggled to raise growth capital while holding on to lofty valuations set during their prior fundraising rounds. Funding for tech companies globally declined to $415 billion, -35% YoY but remained healthy compared to pre-pandemic levels. 


According to Carta and as a benchmark on valuation, 22% of US venture-backed companies in the US, both private and public, reduced their valuations in Q3 2022, nearly tripling year-over-year. Meanwhile, as the maxim goes, “flat is the new up” with 34% of companies witnessing a rise in their valuations — the lowest increase in five years. 

While the weakening fund raising environment became more evident as the year progressed, robust fundraising in the first half of the year more than compensated for the slowdown in the second half of the year with 887 funding rounds totaling US$28.8 billion in 2022 (compared to $25.7 billion raised in 2021), according to a TechinAsia report.

Referring to a joint DealstreetAsia and Enterprise Singapore report, Singapore-headquartered startups closed 517 deals in the first nine months of 2022 raising $8.11 billion, a little shy of the 487 deals and $8.28 billion raised in the same period of 2021, and with less dealmaking as the year prior.


VCs Prefer Early Stage, Late Stage Deals See Declining Investment Interest

Investment statistics from the earlier report also indicate VC preference towards early stage deals, which are defined as seed through Series B rounds. Late stage are attributed to Series C and above rounds. From the graph below extracted from the DealstreetAsia and EnterpriseSG report, investors have shifted their investment dollars into a larger number of smaller, earlier venture deals. The median size of seed rounds have doubled from $1.2-1.5 million in 2021 to $2.5-3.0 million in 2022. For later stage deals, the report also highlighted a contraction of deal value for Series D and E companies by 30-50%.

In the United States, startups seeking late-stage funding are failing to attract investors as dour sentiment in the public markets and dull exit conditions make it tougher to justify higher valuations. As valuations slip to reasonable levels and startups begin to trim operating expenses to get closer to cash or EBIDTA positive levels, they may once again start to look attractive to venture and PE investors who are keen to deploy their fund capital to work.


M&As & IPOs

We observed a notable rise in private-to-private mergers and acquisitions, as publicly-listed big tech companies saw a steep decline in their share price and valuation which in turn affected the SPAC and IPO listing opportunities. Completed venture-backed acquisitions in the first three quarters of 2022 totalled $81.7 billion, according to PitchBook data, down 40.7%, from $137.8 billion in the same period the year before. No significant venture-backed tech startups went public. In total, IPO deal proceeds plummeted 94% in 2022 — from $155.8 billion to $8.6 billion — according to Ernst & Young IPO report. Looking at 2023, there is an air of optimism that the IPO drought will “un-thaw” and favorable market conditions will return to allow the growing pipeline of IPO filings waiting to list – including Instacart (US), Vinfast (Vietnam), Tiktok (China), Stripe (US) and Epic Games (US). 

On the M&A front, Microsoft reportedly acquired Fungible, a Santa Clara maker of data centre chips and storage device for $190m, about $134 million less than Fungible had raised in funding since its launch. Closer to home, according to a Tech in Asia report, Singapore-headquartered Amplify Health – a joint venture between AIA Group and Discovery Group – has announced its acquisition of AI-powered data analytics firm Aida Technologies. GoTo Group, the Indonesia-based tech giant, has acquired Swift Logistics Solutions for 583 billion rupiah (US$38 million).



A year in review would be incomplete without mention of the events that took place in the crypto space which was rocked by high-profile scandals through the year. Terra Luna for example, a cryptocurrency that was launched in 2019 as a stablecoin pegged to the U.S. dollar, witnessed a crash of its Terra (LUNA) crypto token in May 2022 from $120 to $0.02, a 99.9% correction. Forbes Digital Asset estimated that nearly $60 billion was wiped out of the digital currency space. 

Three Arrows Capital (3AC), a crypto hedge fund founded in Singapore and believed to be managing around $10 billion in crypto assets, incurred significant losses due to its staked Luna position. 3AC has since filed for Chapter 15 bankruptcy proceedings in the US Bankruptcy Court for the Southern District of New York to protect its US assets from creditors. And this triggered a contagion of Chapter 11 bankruptcy involving Voyager, BlockFi, Genesis Global and Celsius who had dealings with 3AC. And just before the year ended, the crypto industry experienced a Black Swan event that saw crypto exchange FTX valued at $32 billion based on its most recent funding round declared bankrupt. FTX Exchange was the world’s third largest cryptocurrency exchange specializing in derivatives and leveraged products. News around FTX’s leverage and solvency involving FTX-affiliated trading firm Alameda Research triggered a liquidity crisis when FTX’s customers demanded withdrawals worth $6 billion. FTX Token (FTT) is a utility token that provides access to the FTX trading platform’s features and services. The value of FTT fell by more than 80% within two days.  The crypto industry is still reeling from a brutal 2022, having lost over US$2 trillion of its value throughout the year. Crypto companies still managed to raise a total of US$21.3 billion in funding in 2022, down 42.5% from the previous year.


Recalibration in 2023

The general consensus is that 2023 will remain challenged but with green shoots on the horizon. Negative macro conditions are set to continue into 2023 – sustained inflation, raised interest rates, Russia v Ukraine, China-Covid slowdown etc. However, there has also been positive news flow on many of these fronts in the past weeks (e.g. inflation levelling off; China emerging quicker than expected from Covid-slowdown, China tech reawakening etc). 

Taken together, and as it relates to the tech industry, it seems 2023 will provide the backdrop for a healthy recalibration period for startups globally. In Southeast Asia, for example, where most founders have not yet experienced a significant market downturn, this has been (and will continue to be) an opportunity for founders to adjust internal KPIs towards a more sustainable growth and fundraising future. Creativity loves constraint and we believe that great startups, with solid fundamentals, will emerge winners in a tight operating and funding environment.

Cash is king. VCs are encouraging their portfolio companies to conserve cash and extend their cash runway into 2024 so as to be able to operate through some of these macro headwinds. To that end, it’s worth noting that the companies in Genesis Fund I Portfolio have a weighted average cash runway of approximately 17 months this quarter (up from 13.5 months in Q3 2022).  

Profit before growth. Founders are expected to be more disciplined around spending and investors are edging these startups to turn “profitable”, the definition of which is wide, but in these times has come to prioritise a meaningful and sustainable business model. 

Talent stocking. Hiring exceptional talent used to come at a premium but with many startups downsizing, startup founders can now hire more prudently with less pressure on the P&L. In Southeast Asia, it’s been reported that retrenched executives from tech companies (and new job seekers) are actively in the market looking for opportunities but with more modest salary expectations. 

Dry powder. Venture firms have continued to raise record capital, even as startups received far less money than they did in 2022. Dry powder was estimated to be as high as $1.3 trillion globally for private equity and $580 billion globally for VC. While we do not expect VCs to invest at a pace comparable to 2021, there is pressure stemming from fund size, duration to deploy and the need to put capital to use. As previous downturns have clearly shown, investors with dry powder will find it a rewarding time to deploy capital, amidst more reasonable valuations and the ability to set better deal terms. 


2023 Hot VC Target Sectors 

January is a hotbed for new tech innovation unveiled to consumers through the annual Consumer Electronics Show held in Las Vegas USA. The 2023 show is focused on a number of areas, including the metaverse and Web3, digital health, sustainability, automotive and mobility, and human security for all. There was strong participation from Asia which include those from South Korea, which number more than 500 and include the likes of Samsung, SK, Hyundai Motor and LG, while just under 150 exhibitors hail from Taiwan. We highlight some interesting technology showcased at CES:

    • Sony teamed up with Honda to exhibit a new brand of electric vehicle called the Afeela. The Afeela logo appears on a narrow screen, or “media bar,” on the vehicle’s front bumper. This can also interact with people outside the vehicle and share information such as the weather or the car’s state of charge. Unlike the car Sony showed off at CES 2020, this car is expected to hit the North American roads in 2026. Japan and Europe will follow.

