Startups in Southeast Asia feel the heat of economic slowdown, raising interest rates
The global economic slowdown in recent months has not left Southeast Asia’s startups unaffected, with hundreds of workers fired from some of the largest young companies in the region.
At least six tech companies have let go of their staff, including Singapore-based and NYSE-listed Sea Limited, the owner of e-commerce site Shopee, CNBC reported.
Tech investors say this is just the beginning of more job cuts in the region’s tech industry. As interest rates rise and economic uncertainty looms, companies are now being forced to focus on profitability instead of growing as quickly as possible.
Cheap venture capital drying up
Apart from that, cheap venture capital which used to flood the market and allowed companies to grow at any cost is becoming rare as investors are getting wary about potential returns.
Shopee has laid off workers from its food delivery and payment arms, as well as from its teams in Argentina, Chile and Mexico, according to chief executive officer Chris Feng.
Among other startups having terminated jobs is Singapore-based digital wealth manager StashAway which laid off 14 per cent of its total headcount of about 220 in end-May and June, according to a spokesperson.
Layoffs in Malaysia, Indonesia
Malaysian online shopping platform iPrice cut one-fifth of its workforce in June. The company said it had 250 employees before the layoff. Meanwhile, Indonesian education tech company Zenius let go of more than 200 employees, the company said in a statement.
Singapore-based digital currency exchange Crypto.com also laid off 260, or five per cent of its workforce, the report said. Jobs were cut across the Asia-Pacific, Europe, Middle East and Africa regions and the Americas.
JD.ID, the Indonesian arm of Chinese e-commerce site JD.com, has also cut jobs in order “to maintain the company’s competitiveness in the e-commerce’s competitive market in Indonesia,” a company official said.
Dozens of workers were also reportedly laid off from other Indonesian start-ups including e-commerce enabler Lummo and digital payments provider LinkAja.
Investing in a bear market
Still, there is hope that the storm on the market is only temporary. Most investors agree that Southeast Asia remains a fundamentally good region to bet on for startups, mainly due to the region’s growing middle-class population, high Internet usage rate and growing number of repeat start-up founders.
Some say that the current downturn may be a good time to pick out companies that are actually doing well and invest in them while their valuations are down in order to achieve a profitable exit when the market recovers – and most are sure it will.
The global economic slowdown in recent months has not left Southeast Asia’s startups unaffected, with hundreds of workers fired from some of the largest young companies in the region. At least six tech companies have let go of their staff, including Singapore-based and NYSE-listed Sea Limited, the owner of e-commerce site Shopee, CNBC reported. Tech investors say this is just the beginning of more job cuts in the region’s tech industry. As interest rates rise and economic uncertainty looms, companies are now being forced to focus on profitability instead of growing as quickly as possible. Cheap venture capital drying up...
The global economic slowdown in recent months has not left Southeast Asia’s startups unaffected, with hundreds of workers fired from some of the largest young companies in the region.
At least six tech companies have let go of their staff, including Singapore-based and NYSE-listed Sea Limited, the owner of e-commerce site Shopee, CNBC reported.
Tech investors say this is just the beginning of more job cuts in the region’s tech industry. As interest rates rise and economic uncertainty looms, companies are now being forced to focus on profitability instead of growing as quickly as possible.
Cheap venture capital drying up
Apart from that, cheap venture capital which used to flood the market and allowed companies to grow at any cost is becoming rare as investors are getting wary about potential returns.
Shopee has laid off workers from its food delivery and payment arms, as well as from its teams in Argentina, Chile and Mexico, according to chief executive officer Chris Feng.
Among other startups having terminated jobs is Singapore-based digital wealth manager StashAway which laid off 14 per cent of its total headcount of about 220 in end-May and June, according to a spokesperson.
Layoffs in Malaysia, Indonesia
Malaysian online shopping platform iPrice cut one-fifth of its workforce in June. The company said it had 250 employees before the layoff. Meanwhile, Indonesian education tech company Zenius let go of more than 200 employees, the company said in a statement.
Singapore-based digital currency exchange Crypto.com also laid off 260, or five per cent of its workforce, the report said. Jobs were cut across the Asia-Pacific, Europe, Middle East and Africa regions and the Americas.
JD.ID, the Indonesian arm of Chinese e-commerce site JD.com, has also cut jobs in order “to maintain the company’s competitiveness in the e-commerce’s competitive market in Indonesia,” a company official said.
Dozens of workers were also reportedly laid off from other Indonesian start-ups including e-commerce enabler Lummo and digital payments provider LinkAja.
Investing in a bear market
Still, there is hope that the storm on the market is only temporary. Most investors agree that Southeast Asia remains a fundamentally good region to bet on for startups, mainly due to the region’s growing middle-class population, high Internet usage rate and growing number of repeat start-up founders.
Some say that the current downturn may be a good time to pick out companies that are actually doing well and invest in them while their valuations are down in order to achieve a profitable exit when the market recovers – and most are sure it will.
