The direct-to-consumer (D2C) sector is making its mark in Southeast Asia (SEA)’s startup ecosystem, with more than 2,000 companies and all-time funding of $300 million, Tracxn said Wednesday.

The firm said in a statement that SEA’s D2C sector raised $32.5 million in 2024, reflecting a 208% growth from $10.6 million in 2023, even as the overall SEA tech ecosystem saw more than a 55% decline in funding during the same period.

It is noted that globally, D2C funding declined by 25 percent to $3.9 billion in 2024 from $5.3 billion in 2023, marking 2024 as the least funded year in the past five years.

In contrast, SEA’s rebound in 2024 highlights its growing resilience and emerging strength as a hotspot for D2C brands. However, despite this recovery, funding levels in the region still remain 75% below the $128 million raised in 2022.

The D2C space witnessed a steady increase in funding from 2019 to 2022, after which it entered a downturn, mirroring global trends.

It saw its only decline in 2023 over the past four years, but this was followed by a rebound in 2024.

According to the statement, the region’s D2C seed-stage rounds surged 300 percent to $3 million in 2024, from $740,000 in 2023.

Early-stage funding stood at $10 million in 2024, similar to 2023. Late-stage rounds worth $19.5 million were observed in 2024, with no late-stage funding recorded in 2023.

Within the retail space in SEA, the online Marketplace segment secured $61 million in 2024, twice the investments received by the D2C segment, while commerce enablers raised $164 million, leading the consumer retail space.

In contrast, 2023 Commerce Enablers had topped funding with $327 million, which is followed by online marketplaces at $252 million.

In SEA’s D2C segment, beauty and fashion startups have drawn consistent investor interest, with beauty seeing the highest repeat investments.

Investors like AC Ventures, Accel, and Jungle Ventures have shown repeated backing, especially in Indonesia and Singapore.

It is noted that investments in the SEA D2C sector were largely driven by small-ticket rounds, with only one $10 million+ funding in 2024.

The Ayurveda Experience, an online platform offering multi-category Ayurvedic beauty products, secured $15 million in its Series C round.

The sector has not witnessed any new unicorns in 2024. Similarly, no acquisitions were recorded this year, compared to one in 2023. The IPO landscape also remained inactive in 2024, while one D2C company went public in 2023.

Based on the funding received in the last two years, beauty brands attracted over $40 million, followed by apparel brands ($6 million) and the food and beverage segment ($4 million).

Singapore emerged as the 7th highest-funded country globally in the D2C sector in 2024.

The US stood first ($2.53 billion), followed by India ($718 million), Finland ($279 million), United Kingdom ($92.1 million), Germany ($56.9 million) and Poland ($36.3 million).

Within SEA, Singapore led with $19.5 million raised in 2024, followed by Hanoi ($6 million) and Jakarta ($4 million).

Among top investors in the region, AC Ventures, Jungle Ventures, and Accel continued to show strong interest.

500 Global, First Move Fund, and Init 6 were the most active seed-stage investors in 2024, while Unilever Ventures and Vertex Ventures led early-stage investments. Jungle Ventures and Venturi Partners were the top late-stage investors.

SEA is emerging as a key manufacturing hub for consumer retail products such as electronics, apparel, and beauty items.

A large share of foreign investment is being directed toward setting up factories for major international brands.

Improved infrastructure due to FDI and growing economic activity in the region is expected to activate local demand and spur the emergence of new brands.

“Despite global challenges, SEA’s D2C sector has shown growth, supported by rising manufacturing investments and favorable policies,

“The region’s agility and expansion-friendly climate continue to make it a promising space for digitally native brands,” said Tracxn.

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