    • The battery-operated WasteShark by the Dutch firm RanMarine Technology is an autonomous surface vessel designed to remove algae, biomass, and floating pollution such as plastics from lakes, ponds, and other coastal waterways. At least 14 million tons of plastic end up in the ocean every year, and plastic makes up 80% of all marine debris found from surface waters to deep-sea sediments. Marine species ingest or are entangled by plastic debris, which causes severe injuries and death.
    • Canadian-based eSight Eyewear plans to display a headset designed to help people with visual impairments such as age-related macular degeneration (AMD). AMD is an eye disease that can blur your central vision. It happens when aging causes damage to the macula — the part of the eye that controls sharp, straight-ahead vision. The macula is part of the retina (the light-sensitive tissue at the back of the eye). AMD happens very slowly in some people and faster in others. If you have early AMD, you may not notice vision loss for a long time; hence the importance of regular eye exams. Once the user puts on the device, they will be able to see distinct features such eyebrows, mouth and eyes.
    • Singapore-based Igloo Company will show off its second generation of smart padlocks at CES, including a slimmed-down fingerprint-based model and another featuring enterprise-grade security. The latest smart padlocks will ship in the spring. The keypad-based Padlock 2 builds on the company’s original Bluetooth-enabled smart lock by manufacturing it to military standards, including a hardened steel case. The Padlock 2 gets eight months out of a single charge of its lithium battery (the original relied on disposable batteries), and its shackle can withstand up to 15kN of cutting force, 5kN of pulling force, and 100Nm twisting force.
    • And last but not least, there has been immense interest in generative AI since ChatGPT came online and mesmerised consumers with its ability to provide real-time chat responses (see below). In 2019, Microsoft invested $1 billion in OpenAI, the tiny San Francisco company that designed ChatGPT. Microsoft is now poised to challenge Big Tech competitors like Google, Amazon and Apple with a technological advantage as it is rumoured to be in talks to invest another $10 billion in OpenAI. See the picture below (right column) where we tested Open AI’s ability to write a short paragraph on electric vehicles. Try it at


Tech has been through a rocky patch so far this year, what with the gyrations of the stock market, delayed IPOs, depressed valuations, renegotiated term sheets, and layoffs. How does this align with what we’re seeing on the ground in the tech and venture ecosystem in Southeast Asia? 

Our observations in the first half of the year are that investors continued to bankroll their fundraising activities and pressed on with new and follow-on investments into Southeast Asian startups despite current market conditions. Surprisingly, as at the date of this report, the pace of investments coupled with ever-growing deal sizes suggest an inverse correlation to the market correction.

For example, three Genesis portfolio companies announced strong follow-on Series C rounds in the first half of 2022, registering between a 1.78x to 2.92x increase in their enterprise value. In April, Sequoia-backed Trusting Social, an impact-driven Fintech focused on creating unique, personalised financial credit scores for the unbanked and underbanked individuals, announced its initial close of $65 million led by Vietnam’s consumer-focused conglomerate Masan Group.  

A month later, Believe, a direct-to-consumer (D2C) startup specialising in consumer beauty products and backed by Accel India, raised a $55 million Series C financing led by Venturi Partners.  In June, Deliveree closed its $70 million Series C led by Gobi Partners and SPIL Ventures (the CVC arm of Salam Pacific Indonesia Lines). Deliveree has been focused on creating a dynamic marketplace for the trucking industry across Indonesia, Vietnam and Philippines, matching independent truck drivers and customers with cargo. 

And this was on the back of various other deals announced publicly. Indonesia’s Fintech Flip raised $100 million Series B (Tencent, Block, Insight); eFishery $100 million Series C (Temasek, Softbank, Sequoia);, Bibit $80  million (GIC); Astro $60 million Series B (Accel, Tiger Global); Singapore’s ShopBack $80 million Series C (Asia Partners); BioFourmis $300 million Series D achieving unicorn status (General Atlantic); Neobank Stashfin $270 million equity/debt Series C (Uncorrelated Ventures); Neuron Mobility $43 million Series B (GSR Ventures, Square Peg); Multiplier $60 million Series B (Tiger Global, Sequoia); Thailand’s Fresket Series B $23 million (PTT Oil, Openspace) and many more.

We also observed a continuation of Seed and Series A funding closes for startups across Southeast Asia. For example, Eratani, an Indonesia-based agritech startup raised a $1.6 million Seed round while Li Ka-Shing’s Horizons Ventures co-invested $7.5 million into Ilectra Motor Group, a 2-wheeler EV targeting the Indonesian market.


A Return to Profitability With Leaner Companies

Growth, especially growth at all costs, requires significant capital to take market share now and worry about profitability later. More often than not, customers and revenue acquired in such fashion are far from ideal, leading to higher churn rates, lower retention rates, and driving up costs even further. Raising too much capital at early stages can result in undisciplined spending leading to layoffs and other painful reactions when the burn rate skyrockets and future funding becomes scarce. 

It is sobering to see news on startup layoffs across US and Asia including Southeast Asia (here are some dedicated websites tracking these statistics) and casualties such as Kaodim, an 8-year-old startup in Malaysia, which means “take care of it”, that shuttered its services as Covid halted the home-services industry. Softbank Asia’s Propzy, which bagged a $25 million Series A in 2020, dissolved a major part ofits business and reportedly laid off 50% of its employees.

