Singapore has long ruled the region's booming venture capital and private equity investment market, but new players are emerging that could take its crown. Indonesia and Vietnam are the most likely challengers. Indonesia is the hottest place for investment.
A Bain & Company survey found that around 90 per cent of investors said the two nations would be the hottest South-east Asian markets outside of Singapore over the next 12 months or so.
The number of firms in Indonesia raising first round of funding last year rose more than 300 per cent from 2012. And Indonesia and Vietnam generated 20 per cent of the region's private equity deal value over the past five years, and that percentage is likely to grow, said Bain.
What is abundantly clear is that the pie is growing fast with deal value set to soar to US$70 billion (S$96 billion) over the next five years, double that of the previous five years, a separate Bain report said yesterday.
The report also predicts that the region will produce at least 10 new unicorns - start-ups that rapidly achieve market valuations of US$1 billion or more - by 2024. Indonesia is the hottest place for investment.
Scores of new investors have been pouring into the region, attracted by strong macroeconomic fundamentals, the chance to invest in emerging regional champions and a deepening secondary market for deals of all sizes.
The mix includes a combination of local venture capital funds and private equity operators, sovereign wealth funds and global funds.
Technology companies have attracted the bulk of new capital, rising to 40 per cent of deal count last year from 20 per cent in 2014.
Since 2012, 10 unicorns, including Grab, Go-Jek and Traveloka, have created a combined market value of US$34 billion, ranking South-east Asia third in the Asia-Pacific region, behind China and India.
Strong investor interest in the region's developing technology sector and other consumption-based industries is likely to help sustain higher levels of investment.
(source: The Strait Times)