VC Market in South East Asia

Banker city of South East Asia

Financial Center of South East Asia via members.virtualtourist.com

There is no region in the world that has not experienced the influence of venture capital firms. One reason for this trend is that the VC firm likes to invest in various technologies and as its use continues to grow in popularity around the globe, it opens up more opportunities for VC firms like Effi Enterprises to invest. A VC firm will invest in a company that they feel has great potential and is likely to experience enormous growth. The idea is to fund the startup business to help it grow, and see it through to its IPO. This type of substantial investment is typically done by a VC firm in exchange for equity in the company. Until recently, South East Asia did not have the type of growth expected from a VC firm. But with recent technological advancements the region has become wide open to venture capital firms.

History of VC in South East Asia

Some of the more developed countries have been able to nurture innovation and allowed VC to thrive. But in South East Asia there have been some very different markets where regulations and political environments have not been conducive for venture capital firms. South East Asia just is not as attractive as it is in India, China, UK or the US. Even though the region can be looked at as a single very large market, when you try to move from country to country there are heavy regulations. The IPO is simply not common in South East Asia even for technology based companies. This can be a major problem for venture capital firms since going public is the goal of the investment. Another challenge to the VC in this region is that advertisers do not use internet or mobile devices since they do not see it as important especially in Thailand, Indonesia, Vietnam and the Philippines. With all this in mind, entrepreneurs are increasing and it appears that the region could soon need more startup investments especially in digital media.

Current Trends in South East Asia

Many venture capital firms have been watching the market in Southeast Asia for years and for good reason. The regions 6 largest economies are expected to grow by 5 to 7 percent before 2015. There have been several government investors that have been successful and the region enjoys mostly stable prices and rather large foreign exchange reserves. The region also seems to be relatively free from the economic troubles that the developed markets have undergone. It seems that this is the perfect time of the VC to step in and give a boost to the economy. Experts are very optimistic about the region’s economy and they are unlike other emerging markets in that they are very open to buyouts. This gives the investor even more influence. You might say that for the venture capitalist, the market is wide open in the region and many are beginning to open up investments in the area and expecting sizable returns.

South East Asia and the Future of VC

There is some hope for the future of VC in South East Asia. One very promising factor is that Australia has some very strong research universities as well as some world class development and research facilities. Typically, the Australian VC industry manages more than $2 billion and more than half of the venture capital firms in Australia have been operating for a minimum of 10 years. Australia is primed for the venture capitalist and in the region it is certainly the leader. It is expected that this growth will continue in the coming years as the market shows great potential for future growth.

Advertisements

About Efraim Landa

My name is Efraim Landa I am an entrepreneur and an expert in venture capital. I am the co founder of Effi Enterprises, a venture capital firm as well as the co founder and CEO of Gluco Vista, a company that is in the process of developing a non invasive glucose meter for those with diabetes.

Posted on January 19, 2013, in Business financing, economics, financial history, VC financing, Venture Capital and tagged , . Bookmark the permalink. 1 Comment.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: