Southeast Asia Exit Landscape v2

Southeast Asia Exit Landscape Report 2.
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Exit Landscape
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Southeast Asia Exit Landscape Report 2.0
Introduction
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Golden Gate Ventures conducted a Southeast Asian Landscape report for the first time in
2015. This Bamboo report was meant to give an in-depth view of the potential for
Southeast Asia. Since then the Southeast Asia startup ecosystem grew from strength to
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strength. The potential of the ecosystem was clear, although questions remained about
potential liquidity events. This led Golden Gate Ventures in partnership with INSEAD to
publishing the first edition of the Exit Landscape report in 2019. The report helped analyse
some of the growth levers for the exit landscape across Southeast Asia. A combination of
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new capital investing in growth companies, increase of secondary transactions and
regional unicorns acquiring startups, lifted the exits to new heights. In our second edition,
we discuss the impact of the pandemic on the exit landscape forecast and the rise of
SPACs in Southeast Asia.
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INSEAD has once again partnered with Golden Gate Ventures for the second edition of
the report.
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Golden Gate Ventures conducted the research for this report through General Partner
(GP) and Limited Partner (LP) surveys (page 22 to 28). These investors were selected by
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INSEAD and Golden Gate Ventures, and all have experience with technology investments
in Southeast Asia. The surveys provide a unique and valuable glimpse at on-the-ground
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trends from the perspective of seasoned investors..
Proprietary technology data was used for the second part of the research. Since 2012,
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Golden Gate Ventures tracked the Southeast Asian startup ecosystem. Data such as
timing between funding rounds and fundraising success rates have been instrumental for
drafting this report. In addition to surveys and proprietary data, this report also
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incorporates data from public databases and reports to provide a comprehensive view of
the exit landscape in the region and expectations for the exciting years ahead.
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Executive Summary
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This report provides an analysis and forecast of the exit landscape of technology
startups in Southeast Asia in 2020 and 2021. The report is the second edition of Golden
Gate Ventures' exit analysis. Southeast Asia has seen an increase in interest for the the
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startup ecosystem. Despite the pandemic, startups across Southeast Asia combined
managed to raise US$8.2B (source Cento Ventures / Tech In Asia). Funding in 2020 was "Exits are very difficult to predict.
understandably lower than 2019, but remained resilient. Two important facts to note are
that 50% of funding went to unicorns such as Grab, Go-Jek and Traveloka. More Unexpected events in 2020 initially
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importantly the same reporting by Cento Ventures showed an increase (26% from 2019)
in deals between US$50M - US$100M. These rounds are typically Series B and C rounds slowed down fundraising, M&A and
and provide a strong pipeline for potential exits over the coming 3 - 4 years. The start of
2021 showcased the best start in the Southeast Asian venture capital industry in history.
exit activities. The latter part of 2020
With US$6B in funding in Q1 (Sources Dealstreet Asia, PWC, Genesis Ventures), the and the start of 2021 showed a
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ecosystem got off to a stellar start.
resilient tech industry across
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Methods of analysis for the report included trend analysis using both proprietary data
from Golden Gate Ventures as well as public databases and reports. Acquired data was Southeast Asia and increased investor
analysed internally first and shared with general partners and limited partners for their
appetite for this asset class."
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expert review. Lastly the Golden Gate Ventures team combined historical data, current
trends and fundraising dynamics to forecast exits across Southeast Asia. Similar to the
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previous report the predictions of the number of exits has been determined by:
● Probability of the exit Michael Lints
● Time to exit
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● Historical and forecasted funding Partner
● Forecasted future exits of growth venture companies (partially driven by venture Golden Gate Ventures
capital fund secondaries.
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The report also looks at the probability of local and regional tech unicorns acquiring
companies as part of their growth strategy.
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Executive Summary
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Results of the data analysed and expert analyses led to the following key findings
1. 2020 slowed down the pace of exits but Golden Gate Ventures foresees continued strong forecast for
Southeast Asian exits between 2021 and 2024.
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2. Large pipeline of B and C startups with the ability to raise capital faster.
3. The rise of SPACs has increased the interest of institutional investors for Southeast Asian tech startups.
4. Southeast Asian decacorns leveraging public markets for new acquisitions.
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1. Continued strong forecast
The number of exits in 2019 (115) and 2020 (107) slowed down in comparison to 2018 (124). Respectively due to
startups staying venture backed longer and COVID-19. 2020 saw a slowdown in global M&A activity in the first
quarters of the year. Global M&A was down 35% compared to the last quarter in 2020 according to Dealogic.
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The second half of 2020 saw recovery of global M&A. Southeast Asia started the first quarter strong with a
record amount of funding for startups. Encouraged by the entry of more late stage investors (private equity),
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secondary buyers, SPACs and in general a welcoming public market for technology companies we forecast the
number of exits between 2020 - 2022 will total to 468 (vs 412 previous Exit Landscape report). The majority of
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the exits remain driven by M&A activity (80%) in comparison to IPOs (5%) and Secondary sales (15%).
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The positive sentiment around the Southeast Asian tech ecosystem is fuel for a positive 2021 outlook for
acquisitions. A recent report from EY showed "Optimism about the road to recovery and confidence in growth
and opportunities within the region feeds robust M&A appetite." The report continues "With the wind in their
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sails and anticipation high for a swift shift from resilience to recovery, more than half (56%) of Southeast Asian
executives say they are looking to actively pursue M&A in the next 12 months — the highest since 2012 and
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beating the 11-year average of 44%."
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Executive Summary
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2. Venture Growth Pipeline
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2017 through 2019 saw encouraging signs of a maturing startup technology ecosystem in Southeast Asia.
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Late stage deals (valued over US$60M) have progressively increased by an average of 1.6x Y-o-Y from 2017
through to 2019. Fueled by various forms of growth capital (corporate investors, venture capital and private
equity funds), startups have been able to raise larger rounds faster ~22% (see graph). There has been a
convergence in the average time between funding rounds—startups now take a shorter time to raise series
