Tech deals gain prominence in SE Asia in H1

Tech-focused investments accounted for more than 60% of private equity and venture deals in South-East Asia.

Investments in technology made up the lion’s share of private equity and venture capital investments in Singapore, Malaysia and Indonesia, according to financial advisory firm Duff and Phelps.

The sector contributed 61 percent or $2.75 billion of overall deal value in the first half of 2017, dwarfing telecommunications (13 percent), consumer discretionary (12 percent), industrials (7 percent), and other sectors (7 percent).

Private equity and venture investments in the region totalled approximately $4.5 billion across 123 deals in H1 2017, the report found.

The biggest tech deals in the region include SoftBank Group’s investment in ride hailing company Grab valued at $1.5 billion, Goldman Sachs and TPG Capital’s $550 million investment in Singapore-based data start-up AirTrunk and Northstar Advisors’ $238 million investment in Singapore-listed Innovalues.

Singapore-based investors were the busiest dealmakers in the first half of 2017, recording 90 deals worth $3.2 billion. Malaysian investors closed 13 deals worth $841 million, while Indonesia closed 21 deals worth $298 million.

Some of the region’s largest investors had led the trend in technology deals with the report noting sizeable M&A transactions led by Singapore state investors Government Investment Corporation of Singapore and Temasek Holdings in consortia as well as direct investments.

GIC’s big-ticket tech transactions in H1 include its acquisition of Nordic software company Visma in a deal valuing the company at $5.3 billion and fintech company Allfunds for €1.8 billion.

Temasek, which has a portfolio S$275 billion ($202 billion; €173 billion) as of end-March 2017, funded its investments through divestment proceeds. It committed $800 million to Verily Life Sciences, which was spun off from Google.

“The region has shown a robust growth in M&A and investment activity in H12017, in spite of the negative outlook in certain sectors. Corporates and funds have been opportunistic in tapping into the global markets, leveraging low valuations in certain sectors and high growth in certain other sectors,” Srividya Gopalakrishnan, managing director at Duff & Phelps, said.

“Singapore has contributed to a significant part of the deal values, driven by outbound transactions, while Malaysia and Indonesia have contributed to the growth in deal making, driven by inbound investments.”