SE Asia tech fundraising boom

Tech start-ups in Southeast Asia are seeking more capital to survive in a competitive environment as a series of companies including Grab, Go-Jek, Tokopedia and VNG Corp are coming to market and looking for new investors, according to TMT Finance’s exclusive reports.

In the taxi-hailing sector, Singapore-based Grab is now in its series G funding round, hoping to raise more than US$1.5bn in equity, while its regional rival Indonesia’s Go-Jek is also said to be doing another round. Sources said Grab’s existing investor SoftBank is likely to continue backing Grab while Go-Jek has already attracted investors from China includingTencent, Meituan-Dianping and several other Chinese private equity firms.

In the marketplace space, Indonesia’s Tokopedia has been raising funds with interested investors from China. Its domestic peer, Bukalapak, was also tipped to have been working on a fundraising earlier this year, although the rumour has gone quiet since then.

In the ecommerce business side, Indonesia’s Elevenia has been looking to raise US$200-250m in equity, Thailand’s online retailer aCommerce is in its series B funding round and Singapore’s online luxury retailer Reebonz is looking to raise up to US$150m in a primary share sale and US$50m in a secondary share sale, according to sources.

However, the capital flow may not always be there for South-East Asian tech start-ups. Sources told TMT Finance that as internet businesses in the region are still somewhat untested having acquired significant capital with little profit to show. Some regional investors have been more cautious about ongoing investment. Another source also said that considering the high number of young tech start-ups, it has become difficult to distinguish the one with or without potential.

Although consolidation will happen eventually, no business is keen on being bought first, which pushes them to reach out to cash-rich investors from China.

Before consolidation actually takes place, some of these tech firms turned to the public markets for capital, as new fundraisings get more challenging and investors decide to cash out.

Vietnam’s internet company VNG has been working on a secondary sale of shares with some of its founders looking to sell their own stake. However, the deal has gone very slowly as the potential buyer, VNG’s existing shareholder Tencent, is more inclined to float the business. Reebonz IPO plans may also resurface later on.

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