Q2 2021 Asia Tech Investment Summary
Core Content
Q2 2021 saw a significant recovery in Asian investment activities into Europe and the US, driven by the global vaccine rollout and easing of restrictive policies. The quarter marked record highs in both fundraising and M&A transactions, with Asian investors showing strong interest in specific sectors and regions.
Main Trends and Insights
Recovery from Pandemic
- Asian investment activities in Europe and the US rebounded strongly from pandemic lows.
- Fundraising:
- 52 European tech companies raised $2.6 billion from Asian investors.
- 107 US tech companies raised over $9.7 billion from Asian investors.
- M&A:
- Deal volume and value more than doubled from Q1 in both Europe and the US.
- The US emerged as the top destination for M&A activity, with a notable rebound.
Fintech and Software Dominance
- Fintech and Software remained the most popular sectors for Asian investors.
- In the US, Fintech and Software were the top two sectors, with Fintech leading in deal value.
- In Europe, Fintech and Software also dominated, with Fintech showing stronger growth in deal value.
China's Comeback
- Chinese investors increased their deal volume by 50% compared to the previous quarter.
- They focused on US and APAC targets, with Tencent and CreditEase leading in overseas investments.
- Despite expectations of improved Sino-US relations, most acquisitions were still hindered.
Rise of Southeast Asia
- Southeast Asia became the top destination for tech investments from both European and US investors.
- US investors saw a shift in focus, with Southeast Asia overtaking India in the top destination for tech investments in Asia.
Blockchain and NFT Investments
- Asian investors poured significant capital into blockchain and NFT-related assets, with 20 investments from Chinese investors.
- European and US investors also showed interest, with 21 investments each.
- While the sector saw a surge, there is growing caution due to regulatory uncertainties and crypto market volatility.
Key Figures
- Total Fundraising Value (Asia to Europe and US): $12.337 billion
- Total Fundraising Volume: 159 deals
- Total M&A Value: $7.545 billion
- Total M&A Volume: 15 deals
Notable Fundraising Transactions
| Target |
Investor |
Target Description |
Funds Raised (US$m) |
| WAYMO |
Temasek |
Software developer of self-driving technology |
2,500 |
| Better |
SoftBank |
Online mortgage lending services |
1,500 |
| EPIC |
GIC |
Video game developer |
1,000 |
| SambaNova |
GIC |
Machine learning and data analytics platform |
676 |
| wefox |
Edbi Credito Ventures NELA |
Digital insurance platform |
650 |
Notable M&A Transactions
| Target |
Buyer |
Target Description |
Deal Value (US$m) |
| BlueYonder |
Panasonic |
Integrated software solutions for the retail demand chain |
7,100 |
| Radish |
Kakao Page |
Mobile-focused publishing platform |
161 |
| DigitalOnUs |
Tech Mahindra |
Agile Delivery services technology firm |
120 |
| tapas |
Kakao Page |
Online platform for indie comic artists and visual storytellers |
83 |
| jampp |
Affle |
Mobile application advertising platform |
41 |
Sector Analysis
Asia to Europe
| Sector |
Deal Volume (Q2 2021) |
% of Total |
Deal Value (US$m) |
% of Total |
| FinTech |
9 |
25.7% |
96.4 |
11.3% |
| Software |
7 |
20.0% |
93.8 |
10.9% |
