It has been observed that the investments in Southeast Asian start-up companies have jumped in the months of April to June quarters irrespective of coronavirus pandemic, especially e-commerce and the fintech companies. Based on the data that has been provided by the Singapore-based start-up information platform Deal Street Asia, the number of transactions has climbed from 116 which were in the same period earlier year to 184 in three months. Most of the countries were in lockdown during the quarter that led to a limiting of deal-making opportunities, which in turn affected the sentiments of few investors. But few investors have shown interest and raised a significant amount of capital last year. Many companies in the South East Asian zone which invests in start-ups felt that many deals were in the pipeline from the beginning of the year. It has also been found that even the best online casinos have got a lot of investment during the past few years.
Since mid-2010’s the Singapore’s Grab and Indonesia’s Gojek were the two big companies of Southeast Asia’s startups. They both together have raised about $2 billion in the first quarter of 2020 which is about 70% of the entire regional total. According to the latest quarter’s data, the e-commerce sector has raised about $691 million, finance and tech $496 million, and logistics $360 million. Certain local operating companies have also managed to make a good amount of funds, showing that the pandemic has actually given opportunities for a range of new companies. Unicorn Tokopedia is an Indonesian e-Commerce Company that raised the biggest capital for the quarter that acquired $500 million from the Singapore state investment firm. Tokopedia is Indonesia’s top e-commerce company with the highest top-funded Southeast Asian start-up in 2020, followed by Gojek from the ride-hailing sector.
In a deal that was led by Northstar Group, a private equity fund, Tiki an e-commerce company from Vietnam had raised about $130 million. Even during the pandemic, it has observed a significant growth in the shopping needs of their customers particularly for hand washes, face masks, and various other necessities. Though there is a lot of competition in e-commerce business in Vietnam among local as well as regional players, Tiki differentiates themselves with their unique services. They follow express delivery services known as TikiNow with their nationwide network centers to manage order fulfilments. They claim that after receiving the order, they ship parcels to customers within 2 hours.
With the increase in demand for online shopping in Southeast Asia, the delivery startups and logistics have also picked up their business. The Ninja Van of Singapore had announced in May that they are making a $279 million fundraising round while the Kargo technologies of Indonesia pulled around $31 million. The Voyager innovation which is behind the Philippine mobile payment app had raised around $120 million in the month of April from their existing shareholders like Chinese tech giant Tencent Holdings and US private equity fund KKR.
Digital Money Myanmar, a company based in Myanmar which is a well-known brand for wave money brands, announced in the month of May that Alipay operator of China’s Ant financial group will be investing $73.5 million in the company. In Myanmar, Wave money is a leading mobile financial service provider that allows the public to transfer money digitally rather than carrying cash physically. In the year 2019, Wave money had transferred $4.3 billion in Myanmar which was thrice more than earlier years $1.3 billion. The Wave money had also set up its joint venture along with the Norwegian telecom operator Telenor Group and Myanmar conglomerate Yoma Group in the year 2015. Later in June the Yoma ground had announced that Telenor will be withdrawn from business and will be reframed as a joint venture between Ant financial and Yoma.
When you look at the fundraising deals of start-ups in Southeast Asia, Indonesia has the highest percentage share of 45.8 % followed by Singapore with 33.3%. It is followed by Vietnam’s share of 7.9%, the Philippines with 5.3%, Myanmar with 4.3%, and Thailand with 3.2%, and Malaysia with 0.3%.
The Bangkok-based fintech start-up company Synqa Holdings raised about $80 million from Japanese and Thai investors. The company sees a lot of opportunities in order to raise the digital transformations and digital payments for various enterprises. With social distancing in place, Synqa being a parent company of a provider for payment gateways handles all the payments for e-commerce most securely and quickly along with the day to day credit cards. Though these start-ups have raised their opportunities amid the pandemic, other companies related to travel and transport got affected very badly. They are just trying to drift by cutting their costs.
Certain companies who faced uncertain challenges have managed to raise huge amounts of money. Gojek was able to capture about $300 million, while in the second quarter of the present year, the online travel company Indonesian Unicorn Traveloka raised around $100 million. Both the companies have cut down their overheads by reducing the number of their staff. Whether it’s related to payments, food deliveries, ride-hailing, Gojek is definitely an attractive investment company of Indonesia who wishes to develop their regional profile. Facebook’s investment in this company was the first one among the Indonesian start-up companies. It’s not the same with Traveloka as their business is merely based on people who travel. But the investors are actually betting over the company that it will definitely grow once the travel resumes.
With the persisting pandemic, investors say that the deal-making may slowdown in Southeast Asia. Experts are of the view that the capital might get tighter in the later stages especially those which are driven by international investors. The travel restrictions and global recession may impact the investment in various sectors. Experts are also of the opinion that the companies which are in their earlier stages may see a bit of slowdown in the second half particularly if the economic crisis worsens.