Money flocks to Southeast Asian start-ups as China loses sheen
- Southeast Asia is benefiting from Beijing’s tough lockdowns and other measures to rein in Covid-19 in China and Hong Kong
- Led by Indonesia, the region’s internet economy is forecast to double to US$363 billion by 2025 from S$174 billion in 2021
Southeast Asian start-ups are enjoying a boom in fundraising exercises by venture and buyout funds that are chasing bigger returns and turning away from regulatory turmoil in Chinese markets, even at the risk of slower growth.
Firms such as Insignia Ventures Partners and SoftBank-backed East Ventures are among those that have raised a combined total of billions for start-ups over the past year as the region’s 650 million people take to digital platforms.
“Some of the world’s largest institutions are coming up with strategies now to invest and deploy capital into regions like Southeast Asia, which six to seven years ago may not have even had the ability to absorb cheques of a large enough size,” said Vishal Harnal, a managing partner at venture fund 500 Global, with US$2.8 billion in assets.
Harnal was one of the scores of investors that gathered in Singapore this week at SuperReturn Asia, a private equity and venture capital conference, for whom Southeast Asia tops the investment rankings.
“Today, there’s much stronger appetite for India and Southeast Asia,” Joel Thickins, co-managing partner at TPG Capital Asia, said.
Led by Indonesia, Southeast Asia’s internet economy is forecast to double to US$363 billion by 2025 from an end-2021 estimate of US$174 billion in gross merchandise volume, a report has cited Google, Temasek and Bain & Company as saying.