Tech Is The Third Most Invested Sector In Singapore, Malaysia and Indonesia

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tech investment in Singapore, Malaysia and Indonesia

Ninja Van was classified under ‘Industrials’ in the tech investment report. Source: Vulcanpost.com

Technology is the third most invested sector in three Southeast Asian countries, Singapore, Malaysia and Indonesia according to a recently released report by finance advisory firm, Duff & Phelps (reports Tech Wire Asia). The technology category includes sub-categories such as “hardware, semiconductors, software, design, manufacturing and distribution of technology, technology services”

Technology venture capital deals amounted to 16% of total investments made in the three countries in Q1 of 2016, following behind industrial and banking/financial sectors.

However, there were no significant tech-related IPOs in the first half of 2016, highlighting a concern that tech startups get stuck in a rut and are unable to expand past a certain point.

The report also highlights rising M&A deals

  • Singapore recorded the most M&A deals, with 591 secured in 2015 valued at $101.2 billion. Domestic deals only contributed to 8% of the total deal value, a significant drop from 2014 when domestic deals accounted for 24% of total value.
  • Malaysia recorded 331 M&A deals, valued at $8.9 billion, with domestic deals accounting for more than half of total transacted value, a contrast to Singapore.
  • Indonesia only recorded a total of $1.6 billion for M&A transactions. However, Indonesia’s market is still developing, and its economic growth is not as high as the other two countries.

The first half of 2016 has given us mixed signals with slowing growth in the developing markets, modest growth in the mature markets, fear of interest rate hikes, possibilities of recession in certain economies, but at the same time, a robust M&A and investment climate. -Srvidya Gopalakrishnan, MD of Duff &Phelps, Singapore

According to Tech In Asia, the report doesn’t offer a completely clear view of the tech landscape as startups such as Ninja Van raised $30 million in Series B, but was categorized under the “Industrial” sector. However, it can be seen as a small testament to the diversity of industry in which tech startups are targeting.

Despite the fact that the numbers aren’t as high as from 2015, which resulted in 128 deals across the region, worth $2.7 billion in total, the firm is positive about 2016. That is, if the second half of this year is equally active.

A version of this article was published on Tech Wire Asia in June 6. Read the full version here.