Are Southeast Asian investors shying away from injecting capital in tech?

Technology investments fell by more than 40%.

Private equity firms in Southeast Asia are becoming more selective in their approach when assessing investments, as overall number of private equity deals declined 36% in 1H16.

According to the latest study by EY, the reduction of investments made into the technology sector has pulled down the overall value of private equity deals completed in the first half of the year to US$1.56 billion, 17% lower than the same period last year.

Overall, the number of deals registered for the said period tumbled down 36%.

EY Asean Transaction Leader for Technology, Media and Telecommunications (TMT) Joongshik Wang said although the technology sector still received the largest proportion of global private equity investments, investment in the sector fell by more than 40%.

“It is clear that the technology sector is now entering into a new phase. Valuations have come off with concerns not just around the sustainability of business models, but more importantly, the exit,” Wang explained.

He added, "We are also seeing increased interest from mainstream PE investors, who are spending more time looking at and understanding the sector before they ‘dip their toes in the water’."