Is consolidation on the horizon for Southeast Asia’s tech trade? – TechCrunch

The latest IPOs of a number of tech firms in Southeast Asia would possibly give traders trigger to surprise if the time is ripe for exits and consolidation within the area.

Should you’re pondering alongside these strains, you aren’t far off from the reality. An evaluation of latest modifications available in the market reveals 4 elements which are set to catalyze consolidation in Southeast Asia within the close to future.

Startups have money and need to spend it

After fundraising a number of occasions, there are a variety of enormous and late-stage tech startups which have ample liquidity and are more and more open to pursuing development inorganically.

Current M&A within the area signifies two key strategic concerns influencing acquisitions:

  • Including new product segments/verticals or markets into choices
  • Strengthening their current choices (verticals or markets)

As an illustration, 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.

As extra tech firms look to the super-app enterprise mannequin to retain customers and enhance monetization, we might count on extra inorganic growth and consolidation within the coming years.

The acquisition of the Singapore-based dwelling 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 current markets (Singapore and Malaysia).

We’ve summarized some extra examples of strategic acquisitions beneath:

Picture Credit: Jungle Ventures

As cash-rich tech startups change into keener to hunt inorganic development, consolidation is prone to decide up.

Corporations are increasing throughout areas and international locations

Southeast Asia is culturally various and international locations listed below are totally different from one another regardless of their geographical proximity. The area has 11 international locations with a variety of cultures, ethnicities, languages, religions, financial growth standing, and many others., which give rise to very totally different shopper habits and market traits.

As tech firms from neighboring international locations and areas broaden into Southeast Asia, the area’s range and variations pose challenges to their growth, since every nation probably requires a singular greenfield strategy.

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