Tech is third most invested sector in Singapore, Malaysia, and Indonesia

Photo credit: It is a testament to the diversity of industries that tech startups in the region are targeting.

Technology deals include Garena’s US$170 million round and Trax’s US$40 million fundraise. The technology category, according to the firm, includes sub-categories like “hardware, semiconductors, software, design, manufacturing and distribution of technology, technology services.”

Even that doesn’t offer a very clear idea about the tech startup sector’s performance, as notable deals like Ninja Van’s US$30 million series B and Astroscale’s US$35 million funding round are categorized as “Industrials” – the most favored category with 36 percent of the deals. It is, however, a small testament to the diversity of industries that tech startups in the region are targeting.

Short on listings

It’s a little less positive outlook for tech where IPOs are concerned. This most recent period saw no significant tech-related IPOs in the region, the report reveals. It highlights the current concern that many in the ecosystem share, that a lot of tech startups are unable to grow past a certain point.

It’s good news overall though, as the firm reports a significant pick-up for company listings in Singapore with seven IPOs raising US$1.2 billion raised on the Singapore Exchange (SGX), compared to 13 IPOs in 2015 worth US$450.7 billion.

With six and eight IPOs in the first half of 2016 respectively, Malaysia and Indonesia also look set to surpass last year’s listings by December, although they might not get as much value out of it. Malaysia’s listings raised a total of US$744.3 million in 2015 compared to US$181 million in the last six months. For the same year, Indonesian companies raised a total of US$765 million, while 2016 has so far seen US$362.3 million.

Positive outlook

The firm seems upbeat on the region’s performance deal-wise. The total deal value was US$54.2 billion across 655 deals. This includes M&A, PE/VC investment, and IPO. PE/VC activity accounted for US$2.1 billion and 56 deals across the region. Singapore racked up 37 of those deals. Indonesia followed with 11 deals and Malaysia with eight.

Duff & Phelps seems upbeat on the region’s performance.

It seems like a bit of a drop compared to the boom of 2015, which saw 128 deals across the region (81 in Singapore, 26 in Indonesia, and 21 in Malaysia) worth US$2.7 billion in total, but it could surpass that if the second half of 2016 is equally active. This year certainly looks set to perform better than 2014, with 66 deals for the entire year and total deal worth of US$3.7 billion.

“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 [we are] witnessing a robust M&A and investment climate,” says Srividya C. Gopalakrishnan, managing director for Duff & Phelps Singapore.