More than US$11.8 billion (disclosed) has been spent in Asia on acquisition of startups in the last 6 years. The Asian technological market is showing boundless potential, waiting to be unleashed in the coming years.
Of this US$11.8 billion, about a quarter of this sum came from Southeast Asia (SEA) countries, totaling up to US$2.6 billion (disclosed). SEA countries in this article would refer to Singapore, Malaysia, Indonesia, Philippines, Vietnam, Thailand, Taiwan and Hong Kong.
The other US$9.2 billion is derived from the rest of Asia, including countries like China, India, Japan and Korea.
This article will thus be segmented into these two areas for analysis purposes: SEA and the Rest of Asia.
It might not be the first time you’re hearing this, and definitely not startling to say that Asia is the market to pay attention to now. And, SEA is probably one of the more interesting new and high-growth regions for potential tech investments. The figures in this article more than support this view.
South East Asia
Given the fast pace of development in the SEA economy and technology infrastructure, it brings about great opportunities for the development and deployment of technology.
With more tech companies forming, coupled with acquirers realizing the huge potential that the SEA market has to offer, it has resulted in more merger and acquisitions taking place in the past 6 years.
At least US$2.6 billion was transacted in SEA from 2008 to 2014. This figure only accounts for about 40% of all merger and acquisitions (by count) that happened during this time frame, as 60% of acquisition amounts and details were undisclosed by the involved parties. This suggests that much of the value of past transactions in the SEA market has not even been accounted for.
Here is the compiled list of M&As that occurred in SEA:
Table 1: List of M&As in SEA
|No.||Company Name||Country of Acquiree||Acquirer||Country of Acquirer||Year of Acquisition|
|4||SGE||Singapore||Tech in Asia||Singapore||2013|
|6||ThoughtBuzz||Singapore||To The New||India||2013|
|8||YFind Technologies||Singapore||Ruckus Wireless||United States||2013|
|9||Techsailor||Singapore||To The New||India||2013|
|11||Asian Food Channel||Singapore||Scripps Networks Interactive||United States||2013|
|13||sgCarMart||Singapore||Singapore Press Holdings||Singapore||2013|
|14||Catcha Digital Asia||Singapore||Opt Inc.||Japan||2013|
|16||TMGamer (The Mobile Gamer)||Singapore||Singtel & Softbank||Singapore & Japan||2012|
|19||AdMax Network||Singapore||Komli Media||India||2012|
|22||Aktiv Digital||Singapore||Komli Media||India||2011|
|23||JobsCentral Group||Singapore||Career Builder||United States||2011|
|28||ShowNearby||Singapore||Global Yellow Pages||Singapore||2010|
|29||ShareInvestor||Singapore||Singapore Press Holdings||Singapore||2008|
|32||Fisheye Analytics||Singapore||Kantar Media||United Kingdom||2013|
|34||Fimela Network||Indonesia||KapanLagi Group||Indonesia||2014|
|48||Dealkeren||Indonesia||Living Social||United States||2011|
|50||KasKus||Indonesia||Global Digital Prima (GDP) Venture||Indonesia||2011|
|51||Tongue in Chic||Malaysia||PopDigital||Malaysia||2013|
|54||Integrated Methods||Malaysia||Ticket Monster||Korea||2011|
|57||Think Media||Malaysia||IPGA Ltd||Australia||2010|
|58||Octazen Solutions||Malaysia||United States||2010|
|61||Asian Room Service||Malaysia||Dealguru||Singapore||2012|
|62||I Love Discounts||Malaysia||Dealmates||Malaysia||2013|
|67||Entertainment Gateway||Philippines||Globe Telecom||Philippines||2008|
|68||Digiwave Solutions||Philippines||Premiere Entertainment Productions||Philippines||2008|
|69||Airborne Access Corp||Philippines||Smart Communications||Philippines||2008|
|70||Anino Games||Philippines||Pocket PlayLab||Thailand||2014|
|71||Zest Interactive||Thailand||MOL Global||Malaysia||2011|
|72||Ensogo||Thailand||Living Social||United States||2011|
|76||ISSC Technologies Corporation||Taiwan||Microchip Technology Inc.||United States||2014|
|79||ChinaVision Media Group||Hong Kong||Alibaba||China||2012|
|80||Asia Tone||Hong Kong||Equinix||United States||2012|
|81||MPayMe||Hong Kong||Powa Technologies||United Kingdom||2014|
|82||Divide||Hong Kong||United States||2014|
|83||Alivenotdead.com (AnD)||Hong Kong||Mig33||Singapore||2014|
|84||Lokaly Network Limited||Hong Kong||Dealised||Australia||2011|
|85||Taxiwise||Hong Kong||Ikky||Hong Kong||2014|
Acquirers’ Profiles by Country (SEA)
Through the data gathered, it can be deduced that each country has varying acquisition strategies and/or profiles. This information is further broken down in the Table 2 below, for easier reference.
Table 2: Acquirer's Profile
|No.||Country||Number of Acquirers||Total Disclosed Transaction Amount (USD)||Remarks|
|5||India||5||N/A||All acquisition amounts are undisclosed.|
|6||Philippines||5||$9,310,000||All deals made within own country|
|13||Thailand||1||N/A||All acquisition amounts are undisclosed|
|15||Hong Kong||1||N/A||All acquisition amounts are undisclosed|
United States acquired the most number of companies and amassed the greatest quantity of capital in SEA, followed by Japan. Australia had the third highest amount of dollars on transaction, but the bulk of this capital came from the JobStreet acquisition (which is in the process of closing).