On the flipside, good founders understand the value of a long-term mindset and the importance of building startups with the right values and structure so they can grow into lasting companies. The “exuberant climate” for start-ups has turned and investors are demanding to see financial metrics that are in line with the company’s stage of development. Therefore, it is prudent for start-up leaders to make adjustments in order to enhance operational efficiency and to focus funding resources to achieve important key performance indicators so as to reach the next funding round.

And there are certainly opportunities for resilient founders and companies in a market correction. As with prior downturns, we believe there is a correlation between economic cycles and the formation of category-defining companies. Companies such as Uber, Airbnb, Square, WhatsApp, MailChimp, and Adobe were all founded during recessionary periods. Moreover, today’s founders have an arsenal of tools ready for them to launch their disruptive companies in a cloud-based world with less capital required for growth and the ability to operate with no hard assets. And venture capitalists are still hunting for startups that could well become tomorrow’s category-defining companies.

A great example is Deliveree. Genesis visited Deliveree at its South Jakarta office in June to catch-up with Tom Kim, Deliveree’s Chief Executive. Tom was wrapping up Deliveree’s Series C fund raise and shared how Deliveree had been keeping a tight rein on hiring and marketing expenses which is why the company was able to garner an industry-leading gross margin in the mid-teens, compared to better-funded competitors, some of whom have low, single-digit to negative gross margins.


Brisk Pace of M&A Transactions 

A “buyer’s market” has emerged as deep-pocketed acquirers pick up targets of good value. Acquiring targets in order to bulk up seems to be more attractive as the IPO window remains closed, keeping exit valuations depressed. 

For example, India’s Pine Labs acquired Southeast Asian startup Fave for up to $45 million. Singapore’s Funding Societies announced it is acquiring digital payment provider Cardup to expand its payments offering. 

In fact, Genesis has been receiving requests from founders who want to strengthen their balance sheet with venture debt for the sole purpose of acquisitions – a smart way to raise lower dilutive capital and add breadth and depth to their business.

We expect the pace of M&As to gather further in coming quarters given the conversations we have been having with founders who want to leverage on venture debt to buy up smaller competitors.


Abundant Dry Powder Globally For Venture Capital Investments

Preqin estimates there is more than $497 billion of global venture capital dry powder as at May 2022 (dry powder being the amount of capital that has been committed to funds minus the amount that has been called by general partners for investments).

Quarterly funding levels in 2022 remain above quarterly funding levels in 2020 and prior, according to CB Insights (July 2022) with $108.5 billion raised across 7,651 deals. This is despite the fact that quarterly funding has slowed in 2022 amidst tightening liquidity and a global meltdown in technology stocks.

US VC fundraising tops $120 billion for the second consecutive year, according to Pitchbook. A strong showing from established managers in the first half of the year has pushed capital raised to a record pace. These managers have closed 203 funds worth $94.7 billion through the first six months of the year. Already, 30 funds have closed on at least $1 billion in commitments, eight more than the previous full-year high of 22 recorded last year. While this activity is most likely a continuation of momentum from 2021, it’s still an encouraging sign around the level of capital availability through the uncertainty that the next few years may bring.

In Southeast Asia, fund investors have increased allocations to the Southeast Asia venture corridor. Southeast Asia and India-focused VC funds have raised $3.1 billion in the first 5 months of 2022, eclipsing the $3.5 billion these funds raised in all of 2021, according to a Nikkei Asia report in May 2022.

Established Southeast Asia players like Sequoia, Accel, Jungle and Mass Mutual have raised larger, multi-stage funds. Sequoia raised $2.85 billion, which includes its first dedicated fund for Southeast Asia with a pool of $850 million. And despite the shaky short-term outlook in tech, Sequoia remains optimistic about Southeast Asia’s start-ups, as do new entrants White Star, Antler, and Altara. From our conversations within our network of General Partners (GPs), it is evident that companies that can demonstrate financial discipline and prioritise healthy topline growth with manageable bottom-line expenses will be rewarded in this investment climate.

While GPs believe that the pace of investment may slow compared to 2021, this does not also mean that investing into new deals will come to a halt; rather the deal selection and diligence process will take longer as GPs will now insist on observing certain metrics and may choose to sit on the sidelines while monitoring progress.

On the topic of valuation, we also notice that GPs have already lowered their WTP (willingness to pay) and this is a common theme across funds globally. Seed and pre-A startups are likely most impacted and may see as much as 50 – 75% reduction in valuation as investors prefer not to take very early-stage risk. Series B, C and D startups remain attractive for GPs to continue investing in given their life-cycle and more reasonable enterprise values, and as highlighted above, there remains a barrage of early growth startups that have raised $50-200 million in a single round of financing with little to no discount to valuations. It also appears that funding has shifted away from late-stage pre-IPO mega deals which has resulted in the declining minting of new unicorns into the tech sector (which mirrors the global phenomenon).



