According to private market intelligence firm Preqin, the region's venture capital market grew from US$200 million in 2010 to a whopping US$10.5 billion in 2018 , which has since slightly cooled to US$7 billion last year . In line with this, venture capital firms here began to scale up, raising ever-larger funds .
"Venture capital firms in South-east Asia have been built in a low interest rate environment, and venture money has been commoditised. We have yet to see one full cycle. The tone is changing slowly and that's when the whole industry will be tested," says Raditya Pramana, a partner at Indonesian venture firm Venturra Discovery.
Seavi was the first independent venture fund set up in Singapore in 1984. Even though the venture capital industry is vastly different from what it used to be, Mr Tan's concern is still being echoed by industry players in today's climate. And with the ecosystem flush with capital, more venture capitalists may in fact find themselves being turned away by good founders, notes Jianggan Li, chief executive of venture builder Momentum Works.
Since the release of the iPhone in 2007, mobile penetration has exploded in South-east Asia, creating a whole new digital economy worth about US$100 billion, according to a report by Google, Temasek and Bain and Co last year. And this could triple in size by 2025. But the tech revolution has also given rise to a whole new crop of"asset-light" companies that are difficult to value accurately.
Hian Goh, founding partner of Gojek backer Openspace Ventures, is more direct."I would say that there is really just one culprit: SoftBank," he says, when asked about the negative sentiment towards venture capital. In an essay for the New Yorker, journalist Nathan Heller acknowledges the economic function of venture capitalists."A thriving society needs moon shots, and, in the absence of a literal space race, only venture capitalists have the mandate to throw cash at an improbable success," he notes.