Accordingly, Southeast Asia is fast becoming a hotbed of unicorns, many of them in the tech sector, that are drawing the attention of investors. From Indonesia’s Akulaku to Singapore’s Advance Intelligence Group and Mynt in the Philippines, once-rare valuations north of a billion dollars are slowly becoming more common, and most of the world’s largest data centre and cloud multinationals are setting up or already operating data centres in the region in anticipation of the coming boom.
The region has also become China’s largest trading partner, overtaking the European Union in 2020,6 as well an integral supply-chain centre for companies diversifying manufacturing beyond China. Trade with the United States and EU accounts for almost one-fifth of ASEAN exports, while trade within the region is also thriving. The signing of the Regional Comprehensive Economic Partnership in 2020 is expected to bolster FDI and economic integration.
As ASEAN countries grows wealthier, ancillary opportunities are emerging. Healthcare expenditures, for instance, are forecast to rise 75% from 2020 to reach $740 billion in 2025.7 Underlying that growth are an ageing population—over one-fifth of people in the region will be over 60 by 2050—and the prevalence of non-communicable diseases. While some countries in the region already have booming medical tourism sectors, the broad growth in affluence will drive the development of local healthcare services, too.
The pandemic, coupled with high mobile penetration rates and low levels of local healthcare, are creating substantial opportunities for investment in online and private health services. Health and medical technologies—digital solutions especially—can provide cost-effective and high-quality treatment options. Delivering and scaling those solutions requires investment.
Education also offers new growth opportunities. While ASEAN has made dramatic improvements in primary education rates over the past decade,8 many less fortunate people have been left behind. And enrolment rates in tertiary education lag those of more developed countries and regions like Europe and the U.S.9 The pandemic underscored opportunities to close the gaps through the intersection of education and technology amid increasing connectivity.
Success won’t come easy. Although there are pockets of EdTech innovation across the region, this varies significantly, and typically serves a more affluent consumer. Investment in infrastructure such as devices, connectivity, electricity in schools is important. But it should form part of a wider strategy for how technology will be used effectively to improve learning outcomes.10 Getting that right would prove beneficial for learners and profitable for investors.
One private equity investor recently suggested that ASEAN is on course to see its first EdTech unicorn as the demand for quality online education increases.11 Indonesian EdTech start-up Ruangguru is one of many promising examples. It boasts over 22 million users, recently secured $50 million worth of investment from Tiger Global,12 and has garnered high levels of investment.13 Therein lie opportunities.