- A listed company can expand and acquire through cash and equity combination.
- Grab and Altimeter Group goes under SPAC merger.
- Increasing scope for the fintech, health tech, and Edtech sectors in the South Asian market.
Southeast Asian tech giants can acquire the start-ups
Southeast Asia’s tech giants could buy up start-ups with funds raised when they go public. Acquisition and Merger of Big companies like Gojek and Tokopedia can help in acquiring Grab, Sea, and GoTo. Indonesian-based companies Gojek and Tokopedia are listed on a stock exchange. It provides them with the capital to expand and the valuation to make acquisitions in a combination of cash and equity. Golden gates venture anticipates “a few hundred acquisitions led mainly by these decacorns” by 2025. A startup estimated at more than $10 billion is referred to as a “decacorn.”
South Asia SPAC merger
Special purpose acquisition companies (SPACs) are shell companies that raise money for acquiring private companies. These transactions give businesses an alternate path to going public. One that does not include the conventional initial public offering process. Grab a transport company backed by SoftBank revealed that it would go public for $39.6 billion. Under SPAC merger with Altimeter Group, the largest such merger to date. Vinnie Lauria, Managing Partner at Golden gates venture said, “Southeast Asia’s start-up ecosystem could be approaching a point that some investors want to cash out.” They will not sell the business. But they will search for secondary investors. They will be involved in a partnership, M&A kind of deal.
Undeveloped sector in South Asian market
The fintech sector has a lot of scope in its market. The reason is that Visa and MasterCard is not a market leader in Southeast Asia. There is scope for other new payment services. Education and health insurance are also subjects of concern. Investors are also looking for a health tech and Edtech start-up.