However, interest rates started to spike, and consequently, deal value and count fell significantly. This brought on the now-infamous “funding winter”. With venture capitalists (VCs) becoming more selective and prudent with their investments, start-ups were feeling the squeeze and started to shutter and lay off staff.
Joel Shen, partner at Withers KhattarWong, says the venture capital space is currently “right-sizing”.
Shen – who advises corporate and venture capital clients on cross-border investments, acquisitions and joint ventures, with particular experience in the Indonesian market – explains that the region’s venture capital deals tripled from 525 to 1,711 between 2015 and 2021, with the deal value peaking at US$18.1 billion in 2022. This was due to the shift towards online services caused by the pandemic and low interest rates, which remained close to 0% until the third quarter of that year.
