As the world’s growth engine, Asia Pacific’s technology-focused start-ups are leveraging innovations and new sector verticals to blaze a digital trail forward.
KPMG and HSBC have released the Emerging Giants in Asia Pacific report, which examines new economy businesses across the region with strong potential to impact the global business landscape over the next decade. Over 6,472 technology-focused start-ups1 with valuations of up to US$500 million2 were studied across 12 markets, with ten leading Emerging Giant companies identified in each market3. The report also names 100 Leading Emerging Giants within the overall Asia Pacific region.
Maturing technology-focused ecosystems in the Asia Pacific are producing billion-dollar companies at a rapid rate. With the International Monetary Fund predicting that the region’s emerging markets and developing economies will grow 20 percent faster than the global average4, this year, Emerging Giants – fast-growing, influential and innovative start-ups with unicorn ambitions – are a leading indicator of the Asia Pacific’s growth trajectory.
According to the report, the emergence of new sector verticals is attracting record-breaking investments, leading to a proliferation of larger, more valuable start-ups in the region.
Beyond the traditional sectors associated with new economy businesses such as fintech or Software-as-a-Service, the report identified around 120 technology-related industry subsectors among these businesses, with blockchain, smart city, and sustainability and ESG (environmental, social and governance) verticals being most prominent. Additionally, six out of the 12 markets studied had average valuations of US$300 million or more among their leading Emerging Giants5.
Other key findings of the report include:
- While a repeat of the record-breaking private investment levels in 2021 is unlikely, 1Q 2022 figures suggest that 2022 is on target to exceed both 2020 and 2019 funding levels in the Asia Pacific. Australia, Malaysia and South Korea have already seen deal values pass or nearly pass 2020 totals.
- As the world’s biggest fintech adopter, the Asia Pacific region has experienced a boom in financial services transformation within the last two years as fintech applications progress in tandem with user uptake. Considerable interest in cryptocurrencies has also led to a surge in crypto financial services providers and blockchain players.
- Growing pressure for an ESG focus in business and investment strategies in order to meet climate targets will likely drive an explosive demand for green technologies and services across every industry, creating significant opportunities for Emerging Giants.
- Top challenges faced by Emerging Giants include navigating regulatory complexity and securing technology talent. Formulating effective ESG and tax strategies, as well as leveraging government incentives and implementing management processes for distributed workforces, will be cornerstones of future growth.
The Emerging Giants in Asia Pacific report can be downloaded here.
1 Mainland China; India; Japan; Australia; Singapore; South Korea; Hong Kong (SAR) China; Malaysia; Indonesia; Vietnam; Taiwan and Thailand.
2 Valuations based on Pitchbook data current as of 30 April 2022
3 Consideration for these lists was based on estimated valuations and venture capital received based on Pitchbook data figures; as well as KPMG and HSBC analysis on the future growth potential of these companies.
47.3% vs 6.1% IMF, April 2022
5 Valuations based on Pitchbook data current as of 30 April 2022