SEA’s founders have given up more equity than peers. Here’s why

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Hello readers,

There’s news, and then there’s news. And sometimes there’s enough of the same kind to put together in neat and concise package like Tech in Asia’s regularly updated initial public offering-tracker.

Let’s just put this out there: Not a day goes by that we don’t hear that a company X plans to go public by so-and-so date, or company Y is prepping for a listing. The words change, but the gist is the same.

But there’s a difference when it comes to Southeast Asia: Founders of unicorns in the region often have less equity in their companies compared with peers from other regions. Mic drop.

Today we look at,

• Why SEA’s unicorn founders give up more equity than their peers
• This Singapore-based interior designing platform hopes the replicate the success of its profitable Indian unit
• Other newsy highlights such as Payoneer and Coupang partnering to open up Korean ecommerce market, and Viki founders looking to back 100 Singapore startups through a new venture.

Premium summary

Blood, sweat, and equity

Image credit: Timmy Loen

The ongoing influx of IPO-related news in Southeast Asia’s tech startup ecosystem prompted our team to take a closer look at the shareholdings of unicorn founders. After all the blood, sweat and tears these founders have poured into their companies, some of them are likely to come out as billionaires, thanks to how much their stakes are worth.

After diving into the data of large tech companies that have recently gone public or plan to list soon, Tech in Asia found that many Southeast Asian founders have faced greater levels of dilution compared with their peers from other regions.

• Equity pangs: The ride-hailing and food delivery segments – both verticals that require more cash upfront than others – appear to be more dilutive.

• Eyeing the bull’s eye: There seems to be some link between a company’s primary location and the degree of dilution its founders face. Companies that are singularly focused on a single geographical market – like Bukalapak in Indonesia – have seen relatively less dilution as well.

• Timing matters: This trend may also owe something to the fact that many of Southeast Asia’s companies conducted initial fundraising rounds when VC interest in the region wasn’t nearly as high as it is today.

The Amazon for home interiors