While we recognise this will be a tough period for investors and companies alike, we equally believe that this will be a rewarding time for investors and GPs who have stuck to their investment thesis of backing mission-driven founders who are building sustainable businesses and aiming for market leadership positions.

The medium to long-term outlook of venture capital investing will improve as valuations and investment pacing return to more sustainable levels. And not forgetting the abundant VC dry powder waiting to pounce on attractive deals in the shorter term.

All of this should also lead to more robust dealflow for venture lenders like Genesis. Investors are now more focused on more sustainable companies with a path to profitability, healthy gross margins, lower burn, more reasonable valuation ascents etc. These are the very companies that Genesis has always invested in. In fact, in the last 2 quarters, Genesis reviewed more than $100 million of deals, and since inception, our total dealflow has crossed the $1 billion mark, which is a significant milestone.


A bull run for venture capital funding in 2021

Global technology startup funding clocked in at a record $621 billion in 2021. Southeast Asia startups raised almost $25 billion marking its coming of age as an important, albeit young, tech corridor. In the first quarter of 2022, as macroeconomic and geopolitical conditions continue to evolve in a melting pot of spiralling energy costs, inflation, and interest rates coupled with a war in Europe, how will the rest of the year play out?

Data from Crunchbase seems to indicate continued strength as global startups raked in $61 billion, the 4th month above the $60 billion mark in the last 12 months. Close to $3 billion was invested globally at seed stage. Startup investors deployed another $18 billion at the early stage and just over $40 billion at the later stage and technology-growth stage. This is amidst a changing landscape where global VC funds are raising record mega funds. Andreessen Horowitz closed on a host of new funds this year, with its eighth fund at $2.5 billion, its fourth bio-related at $1.5 billion, and a third growth fund at $5 billion. Fintech specialist Ribbit Capital closed its seventh fund at just under $1.2 billion, marking its first billion-dollar fund.

Source: Crunchbase (4 February 2022)


While the figures for Q1 2022 Southeast Asia funding are yet to be released, funding news throughout the first three months of the year seems to suggest a good quarter for the region, especially with regard to smaller deal sizes of below $50 million.

Sequoia-backed Multiplier, a startup that enables companies to hire and pay remote workers while complying with local laws, raised $60 million at a $400 million Series B valuation with New York-based Growth Equity Tiger Global as its lead. This came barely 3 months after the company’s Series A of $13.2 million. Tiger Global, together with Cathay Innovation and Sequoia, wrote a cheque to Singapore-based AI Rudder, the leading voice artificial intelligence start-up, leading the $50 million Series B funding – less than 6 months after the company wrapped up its US$10 million Series A in November 2021. Tonik Digital Bank targeting Philippines unbanked consumers closed a $131 million round of Series B equity funding in February 2022 led by Japan’s Mizuho Bank. A VC syndicate led by Vertex and includes Prosus Ventures, AC Ventures, and East Ventures injected $30 million in Series A funding into Indonesia-based fishery and marine platform Aruna. Who would have imagined a Southeast Asia Series A round ballooning to $30 million 12 to 24 months ago!

In parallel, investors have raised concerns about the rapid pace of deals and high valuations. Having said that, it could take time for a correction to reveal itself on a market-wide scale. VC and private equity firms are sitting on immense piles of cash earmarked for startups, and competition for deals remains high. The deal-making pace of Q2 2022 will dictate the direction of venture funding for the rest of the year.


Geopolitical risk threatens to trip up venture capital’s global stride

The venture capital model is predicated upon fast growth and rapid scaling. Adding to the lingering pandemic woes is a crucible of geopolitical risk involving the world’s largest nations US, China, and Russia. For VCs, these geopolitical risks can make it more difficult to raise capital from LPs from sanctioned countries. Increased and enhanced due diligence will be necessary to avoid raising capital from sanctioned sources. Speaking to entrepreneurs in Singapore, Indonesia, and Malaysia, we observe that Southeast Asia startups have little to no dealings with Russian investors. However, some startups we spoke to have reported various delays in their supply chains, especially for parts that originate from Europe.

A Reuters report in March 2022 highlighted that global investors have pursued a re-allocation strategy into crypto and blockchain and away from real estate and bond funds, seeking exposure to a sector they believe could withstand the fallout from the Russia-Ukraine conflict. Venture capitalists invested around $4 billion in the crypto space in the last three weeks of February 2022. Bain Capital Ventures, a unit of private equity firm Bain Capital, for instance, announced in March 2022 that it is launching a $560 million fund focused exclusively on crypto-related investment.


