The technology sector in Southeast Asia is increasingly an area of focus for private equity and venture capital investors.
The sector’s share of overall Southeast Asia private equity and venture capital investment grew steadily from 2014 to 2020. The pandemic caused a marginal decline in tech investments while non-tech investments suffered a significant decline. Despite the slight disruption, investment activity bounced back at the start of 2021 and is expected to be valued at USD 13 billion by the end of 2021.
Indonesia, Singapore and Vietnam are the main geographic focus for those investing in technology assets. Singapore leads Indonesia slightly in deal volume; however, Indonesia leads all Southeast Asian countries dramatically in terms of the value of the investments. Between 2018 and the first half of 2021, Indonesia accounted for at least half of the region’s technology investments by value each year and in some years significantly more. Retail/ecommerce and financial services were the sectors that saw the most investment.
Investors evaluating technology investment opportunities should apply three main criteria:
- Value of the last fundraise
- Duration since the last fundraise
- Company’s funding stage
These criteria will reveal opportunities among the approximately 270 Southeast Asia technology companies that will be seeking investment, especially at large scale, in the next one to two years.