Venture Capital firms have been driving technology deals in Asia, as investments have jumped 6-fold in just 8 quarters from USD 1.3 billion in Q1-2013 to USD 8.5 billion in Q4-2014. Q1-2015 has been relatively modest with investments totalling USD 4.8 billion across 247 deals, and China, India and Japan accounting for two-third of all VC-backed tech deals in Asia. While year-on-year growth for the quarter still stands strong at 95%, we believe the technology-led startup landscape is experiencing a tectonic shift, and both start-ups and VCs will have to adapt to stay ahead of the curve. We take a deeper look at deal flow in ASEAN and highlight trends for the future.


The ASEAN region is fast emerging as an attractive alternate investment destination to the overheated markets of China and India. Private Equity and Venture Capital backed deals in the region have steadily risen over the last 5 years reaching pre-GFC levels. Singapore continues to dominate the ASEAN deal flow commanding over 50% of the deal volume over the last 5 years with Malaysia at 17% coming in a distant second. Indonesia, Thailand and Vietnam follow third as their deal-flow has slowed down due to cooling commodities demand and economic and political turmoil.

Overall quality of deal flow in ASEAN market continues to mature as Investors shift focus beyond the traditional consumption driven sectors and open up to new opportunities. Technology is emerging as the dominant sector across ASEAN with 56% share of deal volume in 2014 while consumer (non-cyclical) deals across FMCG, F&B, pharma, healthcare and education sectors continue to account for a quarter of the overall deal flow.

Technology has emerged as a dominant sector across Philippines and Singapore accounting for over half their total deal volumes. However, the remaining ASEAN countries continue to receive investments into consumer related sectors as investors chase companies targeting the ‘demographic dividend’. We foresee that investors will shift focus towards innovative early stage companies once the ‘low hanging fruit’ of consumer deal flow dries up – our analysis illustrates the same as the share of early stage deals has increased to ~50% of total deals from <30% five years ago.

Stage classification is as follows:

·      Early stage: <USD 10m (excluding seed funding)

·      Mid-size : USD 10m – USD 50m

·      Large-size: >USD 50m

Note: Where deal size was unavailable, company and investor profile has been used to estimate deal stage.

Philippines and Singapore have the highest share of early stage deals as % of their respective totals. Malaysia and Vietnam at 18% have the lowest share of early stage deals as % of their respective totals. This correlates to the higher share of consumer focused large size deals in these 2 countries.

Technology sector dominates early stage deal flow

Technology sector deals have increased from 27% of total in 2010 to 81% in Q1-2015. IT-enabled services and e-Commerce account for > 90% of technology deals. We have analyzed the 5-year deal flow in the technology sector to identify the key investment drivers to determine trends for the future.

The key investment driver for early stage technology deals has changed from investing in a ‘Market leader’ in 2010 to ‘Unique service offering' and ‘Differentiated customer experience’ in 2015. VCs are looking beyond the copycat start-ups aping successful business models from Silicon Valley to home-grown companies who understand the ASEAN customer and are willing to innovate with a unique proposition. We strongly believe that innovation is going to be the key driver for future unicorns in Asia.


To discuss further on our ASEAN deal flow analysis reach out to our Business Incubation team who can assist Investors with regional investment themes and start-ups with capital advisory and talent acquisition.


Taipan Partners is a boutique advisory firm specialising in integrated business solutions providing M&A advisory & research, talent management and business incubation services to high-growth, emerging and multi-national corporates, financial services firms and disruptive innovation startups with a focus on Asia.