As businesses continue to reel from an economic slowdown in Asia, startup valuations have come down this year and are expected to stay comparatively flat in 2021, shows DealStreetAsia’s maiden survey of 50 private equity and venture capital investors in Asia.
The survey was conducted by DealStreetAsia – Research & Analytics in the first three weeks of July and seeks to shed light on how investors view valuations, fundraising and markets, among other factors, in Southeast Asia and the larger Asia region in 2020 and 2021.
In managing their existing portfolios, close to two-thirds of investors said they have allocated additional capital. The survey further indicates that private equity firms have a higher appetite for new investments compared to venture capital firms both this year and in 2021.
Amid the economic uncertainty caused by the pandemic, startup investments only weakened slightly in dollar terms as investors continued to expand their portfolio. This is consistent with our review of startup fundraising activities in the first and second quarters.
More than two-thirds of investors said securing an exit is harder to achieve this year compared to last year. A turnaround, however, is expected in 2021.
Vietnam, the first country in Southeast Asia to lift social and economic lockdowns, ranks highest among markets where investors are most confident about placing bets in 2020. The country is followed by the largest consumer market in the region, Indonesia, and the second-largest consumer market in Asia, India.
The confidence ranking for the top three preferred markets stays the same for 2021 but is accompanied by a notable improvement in perception about China.
Access Investor Sentiment Survey: Cautious Optimism for 2021 for full findings. This report is available to DealStreetAsia – Research & Analytics subscribers.