Rising Inflation, Rising Interest Rates: A Threat To Venture Capital And Entrepreneurship?

For the first time since 2018, the Federal Reserve lifted the target for its federal funds rate by a quarter of a point, in order to battle rising inflation, thus signalling the end of a long-lasting pool of cheap capital for companies. Based on historical rate hikes globally, interest rates when they do change are expected to do so gradually. Three or four rate increases by the end of this year could add up to 1% or more to base interest rates in the US.

While higher interest rates will likely lead to a pullback in liquidity, this might have a balancing effect in that it may prevent market pricing and valuations from being driven up to unsustainable levels over the next few years.

The reduction in liquidity may also push VCs and founders to seek alternative forms of capital financing, including venture debt, which will in turn come at higher borrowing costs with venture lenders mirroring (or at least partly mirroring) any interest rate increases in the market at large.

There are two types of companies that need to be careful: companies that are “all tech and no revenue” or “all revenue and no tech”. The critical question is whether these companies are indeed solving real problems for people in a sustainable manner.

Further, such a liquidity pullback may have a disproportionate impact on later-stage technology companies that are pre-IPO (as we witnessed in Q1 2022 in the US). In this scenario, founders and investors will likely delay major liquidity events in order to prevent valuation discounts, given the recent poor performance of many newly listed technology companies.

It’s not all doom and gloom, however. Many technology companies that had a funding event in the past 12 months have likely raised more cash than needed. These companies will likely have to cut expenditures with the aim of extending their cash runways.

Companies can also raise extension rounds, offering shares at the same price as the most recent funding round. Extension rounds were common at the start of the COVID-19 pandemic as they allowed investors to double down on promising companies without having to face steep valuation uplifts amidst an uncertain trading environment.

Many companies with healthy cash flow turn to venture debt and growth debt to shore up balance sheets. A prime example in 2020 was AirBnB which turned away from equity in favour of $2 billion debt at a 10% interest rate from Silver Lake, shoring up its balance sheet despite having close to $4 billion in cash reserves already.

And not to forget that such moments can offer a silver lining for strong founders; market share can be hard to grow when times are good and competition fierce, and perhaps more easily gained during a downturn provided the company is well-financed with a strong team in place.

John Chambers, Chairman Emeritus of Cisco and founder and CEO of Palo Alto’s JC2 Ventures, shared his views that startups are nimble and flexible which works in their favour, highlighting examples of how Cisco and Amazon had trod on similar paths to becoming industry leaders.


Tight Labour Market

It is likely that the Southeast Asian tech ecosystem is entering a golden phase as the tech market continues to grow strongly over the years, speedbumps notwithstanding. Global and pan-Asian tech giants have recognised the region as a strong potential growth engine as part of their global ambitions. As these giants expand in Southeast Asia, the competition to attract and retain talent is becoming a challenge among startups and their larger counterparts. Startups are finding it tough to hire new and replacement employees and expensive to compete with their better-funded, larger, global competitors.

Speaking to regional startup founders and CFOs, we observed a few notable trends. Product, Technology, and Sales are the most challenging positions to fill. There is a growing trend of candidates who accept job offers but do not turn up for work on Day 1. Their reason: they have been offered up to 50% or even 100% more in salary to jump ship. Candidates are also asking for sky-high salaries and are attracted to “frontier” tech like crypto and Metaverse companies.

Startup CFOs tell us that they try to counter these trends with strong and regular internal communications and frequent external initiatives aimed at potential new applicants. Social media, such as LinkedIn, is a valuable tool to grow the employer brand influence of a company. A startup we surveyed is launching what it calls a “Craftsmen Program” to retain team members who have strong coding skills by providing them with visible career path progressions. Last but not least, the delayed nature of the ESOP (employee stock option plan) vesting schedule does also help with retention.


The role of debt financin

2008 (GFC), 2020 (COVID-19) and now 2022. Bumpy years where prudent leadership teams were/are eager to hold on to more cash and shore up balance sheets.

Debt financing can help companies prolong the life of expensive equity already raised. Having an extra 20% or 30% cash cushion gives leadership teams more options by extending the company’s runway, accelerating growth, and staying ahead of the competition.

