PE/VC Investments in Asia Surpassed Europe in 2017 with Investments Tripling to $23.5 Billion in Southeast Asia
Singapore Venture Capital & Private Equity Association (SVCA) released its inaugural research report Southeast Asia PE & VC: Investment Activity, with Private Equity (PE) & Venture Capital (VC) PE investments in Asia surpassing Europe, and investments in Southeast Asia almost tripling from just under $10 billion in 2016 to $23.5 billion in 2017.
” PE/VC Investments in Asia Surpassed Europe in 2017 with Investments Tripling to $23.5 Billion in Southeast Asia “
Much of the $23.5 billion investments were focused on markets in Indonesia or businesses with regional footprint headquartered in Singapore. Corporate venture capital grew more than 2.5x and accounted for a significant portion of the investments into technology businesses in Southeast Asia.
The research report was released at the SVCA’s Southeast Asia PE/VC Conference 2018, titled “PE or VC: Are the Lines Blurring?”, held at Shangri-La Hotel Singapore on the 17th May 2018.
2017 Global Private Equity and Venture Capital Investments:
|North America||$275.2 billion|
|Southeast Asia||$23.5 billion|
2017 Private Equity and Venture Capital Investments in Southeast Asia:
|Private Equity||$15.5 billion|
|Venture Capital||$8 billion|
2017 Average VC Funding per Investment in Southeast Asia:
|Series A||$6.4 million|
|Series B||$19.4 million|
|Series C||$34 million|
Key Research Findings:
1. Asia overtakes Europe
2017 marked the first year when PE/VC investments into Asia overtook Europe.
2. PE/VC investments into Southeast Asia reach 4 year high
Southeast Asia (SEA) experienced a bumper year for both PE and VC investments. Investments into SEA grew almost three times to reach US$23.5 billion in 2017.
3. Corporate Venture Capital (CVCs) increasingly active in Southeast Asia
CVCs participated in seven of the top ten deals in SEA in 2017.
4. Singapore and Indonesia continues as top destinations for PE and VC investments into Southeast Asia
Singapore and Indonesia together accounted for more than 90% of investments into SEA in 2017.
5. PE investments reach 4 year high dominated by public to private deals
PE involvement in public to private transactions experienced exponential growth. Public to private investments have grown at CAGR of 113% from 2014 to 2017.
6. Average PE deal value soars above US$600 million but median value remains below US$100 million
From 2014-2017, average size of PE deals almost tripled skewed by a few mega public to private transactions.
7. Mega-rounds in venture financing attracting PE, Hedge and Corporate Funds
Venture financing grew 4.8x from 2014 to 2017. Mega C+ rounds have grown attracting participation from corporate venture, hedge funds and private equity blurring traditional boundaries.
8. Average round sizes increasing for Seed, Series-A and Series-B
Sizes of Seed, Series-A and Series-B rounds have been growing around 12% per annum from 2014 to 2017 while Series-C has remained relatively steady.
9. No lack of Series-A financing although Series-B challenges remain
For companies that raised seed financing over the period 2008-2014, the percentage of companies that successfully raised Series-A financing was comparable to that in the US. However, less than a third of Series-A funded companies successfully raised Series-B funding, well below US and UK figures. However, median times between rounds of financing are comparable across US, UK, India and Southeast Asia.
10. Spotlight on IPO of Southeast Asian Unicorns in 2017
The IPO of two of Southeast Asia’s “unicorns” created some excitement in 2017 although stock prices of Sea Limited and Razer have since seesawed above and below their IPO price.
The research report was released at the SVCA’s Southeast Asia PE/VC Conference 2018, titled “PE or VC: Are the Lines Blurring?”, held at Shangri-La Hotel Singapore on the 17th May 2018. More than 200 regional experts from the private equity and venture capital industry attended the conference with keynote speakers featuring John Tang, Managing Director of GIC Private Limited and Steve Melhuish, Co-founder & Vice-Chairman of PropertyGuru Group.
The SVCA’s Southeast Asia PE/VC Conference 2018 was sponsored by Blackpeak (Singapore) Pte Limited., Deloitte & Touché Financial Advisory Services Pte Ltd, Duff & Phelps Singapore Pte. Ltd., Simmons & Simmons JWS Pte. Ltd., and Singapore Exchange Limited.
SVCA was formed in 1992 to promote the development of the venture capital (VC) and private equity (PE) industry. SVCA’s mission is to foster greater understanding of the importance of VC and PE to the economy in support of entrepreneurship and innovation and to look after the interests of our members.
The thrust of SVCA’s activities are to promote the professional development of the industry through awards, training, workshops, and conferences; facilitate interaction and collaboration among its members through regular networking events, act as a platform for dialogue on regulatory and policy issues pertaining to VC and PE and build linkages to centres of VC and PE activities in the region through active participation at regional and global initiatives.