The State of Venture Capital Investing in Asia | SALT iConnections Asia | Summary and Q&A

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December 9, 2023
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SALT
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The State of Venture Capital Investing in Asia | SALT iConnections Asia

TL;DR

Panelists discuss the current state of venture capital (VC) in Asia, highlighting the challenges and opportunities in the region.

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Questions & Answers

Q: How has the current macroeconomic environment affected the VC ecosystem in Asia?

The panelists note that the previous bull market fueled success in the VC industry, but the shift in the macroeconomy has brought new challenges, such as the need to address profitability and talent acquisition. Market conditions have led to firm closures and fund closures in Southeast Asia.

Q: What measures are VC firms taking to navigate the current market conditions?

VC firms are adjusting their investing models and criteria, focusing on sustainable growth and cost-cutting measures for portfolio companies. They are also placing more emphasis on diligence and selection criteria for investments. The panelists discuss the importance of having a network of connections for successful exits and the role of relationships in the VC industry.

Q: How do VC firms balance the depth of capital markets and opportunities in more mature markets like the US with the potential in the Asian market?

The panelists discuss the balancing act between mature markets and Asian markets, highlighting the shallower capital markets and lack of strategic acquisitions in Asia. They emphasize the need for VC firms to build relationships and networks globally to ensure successful exits and increase their range and frequency of acquisitions in the region.

Q: What are some potential exit options for startups in Asia?

The panelists discuss the limited options for exits in Asia due to the underdeveloped IPO and M&A markets. They mention the potential of tech-focused markets like Hong Kong's Rule 18c and the importance of relationships and networks with tech giants that have the capability and interest in acquiring startups. Secondary platforms and token listings are also considered as potential exit options.

Summary & Key Takeaways

  • The panelists discuss the impact of the macroeconomic environment on the VC industry in Asia, highlighting the opportunities and challenges in the current market.

  • They emphasize the importance of sustainable growth and profitability for portfolio companies, especially during a time of economic stress.

  • The panelists share their perspectives on the balance between investing in more mature markets like the US and the potential in the Asian market, considering factors like shallow capital markets and the need for strategic acquisitions.

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