While e-commerce and mobility sectors have seen the emergence of regional tech giants, Southeast Asia may be set to usher in its first edtech unicorn given the huge demand for quality online education in the region, says a top private equity investor.
“Southeast Asia has yet to nurture its first edtech unicorn because the TAM (total addressable market) is not as big as the e-commerce and TMT sectors,” said Conrad Tsang, founder and chairman of Strategic Year Holdings Limited, in a virtual interview with DealStreetAsia. “GoTo and Grab are decacorns because their TAM in Southeast Asia is huge. Edtech companies, whose TAM is smaller, will grow into unicorns later.”
The region has yet to witness its first billion-dollar-worth edtech business, although players like Ruangguru are leapfrogging to approach that milestone with the support of investors including Tiger Global Management, General Atlantic, and GGV Capital.
Tsang, the helmsman of Hong Kong-based PE firm Strategic Year, is using the playbook of industry development in more sophisticated markets to envision the potential of SE Asia’s emerging economies.
In SE Asia, the team is particularly interested in markets like Vietnam, Indonesia, Cambodia, and the Philippines, as well as other cross-border opportunities.
Besides edtech, Strategic Year also invests in TMT, e-commerce, consumer products & services, and other tech-enabled segments related to healthcare, fintech and beyond.
An investor in Malaysia-based used car trading platform Carsome, Indonesia’s upskilling services provider Cakap, and Vietnam’s education service provider Teky Holdings, Strategic Year has so far closed two investments in 2021 in Indonesian healthtech platform Halodoc, and fresh produce platform Sayurbox. It plans to complete two to three more deals for the rest of this year depending on the COVID-19 situation.
While actively making investments in the market, Strategic Year is also in the process of raising several hundred million US dollars for a new fund to focus on SE Asia, DealStreetAsia has learnt from a source, who declined to be identified because the information is private.
Edited excerpts of the interview with Tsang:
