2022 is on track to outperform both 2020 and 2019 funding levels in APAC: Report

The rise of new sector verticals is attracting record-breaking investments, increasing the number of start-ups in the APAC region. 

KPMG and HSBC have issued the Emerging Giants in Asia Pacific report, which notes that Asia Pacific’s maturing technology-focused ecosystems rapidly produce billion-dollar businesses. 

With the International Monetary Fund predicting that Asia Pacific’s emerging markets and developing economies will grow 20 per cent faster than the global average, Emerging Giants – fast-growing, influential, and innovative start-ups with unicorn ambitions – are a leading indicator of the region’s growth trajectory this year.

According to the analysis, while replication of the record-breaking private investment levels in 2021 is improbable, 1Q 2022 figures indicate that 2022 will exceed the 2020 and 2019 funding levels in the Asia Pacific. 

Deal values in Australia, Malaysia, and South Korea have either surpassed or are on their way to exceeding 2020 totals. As the world’s largest fintech adopter, the Asia Pacific region has seen a surge in financial services transformation over the last two years, as fintech applications have advanced in line with user adoption. Significant interest in cryptocurrencies has also increased the number of crypto financial services providers and blockchain participants.

“Fast-growing technology start-ups are the new wave of SMEs contributing to economic growth. The global push towards carbon-neutrality will be a major driver of innovation as traditional sectors go green. Emerging Giants will likely play a key role in developing technologies that can reduce carbon emissions and promote more responsible stewardship of the environment.  Asia will be a crucial battleground in the fight for a more sustainable future,” says Honson To, Chairman of KPMG Asia Pacific and KPMG China.

“Emerging Giants in the Asia Pacific excites us because we see the start-up ecosystem as complementary to the established end of the financial services industry: they’re a source of innovation and invigorate both local and regional economies with their dynamism,” says Surendra Rosha, Co-Chief Executive of HSBC Asia-Pacific.

“As the world’s leading trade bank, we’re always looking for ways to help our customers innovate, develop future solutions and add value. As up-and-coming leaders who will shape industries in the next decade, Emerging Giants represent a vital building block for a sustainable and prosperous future for the region,” says Dan Roberts, HSBC’s Global Head of Business Banking.

“Asia Pacific’s emerging giants are bold, ambitious and cutting-edge in their new platform and software applications. They are courageous about whom they choose to partner with, which markets they target, and how they shape their business models and transform company culture and mission statements. Perhaps most importantly, they are transforming and pioneering the technology landscape over the coming years, in addition to thinking about what is useful to their customers now,” says Darren Yong, Head of Technology, Media and Telecommunications, KPMG Asia Pacific.

Growing pressure to incorporate ESG considerations into business and investment strategies to meet climate targets will almost certainly cause an explosion in demand for green products and services across all industries, offering massive potential for Emerging Giants. 

The most difficult obstacles for Emerging Giants are overcoming regulatory complexity and securing technology talent. Future growth will be built on developing efficient ESG and tax strategies, using government incentives, and establishing management systems for scattered workforces.

The Emerging Giants in Asia Pacific report can be downloaded at: https://kpmg.com/emerginggiants


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