US Big Tech builds appetite for startup pie in South-east Asia

The Business Times

More high-profile investments in regional startups are emerging in a space already familiar to Chinese tech firms

US tech giants have made some recent high-profile investments into South-east Asian startups, the latest being Google’s plans to join Indonesian e-commerce player Tokopedia’s funding round, which aims to raise US$500 million to US$1 billion. Whether these investments will turn into proxy wars – as it has with Chinese tech majors – is still a question up for debate.

The strategic moves by US tech majors such as Facebook and Visa are likely to be fuelled by the rise of South-east Asia’s Internet economy and favourable demographics for growth.

“The US tech giants are actively searching for friendly frontier pastures in comparison to what they are facing at home, with Trump conservatism, and in China, their previous frontier land that is now made unfriendly by inter-governmental tensions,” said Jeffrey Seah, a partner at early-stage tech investment firm Quest Ventures.

“South-east Asia and South Asia represent scale, infrastructure-poor but aspiration-rich marketplaces to conquer and bring development economic benefits that are welcome by host governments.”

For Chinese tech giants, the battle lines have mostly been drawn in the e-commerce and e-wallet landscapes. For instance, a report from DealStreetAsia found that Alibaba (or affiliate Ant Financial) and Tencent are backing at least 11 e-wallet players in South-east Asia, in addition to expanding their respective Alipay and WeChat Pay.

For US firms, the strategy for now looks to be gaining exposure to opportunities in emerging markets. Heritas’ Mr Chik noted how some US and Chinese tech firms are common shareholders in South-east Asian startups. Google is with Tencent and JD.com in Gojek, for instance.

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