Tech titans Grab, Traveloka, PropertyGuru eye US listings via SPAC merger – but what of Asia’s bourses?
- Some of Southeast Asia’s biggest technology companies are looking to go public by merging with US ‘special purpose acquisition companies’
- Observers say the frenzied rush is timely, though there are risks. And it leaves Asian bourses with some introspection to do
SPACs are companies with no commercial operations that are set up to raise money in an IPO. They are formed and listed for the sole purpose of later acquiring an existing company, which will then indirectly and quickly be listed on the exchange – much faster than going through a traditional initial public offering (IPO).
Like most high-growth, early-stage companies, these firms are loss making, and going public sooner rather than later is vital for accessing additional capital to fund expansion plans that will put them on the path to profitability.
Most, if not all, of the region’s biggest digital-economy players also have an eye on catching up with the aggressively expanding NYSE-listed tech group Sea Limited – which already has a capital-raising toolbox at the ready, having gone public in 2017. The Singapore-headquartered company’s share price has risen fivefold over the last 12 months.
While the current listing fever bodes well for Southeast Asia’s US$100 billion digital economy, there are risks, observers say – pointing to concerns about consumer rights and regulation. It also leaves Asian bourses with some introspection to do as they continue to lose out to the US, where listings can put regional tech titans on the global map.