B and C rounds (less than 21 months average). A recent report from The Ken confirmed more overseas
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investors (e.g. Valar, a16z and Hedosophia) are making investors locally or are opening up a local office in
Southeast Asia.
An increase in later stage capital will lead to startups staying private longer (as we have
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seen in other markets such as the US). This is not necessarily a negative development for
exits, because late stage companies have a higher probability of exiting than earlier stage
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companies (respectively 12% vs 22%). .
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One of our conclusions from the previous report was that the first cohort of institutional venture funds launched in 2010 - 2012 will get to the
end of their fund life from 2020 onwards. The general partners for these funds will drive exits before closing the fund. This means a significant
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increase in M&A transactions and secondaries. Typically a secondary transaction on the fund level is based on the best performing companies in
the fund’s portfolio (later stage venture companies post series B). A recent secondary transaction by LGT in a 2010 vintage SEA based fund as
reported by Secondariesinvestors.com shows appetite for assets in the region and the potential for exits from 2010 - 2012 vintage funds.
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Portfolios with a significant percentage of late stage companies will increasingly become targets for secondary buyers, increasing the number
of exits for Southeast Asia.
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Executive Summary
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3. The Rise of SPACs
SPACs have significantly impacted the ability of companies to list on stock exchanges in the US. The
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astronomical rise of SPACs has increased interest in Southeast Asia’s technology startups. The New
York Stock Exchange has listed 111 SPACs in 2021 so far, including several focused on Southeast Asia.
Between 2020 and 2021 capital raised by Southeast Asia focused SPACs climbed from US$1.52B to
US$3.55B. The potential of SPACs for the region are obvious, but there is no guarantee of successful
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mergers between the target companies and the SPACs. Grab, being the most high profile announced
SPAC merger with a value of US$40B, and a number of companies from Vietnam, Indonesia and
Singapore are closely exploring a listing through the SPAC route.
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The rise of SPACs is not without risks for Southeast Asia. The public markets will look at Southeast
Asian SPAC mergers with interest. An unsuccessful SPAC merger will leave its imprint on sentiment
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and could negatively impact interest or momentum.
4. Leveraging Public Markets
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One trend the market hasn’t seen yet is Southeast Asian public technology
companies acquiring in the region. Although private companies like Grab, Gojek and
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Trax have made a number of acquisitions (in total 22), Golden Gate Ventures expects
an increase after these unicorns are publicly listed. The stock markets provide a pool
of liquidity which can be leveraged to finance acquisitions.
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Limitations of the report
The report does not include any judgement or opinion about the value of exits for individual investors
or of individual investments. This report is meant to provide a trend analysis on the exit landscape
based on a combination of data sources. The value of individual M&A/Trade Sale exits are typically not 6
publicly available.
Table of Contents
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A Look Back on 2018-2020..……………………………………………………………….8
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Overview of 2020…………………………………………………………………………………..13
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Exit Routes……………………………………………………………………………………………....19
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Future Outlook………………………………………….………………………………………….26
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Key Metrics……………………………………….…………………………………………………….41
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Appendix………………………………………………………………………………………………...54
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A Look Back on 2018 & 2019
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Southeast Asia’s Tremendous Trajectory
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In 2019, there were 11 Transport & Food
More than 2,000 unicorns in SEA: Bigo, unicorns received the
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Internet usage in
startups were Bukalapak, Gojek, lion’s share of all
Southeast Asia
funded by Venture Grab, Lazada, Razer, funds raised between
continues to
Capital in Southeast
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multiply, with 360M OVO, Sea Group, 2016 and 2019 –
Asia between 2015
users in 2019. Traveloka, Tokopedia US$15B out of
to 2019.
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and VNG. US$40B.
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Number of Deals Peaked in 2019
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An estimated US$52B of Venture Capital has been
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invested into Southeast Asia in the last 10 years. In 2020,
the total investment stood at US$8.2B. The start of 2021
has already broken all fundraising records for
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technology startups.
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Fundraising by privately-held companies amounted to
US$8.76B in 2019.
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Deal value in the FinTech surged to a record high of
US$1.7B in 2019, a 40% jump from 2018. This was driven
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by a blend of 1) increased deal count (15% increase in
number of deals in 2019) and; 2) larger investments into
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payments and lending companies, such as VNpay and
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FinAccel. The fintech funding trend is continuing in 2021.
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Number of Deals are Increasing across all
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Stages
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Although deployment across Series B-C
companies is increasing relatively slowly, a
healthy pipeline of Seed to Exit-Ready startups
continues to grow.
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Deals < US$3M increased nearly 2x
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between 2017 to 2019.
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A sign of a maturing ecosystem, late stage deals
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>US$60M have also progressively increased by an
average of 1.6x Y-o-Y from 2017 through to 2019.
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Number of Exit Events
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Our previous projections for 2019 were
slightly more aggressive than the
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actual results. The previous report
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didn’t account for a strong growth in
venture growth funding. Startups
didn’t have the immediate need or
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pressure to look for exits. Follow on
funding was readily available for post
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Series A rounds.
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Overview of 2020
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Overall Investment Declined Globally During COVID
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Golden Gate Ventures looked at the impact of COVID-19 for
the Southeast Asian technology ecosystem. A decrease in
funding and deal activity was to be expected. Southeast
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Asia saw a decrease of 13% in invested capital and 15% in
number of deals in 2020.
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Compared to other regions of the world, the Southeast
