The current IPOs of a number of tech corporations in Southeast Asia would possibly give buyers trigger to surprise if the time is ripe for exits and consolidation within the area.
When you’re considering alongside these traces, you aren’t far off from the reality. An evaluation of current adjustments out there reveals 4 elements which can be set to catalyze consolidation in Southeast Asia within the close to future.
Startups have money and want 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 corporations look to the tremendous app enterprise mannequin to retain customers and improve monetization, we might anticipate extra inorganic growth and consolidation within the coming years.
Current M&A within the area signifies two key strategic issues influencing acquisitions:
- Including new product segments/verticals or markets into choices.
- Strengthening their present choices (verticals or markets).
As an example, 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 section, as a result of it helped Seize carry retail wealth administration and funding options to its customers and companions.
The acquisition of the Singapore-based residence 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 present markets (Singapore and Malaysia).
We’ve summarized some extra examples of strategic acquisitions beneath:
As cash-rich tech startups develop into keener to hunt inorganic progress, consolidation is more likely to choose up.
Firms are increasing throughout areas and nations
Southeast Asia is culturally various 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 improvement standing, and so on., which give rise to very completely different shopper conduct and market traits.
As tech corporations from neighboring nations and areas develop into Southeast Asia, the area’s variety and variations pose challenges to their growth, since every nation seemingly requires a singular greenfield strategy.