As for rising interest rates, venture lenders will continue to price in risk and mirror market movements. Where bank rates edge upwards venture lenders are expected to generally mirror that movement by way of interest rate adjustments and even adjustments to warrant option coverage, all with the objective of risk-adjusted pricing. In fact, increased interest rates notwithstanding, our conversations with other regional venture debt operators point to strong deal flow in H1 2022. From Europe to India, and in Southeast Asia considering our own deal flow pipeline, indications are positive that a strong lending pace will continue into the rest of the year. However, lenders are also more cautious of who they lend to and will necessarily tighten the qualification requirements and their credit lens.


Genesis is exploring various deeptech startups in healthcare, energy storage, sustainable energy, and smart mobility. We believe that beyond the first wave of Southeast Asia startups that are disrupting retail, commerce, and finance for consumers and businesses, the next wave of disruptive startups is already in their early growth phases. For instance, plant-based to lab-grown food companies; sustainable farming and energy; and healthcare technologies are leveraging cheaper, faster processing chips to develop home-based devices that can monitor individuals outside the clinical environment.


Battery Technologies That Could Power The Future

Cheaper, denser, lighter, and more powerful. These are the attributes of a futuristic battery pack that every device maker wants. From iPhones to laptops and electric vehicles (EVs), a battery that can store energy for use continuously without having to charge for at least 24 hours would be a breakthrough. 

At CES 2022, HyperX showcased the Cloud Alpha Wireless, claiming the wireless headset can operate for 300 hours, (or more than 12 days of use.) Avid gamers would be thrilled to have this device. Range anxiety is an issue that all car manufacturers are working hard to resolve; and the Mercedes-Benz Vision EQXX concept EV was unveiled with a claimed range of 1,000 km, packed with a 100kWh battery that is 50% smaller and 30% lighter. Current Tesla EV models can push the 600km range with additional specifications. With more EV models launching into mass production, would 2022 be the year that the EV tsunami comes ashore?


Entering The Metaverse Will Become A Necessity For Brands

For the uninitiated, the metaverse is an immersive virtual world that will serve as a form of the embodied internet. It is a general term most commonly associated with Mark Zuckerberg’s dream of migrating social media platforms into virtual and augmented realities.

Bloomberg shares that fashion and beauty companies are selling visions of metaverse makeovers, in which avatars get dressed and dolled up. Luxury brands like Gucci, Balenciaga and Burberry have been sketching and planning digital fits to adorn digital users. Louis Vuitton released an exclusive capsule collection that featured the League of Legends gaming universe, including special Prestige skins for the League of Legends Champion, Qiyana. PulpoAR will offer virtual makeovers. Other companies, like Procter & Gamble, are adding more subtle beauty experiences like BeautySPHERE, which walks users through the ingredients and processes used to make their cosmetic products.


Digital Twins in Healthcare

Digital twins of human organs and systems are a closer prospect, according to a Forbes article on The Five Biggest Healthcare Tech Trends In 2022, and these allow doctors to explore different pathologies and experiment with treatments without risking harm to individual patients while reducing the need for expensive human or animal trials. A great example is the Living Heart Project, launched in 2014 with the aim of leveraging crowdsourcing to create an open-source digital twin of the human heart. Similarly, the Neurotwin project – a European Union Pathfinder project – models the interaction of electrical fields in the brain, which it is hoped will lead to new treatments for Alzheimer’s disease


TeleHealth Could Be A Quarter of Trillion Dollar Industry

According to the HIMSS Future of Healthcare Report, remote healthcare and telemedicine have gone mainstream with the pandemic restricting people from going out. During the first months of the pandemic, the percentage of healthcare consultations that were carried out remotely shot up from 0.1% to 43.5%. Analysts at Deloitte say that many doctors and patients have shed their discomfort with video visits, setting the stage for their continued use post-pandemic. McKinsey is of the view that Telehealth could be worth $250 billion with the acceleration of consumer and provider adoption of telehealth and extension of telehealth beyond virtual urgent care in the US.

In line with the envisaged growth in remote healthcare and aging population demographics, new generation wearable technologies equipped with heart rate, stress, and blood oxygen detectors are needed to enable healthcare professionals to accurately monitor vital signs in real time at home. GE Healthcare is creating the next generation of patient monitoring with wearable sensors. In the future, light-weight, even printable technology could help in ensuring patients’ safety in recovery after medical operations. Monitoring technologies offering precision in performance could give healthcare officials new possibilities to monitor patients from afar.

Some of these technology trends may be available very soon and others will be very important in  the future as they begin graduating from R&D labs and enter the marketplace.  We hope to see more great tech become commercially ready as these will impact our lives and make us healthier people. Until 2023!


