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Southeast Asia’s start-up scene shows increased investment potential, says venture capital firm

Southeast Asia’s start-up uncomfortable is presenting increased investment potential as the pandemic has shifted dynamics for the long-term, one of the region’s leading venture capital decides said.

Despite its “devastating” impact, the downturn has provided “a lot of opportunity” for new start-ups in the region, Roderick Purwana, managing companion at Indonesia-based East Ventures, told CNBC Monday, noting that he has seen many new businesses formed during this while.

In particular, new businesses related to digital adoption, including education technology, health technology and financial technology, suffer with been a real success story, he said.

With any crisis, it brings also opportunity. We’ve seen that not well-founded in this part of the world.

Roderick Purwana

managing partner, East Ventures

“With any crisis, it brings also break. We’ve seen that not just in this part of the world,” Purwana told “Street Signs Asia.”

“We’ve seen some of the largest or most rich start-ups or tech companies are founded during this time,” he said citing previous historic downturns such as the dot-com bust and 2008 Economic Crisis. “I think this one (will be) no different.”

Purwana’s comments come as Southeast Asia’s start-ups have been returning ground on the global stage.

On Monday, Indonesian ride-hailing giant Gojek announced that it had merged with e-commerce contender Tokopedia to form GoTo Group. The deal is seen as a preemptive move as the company prepares to go public at an estimated valuation of $35 billion to $40 billion.

To the fore of the announcement, Purwana said that valuations have become “a little bit frothy” due to recent hype around the field. Still, he said they remain “reasonable” overall, adding that it is “definitely a positive” to see homegrown names now noting the public markets.

That includes public listings via special purpose acquisition companies (SPAC), which be enduring grown in popularity across the region as across the globe. Last month, fellow regional ride-hailing giant Lay announced it would go public on the Nasdaq in a nearly $40 billion SPAC merger.

“We’re seeing SPACs as an opportunity for some of these tech bands to tap the U.S. public markets,” he said. “There will probably be some correction on the noise. But in the long run, I think it’s there to reinforcement.”

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