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Asian investment community showed strong resilience
and was not as strongly impacted.
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Bullish Themes Continue to Drive SEA
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In 2019, the eConomy SEA Report identified six key barriers to
8 out of 10 Southeast Asians viewed technology as “very
growth:
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helpful” during the pandemic. It has, no doubt, become
an indispensable part of people’s daily lives. ● Internet Access
● Funding
● Consumer Trust
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● Payments
● Logistics
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● Talent
In 2020, all but Talent have made significant progress -
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especially, Payments and Consumer Trust.
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Talent, however, remains a key blocker that all parties continue
As the Southeast Asia ecosystem matures and remained to work on.
vibrant in the face of COVID-19, VNPay became the 12th
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Unicorn in 2020. This connects to theme #3. Mobility, vocational training, wage access and upskilling - are
key themes that will define the future of work and future of
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Southeast Asia.
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Deal Activity by Region in 2020
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Fundraising by privately-held
companies stood at US$8.2B, just
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around 3% lower than US$8.76B in
2019. Unsurprisingly, fewer mega deals
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occurred amidst the pandemic.
This drop could be attributed to
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corrections in company valuations as
investors increased focus on unit
economics, sustainable growth and
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scaled back on large bets.
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Singapore continues to be the hotspot
with around US$3.66B raised, a large
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portion of this going to Grab (raised
US$1.6B).
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Indonesia came a close second.
Vietnam, Thailand and Philippines also
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increasingly attractive as economies
mature.
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M&A Continues to Drive Exits
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Despite the pandemic, 2020 recorded
an est. 45 M&A deals.
Ecommerce, fintech, media, adtech,
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and social networking-related
companies made up almost half of all
the M&A in the region.
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Average deal size stood at US$74.7M
and Singapore topped the chart.
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Gojek increased their number of
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acquisitions to thirteen. Making
the company one of the top
acquirers in the region. Its
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acquisitions include Moka,
Loket, and MVCommerce. Grab
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has made less acquisitions, but
has been an active investor.
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The IPO Exit Route
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Challenges and Opportunities for Asian Exchange Listings
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Asian Exchanges and 03 HKEX Remains China Heavy
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accessibility
With China at its hinterland, HKEX already has
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Most Asian exchanges have stringent listing many Chinese Tech companies listed. Ongoing
requirements, which can amount to relative China-trade tensions may deter SEA companies
high costs (vs opportunity) and longer from entering the Greater China region and
pre-listing preparation. Enabling dual listings, consequently, from favorably listing on HKEX.
bringing down standards for substance,
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disclosure and reporting and broadening local
access to brokerage services could be potential
solutions offered by different exchanges..
A migration is being made by leading Asian 01 02 Low Liquidity
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exchanges such as the SGX (Singapore
Exchange). The SGX initiated a consultation Refinancing from secondary markets post-IPO
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round earlier in 2021, which should lead to remains low, retail investors largely remain excluded,
SPACs being able to list on the exchange later and dual listings with established standard exchanges
in the year. With interest from local and with high tolerance for below institutional-grade
regional family offices and other institutional
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assets and access to deeper pools of liquidity are only
funds, this should increase the potential for slowly emerging.
Southeast Asian technology startups to list.
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“Over the past year, we have welcomed numerous technology listings in the deep tech, e-commerce, data and payment sectors. These
companies have demonstrated resilience and the ability to tap the public markets despite the ongoing pandemic. The robust global
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institutional participation at IPO and post-listing performance and liquidity reflect the burgeoning investor appetite for this sector.
Looking ahead, we are confident that our upcoming SPAC framework will further meet the needs of the market – this will be an
additional listing option that offers price certainty and speed to market for next-generation high-growth companies across diverse
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sectors including technology. We will continue to work closely with the ecosystem to anchor Southeast Asia as a global technology and
capital raising hub.”
- Mr. Mohamed Nasser Ismail, Senior Vice President, Global Head of Equity Capital Markets
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NYSE is Bullish on SEA
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“[The NYSE is] incredibly bullish on Southeast Asia. The
ingredients are all there. A large market, strong and
growing mobile and internet penetration, and a young,
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tech-savvy and increasingly affluent population have
contributed to the growth of several fantastic
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companies (especially in the tech space)."
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Delano Musafer
Head of Asia-Pacific Capital Markets
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NYSE
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US Exchange Listing Possibilities
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“For Southeast Asia tech companies, the NYSE is the more proven destination of
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choice, as evident by the reception of companies like Sea. Indeed, we expect to see
several IPOs from Southeast Asian startups over the next two years.”
Delano Musafer, Head of Asia-Pacific Capital Markets, NYSE
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Unlike the past where trade sales were For ‘new economy’ companies, a U.S. listing The SEC recently approved NYSE’s proposal
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more common than IPO listings, things are offers significant advantages such as the to allow direct listings with a capital raise,
changing. Provided companies satisfy most sophisticated tech investor base, creating another pathway for companies to
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minimum market cap requirements and unmatched liquidity, a truly global profile access the public markets.
demonstrate global best practice (corporate and prestige.
governance, ESG compliance, etc.),
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Southeast Asian companies should be
confident they can list in the US without
In 2020 SEA Group saw phenomenal growth of their share price on the NYSE (~ +385%).
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any major issues.
