This week, On the Rise looks at funding data on Southeast Asiaâs venture capital firms and whatâs behind the recent spate of layoffs in edtech. [Read from your browser]( On the Rise ð Welcome to On the Rise! Delivered every Tuesday via email and through the Tech in Asia website, this free newsletter breaks down the biggest stories and trends in emerging tech. If youâre not a subscriber, get access by [registering here](. Written by Shadine Taufik
Journalist Hello {NAME} Iâm a film buff. From Citizen Kane to Paddington 2, Iâll watch anything under the sun, no matter how disconnected or far from reality they are. For me, movies always offer something I can take away and keep. As such, you could say that my interest in the business sphere is an acquired taste, spurred by films like The Big Short and The Wolf of Wall Street. With big players and even bigger personalities, these movies are akin to high-stakes reality shows and drew me deep into the spectacle of the corporate world. Although these works were based on real incidents, I assumed that they were overly exaggerated. But as it turns out, art does imitate life - sometimes, at least. This weekâs Big Story reflects how true this statement is. In our premium story, my colleague Tian Wen explores the funding landscape of Southeast Asiaâs venture capital firms through charts. With the digital economy boom, data shows that VCs in the region have become increasingly influential, closing nearly 7x more deals in 2021 than in 2012, with total funding multiplying 180x. But just like in every good story, there are also winners and losers in this scene. These funds are disproportionately invested into the top three verticals - logistics and transportation, ecommerce, and fintech. With 25.6% of the funding between 2012 to 2021 flowing into logistics, this sector reigns supreme. Nonetheless, it looks like the underdogs still have a fighting chance for the spotlight. The Covid-19 pandemic has sparked an interest in more niche sectors such as edtech and gaming. Companies in these fields have experienced a 17x and 60x rise in funding, respectively. Keep in mind, though, that it doesnât necessarily mean the road ahead will be smooth. Speaking of edtech, Indonesiaâs [Zenius laid off 200 employees]( last week. My colleague Collin elaborates on the development in this weekâs Making Waves. -- Shadine  --------------------------------------------------------------- THE BIG STORY [Revisiting a decade of VC funding in SEA]( We look past 10 years of funding headlines to unravel venture capitalâs explosive run in Southeast Asia.
 --------------------------------------------------------------- MAKING WAVES Zenius could be chapter 1 in Indonesian edtech layoffs Hereâs what happened: - Zenius has laid off over 200 employees.
- India and China have seen sizable job cuts at edtech firms.
- Indian and Indonesian edtech players have been shifting to offline learning. Hereâs our take: Indonesian edtech startup Zeniusâ decision to retrench [over 200 employees]( may have caught many by surprise. But this is just [the beginning of a slowdown]( for the once-booming sector. Rumors are rife that another Indonesian edtech firm will show 150 employees the door this month. As the countryâs edtech sector seems to be the first to take a hit by global economic headwinds, there will be more news of layoffs not only in Indonesia, but in Southeast Asia at large. Zenius blamed macroeconomic conditions for the move, just like its peer Unacademy. The Indian edtech unicorn [shed around 1,000 jobs]( in April. Macroeconomic conditions have a part to play - as investors tighten their purse strings, funding dries up. But thereâs more to the large-scale layoffs in India and Chinaâs edtech sectors. Indian edtech has slashed nearly 2,000 jobs since February. That same month, Lido Learning, which had [raised US$10 million]( in September 2021, shut down its operations. Vedantu, another edtech unicorn, let over 600 of its staff go this month. Just yesterday, FrontRow [axed 30%]( of its workforce - thatâs around 150 employees. The startup raised US$14 million in September 2021. Chinese edtech has seen over 75,000 pink slips, primarily because of stringent government regulations. . On the other hand, the layoffs in India are generally driven by a shift in consumer trends - as schools and colleges reopen, people are going back to [offline learning](. This is why the sackings are largely seen in the K12 and test-preparation segments. Players in India are aware of this change, so theyâre making an effort to move offline. Case in point: Byjuâs, the countryâs biggest edtech firm, recently launched [80 physical tuition centers](. It plans to set up 500 of these facilities in 200 cities across the country by the end of 2022. In Indonesia, over 10,000 schools in Jakarta resumed [100% offline learning]( at the start of this year. Like their counterparts in India, parents in Indonesia also send their kids for after-school offline tutoring services to boost their prospects of getting into the best colleges. Since old habits die hard, edtech companies have also adopted offline learning. In February, Zenius acquired [Primagama]( an offline tutoring giant that has more than 300 branches, employs 3,000 teaching staff, and attracts more than 30,000 students every school year. Ruangguru also introduced [Brain Academy]( a hybrid product that combines offline and online learning. The company seems to have recently expanded its centers in cities such as Jakarta. But the offline-also approach could prove to be an expensive move for edtech firms due to the high overhead costs, which will leave them with less room to scale their businesses faster. Without accounting for any macroeconomic headwinds, the Indonesian edtech market is expected to hit [US$14.5 million]( in 2022. However, the market revenue growth is expected to slump to 12.2% during the year from a 17.3% growth rate in 2021, according to Statista data. The revenue growth in Indonesiaâs edtech industry is expected to drop to just 4.3% by 2026. As revenue growth for Indonesiaâs edtech sector lags, it will see more disruptions in the coming year. But this shift also brings about bigger questions, such as do their valuations make sense with the move to offline? And as VCs calculate valuations, have they factored in the startupsâ increasing offline presence? If not, we could see a significant correction in the valuations of many edtech startups in India as well as Indonesia. â Collin  Â
--------------------------------------------------------------- NEWS YOU SHOULD KNOW Check out Tech in Asiaâs coverage of the emerging tech scene [here](. 1ï¸â£ Singaporeâs Dedoco, a blockchain-based document management firm, [has raised US$3m]( , which will be used to enter new markets. The companyâs platform ensures users have increased data privacy and document security. 2ï¸â£ Bangladesh-based iFarmer has replenished its funds with a [US$2.1 pre-series A]( round. The agritech startup hopes to help farmers with its app, which analyzes the performance of farm production and supplying loans. 3ï¸â£Â Allinfra, an eco-conscious startup based in Hong Kong, has [received US$6 million]( in a series A funding round. The blockchain-based business allows users to store climate-relevant information to solve environmental finance issues. 4ï¸â£ Googleâs [Imagen]( marks the companyâs second foray into AI art. This program generates photorealistic pictures from text.
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