Early investor exits open up hot secondary market for startup equity

THE meteoric rise of South-east Asia's startups has injected life into the market for secondary transactions in startup equity, as early-stage investors look to exit their portfolio companies while private equity players find ways to get in.

South-east Asia's startup ecosystem was seeded some ten years ago with the birth of venture capital (VC) firms focused solely on the region. But VC fund lives are coming to an end, and these early investors are selling their stakes in companies to late-stage investors wanting to get in on the action.

Record levels of dry powder amid a low interest rate environment has spurred growth-stage investors to take larger stakes in tech companies. When funding rounds are oversubscribed, investors can get a bigger slice of the company by buying shares off existing backers looking for liquidity.