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Valued at approximately $340 billion as of 2020, Jungle Ventures, Southeast Asia’s largest independent venture capital firm, estimates the tech industry could rise to hit $1 trillion.
Amid the ongoing global economy restructure by the Covid crisis, Jungle Ventures forecast a triple gain in Southeast Asia’s tech startups by 2025. Valued at approximately $340 billion as of 2020, Jungle Ventures, Southeast Asia’s largest independent venture capital firm, estimates the tech industry could rise to hit $1 trillion.
Speaking to media outlet CNBC, Amit Anand, founding partner at Jungle Ventures said that the actual figure could currently be much higher than $340 billion.
“We have done such back-of-the-envelope calculation that it’s not hard to imagine there’s a lot more data than we are not looking at, in terms of the rounds that are either not announced or companies that are still under the radar,” he said.
“If you look at the growth rate of the last 3 to 5 years in Southeast Asia, if it continues, which by all means it will, you’re going to head to a trillion dollars even before 2025,” Anand added.
One of the notable aspects used by Jungle Ventures to come up with the rough estimate is the publicly available information on 31 startups with a minimum valuation of $250 million. “I was a little bit surprised, but then also not,” said Anand.
Notably, Jungle Ventures has a total of $352 million in assets under management and a combined portfolio value of approximately $4 billion. Over the years, Jungle Ventures has invested in tech companies including Indonesia’s largest consumer lending application Kredivo.
Jungle Ventures’ Point of View Regarding Southeast Asia’s Tech Companies
Southeast Asia is home to millions of people who are not only active on the internet but also use it in their day-to-day activities. Jungle Ventures sees most of the tech companies going public as an exit strategy. Moreover, there is a growing appetite for initial public offerings in the market, moreso, for tech-related companies.
According to Anand, tech businesses in Southeast Asia have the advantage to learn from their predecessors, particularly successful tech companies from China, India, and the United States.
Additionally, there has been a notable proliferation of global investors seeking to tap on the promising Southeast tech companies. Among them, Amazon.com Inc (NASDAQ: AMZN) has made notable investments in the region.
However, according to Anand, the local Southeast Asian stock market cannot handle mega IPOs. Consequently, most tech companies seeking high valuation might be compelled to go for double listing in the United States.
“Governments have a lot of work to do before we get there but that’s going to unlock another level of global liquidity,” he said.