Companies must have at least US$200M market cap on the day of listing, and a minimum IPO deal size of US$40M. 21
Key Factors Affecting Companies Going Public in Next 2-3 Years
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SUPPLY DEMAND
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There is a significant pipeline of APAC Sea’s NYSE IPO in 2017 and its aftermarket
companies interested in going public over the performance has greatly increased interest in an
next 3 years. NYSE listing amongst SE Asian ‘new economy’
companies.
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Many of these are ‘new economy’ companies,
which view going public as a natural way to raise International investors are hungry for ‘growth at
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capital to grow their businesses, and offering scale’ investment opportunities.
shareholders a liquidity event.
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Asia- Pacific is an obvious market.
Assuming favorable market conditions and a
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relatively stable geopolitical environment, [NYSE] don’t see a decrease in appetite for quality
[NYSE] see no reason why companies should not growth stories from the region over the next 2 to 3
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choose to go public. years.
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Delano Musafer, Head of Asia-Pacific Capital Markets, NYSE
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Snapshot: Special Purpose Acquisition Companies
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Bridgetown & Bridgetown 2
B Capital
US$550M & US$260M
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Unique
Especially in SEA, SPACs present a unique US$300M
Richard Li & Thiel Capital
opportunity for companies to go public globally Eduardo Saverin, Raj Ganguly
“New economy” in SEA (2 also
Vehicle
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while avoiding the complexity of listing in Technology (Global)
covers South Asia)
regional markets.
COVA L Catterton
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US$261M US$250M
Jun Hong Heng, KV Dillon, Alvin S. L Catterton Asia
Tech in SEA or US Consumer Tech in Asia
Global 219 SPACs raised > USD 79 B in 2020. In 2021, 8 Asia
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focused SPACs have raised USD 2.3 B, already
Boom exceeding that of 2019. Catcha
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US$300M Silver Crest
Patrick Grove, Luke Elliot, Wai Kit US$300M
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Wong Leon Meng
“New economy” in APAC, preferably Consumer Tech Global & Regional
SEA or Australia
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Asia
The NYSE has already listed 111 SPACs globally in
Provident
2021 including several focused on Asia. Appetite Vickers
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US$230M
Surge on both the sponsor and the investor side seem
strong.
Winarto Kartono
Consumption-focused for disruptive
US$120M
Jeffrey Chi, Chris Ho
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Tech (General)
growth in SEA
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Growth in SEA-Focused SPACs
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22%
134%
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The growth of SEA-focused SPACs have outpaced overall growth in US SPACs, with value increasing 910% vs 513% between 2020 and 2019, and 134% vs 22%
between 2021* and 2020. Number of deals increased 600% vs 320% between 2020 and 2019, and 71% vs 26% between 2021* and 2020.
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*year-to-date (April 2021)
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Future Outlook
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Survey Introduction
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In a partnership with the INSEAD Global Private Equity Initiative, Golden Gate
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Ventures surveyed 16 Southeast Asia (SEA) Venture Capitalists and limited
partners to gather both quantitative and qualitative data about their opinions
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on the region’s market outlook, including factors believed to be of high
importance, future growth patterns, and overall confidence. The topics this
group were surveyed about were:
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● Future exit outlook for the next 3 - 5 years
● The most important factors affecting the exit landscape
● The probability of Southeast Asian startups to successfully exit
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● The split between different ways of exit (M&A, secondary, IPO)
● The economic impact due to COVID-19
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● Potential for local stock exchanges
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The results of the survey have been matched to Golden Gate Ventures’
proprietary data.
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Survey Key Takeaways
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While investors confidence for regional growth ranges from neutral to positive for the
coming years, the majority believes that the region will continue to see strong growth
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overall. One important observation is the resilience of the ecosystem as a whole. Since
2014 the market overall has seen growth without any major declines.
Growth will be fueled by an increasing appetite for technology, growing numbers
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internet users, and the sheer quantity of new startups and investment opportunities
emerging. Encouraged by late stage rounds and foreign institutional capital entering
the region.
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The region must make it easier to list on local exchanges and continue along trends of
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consolidation to realize larger returns. First steps have been taken by the Singapore
Stock Exchange (SGX) and the Indonesian Stock Exchange (IDX) to (potentially) allow
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SPAC listings. Consolidations are a double-edged sword. Companies with the ability to
consolidate and roll up competitors will be a stronger target for an exit. On the flipside,
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companies that are being rolled up might not show the best return on investment.
One concern surveyed investors have is the readiness of Southeast Asian technology
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startups and founders before listing. Running a public company is vastly different than
a private company. Not many founders in Southeast Asia have had experience in public
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markets and dealing with public market scrutiny. This could be a potential risk ahead of
listing.
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How would you rate the future exit outlook (3-5 years)?
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On a Scale of 0-10 where:
6.73
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0 = "Much more negative"
5 = "Maintaining similar outlook"
10 = "Much brighter outlook"
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“More appetite for tech from “More tech giant interest in SEA, more
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PE, IPO and trade” SEA uni/deca corns trying to dominate
local ecosystem.”
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“Slightly better outlook”
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“Consolidation” “Growing maturity of the
market”
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“Oversupply of exits”
“Digitalization, local
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transformation”
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Crucial Next 3 Years for SEA
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Many 10-year venture capital funds in Southeast Asia began between 2010 and
2015. According to Preqin 50 funds were raised in this time period. These
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funds will be pressed to return capital to their limited partners between now
and 5 years. Note, that not every fund will successfully exit their portfolio and
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might need to liquidate a number of portfolio companies.
The next 1-3 years will be critical to understand the success of Southeast Asia
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for the venture capital industry. Golden Gate Ventures is estimating the
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number of secondary transactions on funds and individual portfolio
companies will increase (this is accounted for in the total number of
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forecasted exits).
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A combination of increasingly more growth deals and a jump in the number
of exits, could spur exponential growth in the number of investors and deals,
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contributing to the overall exit success of the region as a whole.
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Outlook on Verticals
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“With very few exceptions (ride hailing and some ecommerce companies), companies in SEA still face a
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capital gap especially at growth equity stage (C, D rounds), they have had to stay lean even before the
downturn so they will be more resilient” (INSEAD Survey)
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This being said, the number of growth equity stage rounds in 2021 is already showing strong momentum.
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Especially Fintech is seeing a positive inflow of new late stage capital.
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Investor Opinions on Exit Splits
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The current exit split (2017, according to Slush Singapore)
is 5% IPOs and 95% acquisitions. Some experts predict it
will remain largely the same, 5% IPOs, 80% M&As and 15%
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secondary acquisitions.
Do investors agree?
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Investor Opinions on Exit Outlook
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Globally, the "probability of reaching successful exit" (according to dealroom.co) from Seed stage is about 7%,
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Series A 12%, Series B 18%, Series C 22%, and from Series D is about 29%. Do you think this potentially reflects
the chances for startups in Southeast Asia as well? If not, how do you think the chances are in Southeast Asia?
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Investor Opinions on Acquisitions Outlook
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With mid-stage startups focused on sustainable growth amidst a slowdown in access to
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capital in 2020, cash rich companies are well positioned to acquire from 2021 onwards.
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Key Factors Affecting Exits
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Corporate Venture Capital (CVC) Secondary Funds
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“We are not seeing CVCs as active with new investments as expected (partially as a result
of COVID), but we expect them to remain active players in the exit landscape, and we also
expect new allocations to early stage startups and accelerators will emerge from
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smart CVCs in late 2021 and early 2022”
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Economic & Political Instability Need for Consolidation
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“Many VCs will need to demonstrate exits in the coming years, so there might [be] an
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increased proportion of supply-led exits”
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Sustained Exit Opportunity (Unicorns & Soon to be Unicorns)
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Unicorn No. of Acquisitions Acquisitions (Year)
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WePay (2020), Moka (2020), AirCTO ('19), Coins.ph ('19), Promogo ('18), Pianta ('16), Midtrans ('17), PT Ruma ('17), C42 ('16),
Gojek 13 (was 11)
MVCommerce ('16), Leftshift Tech ('16), Kartuku ('17), LOKET ('17)
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Trax 6 (was 4) Survey.com ('20), Qopius ('20), Planorama ('19), Shopkick ('19), LenzTech ('19), Quri ('18)
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Razer 5 (was 4) Controller Gear ('21), MOL ('18), Nextbit Systems ('17), THX ('16), OUYA ('15)
Carousell 4 701 Search (‘ 19), Duriana (‘17), WatchOverMe (‘ 16), Caarly (‘ 16)
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Traveloka 3 Mytour ('18), Pegipegi ('18), Travel Book ('18)
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Grab 3 (was 2) Bento ('20), iKaaz ('18), Kudo ('17)
Sea 2 (was 1) Bank BKE ('21), Foody ('17)
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Carro 1 Jualo (‘19)
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Tokopedia 1 Bridestory (‘19)
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Bukalapak 1 Prelo (‘18)
Lazada 1 Redmart (‘16)
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2021 Rebound in Larger Acquisitions
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Acquisitions <30M Acquisitions ≥30M
2020 2021 (YTD) 2020 2021 (YTD)
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acquired for 80M by acquired for 45M by
acquired by acquired by acquired by
VE
acquired by acquired by acquired for 125M by
R
SI
acquired for 110M by
O
30M partnership with
N
acquired by acquired by
2.
acquired for 130M by acquired for 40M by
0
36
2021: Big Mergers, Rise of SPACs
FI
N
Public Listing Mergers
AL
US$4.5B, Apr 2021, NASDAQ via US$2.41B, Jan 2021
VE
AGC SPAC
R
SI
O
US$18B, Apr 2021
Grab, Southeast Asia's most valuable startup, is
N
set to go public through a merger with
Altimeter Growth Corp., a special purpose
acquisition company (SPAC) listed on
2.
NASDAQ.
0
37
Projected Exits
FI
N
Projected exit events are based on exponential
regression and extrapolation of exit events from 2017
AL
to 2021. The region has recovered quickly from a
slightly slower 2020 and produces greater numbers of
exits as of 2021. The largest influence of exits from
2021 onwards is:
VE
● Continued interest in the region from
institutional capital
● Pipeline of growth deals
R
● The influence of SPACs on the potential for
technology startups to exit*
SI
● Upcoming listed technology companies
expanding their reach through acquisitions
O
* SPACs recently seen a dip in institutional investor
interest due to decline in their overall value. The SPAC
N
mechanism remains a flexible and feasible avenue for
technology startups to list.
2.
0
38
Conclusion
FI
N
Momentum for an emerging ecosystem is crucial. The number of exits between 2018 and
2020 don’t tell the entire story. As the number of exits in 2019 (115) and 2020 (107) slowed
AL
down in comparison to 2018 (124), one might argue the region has lost momentum. The
slowdown in exits in 2019 can be explained by the number of companies looking to remain
venture backed instead of looking for an early exit. Between 2018 and 2019 technology
startups were able to raise over US$19B in aggregate. Earlier stage startups have been raising
VE
larger rounds over the past years, helping to extend their runway. The average pre-seed
round increased by 50%, and the average series A round increased by 32% from 2019
onwards. 2021 is already proving to be a record year for venture capital in Southeast Asia and
we foresee growth in the number of exits from 2021 onwards.. The pipeline for growth
R
companies is increasing (fundraising momentum), thus enabling a healthier environment
for exits in the long run.
SI
(1) Late stage companies become acquisitive as they are expanding their business (e.g.
Grab, Gojek, Carro and Trax).
(2) Well funded and fast growing late stage companies are more likely to either list on a
O
stock exchange or being a larger acquisition target for incumbents.
N
Reviewing the previous INSEAD / Golden Gate Ventures Exit Landscape report and
comparing the data with new insights, we can conclude that Southeast Asia is emerging
when it comes to exits.
2.
● Growth in funding for later stage technology companies
● Upcoming public listing for regional unicorns
0
● More listing opportunities and institutional exposure to the rise of SPACs
● Southeast Asia as a general growth market for incumbents
39
FI
N
AL
VE
Key Metrics
R
SI
O
N
2.
0
40
Overview
FI
N
2020 has certainly been a unique year for all
AL
Real Estate & industries, including venture capital. Regions
Infrastructure
Payments across the world have seen a decline in VC