| Marketplaces |
6 |
17.1% |
227.1 |
26.5% |
| Industrial-tech |
3 |
8.6% |
105.8 |
12.4% |
| Content - Digital Media |
1 |
2.9% |
0.9 |
0.1% |
Asia to US
| Sector |
Deal Volume (Q2 2021) |
% of Total |
Deal Value (US$m) |
% of Total |
| FinTech |
46 |
29.1% |
2,292.4 |
20.4% |
| Marketplaces |
35 |
22.2% |
5,954.7 |
53.1% |
| Software |
33 |
20.9% |
1,250.2 |
11.1% |
Top Overseas Investors
- Tencent continued as the leading Asian investor, with notable deals including:
- wefox (650.0 US$m)
- GoStudent (244.2 US$m)
- 10x (187.0 US$m)
- scalableCAPITAL (182.7 US$m)
- vivawallet (80.0 US$m)
Public Company Comparisons
Large Cap Consolidators
| Company |
HQ |
Listing Venue |
Market Cap (US$m) |
EV (US$m) |
L3M Share Perf. |
LTM Share Perf. |
CAGR 2019A-21E |
Gross Margin CY2020 |
EBITDA Margin CY2020 |
EV/Revenue CY2020 |
EV/EBITDA CY2020 |
| Tencent |
China |
SEHK |
715,445 |
734,439 |
(10.6%) |
11.1% |
26.4% |
49.2% |
37.5% |
9.9x |
26.3x |
| Alibaba |
China |
NYSE |
614,827 |
589,487 |
1.1% |
1.4% |
35.3% |
60.7% |
29.9% |
6.0x |
19.9x |
| Baidu |
China |
NasdaqGS |
72,100 |
61,363 |
(7.2%) |
65.4% |
28.3% |
55.8% |
26.0% |
3.7x |
13.3x |
| Median |
- |
- |
- |
- |
(7.2%) |
11.1% |
28.3% |
55.8% |
31.1% |
6.0x |
20.2x |
| Mean |
- |
- |
- |
- |
(5.6%) |
26.0% |
30.0% |
55.2% |
31.1% |
6.5x |
18.4x |
Digital Media
| Company |
HQ |
Listing Venue |
Market Cap (US$m) |
EV (US$m) |
L3M Share Perf. |
LTM Share Perf. |
CAGR 2019A-21E |
Gross Margin CY2020 |
EBITDA Margin CY2020 |
EV/Revenue CY2020 |
EV/EBITDA CY2020 |
| Tencent |
China |
SEHK |
715,445 |
734,439 |
(10.6%) |
11.1% |
26.4% |
49.2% |
37.5% |
9.9x |
26.3x |
| Sea Limited |
Singapore |
NYSE |
144,009 |
139,998 |
16.1% |
133.5% |
93.4% |
21.1% |
10.2% |
11.2x |
39.1x |
| NetEase |
China |
NasdaqGS |
74,967 |
65,119 |
8.1% |
33.7% |
22.2% |
56.4% |
23.7% |
5.7x |
24.2x |
| Kakao Corp. |
South Korea |
KOSE |
62,230 |
60,828 |
63.1% |
194.1% |
35.9% |
93.2% |
16.7% |
16.6x |
63.6x |
| Naver |
South Korea |
KOSE |
54,773 |
54,477 |
10.2% |
59.6% |
23.4% |
100.0% |
28.7% |
11.2x |
33.5x |
| Bilibili |
China |
NasdaqGS |
46,831 |
44,062 |
8.8% |
152.9% |
69.2% |
22.2% |
10.2% |
24.1x |
n.m. |
Digital Services
| Company |
HQ |
Listing Venue |
Market Cap (US$m) |
EV (US$m) |
L3M Share Perf. |
LTM Share Perf. |
CAGR 2019A-21E |
Gross Margin CY2020 |
EBITDA Margin CY2020 |
EV/Revenue CY2020 |
EV/EBITDA CY2020 |
| Tata Consultancy |
India |
NSEI |
166,499 |
162,473 |
4.3% |
52.7% |
9.4% |
40.9% |
27.6% |
7.6x |
27.4x |
| Infosys |
India |
NSEI |
90,294 |
87,383 |
12.6% |
108.1% |
9.5% |
35.0% |
26.0% |
11.1x |
22.9x |
Regional Focus
- United Kingdom and FinTech were the top destinations for investments from Asian investors.
- Southeast Asia emerged as the top region for both European and US investors, with a notable increase in deal volume compared to previous quarters.
Conclusion
Q2 2021 witnessed a robust recovery in Asian investment activities in Europe and the US, with a strong focus on Fintech and Software. The rise of Southeast Asia as a key investment destination and the continued dominance of Tencent in overseas investments highlight the dynamic and evolving landscape of Asian tech investment. Despite the enthusiasm for blockchain and NFTs, there is an increasing need for caution due to regulatory and market uncertainties.
