Growing global tension and market volatility are raising alarm bells for startup founders and investors as they plan their public market debuts in 2022, even after Southeast Asia’s blockbuster IPOs in 2021.
Indonesia’s GoTo is seen as the next Southeast Asia IPO this first quarter, but recent IPO failures and market volatility are expected to lead GoTo to delay its listing.
Bukalapak’s IPO plunged 66% from a US$1.5 billion valuation in August. In addition, Grab’s 2021 fourth-quarter net loss led to a $1.1 billion loss, affected by non-cash interest costs and expenses. The company’s revenue also plummeted 44% due to incentives offered to users and drivers. The super app went public on the Nasdaq Stock Market last December 2 through a SPAC with Altimeter Growth Corp.
These huge losses are sending a signal to tech companies planning their IPO debut during the first quarter of 2022. Bloomberg’s SPAC research data also shows that globally, at least six mergers with SPAC have been called off in the first quarter of this year.
Amid the pandemic, SPAC deals have helped companies become unicorns and go public at an impressively faster rate with less regulatory scrutiny. However, recent developments have shown that these recent IPOs have been unsuccessful once the hype has died down.
However, many companies remained optimistic and decided to move forward with their IPOs. As early as September 2021, Traveloka and Bridgetown Holdings Ltd. reportedly halted merger talks because of a decline of interest in the SPAC market. Traveloka has since decided to go the traditional route of going public.
Toward the end of 2021 and into the early days of 2022, Southeast Asia’s SPACs continued to go public regardless of the market situation. VTAC and Pegasus were listed on Singapore Exchange (SGX) on January 20 and 21, respectively, becoming the first SPACs in Singapore. VTAC closed up at 1% at $5.05, while Pegasus closed up at 0.4% at $5.02 on their trading debut.
After a week, Novo Tellus Capital Partners became the third SPAC listing in Singapore, raising $111 million in its IPO backed by 13 cornerstone investors, including Malaysia’s Affin Hwang Asset Management Bhd. Bukalapak, on the other hand, has been attempting to bounce back, even setting up the company’s first-ever international Technology Hub in Melbourne.