Financial Services
VE
investment as economies struggle to respond to
COVID-19. While SEA too was impacted and saw
R
Leading Funded
Sectors an overall decline in exits, it responded well
SI
Local Services Multi-Vertical
compared to many other parts of the world with
O
US$8.2B invested in 2020.
N
Retail
2.
Business
Automation
Healthcare
0
41
Total SEA Investments
FI
N
AL
VE
R
SI
O
N
2.
0
Note: H2 2020 data is an estimate based on CrowdFundInsider data
42
Investments below US$100M
FI
N
AL
VE
H2 2020 data is an estimate based
on extrapolation of 2017-2019 data.
R
From the presented 2017 through
2019 data linear lines of best fit were
SI
defined through the ordinary least
squares method. These lines were
O
extrapolated into H2 2020 to provide
estimates.
N
2.
0
43
Exit Events below US$100M
FI
N
AL
VE
R
SI
O
N
2.
0
Note: H2 2020 data is an estimate based on overall investment decline rate.
44
Investments above US$100M
FI
N
AL
VE
R
SI
Decreases in high investments in 2020 due
O
to the pandemic appear more significant
than they are because large funding going
N
into companies in prior years was
abnormally high.
2.
0
Note: H2 2020 data is an estimate based on overall investment decline rate.
45
Average Deal Size by Series
FI
N
AL
VE
R
SI
O
The average Pre-Seed Round increased by 50%,
N
and the average Series A increased by 32% from
2019 onwards.
2.
0
Note: FYE 2020 data is an estimate based on H1 2020 data
46
Deals By Series
FI
N
AL
VE
R
SI
While Series A and B deals remained
persistent in 2020 H1, COVID-19 has put a
downward pressure on the number of deals
O
across the board. The sharp drop in number
of seed/pre-seed deals, however, can be
N
partly attributed to a maturing ecosystem
and points towards greater follow-on rounds.
2.
0
Source: Crunchbase (retrieved May 2021); other reports may exclude deals with undisclosed amounts.
47
2020 Deals by Series
FI
N
AL
VE
R
SI
O
N
2.
0
Source: Crunchbase (retrieved May 2021); other reports may exclude deals with undisclosed amounts.
48
Exits
FI
N
In the first half of 2020, Southeast Asian startups and investors saw
AL
28 exits across the region. Of these, the average valuation at exit
VE
US$27 Million. This also includes 2 IPOs and 26 acquisitions/
R
secondaries, valued collectively at US$7 Million and US$379
SI
O
Million respectively.
N
2.
0
49
Number and value of Exits
FI
N
AL
VE
R
SI
O
N
2.
The main drivers for M&A are local and regional tech companies’ expanding their reach across the region, acquiring a new customer base
0
and acquiring talented teams and technology. 2021 onwards the ecosystem will see a more diverse group of acquirers.
50
Exit Valuations
FI
N
AL
VE
R
SI
Exit proceeds have been getting smaller on
O
average. This may be due to an influx of
startups, particularly in retail and fintech,
N
redistributing market share more evenly.
Larger startups don’t have the need to exit
and will remain private longer. Earlier stage
2.
troubled companies might see the need to
exit earlier as they can’t raise follow on
funding. Startups with the ability to raise
0
funding will not be pressured to get
acquired.
51
Exit Events above US$100M
FI
N
AL
VE
R
SI
The number of large exit events has
O
been decreasing since 2018. More
money in the region has led to a
N
preference of companies to raise over
exiting. This may mean companies are
overvalued, and it may show in the
2.
coming years if foreign investors are
increasing their readiness to buy into
0
SEA.
52
Convergence in Time between Rounds
FI
N
AL
VE
~22%
R
SI
O
N
There has been a convergence in the average time
between funding rounds—startups now take a
shorter time to raise series C rounds, indicating a
2.
maturing ecosystem and a positive outlook on exits.
0
*year-to-date (April 2021)
53
FI
N
AL
VE
Appendix I
Contributors
R
SI
O
N
2.
0
54
Golden Gate Ventures
FI
Golden Gate Ventures is a leading Southeast Asia focused venture capital firm headquartered in
N
Singapore. Founded in 2011 by serial entrepreneurs, Golden Gate Ventures invests in audacious local
companies in the consumer-driven internet and mobile sectors which offer superior growth and
AL
profitability. The firm has managed 3 early-stage funds and invested in 60+ companies across all major
Southeast Asian countries: Singapore, Indonesia, Thailand, Vietnam, Malaysia, and Philippines.
Golden Gate Ventures is actively sought out by new economy venture owners because of its
VE
“entrepreneur first” reputation. The firm consistently utilizes its extensive network to access regional
cross-border growth opportunities and applies best practices emerging in Silicon Valley.
R
“Entrepreneur First” – emphasis on accelerating sustainable growth
SI
and profitability through proven operational improvement strategies
developed over multiple venture funds
O
Golden Gate Ventures helps the portfolio companies develop and
implement strategic and tactical growth initiatives, including
introducing partnerships with leading consumer brands and global
N
organizations, developing digital growth strategy, helping talent
recruitment, fundraising and improving internal governance, etc.
2.
0
55
New York Stock Exchange
FI
N
AL
Delano Musafer is Head of Asia-Pacific Capital Markets for the New York Stock Exchange (NYSE).
As such, he is responsible for new IPOs/listings from across the entire APAC region, playing a
VE
leading role in their origination and also overseeing their execution e.g. Sea, Coupang, LINE,
Takeda, Amcor, XPeng, One Connect, AMTD, Studio City; SPACs from Catcha, SC Health, D8, Tiga,,
New Frontier. He also manages the relationships with APAC ex. Mainland China companies after
they have listed on the NYSE.
R
He continually interacts with prospective issuers, PE/VC firms, sovereign wealth funds, investment
banks, legal advisors, auditors, relevant government entities and other exchanges from the region.
SI
Delano started his career in 1997 as an Equity Capital Markets banker at SBC Warburg (now UBS)
based in London, working on numerous corporate and privatization IPOs and follow-ons
O
throughout the EMEA and APAC regions. In 2006, he moved permanently to Asia, and worked at
Morgan Stanley’s and Nomura’s APAC Equity Capital Markets teams in both Singapore and Hong
Kong. Following that, he was Asia-Pacific Head at specialist IPO roadshow consultancies, which
N
including working on the NYSE-listed US$25B Alibaba IPO. He joined NYSE in January 2016.
Delano Musafer
Delano has a BSc in Economics from University College London (UCL) as well as an MSc in Head of Asia-Pacific Capital
2.
International Securities, Investment & Banking. Markets
0
56
INSEAD GLOBAL PE Initiative
FI
N
Professor Claudia Zeisberger is an Author, Angel Investor and Professor of Entrepreneurship & Family Enterprise at
AL
INSEAD; she is the Founder and Academic Director of the school’s private equity centre (GPEI). Before joining
INSEAD in 2005, she spent 16 years in global investment banking.
Passionate about education, she devotes much of her time advising startups & is a mentor in Google’s Startup
VE
Accelerator. She ensures resilience of businesses in her work with corporates & institutional investors.
Professor Zeisberger teaches the Private Equity & Venture Capital, Corporate Turnaround and Risk Management
electives and has been awarded the “Dean’s Commendation for Excellence in MBA Teaching at INSEAD” annually
R
since 2008.
SI
Professor Zeisberger’s books 'Mastering Private Equity – Transformation via Venture Capital, Minority Investments
& Buyouts' as well the corresponding case book 'Private Equity in Action have become THE standard textbooks.
O
Claudia Zeisberger
N
Professor of Entrepreneurship
& Family Enterprise at INSEAD
2.
0
57
Overview INSEAD
FI
N
As one of the world’s leading and largest graduate business schools, The Global Private Equity Initiative (GPEI) drives teaching,
AL
INSEAD brings together people, cultures and ideas to develop research and events in the field of private equity and related
responsible leaders who transform business and society. Our research, alternative investments at INSEAD.