Singapore had the second highest number of acquisitions, and it is the biggest acquirer from SEA. As the Singapore economy is one of the more developed economies in SEA, Singapore companies have a greater economic capability to handle more M&As, and are also sufficiently advanced in the use of technology to value the startups they acquire. However, the total acquisition amount was significantly lower than that of United States, Japan, and Australia. Singapore preferred to diversify their choice of acquirees, much like the analogy of placing eggs in several baskets rather than all in one.
Another interesting find was that acquirers from Philippines preferred to invest locally. All acquisitions by Filippino companies were made within their own country, as this would help to improve their domestic economy.
Other Western countries like France, The Netherlands and United Kingdom are making a foray into the SEA market.
Acquirees in SEA
There were a total of 85 companies in SEA which were acquired from 2008 to 2014. Table 3 shows the profiling of all acquirees in SEA.
Table 3: Acquiree Profiling
|Country||Number of Acquirees||Total Disclosed Acquisition Amount|
Almost 40% of all the M&As in SEA happened in Singapore. The country has been focused on encouraging entrepreneurship and innovative thinking in recent years. This is all done in a bid to make further progress as a nation and ensure a strong foothold in the technology sector. As such, the number of tech startups have been on the rise in recent years.
However, Hong Kong had the highest ratio of transaction capital to number of acquirees in the country. This means that the average acquisition amount for Hong Kong was the highest amongst all the other countries, at about $185 million.
Increasing Growth of M&As in SEA
There is an increasing trend in the number of acquisitions happening in SEA, as can be seen in Table 3.0 below. Although there was a dip in growth from 2011 to 2012, this could be attributed to the fact that there were a higher proportion of undisclosed transaction details. However so, there is still an overall increase in M&As in the region from 2008 to 2014.
Table 4: Acquisitions by Year
|Year||Number of Acquisitions||Total Disclosed Acquisition Amount (USD)|
|First half of 2014||16||$960,750,000|
In 2008, only 5 acquisitions took place in SEA. But by 2013, this number multiplied by more than four times and increased to 21 within that year itself. There has also been an immense jump in the amount of capital that has gone into these M&As, from $54,960,000 in 2008 to $1,046,970,000 in 2012. The charts below show a clear upward trend in M&As in SEA.
As the SEA countries continue to develop and grow, the IP creation scene in SEA has made advancements. Technological capabilities have not gone unnoticed, as the occurrences of M&As have been increasing over the years. For example, Google recently acquired Divide, whose engineering team is based in Kowloon (Hong Kong) for the company’s technology.
Rest of Asia: Outside of SEA
Acquisitions outside SEA reached a high, amounting to more than US$9.2 billion. Similarly, most of the acquisition amounts were undisclosed so the total dollars on transaction is actually much higher than the reported amount. Table 5 below summarizes the numerical findings.
Table 5: Acquisitions made in the Rest of Asia
|Country||Number of Acquirees||Acquisition Amount|
China had the largest amount of capital pumped into their economy, with at least $7 billion worth of acquisition amounts. With 10 acquirees originating from China, the average net worth of a China acquiree is close to US$600 million. This shows that the scale of these China companies are of extreme magnitude.
More than $1 billion of dollars on transaction was recorded for Australia, which shows that the tech startup community in Australia is growing and developing as well.
India’s startup industry is also on a steady rise with greater innovation taking place within the country. With 15 acquisitions on hand, it closed almost a billion US dollars.
Moving on, we shall now analyse the buying trends of acquirers, segregated by their country of origin. The table below breaks down the profile of acquirers in the Rest of Asia.
Table 6: Acquirers in Rest of Asia
|Country||Number of Acquirers||Acquisition Amount|
China not only possessed acquirees of huge scales, it was also large acquirers of businesses, willing to pump in huge amounts of money to buy out a company. On average, they would fork out about US$750 million per acquirer in a transaction. With the sheer size of China’s market, it is no surprise that there are so many big players in the country.
Japan and India preferred to commit to domestic deals, with majority of acquirers buying out local firms.
It is not alarming that most companies offer an acquisition because they are planning on expanding their clientele base, or to break into a new market. What’s interesting is their choice of the market; this anchors in the thought that there is a deep belief that the Asian market is thriving, and will continue to do so in the future. This is not a new finding, but it is fascinating to see past predictions take shape in the past 6 years.
In conclusion, the information gathered speaks bounds and affirms the following stand—Asia is an up and coming rising force in the technological world today; and there is a huge upside in the Southeast Asian market waiting to be exploited.
1. Cheryl Ho was an intern at Monk's Hill Ventures from May through July 2014.
2. All transaction amounts discussed are disclosed amounts. About 40% of the transactions do not have disclosed amounts, which means the aggregate numbers are probably larger than reported in this report.
3. Please keep sending us information on deals that we missed, and we will continue to keep an updated list on our site.
The sources of this research are mainly public information on the Internet, including (but not limited to) articles from the following websites:
beSuccess, Bloomberg, Business Spectator, CNET, e27, Dailysocial, Marketwatch, Next Up Asia, Reuters, Smart Company, Startup Smart, TechCrunch, Tech in Asia, Technode, Telegraph, The Bridge, The Edge Singapore, TNW, Your Story