The tech sector is currently facing massive hurdles, thanks to the rising interest rates, economic volatility and disappointing earnings results. Many startups in Southeast Asia, even the prominent ones, are still operating without profit. Sea Group and Grab are among them that keep on losing billions annually. These start-ups’ valuations are also being affected by it.
Sea Group, an e-commerce giant, now being valued at only $30 billion, from a value of more than $200 billion in 2021. Grab’s valuation has gone down too. Grab’s valuation last year was approximately $40 billion, but today the value has significantly down 69 per cent. GoTo made a headline in Indonesia this year. Its valuation of $28 billion was significantly down more than 75 per cent since it went public last April 2022.
Crunchbase recently reported that venture capital-backed start-ups raised only $369 billion for the first three quarters of this year, which is far less than last year’s achievement of $679.4 billion globally. The signal to go back to reality is here. Start-ups need to have a path to profitability. It is as simple as that.