teaching and partnerships reflect this global perspective and cultural
diversity. It was launched in 2009 to combine the rigour and reach of the
VE
school’s research capabilities with the talents of global professionals
With campuses in Europe (France), Asia (Singapore) and the Middle East in the private equity industry. The GPEI aims to enhance the
(Abu Dhabi), INSEAD’s business education and research spans three productivity of the capital deployed in this asset class and focuses
continents. Our 155 renowned Faculty members from 40 countries attention on newer areas shaping the industry such as impact
R
inspire more than 1,300 degree participants annually in our MBA, investing and operational value creation, and specific groups of LPs
SI
Executive MBA, Specialised Master's degrees (Master in Finance, like family offices and sovereign wealth funds.
Executive Master in Change) and PhD programmes. In addition, more
than 12,000 executives participate in INSEAD Executive Education
O
programmes each year.
INSEAD continues to conduct cutting-edge research and innovate across
N
all our programmes. We provide business leaders with the knowledge
and awareness to operate anywhere. These core values drive academic
2.
excellence and serve the global community as The Business School for
the World.
0
58
Golden Gate Ventures
FI
Nidhi Singh is a Pre-MBA Associate at Golden Gate Ventures. Michael Lints is a Partner at Golden Gate Ventures.
N
Nidhi pursued Computer Engineering and Business at Michael Lints has over 20 years of experience helping
AL
Nanyang Technological University and started her career with innovative businesses obtain the resources, insights, and
Citi Credit Sales & Trading in Hong Kong. Eager to intersect her expertise they need in order to be successful. Michael has been
love for tech with her background in finance, she then joined a a startup operator, investor, and mentor, and is currently a
Series-B B2B AI Startup HQ in Singapore. In 2 years, she has Partner at the Singapore-based venture capital firm Golden
helped her Founders raise, build and grow the business as Gate Ventures. He joined the firm in 2013 and is currently
VE
Director of Corporate Strategy. Nidhi is headed to The Wharton leading growth venture efforts, which include LP fundraising
School for her MBA in Fall 2021. Outside of work, Nidhi enjoys and portfolio management for Golden Gate Venture's
reading non-fiction, Formula 1, running, playing golf, travelling investments at Series B and beyond.
and exploring bars!
R
Lucas Vining is an Analyst Intern at Golden Gate Ventures. Jun Bin Ho is an Analyst Intern at Golden Gate Ventures.
SI
Lucas is currently a 3rd year student working to earn his Jun Bin is currently a first year student studying Business
Management and Computer Science at New York University
O
Bachelors degree in Molecular Biology and Entrepreneurship
at the George Washington University in Washington, D.C. While Abu Dhabi. Always excited to get hands on and generate
most of his academic training is in biology, his passion for impact, he had supported multiple startups with marketing
N
entrepreneurship and the startup community drove him to and growth before joining his first VC, a Southeast Asian
found his first company, Ichosia Biotechnology in 2020. He has startup accelerator. There, he grew fascinated by the rapid
also founded Sa’akom Farms, a nonprofit dedicated to the development of the regional innovation ecosystem, and now
2.
alleviation of poverty in Cambodia through the actively advocates for students and young people to engage in
implementation of hydroponic farming. In between work at the space. Outside of his work, Jun Bin is an avid portrait
Ichosia, Sa’akom, and Golden Gate Ventures, Lucas loves to run, photography and enjoys museums, the beach and good wine.
0
play piano, and read up on the newest technology trends and
innovations!
59
FI
N
AL
VE
Appendix II
Sources
R
SI
O
N
2.
0
60
Sources
FI
Reports
e-Conomy SEA 2020 report. Temasek, Google and Bain
N
●
● INSEAD - Golden Gate Ventures Exit Landscape report 2019
● Cento Ventures SE Asia Tech Investments FY 2019
AL
● Preqin Venture Capital in Southeast Asia September 2017
Blogs / Articles
● https://www.cento.vc/southeast-asia-tech-investment-h1-2020/
VE
● https://www.cento.vc/wp-content/uploads/2020/02/Cento-Ventures-SE-Asia-Tech-Investment-FY2019.pdf
● https://asavi.co/blog/spacs-m-a-and-asias-talent-future/
● https://markets.businessinsider.com/news/stocks/spacs-raised-73-billion-more-than-traditional-ipos-blank-checks-2020-12-1029906693
● https://www.techinasia.com/tech-merger-acquisition-southeast-asia
R
● https://www.dealstreetasia.com/stories/sea-q4-2020-review-223459/
● https://www.techinasia.com/tech-merger-acquisition-southeast-asia
SI
● https://www.sgx.com/securities/ipo-performance
● https://www.asiapacific.ca/asia-watch/southeast-asias-tech-landscape-remains-attractive-despite
● https://www.dealstreetasia.com/stories/southeast-asia-seed-ecosystem-219507/
O
● https://www.vertexholdings.com/news/venture-capital-landscape-in-southeast-asia/
● https://www.ey.com/en_sg/ccb/southeast-asia-mergers-acquisitions
N
● https://www.techinasia.com/southeast-asian-tech-startups-raised-82b-2020-despite-covid19-impact
● https://www.businesstimes.com.sg/garage/singapore-takes-lions-share-of-venture-dollars-in-south-east-asia
● https://www.secondariesinvestor.com/lgt-doubles-down-on-asia-with-vertex-gp-led/
2.
● Crunchbase
● Tech In Asia
● e27
0
61
Legal Disclaimer
FI
N
Disclaimer
AL
This communication has been prepared by Golden Gate Venture’s Research Team (“GGV”) for general information only and is not intended to be relied upon in
any way. Golden Gate Ventures is an early stage venture capital firm based in Singapore. We are an independent company incorporated in Singapore and are not
affiliated to any other company outside of Singapore and the Cayman Islands. In particular Golden Gate Ventures is not associated in any way with GGV Capital
based in Silicon Valley, United States of America and Shanghai, China or Golden Gate Capital based in San Francisco, United States of America. Our business takes
VE
us to various parts of the world, and there may be companies in those countries with a similar corporate name, but we are not in any way related to them.
Information, projections and images
R
Information contained in this communication has been obtained from materials and sources believed to be reliable at the date of publication, however GGV has
SI
not taken steps to verify or certify its accuracy or completeness. Opinions, projections and forecasts in this communication depend on the accuracy of any
information and assumptions on which they are based, and on prevailing market conditions, for which GGV does not accept responsibility. No representations or
warranties of any nature are given, intended or implied by GGV about this communication, any information, opinions and forecasts contained within this
O
communication or the accuracy or enforceability of any material referred to in this communication.
GGV (including its employees, officers and agents) any of the employees of GGV referenced in the communication will not be liable, including in negligence, for
N
any direct, indirect, special, incidental or consequential losses or damages arising out of or in any way connected with use of or reliance on anything in this
communication. For the avoidance of doubt, GGV (including its employees, officers and agents) will not be liable for any investment decision based in whole or in
2.
part on the information or projections contained herein. All images are only for illustrative purposes. Given the above, GGV strongly advises all recipients of this
communication to exercise caution and to conduct their own due diligence on the relevance, accuracy, completeness and currency of the information in this
communication.
0
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Southeast Asia Exit Landscape Report 2.

