Can Asean unicorns keep up the momentum they had last year?

Bain released its 2021 report on the South-east Asia PE market on Tuesday (May 10), saying that Southeast Asian unicorns faced a great "re-rating" in 2021 as they moved into public markets and suffered from the global hit to high-growth tech stocks.

Singapore drove the growth of exits in 2021, notably with Grab's US$4.3 billion SPAC IPO in November 2021 accounting for the bulk of the US$8 billion exit value in South-east Asia.

Asia now makes up slightly over 25% the global PE market with US$1.7 trillion in assets under management. Deal value in Apac grew accordingly, reaching US$296 billion from US$198 billion in 2020. Exit value has shot up to S$172 billion from US$83 billion a year prior. South-east Asian deal value hit a record US$25 billion from US$10 billion in 2020, while exit value grew to US$8 billion from US$3 billion.

The IT sector continue to dominate South-east Asia's PE deals, making up 57% of all PE deals in the region. But that dominance is waning a bit, as the sector has declined from a high of 66% in 2019.

Looking ahead, growth stage and late-stage startups are not likely to constitute the bulk of investments as it did in 2021. As a region, South-east Asia has not fared as well with exits, with fewer than anticipated happening in 2021.

The frothy valuations that startups have been enjoying aren't helpful either, and can impact exit strategies for investors in the region. Not having an obvious natural buyer is also another issue that the tech sector is facing in the region.