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HomestartupsSoutheast Asia's start-ups are moving with caution amid IPO frenzy, venture capitalist...

Southeast Asia’s start-ups are moving with caution amid IPO frenzy, venture capitalist says

  • Appetite for Southeast Asia's start-ups is growing, but that hunger could remain unsated for some time, according to one of the region's early-stage venture capital firms.
  • Vinnie Lauria of Golden Gate Ventures told CNBC that several companies in his portfolio have turned down or deferred various offers to go public.
  • "There's definitely companies in our portfolio that are getting asked by multiple angles, but they just don't have the appetite yet," he said.

Indonesian ride-hailing giant Gojek's drivers on the streets of Jakarta.GoTo

SINGAPORE — Appetite for Southeast Asia's start-ups is growing as investors seek to take advantage of the region's vast potential and hunt for the next blockbuster IPO.

But that hunger could remain unsated for some time, according to the managing partner of one of the region's early-stage venture capital firms, who said some start-ups are holding off on going public.

"There's definitely companies in our portfolio that are getting asked by multiple angles, but they [the companies] just don't have the appetite yet," Vinnie Lauria of Golden Gate Ventures told CNBC.

Southeast Asia has been the subject of an investing frenzy in 2021, attracting a reported $6 billion in the first quarter. IPO announcements from Grab, GoTo and Bukalapak have sparked new confidence in the region.

If we had two that blow up, that could literally turn people off Southeast Asia for 10 years.Vinnie Lauriamanaging partner, Golden Gate Ventures

But Lauria said that several companies in his portfolio have turned down or deferred various offers to go public — either via a SPAC or direct IPO — because they say they are not yet at the right level of maturity, preferring instead to be "ready."

To be sure, a public listing opens start-ups to a greater level of scrutiny from investors, as well as regular reporting demands. Lauria, whose portfolio includes online classifieds business Carousell and automotive marketplace Carro, declined to name any companies specifically, but he said two of the prospects were above or nearing $1 billion valuations.

Moving ahead with caution

Southeast Asia is currently home to around 20 unicorns — start-ups with a valuation of $1 billion or more — the region's tech start-ups are forecast to be worth $1 trillion by 2025.

Some have already declared their plans to go public. Others, meanwhile, have been more guarded. Lauria said, however, 2022 could mark a turning point, with almost half potentially listing by then.

"For the 20 or so unicorns in Southeast Asia, we probably will see eight of them take that route over the next year," he said.

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