4. Leveraging Public Markets

Southeast Asia’s Tremendous Trajectory

Number of Deals Peaked in 2019

Number of Deals are Increasing across all

Number of Exit Events

Overall Investment Declined Globally During COVID

the Southeast Asian technology ecosystem. A decrease in

funding and deal activity was to be expected. Southeast

number of deals in 2020.

and was not as strongly impacted.

Bullish Themes Continue to Drive SEA

In 2020, all but Talent have made signiﬁcant progress -

Deal Activity by Region in 2020

This drop could be attributed to

M&A Continues to Drive Exits

Ecommerce, ﬁntech, media, adtech,

Challenges and Opportunities for Asian Exchange Listings

A migration is being made by leading Asian 01 02 Low Liquidity

NYSE is Bullish on SEA

US Exchange Listing Possibilities

Key Factors Affecting Companies Going Public in Next 2-3 Years

Snapshot: Special Purpose Acquisition Companies

Growth in SEA-Focused SPACs

Survey Key Takeaways

Growth will be fueled by an increasing appetite for technology, growing numbers

Crucial Next 3 Years for SEA

Investor Opinions on Exit Splits

Investor Opinions on Exit Outlook

Investor Opinions on Acquisitions Outlook

Key Factors Affecting Exits

Sustained Exit Opportunity (Unicorns & Soon to be Unicorns)

Sea 2 (was 1) Bank BKE ('21), Foody ('17)

Lazada 1 Redmart (‘16)

2021 Rebound in Larger Acquisitions

acquired for 130M by acquired for 40M by

2021: Big Mergers, Rise of SPACs

Payments across the world have seen a decline in VC

COVID-19. While SEA too was impacted and saw

compared to many other parts of the world with

Total SEA Investments

Investments below US$100M

Exit Events below US$100M

Investments above US$100M

Average Deal Size by Series

2020 Deals by Series

Number and value of Exits

Exit Events above US$100M

Convergence in Time between Rounds

Golden Gate Ventures

New York Stock Exchange

INSEAD GLOBAL PE Initiative

Golden Gate Ventures

Information, projections and images

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