The Southeast Asia digital economy is set to continue its momentum and strong growth despite the pandemic, with Regional M&A activity hitting an all-time high of almost USD 125 billion in the first half of 2021. The number of venture investments into Southeast Asian tech start-ups rose by 20% year-on-year in the first half of 2021, and the valuation of the region’s technology start-ups is expected to triple to more than USD 1 trillion by 2025, up from a combined value of USD 340 billion in 2020.
To take advantage of this, Singapore has positioned itself as a gateway for global entrepreneurship into the Southeast Asian region, with direct investments and partnerships with global venture capital (VC) players creating a unique ecosystem that optimizes a start-up’s chances of success, making the country an ideal location for companies looking to invest in the region. This can be seen with the continuous growth in Singapore’s startup economy, which is home to nearly 4,000 tech start-ups, as well as 200 supporting organizations, including accelerators, incubators and research institutes. In 2019, companies in Singapore accounted for three-quarters of the VC and private equity funds raised in Southeast Asia, and tech startups in the country raised SGD 5.3 billion (USD 3.9 billion) in the first half of 2021, up from SGD 3.4 billion (USD 2.5 billion) in the same period in 2020.
Due to the diverse cultures and business environments across the 11 Southeast Asian countries, foreign entrepreneurs and investors entering the regional market could find it potentially confusing to navigate without a local partner, especially in the initial stages of exploration and expansion. As such, Singapore has positioned itself as a launchpad from which to access the rest of the region, due to the various US and Chinese tech companies already present in the country, and the various initiatives set up by the Singapore government to attract investments, such as Singapore-based global investor EDBI’s Growth IPO Fund, which focuses on investing in late-stage private enterprises two or more funding rounds away from a listing, helping them to grow and prepare for an eventual public listing in Singapore.
(Source: Investment Monitor)
