KPMG and HSBC jointly 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. It studied over 6,472 technology-focused start-ups with valuations of up to $500 million across 12 markets, with ten leading Emerging Giant companies identified in each market.
Some of the 16 Indian start-ups that made it to the list include e-learning platforms BrightChamps and Teachmint, fintech JusPay, MSwipe, Niyo and Airtel Payments Bank, as well as Interglobe Technology Quotient, which offers automated reservations for the hospitality and travel industry. Online automobile retailer Ki Mobility Solutions, travel app ixigo and e-sports gaming platform WinZo are also featured in the list.
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 verticals being the most prominent. Additionally, six of the 12 markets studied had average valuations of $300 million or more among their leading Emerging Giants.
According to the report, the emergence of new sector verticals attracts record-breaking investments, leading to a proliferation of larger, more valuable start-ups in the region. It also named 100 Leading Emerging Giants within the overall Asia Pacific region.
An Eye On Asia
While a repeat of the record-breaking private investment levels in 2021 is unlikely, 1Q 2022 figures as per the KPMG and HSBC report 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.
Moreover, growing pressure for an ESG to focus on business and investment strategies to meet climate targets will drive an explosive demand for green technologies and services across every industry, creating significant opportunities for start-ups. The top challenges faced by Emerging Giants include navigating regulatory complexity and securing technology talent. Formulating effective ESG and tax strategies, leveraging government incentives and implementing management processes for distributed workforces will be cornerstones of future growth.
New Sectors On The Block
Maturing technology-focused ecosystems in the Asia Pacific are producing billion-dollar companies at a rapid rate. The International Monetary Fund predicted that the region’s emerging markets and developing economies would grow 20 per cent faster than the global average this year. In light of this statement, Emerging Giants—fast-growing and influential start-ups with unicorn ambitions—are a leading indicator of the Asia Pacific’s growth trajectory.
“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 the technologies that can reduce carbon emissions and promote more responsible stewardship of the environment,” said Honson To, Chairman of KPMG Asia Pacific and KPMG China.
Asia will likely emerge as a crucial battleground in the fight for a more sustainable future. “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,” added Surendra Rosha, Co-Chief Executive of HSBC Asia-Pacific.