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Compelling Opportunities for Venture Capital and SPACs in Southeast Asia

Data Science and Technology

By Jason Edwards  |  September 21, 2021

While COVID-19 has had a destructive effect on many businesses around the world, the amount of venture capital (VC) funding in Southeast Asia has never been higher.

Compelling Macroeconomics

The macroeconomics of the six ASEAN countries provides very favorable tailwinds for venture investments. The population of these nations (i.e., Indonesia, Thailand, Vietnam, Malaysia, Singapore, and the Philippines) in 2019 was 582 million according to the World Bank. They include some of the fastest-growing economies in the world—Indonesia, Vietnam, and the Philippines all had GDP growth above 5% from 2012 to 2019.

The internet economy was 3.7% of Southeast Asia’s GDP in 2019, up from 1.3% in 2015. According to Google, Temasek, World Bank, Bain & Company, and Statista, this is projected to increase to 8.5% in 2025. Over the past five years, Southeast Asian countries have come online at a faster rate than any other country globally. ASEAN continues to be the world’s fastest-growing internet market with more than 50 million consumers coming online every year on average. Internet penetration has been growing at up to 20% compound annual growth rate over the past five years in Southeast Asia. This adoption has been caused by the “leapfrogging” of desktop technology—90% of this growth has been driven by smartphone adoption, acting as a catalyst for overall market growth.

Beyond being the fastest-growing internet population globally, ASEAN consumers have also emerged as the most engaged mobile users globally, creating consumer- and enterprise-facing opportunities. Southeast Asians, on average, spend more time on their mobile devices and download more mobile applications than even consumers in China or India.

For example, Internet users in Thailand spend 4.3 hours per day on the Internet, more than those in any other country, according to research by Google, Temasek, and Bain & Company. By comparison, the global average is three hours and 13 minutes. According to Google in that same research, users from Indonesia, the Philippines, and Malaysia are connected to the Internet for approximately 4.2 hours a day, which places those countries among the top 10 countries in the world by mobile Internet usage.

This level of engagement is driven by the fact that Southeast Asia has the fastest-growing emerging middle class and is one of the youngest regions globally. Cambodia, Vietnam, Indonesia, and the Philippines have an average age in the “golden” zone, being 22–32 years old. These young populations are driving the emergence of a broader middle class, and in turn, adopting and using technology at a globally historic rate. According to the World Bank Economy and Population Framework, this supports the thesis that the “golden age” of technology innovation is only just beginning in Asia.

Digital adoption in the region is also rapidly rising—as of 2019, Southeast Asia had 360 million internet users, an increase of 100 million from 2015. The region’s internet economy reached USD 100 billion for the first time in 2019, a 39% increase from 2018, according to Google, Temasek, and Bain & Company.

Enormous Opportunities for Venture Capital

The combination of these macroeconomics provides fantastic opportunities for venture capital in Southeast Asia.

More capital is being raised now than ever before. There are many more local VC funds and similar investors every year, and more foreign investors are now investing in Southeast Asia.

This has resulted in higher valuations, more unicorns, and a growing secondary market for shares in venture-backed companies. To highlight just a few examples:

  • Telio, a Vietnamese company barely two years old when Tiger Global led a USD 25 million round, with a post-money valuation of USD 88.5 million
  • Shopup, a Bangladesh marketplace for online and offline merchants to help them sell on social channels, raised USD 26 million before it was three years old and its post-money valuation was USD 60 million
  • Zenyum, which provides 3D-printed invisible braces to patients, raised a USD 13 million round when it was just over a year old

All three companies were part of Sequoia’s Surge accelerator. If we look at some other companies in Surge that have raised again after the initial investment, we can see that the average increase in valuation is 553% in just nine months.

The graph below shows the valuations for some of Surge companies when Surge invested, and when they raised the round after Surge invested.


Zilingo, a commerce platform that is making the fashion and beauty supply chain more efficient through technology, raised more than USD 300 million in its first five years. While Indonesia’s Ruangguru, an edtech company, raised over USD 150 million in its first five years and investors wanted shares so much that they also bought USD 60 million in secondaries.

VentureCap Insights has the valuations, cap tables, and financials for thousands of startups in Southeast Asia. It also tracks every secondary trade of shares. VentureCap connects to government company registries and gets all the regulatory filings for startups and runs analytics on top.

Attracting Attention from Special-Purpose Acquisition Companies (SPACs) 

SPACs from around the world are looking at Southeast Asia.

Altimeter in the U.S. looking at Grab and Thiel and Richard Li’s Bridgetown looking at Traveloka, Citic, and James Murdoch are just a few of the others with SPACs focusing on SEA.

Grab will have a market value of USD 39.6 billion and it will raise more than USD 4 billion, which will make it the largest U.S. equity offering for a Southeast Asia company. Looking at the financials for Grab, it will certainly need a significant capital injection.

Most attention on Grab has been on its projections. To the extent there is coverage of historical performance, it focuses on revenue. But what about the EBIT?

Looking at five of the largest Grab subsidiaries in Singapore alone, we can see that their revenue grew from SGD 231 million in 2018 to SGD 625 million in 2019. But the negative EBIT grew much faster, from negative SGD 918 million in 2018 to negative SGD 1.8 billion in 2019. The table below shows the revenue and EBIT for these five subsidiaries in Singapore. For every million dollars that the revenue increased from 2018 to 2019, the burn increased by SGD 2.2 million dollars.


Consolidated Revenue and EBIT in SGD for Subsidiaries


principal activities of subsidiary

GP Network Asia

Holding company and provides financial services which are not insurance or pension funding related. Subsidiaries under GP Network Asia include Malaysian and Indonesian companies such as Gpay Network (M) Sdn. Bhd. and PT Kudo Teknologi Indonesia.


Software development and promoter of Grab's internet application.

GrabTaxi Holdings

Investment holding and provision of management services. Subsidiaries under GrabTaxi holdings are GrabBike, GrabExpress, and GrabChronos.


Software development and promoter of Grab's internet application.

Grab Rentals

Renting and leasing of private cars. 

Source: VentureCap Insights 

Grab has many subsidiaries in other countries in Southeast Asia too. VentureCap Insights has the full financials for startups in Southeast Asia that have revenue more than USD 5 million.

This blog post has been written by a third-party contributor and does not necessarily reflect the opinion of FactSet. The information contained in this article is not investment advice. FactSet does not endorse or recommend any investments and assumes no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained in this article.


Jason Edwards

Founder, VentureCap Insights

Mr. Jason Edwards is an investor at venture capital firm January Capital. He is also the founder of VentureCap Insights, which provides information on funding, valuations, cap tables, and financials for startups in Southeast Asia. Prior, he was a partner with the law firm Baker McKenzie, and then general counsel of a multibillion-dollar private equity fund, Clearwater Capital. Mr. Edwards earned a degree in Law, a Master of Laws (LLM), and a Bachelor of Laws (LLB) from Queensland University of Technology.


The information contained in this article is not investment advice. FactSet does not endorse or recommend any investments and assumes no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained in this article.