Amit Anand is a founding associate of Jungle Ventures and an early pioneer and chief within the improvement of Southeast Asia’s enterprise capital business.
Southeast Asian tech corporations are drawing the eye of traders all over the world. In 2020, startups within the area raised over $8.2 billion, about 4 occasions greater than they did in 2015. This development continued in 2021, with regional M&A hitting a document excessive of $124.8 billion within the first half of 2021, up 83% from a yr earlier.
This begs the query: Who precisely is investing in Southeast Asia?
Let’s discover the three key kinds of traders pouring cash into and driving the expansion of Southeast Asia’s tech ecosystem.
Over 229 household places of work have been registered in Singapore since 2020, with complete belongings underneath administration of an estimated $20 billion.
Southeast Asia has grow to be a gorgeous marketplace for U.S. and Chinese language tech companies. Web penetration right here stands at 70%, larger than the worldwide common, and digital adoption within the area stays nascent — it wasn’t till the pandemic that adoption of digital providers akin to e-wallets and on-line buying took off.
China’s tech giants Tencent and Alibaba have been among the many first to assist early e-commerce development in Southeast Asia with investments in Sea Restricted and Lazada, and have since expanded their footprint into different web verticals. Alibaba has backed Akulaku, M-Pay (eMonkey), DANA, Wave Cash and Mynt (GCash), whereas Tencent has invested in Voyager Improvements (PayMaya), SHAREit, iflix, Ookbee and Sanook.
U.S. tech companies have additionally not too long ago entered the scene. In June 2020, Gojek closed a $3 billion Collection F spherical from Google, Fb, Tencent and Visa. Google, along with Singapore’s Temasek Holdings, invested some $350 million in Tokopedia in October. In the meantime, Microsoft invested an undisclosed quantity in Seize in 2018 and has invested $100 million in Indonesian e-commerce agency Bukalapak.
In Q1 2021, Southeast Asian startups raised $6 billion, in accordance with DealStreetAsia, positioning 2021 as one other document yr for VC funding within the area.
The area can also be rising in prominence as a vacation spot for funding capital relative to the remainder of Asia. Regional VC funding grew 5.2 occasions to $8.2 billion in 2020 from $1.6 billion in 2015, as we are able to see within the desk under.
Southeast Asia additionally has many alternatives for VC funding relative to its market dimension. From 2015 to 2020, China noticed VC funding of practically $300 per individual; for Southeast Asia — regardless of a latest funding increase — this metric sits at simply $47.50 per individual, or only a sixth of that in China. This means a considerable alternative for investments to develop the area’s digital financial system.
The area’s rising inhabitants and development prospects are larger because of China’s inhabitants development challenges, alongside the latter’s larger digital financial system market saturation and maturity.