Global Investment Slows in H1 2023, Despite Notable Deals and Fund Launches
The global investment landscape has seen a significant shift in the first half of 2023, with 87% of investors reporting increased fundraising difficulties and a 64% reduction in diligence and top-of-funnel activity. This slowdown has particularly affected the digital economy sectors, which have regressed to 2017 funding levels.
Despite these challenges, several notable deals and fund launches have taken place. Compannon, an Indonesian pet food company, secured an undisclosed investment led by East Ventures. Meanwhile, Leapmotor, a Chinese electric vehicle manufacturer, received EUR 1.5 billion (USD 1.59 billion) from Stellantis, with Stellantis acquiring around 20% of the company.
In the fund management sphere, Mandiri and Investible launched the Mandiri-Investible Global Climate Tech Fund. Kenanga Islamic Asia Pacific (Ex Japan) Total Return Fund and Java Capital's second fund, valued at INR 500 million (USD 6 million), also debuted. Looking back, venture capital firms and private equity institutions surpassed their 2017 investment levels in digital economy sectors in 2022, committing USD 15.7 billion.
Expansions and acquisitions have also been prominent. Temus, a Singapore-based digital transformation company, acquired Decision Science Agency and expanded to Hong Kong. Little Joy, an Indonesian D2C startup, completed its Series A funding round to enhance its offerings and address child malnutrition. Mitsui agreed to acquire a 12.69% stake in Axiata's digital and analytics unit for USD 58 million. Furthermore, EDBI established August Global Partners, a new multi-stage investment firm with USD 250 million in assets under management.
While the first half of 2023 has seen a slowdown in investment activity, particularly in digital economy sectors, notable deals and fund launches continue to occur. As investors navigate current challenges, the long-term prospects for these sectors remain promising, with several companies and funds continuing to grow and expand.
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