Bridging the Gap in Southeast Asia’s Capital Markets

Jun 6 2024
5-min read

By Jenny Lee and Ng Yao Loong

Southeast Asia (SEA) is flourishing with some of the world’s fastest-growing economies and a dynamic start-up ecosystem. Despite Singapore’s thriving startup scene, finding sustainable capital or public equity can be challenging.

Last year, Singapore led SEA in start-up investments with a total of US$6.1 billion, even amid a global downturn in funding(1). In a challenging year for public listings globally, SEA IPO markets raised a combined US$5.8 billion last year, of which only US$35 million came from Singapore(2). The gap in comparison to the U.S. start-up funding and IPO markets is stark and concerning.

Over the past two decades, Granite Asia has catalysed 29 companies to create a combined market cap of US$548 billion at their IPO. This remarkable capital leverage is something we aspire to build in this region.

Mind the gap 

In today’s macro environment, companies are staying private longer. This leads us to the question – can an international financial hub survive without a vibrant public equity market?

While private markets provide initial risk capital and expertise, it is only one half of the equation; they cannot fully replace public equity markets. The same companies backed by private capital will need to access the public market at some point for more sustainable capital and provide liquidity to their investors. The recycling of capital within private markets can create a positive cycle, with freed-up funds reinvested into new start-ups and growth companies.

At the same time, not having a vibrant well-functioning public market could remove an essential link in a country’s economic growth and job creation value chain, limit the investing public’s access to burgeoning opportunities in their own backyard, as well as reduce transparency of these firms.

The integration of private and public markets will attract a new wave of talent in future-oriented businesses to complement founders in scaling their ventures. By drawing in experts with experience running scale-up or public companies, Singapore strengthens its position as a talent hub, extending its appeal beyond entrepreneurship into professional management and capital market expertise.

What may be less obvious is the importance of price signals from the trading of publicly listed companies. Arguably, this data is a public good. For example, the price discovery for public companies provides private companies and private investors with valuable information on asset pricing.

Finding the Big Fish

A consistent issue has been the absence of a “natural” home for SEA unicorns valued under US$5 billion. Markets like the U.S. may be a fit for some companies but not all, particularly the smaller ones. There is a real risk that these smaller companies are overlooked in larger markets and unable to sustain investor interest. Sometimes, it is advantageous to compete as a “big fish in a smaller pond.”

Companies operating in this region are also different from their counterparts worldwide due to factors beyond size.  As global challenges like AI’s impact on jobs, climate change, and energy transitions unfold differently in Asia, we need tailored solutions from innovative start-ups.

Investors who grasp these distinctive opportunities will value SEA companies differently, rather than benchmarking their performance against seemingly similar public companies from other exchanges. In essence, “comparable” companies might not be truly comparable.

Singapore has the ingredients to be an all-encompassing source of risk capital, ranging from early stage, growth to patient capital. We have a ready pool of institutional capital including family offices, pension and asset managers. We also see a growing number of innovative portfolio companies backed by private capital that will be ready to access the public market in the near future.

With a credible group of investors and ecosystem enablers coming together, we could create a strong pipeline of home-grown companies transitioning from private to public markets, broadening investment options for foreign investors interested in the region.

Granite Asia, together with 65 Equity Partners, DBS, EDBI, IMDA, KKR, Northstar Group, Singapore Business Federation, and Singapore Exchange, have launched NextGen Tech 30. This is SEA’s first public-private initiative to highlight growth companies in the region. By providing a platform for innovative start-ups and tech companies to gain visibility and attract investment, we aim to accelerate their growth trajectory.

We believe the next decade belongs to SEA, with Singapore playing a pivotal role as a global node. We are committed to recognising and elevating the wave-makers in this rise.

Our preference is for home-grown companies to continue anchoring to Singapore and the region. We endeavour to work with like-minded partners, not only when companies are ready to list, but even when they are in their early stages of growth.

The journey from private to public markets is not merely about raising capital; it is about fostering innovation, deepening the talent pool, driving economic growth, staying relevant as a financial hub, generating mutual prosperity, and creating a brighter future for all. We aim to harness the power of both public and private markets to support the next generation of entrepreneurs and business leaders. But we cannot do it alone.


Jenny Lee is a senior managing partner at Granite Asia. She has been a member of the Forbes Global 100 VC Midas list since 2012 and was the first woman to break the top 10 in 2015. Her portfolio includes 21 companies valued at more than $1 billion each and 16 IPOs across five different global exchanges.

Ng Yao Loong is Chief Financial Officer of SGX Group and will transition to the position of Head of Equities to lead the development of Singapore’s securities market. He has over 20 years of capital markets experience spanning investment banking, market development and financial regulation.

1) “Singapore is top startup investment destination in Southeast Asia; deep tech deals increased, accounting for a quarter of total value”, Enterprise Singapore, 3 April 2024

2)  “South-east Asia weathers IPO drought, SGX potential intact amid subdued performance: Deloitte”, The Straits Times, 18 January 2024

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