Merely having a unique product is insufficient for securing funding from cautious venture capital (VC) firms, who now prioritise investments in startups with a clear return profile. “What is your growth path to profitability?” is now the question that VC firms pose, said Stephen Bates, partner and head of Deal Advisory at KPMG in Singapore.
The decline in VC deals in 2023 mirrors the caution exhibited by investors. Data from GlobalData showed that last year, VC deals in Asia-Pacific fell 26.3%.
In 4Q23, the Asia-Pacific region also experienced a slump, with investment falling to US$18.8b, which according to KPMG is the lowest level since 1Q17.
“VCs that have invested in the past are a little bit more cautious around the companies that they are investing into. They are acutely conscious of making sure that the performance of these companies is tracking towards their plans in a relatively difficult economic environment which we're still facing,” Bates said.
This story is from the Issue 107 edition of Singapore Business Review.
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This story is from the Issue 107 edition of Singapore Business Review.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
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