For some investors, the term “emerging markets” might conjure up the thought of nations like China, Taiwan, and Singapore. The thought that comes to mind is that these countries have a plethora of great value stocks that are poised to thrive as their respective industrial and consumer economies gain greater traction.
The urge to look East for investments might be even greater now that MSCI opted to include Chinese A-shares in its benchmark emerging markets index.
Investors who are enchanted with the idea of international capital markets investing should broaden their horizons even further. Even though equity in established companies will generally reap the immediate benefit of the growing standard of living and consumer growth, there are other avenues of investment available in these Pacific countries.
Private Markets Across The Pacific
Some of the strongest economic development in emerging markets is happening on the bleeding edge of tech. While more established startup hubs like Israel, India, and the U.S. draw their share of international private capital, the entrepreneurial ecosystems of Southeast Asia could merit more attention from global investors.
Case in point: both Taiwan and Singapore rank within the World Economic Forum’s most recent Global Competitiveness Index’s top 15 in terms of overall competitiveness rankings. Additionally, their capacity for innovation exceeds even Canada, the U.K., and the U.A.E. based on their respective technological infrastructures—for example, in Singapore, fintech is baked into the fabric of daily life.
Recent examples in the region’s incubation of successful digital startups is Taiwanese social media and live streaming startup 17 Media, which launched less than two years ago but already boasts a user base of 15 million. 17 Media has also raised over $30 million in that same span over several rounds of venture capital fundraising from firms like LeSports Innovation Fund, Infinity Venture Partners, and Prometheus Capital. In April, 17 Media announced it would be merging with Singapore-based dating app company Paktor (think Tinder) to become M17, now one of the largest social media entities in the region.
A Global Investing Network
Another example is the M.I.T./Singapore tech company NuTonomy, which launched a pilot autonomous vehicle service in Singapore in partnership with Uber-like transport company Grab. Then there’s Taipei-based NextDrive, which was founded in 2015 after a crowdfunding campaign selling portable wireless storage devices and is set to launch a business-oriented product this year.
While these companies may sound unfamiliar to an occidental audience, venture capital is paying close attention to them. Israel-based equity crowdfunding company OurCrowd already has an office in Singapore. Additionally, early in 2017 OurCrowd also announced another office to in the heart of Taipei in 2017 in partnership with Shanghai Commercial & Savings Bank (SCSB).
OurCrowd also recently announced partnerships with Reliance Private Client, a major wealth management firm in India, and the National Australia Bank.
Examples like these can be found throughout the Southeast Asian hub cities. the rapid pace of growth and development shown by tech and media companies in Southeast Asia like 17 Media as well initiatives like those spurred by NextDrive are creating an environment for innovation not unlike that of Silicon Valley or Tel Aviv.
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