,Singapore

Singapore bags more than half of PE and VC investments in Southeast Asia

Singapore’s foodtech market will also continue to grow as international players enter the scene.

Private equity (PE) and venture capital (VC) investments in Singapore contributed 56% of the overall value of PE deals completed in Southeast Asia for Q2 which raised $1.8b across 36 deals, according to Ernst & Young’s (EY) private equity briefing report. 

Singapore was followed by Malaysia (26%) and Indonesia (14%) and the country witnessed 20 deals in Q2 where PE and VC investments reached US$1.04b, EY said.

Consumer products and retail (30%) and technology (25%) emerged as they key sectors attracting the majority of the PE and VC investments in Q2 by deal value.

EY noted that the largest investment in Q2 was received by Singapore-based crane supplier Tat Hong Holdings which saw US$312m in investments and was privatised by the family of its CEO Roland Ng San Tiong and Standard Chartered Private Equity.

Trailing behind it were Luxembourg-based CVC Capital Partners’ investments in Malaysian snack food manufacturer Munchy’s Group and Indonesian snack maker Putra Putri Jaya for US$250m and US$150m, respectively.

In Q2 2018, there were six Asia-Pacific-based PE and VC funds with focus on Southeast Asia that reached their final close raising an aggregate US$942m ($1.31b), which is lower than the 11 funds closed in Q2 2017 that raised an aggregate US$1.4b, the report revealed.

“The largest Asia Pacific domiciled fund that closed in Q2 2018 with Southeast Asia as a region of focus was Dymon Asia Private Equity’s Fund II, raising US$450m ($623.61m) which it aims to invests across a range of industries primarily in Singapore,” EY said.

Meanwhile, food technology, commonly referred to as foodtech, companies have been gaining popularity in Southeast Asia the report noted, with numerous companies vying for consumers’ attention and wallet share in recent years.

“Millennials are increasingly seeking convenience and variety, resulting in a shift from home-cooking toward eating out and on-demand food delivery,” EY said.

Also read: What you need to know about food delivery habits of Singaporean workers

As a result, software only, software and logistics and ride hailing companies have been converging on their services offered to consumers, the report noted.

The food delivery landscape consists of three types of competitors according to the report comprising of asset-heavy marketing platforms, ride hailing or customer platforms and captive restaurant chain players such as KFC and McDelivery.

“Food delivery is becoming an integral part of ride-hailing companies and they have the financial muscle power and assets to capture a large share of the massive food delivery opportunity,” EY noted. “In the long term, ownership of delivery capabilities is likely to be more profitable for foodtech companies.”

Also read: Grab launches GrabFood beta in Singapore

The report highlighted that competition in the Singapore foodtech market is intense following the entry of multiple global players, with Foodpanda being the early entrant.

“The past year saw the entry of Deliveroo and GrabFood (after acquiring Uber Eats). Other credible players that have joined the fray include honestbee, hawker-focused WhyQ, and curated food delivery provider Plum.”

Indonesia’s Go-Jek has also expressed intention to launch in the Singapore market with Go-Food, EY’s report revealed.

EY also drew on Singapore’s Chope as a recent notable foodtech deal as it raised US$13m from venture capital firms Square Peg Capital, C31 Ventures and Moelis Australia.

“However, at a country or regional level, two or three competitors will continue to co-exist, with consolidation continuing as venture capital funding has declined, and smaller players seek to be acquired by global companies looking to make regional forays,” EY observed.

Whilst PE comprised more than 60% of the aggregated size of funds closed in H1 2018, PE fundraising declined from US$4.4b in H1 2017 to US$1.1b.

“We expect the momentum in deal activity to continue for the rest of the year,” EY said. “PE fundraising remained robust despite being lower than the record levels in previous years.” 

Join Singapore Business Review community
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

Analysts said there are three factors that drove the price growth.
Prices of private residential properties rose by 1.1% in Q3, marking the sixth consecutive quarter of growth.
72% of Singaporeans were aware of the term 'ESG.'
This strong performance was due to the recent acquisitions by the company.
They want a comfortable retirement, improved health, and a maintained lifestyle.
Meanwhile, 45% of respondents said they can effectively respond to cyber-attacks.
The previous projection was at S$1.3600/US$.
HongkongLand showed the most growth.
People are looking for a change of environment after 20 months, Lina Ang says.
They aim to supplement Singapore’s 2040 vision for cleaner energy for vehicles. 
This is expected to raise MLT's e-commerce revenue exposure in S. Korea to 31%.
The bank said the merger is crucial in the REIT sector.