Southeast Asia is thriving. The young and vibrant technology startup ecosystem is maturing at a rapid pace with capital increasingly allocated to up and coming tech startups.

The region has seen the rise of unicorns, foreign venture capital, and corporates, prompting Golden Gate Ventures and INSEAD to revisit its earlier research relating to the exit landscape.

In revisiting the earlier research detailing the historical exits including strategic acquisitions, IPOs, and trade sales, Golden Gate Ventures and INSEAD found that their previous predictions (Bamboo Report, Q3 2015) were generally in line (albeit slightly too conservative) with the actual exits between 2016–2018.

The companies further noted that since the last report, there have been numerous developments in the past few years. The highlights were IPO of Sea Group on NYSE, Grab’s acquisition of Uber SEA in 2018, and the emergence of at least six new SEA unicorns since 2015.

“There is certainly no better time to be an entrepreneur in the thriving entrepreneurial ecosystem of Southeast Asia. Investors in Europe and the US are looking to increase their exposure to the funds in this region, and those imminent exits will only increase their commitment,” said Claudia Zeisberger, Professor of Entrepreneurship & Family Enterprise at INSEAD.

Exits forecast based on the type

Combining past SEA exit data and inputs from global benchmarks with results from INSEAD’s survey, the companies came up with at least 700 anticipated startup exits between 2023–2025. Golden Gate Ventures In partnership with INSEAD has surveyed more than 10 GPs about the probability of a healthy exit landscape for startups in Southeast Asia.

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65 per cent of respondents believes the probability of global benchmarks for exits can be applied to startups in Southeast Asia. 54 per cent of respondents believes that startups and stakeholders in Southeast Asia are unprepared for a possible downturn.

The report mentioned that the primary drivers of future exits include:

  • Unicorns becoming acquirer, case in point is Go-Jek acquiring seven other startups between 2017–2019).
  • Growing Corporate VCs investment, like Toyota’s US$1 billion investment into Grab was 2018’s largest CVC deal, globally.
  • Growing global PEs participation, highlighted by Warburg Pincus’s US$4 billion dedicated funds for SEA and China.
  • Initiatives by various stock exchanges to support more startup listings sparked and inspired by Sea Group’s IPO in 2017.
  • Given that Southeast Asia falls in a maturing ecosystem category, the report notes that regional tech giants drive most of its exits. It is further strengthened by the fact that the large Chinese tech corporates have been absent from the acquisition market, except for Lazada’s acquisition by Alibaba.

The report also predicted that secondaries would become a more significant trend, post-2022. However, there is currently very little to no public data about secondaries in Southeast Asia.

Another prediction is that there will potentially be a substantial increase in exits after 2022 due to end of fund life for new venture funds, especially those with funds raised in 2010–2012. At the same time, an influx of fresh capital will help validate more business models and push more companies towards growth and pre-IPO stage.

The fate of Corporate Venture Capital and Private Equity

The report further predicts that Corporate Venture Capital and Private Equity will create more liquidity.

Regional corporates have been increasingly more active in Southeast Asia with countries like Indonesia, Thailand, and Singapore leading the pack of corporates who have invested in startups.

The last eight years have seen the number of corporate venture capital (CVC) firms increase by 5–fold, followed by the number of investments that have increased by 63 per cent in the same period.

Besides the increases of regional corporates venture capital funds’ presence in Southeast Asia, North Asian corporates such as Hyundai and Mitsubishi, and global corporates such as Naspers, Hubert Burda Media, and Rakuten have also shown their interest in the region.

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Global Private Equity firms, known for their early investments in Southeast Asia, saw an increase of 30 per cent new investments over the last eight years, albeit not as substantial as the CVC.

Following closely, Southeast Asian venture funds have shown up over the last 12 months, launching or announcing to launch. The most notable launches were Asia Partners, launched by Nick Nash, EV Growth (a partnership between East Ventures, SMDV, and YJ Capital), and Golden Gate Ventures in partnership with Hanwha Asset Management.

According to EY report, in 2018, venture capital investments have shown an increase with 311 announced deals, all valued at US$5.2 billion, compared to 230 announced deals worth US$4.1 billion in 2017.

The driving force behind the prediction

The report lists a few factors that are said to have played a role in shaping Southeast Asia’s optimistic tech ecosystem, which include:

  • An increasing number of regional tech giants that increasingly acquire companies to expand their market reach or product range (100% CAGR between 2015–2018).
  • Increase of liquidity across various stages of venture capital.
  • Continued support from regional and global stock exchanges. Even with a small number of IPOs in the region, the increase of capital and validation of the market can help Southeast Asia see more companies ripe for an IPO.
  • The first cohort of institutional venture funds is at the end of their fund life. 2010–2012 saw the first cohort of institutional venture funds that invested in Southeast Asia tech startups, and it will end within two years.

The report predicts that the general partners for these funds will drive exits before closing the fund. It may mean that there will be a significant increase in M&A transactions, secondaries, and acqui’hires.

Meanwhile, venture funds raised after 2014 will start driving exits from 2022 onwards.


The survey poses a question that reads: “What do you think are the most important factors affecting the exit landscape?”, the answers were:
[+] Larger funds and strategic players; High valuations make an exit attractive.
[+] Unicorns becoming acquirers; Late-stage was doing secondary sales; More inorganic growth; Emergence of regional consolidators.
[+] SEA’s GDP growth.
[+] Many startups maturing, thinking about IPOs; initiatives by exchanges.
[-] Growing competition; Stock markets don’t understand venture capital investments.

An increase in available venture capital funding will lead to more companies reaching the growth stage (with proven business models and scalability) and becoming acquisition targets for MNCs, tech corporates, and private equity funds.

The increase in late-stage funding from PE funds (30 per cent) and CVCs (63 per cent) will prove crucial for a viable exit landscape.

Also Read: Golden Gate Ventures, Hanwha Asset Management team up to invest in Series B rounds

Golden Gate Ventures foresees that M&A, trade sales, and secondary sales can potentially be the primary driver for exits in Southeast Asia. Currently, the strongest acquirers are local and regional tech giants as supposed to Chinese or global tech firms.

Regional and US stock exchanges remain positive about listing technology startups in the coming years. Institutional investors will need education about the Southeast Asian potential as regional tech giants will continue to acquire startups to strengthen their platforms and extend their market reach.

The full report can be downloaded here.