Southeast Asia’s Unicorns Suffer!

Global investors who have invested in three of Southeast Asia's high-profile tech start-ups are facing a grim reality that has seen the firms lose US$51 billion (RM225.25 billion) in value in the past year and a half since their equity debuts.

Singapore-based ride-hailing firm Grab Holdings Ltd, which listed in New York about a year ago, has shed over 70% of its market value. It was Southeast Asia's most valuable start-up at the time it merged with Altimeter Growth Corp. Grab lured more than US$4 billion from investors including BlackRock Inc, Fidelity International, and T Rowe Price Group Inc.

Source: Bloomberg, 12 December 2022

PT GoTo Gojek Tokopedia, Indonesia's largest initial public offering (IPO) in 2022,  plunged 74% while PT Bukalapak.com, which listed in 2021, plunged 69% since their first day of trade in Jakarta following widely expected IPOs. Both companies underperformed local benchmarks and about a 30% drop in the Nasdaq 100 since the start of the year. Grab is now worth US$11.6 billion, Bloomberg data showed.

The Southeast Asian newcomers join a slump engulfing recently listed Indian start-ups as investors question their high valuations. The three firms offered investors an exposure to Southeast Asia's booming e-commerce sector. But rising interest rates globally and risks of recession are taking a toll on technology shares.

There are also concerns that early investors will be paring their stakes after initial lock-up periods end. GoTo has lost nearly 60% in market value over the past month amid the expiry of a lock-up on its major shareholders' stakes and as investors fret about the unprofitable Indonesian internet company's prospects.

Online marketplace Sea Ltd, another Singaporean unicorn that was listed in the US back in 2017, lost about US$169 billion in market value since a peak in October 2021.

Most growth stocks are on a downward trend because of recent developments in the global economy. Many have also switched to value stocks in their investment journey.

Reference:

Star Southeast Asia unicorns see US$51 bil gone since listings, Filipe Pacheco & Ishika Mookerjee, Bloomberg, TheEdge CEO Morning Brief, 13 December 2022