As the tech startups in Southeast Asia, particularly those in the fintech sector, expand despite the contracting economy, there will inevitably be more interest from Special purpose acquisition companies (SPACs). The region is becoming a SPAC hunting ground partly due to startups working with acquisitions companies to consolidate their positions in this changing landscape. The VC trends in Southeast Asia have already significantly impacted the burgeoning tech startup landscape, and with SPACs eager to enter new markets, increased investments, acquisitions, and funding are the likely result. 

The blank cheque era

Special purpose acquisition companies, otherwise known as blank cheque companies, are skeleton organisations that are increasingly influential in the Southeast Asian economies. Although SPACs are currently trending, they are not new. They were a growing part of the emerging landscape in the 1990s, but the market at the time was still finding its feet. During those times, it was awash with capital and willing investors, but the failure rate of startups was enormously high. This translated to many investors losing lots of money, forcing the SPACs’ influence to recede. Now, as the market has a relatively more stable shape, investors are once again gaining the confidence to invest.


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One of the obvious advantages of the blank cheque route is that there is less IPO scrutiny. If this trend is successful, and there is no indication it will not be, SPACs could reduce the Initial Public Offerings scarcity the region has long endured. Banks could also be facing competition for investment transactions in the retail sector with the drift towards eCommerce. Globally, 2020 saw a significant increase in SPACs, and this trend is likely to continue, especially in the fintech sector in Southeast Asia. 

The move towards a US listing is not limited to Indonesia and Singapore where the most successful startups are located. Other countries in the region are also seeing blank cheque companies rapidly increasing their involvement. Many established unicorns in the area are considering going public, and the startup sector is ripe for SPAC activity. 

This rise in potential SPAC activity is happening in parallel to a three-year decrease in VC investments in the region. With all reports pointing towards growth in the financial, education, and healthcare technology sectors in Southeast Asia, traditional IPO exit options with the backing of VC funds face competition as many startup founders see the SPAC route as a quicker way to monetise. 

Movement in the Indonesian markets

Indonesian giants Tokopedia and Traveloka are planning to go public in the coming months, providing an important barometer for the region. The country’s largest travel startup, Traveloka, is assessing a consolidation with a SPAC as a potential avenue to an exit. The Jakarta based company is eyeing a valuation of $5 to 6 billion USD and says that using a blank cheque company is the most efficient way for it to make this move. 

Also in Indonesia, eCommerce platform PT Tokopedia is in discussions with Gojek with a view to merging with the ride-hailing decacorn. It has stated that these plans have accelerated since the pandemic related quarantines and lockdowns. The move will strengthen their current position and is made with the post-pandemic environment in mind as they try to secure their market share. This is a merger of significant scale as it involves Indonesia’s two most valuable startups, and if they combine as one company, they will have a value of between $35 and 40 billion USD.  Tokopedia’s merger and new corporate governance will provide a stronger armoury in the battle against its biggest current rival, Shopee, while Gojek will also benefit and have the upper hand in its ongoing competition with Grab. 

The coup of securing a deal on the scale of Tokopedia would be a massive boon for the profile of SPACs and could fuel a rush towards blank cheque financing, particularly as the region tries to lift itself out of the economic downturn.  This uptick in activity by the acquisitions companies would see the region follow a rapidly emerging trend in the US over the past few years.  

Regular IPO measures are costly and very time, personnel and resource consuming. For tech startups in Southeast Asia, SPACs are a less expensive and more effective alternative method of raising support. The current indicators point towards strong growth of this funding path.  SPACs have become a steadily increasing force in the US markets, raising over $8,4 billion USD in January, 2021. This escalation of acquisitions will give Asian business a reference point for the coming year.

With the everchanging VC trends in Southeast Asia and the tech companies’ willingness to be listed, the region is likely to become a SPAC hunting ground and see a hectic year of IPOs, investments, and acquisitions.