The technological boom in Southeast Asia is pushing for record mergers and acquisitions

The Southeast Asia technology sector deal reached $ 19 billion in the first six months of 2021, the strongest year ever to begin, driven by the acquisitions of the largest Grab, Gojek and Sea groups.

Mergers and acquisitions rose 114 percent compared to 2020, according to Dealogic data, in one of the fastest-growing Internet markets in the world that reflects investor excitement.

About 400 million users live in Southeast Asia and the digital economy is projected to reach $ 300 billion by 2025, according to a report last year by Google, Singapore-based state-owned investment firm Temas and Bain Consulting.

If the announced agreements expire at the end of the year – inclusive Grab-a-merge with a special purpose buying company that will value a SoftBank-sponsored start at $ 40 billion – volumes would be $ 75 billion, $ 17 billion in 2020 and well over $ 23 billion in 2019.

Harry Naysmith, head of investment banks in Southeast Asia, told Goldman Sachs that the region’s technology economy has “accelerated for 5-10 years,” boosting large-scale liquidity events such as the initial public offering.

It was one of the biggest deals Between Goj and Tokopedia, Indonesia’s technology team, to create a technology platform worth more than $ 18 billion, the largest unification the sector has ever made. But even with that deal and Grab’s Spac discarded, making deals in 2021 continues to lead to a year-long record.

Digital banking and lending were the main sectors that generated interest, said Varun Mittal, a partner in Singapore and a fintech specialist for the professional services company EY.

Among them acquisition Seas, the gaming and e-commerce platform of the Bank of Kesejahteraan Ekonomi in Indonesia in January. The size of the deal was not disclosed.

“We’re getting holders of Fintech companies to get regulatory licenses and get them on a fast-paced scale,” Mittal said. “Southeast Asia will have 10-15 new digital banks across Singapore, Malaysia, the Philippines and Indonesia over the next three years, making this sector one of the critical investment destinations.”

The telecommunications sector has also become well-known as one of the companies to improve the return on investment in 5G mobile networks and to create and consolidate scale, said Rohit Chatterji, head of M&A in Asia Pacific for JPMorgan.

Companies based in Malaysia, Celcom Axiata and Digi.com, have completed a merger this month to form the largest telecommunications group in the country.

According to Chatterji, the companies planned to make money from the telecommunications towers, including plans to “rent capital and unlock it from infrastructure that can be shared”.

Indosat Ooredoo, an Indonesian-based telecommunications company, sold its mobile tower wallet for $ 750 million in March to US infrastructure company Digital Colony.

It will be a big test for investors to see if the company is capable. Bukalapa, an Indonesian e-commerce company, will launch its IPO in Jakarta next month. GoTo, the combined Gojek and Tokopedia entity name and Grab will be listed by the end of the year.

“If short-term capital market events go as planned, we should see a truly virtuous cycle begin,” Naysmith said. “More investors will be comfortable with TMT in Southeast Asia [technology, media and telecom] the sector ‘s ability to deliver returns “.