The latest IPOs of a number of tech firms in Southeast Asia would possibly give buyers trigger to marvel if the time is ripe for exits and consolidation within the area.
For those who’re pondering alongside these traces, you aren’t far off from the reality. An evaluation of latest adjustments available in the market reveals 4 elements which might be set to catalyze consolidation in Southeast Asia within the close to future.
Startups have money and wish to spend it
After fundraising a number of occasions, there are a variety of huge and late-stage tech startups which have ample liquidity and are more and more open to pursuing progress inorganically.
As extra tech firms look to the tremendous app enterprise mannequin to retain customers and enhance monetization, we may count on extra inorganic enlargement and consolidation within the coming years.
Latest M&A within the area signifies two key strategic concerns influencing acquisitions:
- Including new product segments/verticals or markets into choices.
- Strengthening their current choices (verticals or markets).
As an illustration, Seize acquired Singapore-based robo-advisory startup, Bento, in 2020. The acquisition was primarily pushed by the strategic consideration of including a brand new product phase, as a result of it helped Seize convey retail wealth administration and funding options to its customers and companions.
The acquisition of the Singapore-based dwelling renovation platform Qanvast by Livspace in 2021 is an instance of the second strategic consideration. This acquisition helped Livspace strengthen and consolidate its place in current markets (Singapore and Malaysia).
We’ve summarized some extra examples of strategic acquisitions under:
Picture Credit: Jungle Ventures
As cash-rich tech startups change into keener to hunt inorganic progress, consolidation is more likely to decide up.
Corporations are increasing throughout areas and nations
Southeast Asia is culturally numerous and nations listed below are completely different from one another regardless of their geographical proximity. The area has 11 nations with a variety of cultures, ethnicities, languages, religions, financial growth standing, and so forth., which give rise to very completely different client conduct and market traits.
As tech firms from neighboring nations and areas develop into Southeast Asia, the area’s variety and variations pose challenges to their enlargement, since every nation seemingly requires a singular greenfield method.
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