Southeast Asian ride-hailing and food delivery giant Grab raised $2 billion in debt [1] in Q1’2021 in what it said was the largest institutional debt in Asia’s technology sector, as the company expands its regional services. The five-year senior secured loan was upsized from the initial $750 million after the company secured commitments from international institutional investors. Just a year earlier, Grab raised $4 billion of equity from SoftBank and Toyota and added $500 million of debt [2] from debt investors.

While it may not be apparent at first, experts will suggest that debt becomes an increasingly important part of a startup’s capital structure as it grows. In many cases with late-stage companies, part of the reason is that the cost of debt is less expensive and dilutive than equity. Debt providers play a crucial role in providing startups’ first credit lines helping them to build their credit track record over time. Debt investors, including large growth debt fund and traditional financial institutions, begin to take comfort in a 10-year-old (or more) startup that now has historical financials and a level of credit-worthiness that these lenders can fall back on.

Grab was founded in 2012 and raised its first clip of debt financing in 2017. The company sought $2.5 billion of equity to fund growth of its ride-hailing service in Southeast Asia and tapped on $700 million in debt facilities from leading global and regional banks to expand its car rental fleet in Singapore and Indonesia, two of its key markets. In this period of time, venture debt had just emerged as a debt financing opportunity for early growth startups but the enormous debt quantum was out of reach for Southeast Asia venture debt players then.

Is this a one-off situation unique to Grab or are startups in Southeast Asia following the footsteps of raising larger rounds of debt financing as they grow? Let’s take a look at a few more examples.

Last year, Kredivo (an Indonesian digital lending and credit scoring platform) secured $100 million of debt facility, taking its total debt raise to $200 million in all. UnaBrands, a specialist that consolidates smaller e-commerce brands, raised $40 million in an equity and debt round that closed in May 2021. In Genesis’ portfolio, Matterport had chosen to go with venture debt to grow its business in Southeast Asia instead of taking equity dollars that would have meant further dilution for existing shareholders. Apart from the fundamentals and the fit, it certainly helped that Matterport’s Chief Financial Officer, J.D. Fay, was a seasoned executive who has leaned on venture debt throughout his career.


Expanding The Spectrum of Debt Financing: Early Startups to Growth Stage

In the US, three key private debt providers, Silicon Valley Bank, Hercules Capital and Triplepoint Capital have provided more than 30,000 [4] startups with debt at seed stage (debt size of $25K to $5m) to early stage ($1m to $25m) and later-stage companies ($1 to $50m). To give the reader a sense of the size of the market, Hercules Capital originated a record $1.5 billion worth of deals year-to-date (as at September 2021) annual total gross debt (including equity commitments). This sets a clear path for the “venture to growth debt” journey that a private debt provider like Hercules Capital has undertaken since it started venture lending in 2003.

Turning to Southeast Asia, the venture equity landscape only took off in 2015 with the early cohort of funds investing largely in Seed and Series A companies. Today some of these funds including Vertex [5] and Openspace [6] are already managing both early and later-stage investment vehicles, a natural investment progression given that their own portfolio companies and the rest of Southeast Asia startups continue to move up the development curve.

We believe this phenomenon will continue to play out in the private debt space in Southeast Asia. With SME loans and venture debt covering the early growth debt requirements of startups in the region, we are beginning to see growth debt players moving to cover the gap in the later growth stage. New entrants such as EvolutionX announced a $500 million fund that will write debt cheques of between $20 to $30 million per investment. As more startups graduate from early growth and prepare for pre-IPO funding, there will be more opportunities to inject growth debt into these companies.

The beginnings of this ecosystem maturation bodes well for lenders. Whether at the venture or growth end of the spectrum, an increased rate of lending opportunities (and with additional lenders) will lead to a more sophisticated marketplace of borrowers that better understand the merits of debt (venture and growth). Genesis will be well-placed to continue building on its strong position in the regional venture debt space while selectively looking at growth debt opportunities together with aligned co-lenders.


  1. Grab upsizes debut term loan to $2 billion on strong investor demand [link]
  2. Grab secures $500m syndicated facility for vehicle fleet financing [link]
  3. Kredivo Lands $100 Million For BNPL In Indonesia [link]
  4. Bloomberg: Meet Venture Capital’s Baby Cousin, Venture Debt [link]
  5. Vertex Growth to hit $330 million 2nd fund close [link]
  6. Openspace Ventures Closes Third Fund at Hard Cap of US$200M [link]
  7. Temasek, DBS launch $677m debt financing platform for tech firms in Asia [link]