More ASEAN start-ups become unicorns from strong finance and a growing middle class: new report

More ASEAN start-ups become unicorns from strong finance and a growing middle class: new report


Unicorns—start-ups valued at more than $1 billion —have become increasingly common in Southeast Asia over the last few years, spurred by factors such as private equity investment and a growing middle class.

According to research on Asean start-ups by Credit Suisse earlier this month, 19 start-ups in the area experienced a rise in value of more than $1 billion in 2021 alone.

Fifteen Singaporean and eleven Indonesian unicorns make up the majority of the region's 35 start-ups.

Carro, a marketplace for old cars, and Ninja Van, a transportation company, are two new unicorns in the Republic.

It is not included in Credit Suisse's list of companies that have yet to go public, such as Grab, which is based in Singapore.

Asean unicorns are concentrated in the financial and e-commerce sectors, followed by logistics and diversified Internet/technology businesses (8 per cent).

With few unicorns operating in the B2B sector, the majority of these companies are consumer-focused.

Start-ups have relied more on private equity agreements than on public market investment, but this might soon change, according to the research. According to the report, the value of Asean technology is rising.

The growth of Asean unicorns has been linked to a variety of factors, including demographics, a rising middle class, increased smartphone and data use, as well as an increase in private equity money.

For example, Indonesia, Malaysia, the Philippines, Singapore, and Thailand are among the world's youngest populations. This indicates that they are more inclined to embrace new technology.

The rise of the middle class may be attributed to the steady rise in GDP per capita over the last 10 years.

In the past, most private equity investment has been concentrated in Singapore and Indonesia, but research shows that activity in Malaysia and Vietnam has increased lately as well.

In general, Singapore is seen as a good site to raise money because of its excellent standards of corporate governance.

Entrepreneurial start-ups are valued based on variables including their skills and the accessibility of their goods, according to Quest Ventures partner Jeffrey Seah.

He referred to instances when start-ups have received money at a lower value than they did in a prior round of fundraising.

There were certain companies last year whose sales expectations did not materialize or whose growth did not proceed according to plan.

"The COVID-19 epidemic increased this incidence throughout the Southeast Asian markets," Mr. Seah said.

Many industries, including finance and e-commerce, have benefitted from COVID-19, according to research from Credit Suisse.

Financial services adoption and migration to digital channels have been boosted by the epidemic, and these trends are projected to continue in the long run, it added.

This area has implemented policies and programs aimed at increasing non-cash use and financial inclusion by promoting digital payments.

The survey said that graduates of successful start-ups and IT corporations are starting new businesses.

A "virtuous cycle" in which increasing growth results in further investments and further development of the ecosystem, which in turn produces new firm founders, co-founders, or chief executives in Southeast Asia, may thus be set into motion.


Source: TING, C. Y. (2021, October 21). More Asean Start-ups Became Unicorns Thanks To Robust Funding, Rising Middle Class: Report. The Straits Times.

Akhyari Hananto

I began my career in the banking industry in 1997, and stayed approx 6 years in it. This industry boost his knowledge about the economic condition in Indonesia, both macro and micro, and how to More understand it. My banking career continued in Yogyakarta when I joined in a program funded by the Asian Development Bank (ADB),as the coordinator for a program aimed to help improve the quality of learning and teaching process in private universities in Yogyakarta. When the earthquake stroke Yogyakarta, I chose to join an international NGO working in the area of ?disaster response and management, which allows me to help rebuild the city, as well as other disaster-stricken area in Indonesia. I went on to become the coordinator for emergency response in the Asia Pacific region. Then I was assigned for 1 year in Cambodia, as a country coordinator mostly to deliver developmental programs (water and sanitation, education, livelihood). In 2009, he continued his career as a protocol and HR officer at the U.S. Consulate General in Surabaya, and two years later I joined the Political and Economic Section until now, where i have to deal with extensive range of people and government officials, as well as private and government institution troughout eastern Indonesia. I am the founder and Editor-in-Chief in Good News From Indonesia (GNFI), a growing and influential social media movement, and was selected as one of The Most Influential Netizen 2011 by The Marketeers magazine. I also wrote a book on "Fundamentals of Disaster Management in 2007"?, "Good News From Indonesia : Beragam Prestasi Anak Bangsa di dunia"? which was luanched in August 2013, and "Indonesia Bersyukur"? which is launched in Sept 2013. In 2014, 3 books were released in which i was one of the writer; "Indonesia Pelangi Dunia"?, "Indonesia The Untold Stories"? and "Growing! Meretas Jalan Kejayaan" I give lectures to students in lectures nationwide, sharing on full range of issues, from economy, to diplomacy Less
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