As private investors pursue tech opportunities in emerging markets outside of China, our latest research shows that India and Southeast Asia continue to capture investments in 2018. Private equity (PE) and venture capital (VC) investors announced 170 tech transactions worth US$2.6bn in the first quarter of 2018, reflecting a sustained momentum from the 172 transactions in Q4 2017 in terms of volume of deals. Throughout 2017, India and Southeast Asia received US$18bn of investments in tech deals*, up from only US$6.5bn in 2016.
PE and VC funds continue to study how technology will reshape some of the core growth sectors in these countries such as financial services, education, healthcare, and retail. As industries pursue digital transformation and grapple with tech-related disruption, investors will see new investment opportunities in the next few years.
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- Hot tech sub-sectors: Ecommerce, fintech, medical (pharmatech/medtech) and artificial intelligence stand out for their advances in cross-sector applications.
- Top target countries: India saw the majority of total tech PE and VC activity in the Indian and Southeast Asian markets from 2015- to Q1 2018, accounting for 56% of deal value and 71% of volume. Coming in second, Singapore contributed to 33% of value and 10% of volume, followed by Indonesia with 7% of both value and volume.
- Foreign funds: While local or regional funds have been the dominant players in these markets, foreign investors have been making inroads. US investors took part in 25% of tech investments from 2015- to Q1 2018, followed by Japanese (5%) and European (4%) funds.
- Mitigating risks: A look at sector, country and political risks that can impact investment success, and the value of investigative due diligence to uncover potential liabilities.
*In this newsletter, tech deals/transactions refer to PE/VC transactions with either “computer related” or “information technology” as their investee primary industry, based on data generated from the AVCJ Database.
Join Kroll on Thursday, 24th May at 2 p.m SGT/ 11:30am IST, for a live one-hour webinar on managing sector, country, and political risks when making investments in “disruptive technology” in Southeast Asia and India.
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Private equity and venture capital investors in Southeast Asia and India capture 170 technology transactions worth US$2.6 billion in Q1 2018
Digital transformation and disruptive technologies will continue to reshape growth, presenting new investment opportunities for PE and VC funds
India/Hong Kong, 26 April 2018
Southeast Asia and India continue to capture heightened attention from investors in 2018 looking to capitalize on budding technology (tech) opportunities and emerging market plays outside of China, with private equity (PE) and venture capital (VC) investors capturing 170 tech transactions worth US$2.6bn in Q1 2018. This reflects sustained momentum from 2017, which saw the value of tech PE/VC deals in Southeast Asia and India nearly tripling over the prior year: US$18bn versus US$6.5bn in 2016.