Southeast Asia's richest kins Eye the Next Unicorn

By: Asia Business Outlook Team | Monday, 18 October 2021

A few Southeast Asia’s old-money tycoons are advancing investment in technology startups, eyeing to ride a wave of inflating valuations as they seek to counter the fallout of the pandemic on businesses ranging from retail to hospitality and manufacturing.

Holding companies, family investing wings and other vehicles of moguls from Thailand’s Dhanin Chearavanont to the Philippines’ Lance Gokongwei are either plowing millions of dollars directly into promising companies or setting up venture capital funds. Partnering with Silicon Valley venture capital firms is also gaining popularity.

Vishal Harnal, managing partner of 500 Startups Southeast Asia says, “The universe of family money in Southeast Asia has become very alive to what technology and tech investments are bringing because of recent startup successes. There’s a lot more family money coming in to chase that, and the pandemic’s accelerated that race.”

With the flurry of investments, these traditional brick-and-mortar business empires are also transitioning to a new world of e-commerce and

digitization, paving the way for fresh revenue streams after being crippled by months of lockdowns and travel restrictions. The pivot has gained even more urgency under a new crop of leaders — in some cases younger, third-generation heirs.

The companies, which have helped power Southeast Asia’s economies for decades, are now facing some tough challenges as governments still battle to contain COVID-19 infections. The Asian Development Bank last month slashed the 2021 growth outlook for the region to 3.1 percent, saying “developing Asia remains vulnerable” to the pandemic.

Although COVID-19 has decimated tourism and retail in Southeast Asia, the region is home to some of the fastest-growing internet markets. Venture backers made a record 393 deals in the first half of 2021, raising $4.4 billion by investing in startups across Southeast Asia, according to a separate research by Cento Ventures.

Among the leaders in the race is Charoen Pokphand Group Co., a 100-year-old Thai conglomerate spanning agri-food to retail and telecommunications. The group’s senior chairman is Dhanin, the head of Thailand’s wealthiest business dynasty.

Bangkok-based CP Group led a series C investment round in startup Ascend Money in September — backed by Jack Ma’s Ant Group Co. — that spawned Thailand’s first fintech unicorn with a valuation of $1.5 billion. CP Group also partnered with Siam Commercial Bank the same month to set up a $800 million emerging-technologies venture fund, seeding it with $100 million each.

Yue Jun Jiang, CP Group’s chief technology officer says, “CP Group is actively embracing innovation and exploring advanced technologies such as robotics, logistics, cloud and other digital technologies. Southeast Asia is going into a golden era of transformation where corporations are upgrading with advanced technologies and new business models, and the pandemic has further accelerated digitization.”