In The News

Startup IPO Jitters Spill over into South-East Asia

The Business Times

24 Oct 2019

In the recent The Business Times article, “Startup IPO jitters spill over into South-east Asia” (subscription required), Morrison & Foerster partner Jake Robson shared his thoughts on the IPO market for the startups in South-east Asia.

Market sentiment in the region has weakened since the recent flops of startup IPOs in the U.S. Mr. Robson said:  "If you're looking at a five-year horizon, are most of the South-east Asian unicorns going to be listed by then? I imagine so. But the next six months? No, I don't think so, because the market conditions just aren't right."

According to him, startups also have an incentive to simplify their shareholding structure via an IPO sooner than later. "If they carry on doing these fundraising rounds, raising half a billion or a billion dollars at a time, each time with a new series of shares and rights attached to those shares which trump the previous rounds, it gets incredibly difficult to manage," he said.

For startups, a public listing is not the only option. Faced with persistent cautious sentiment, South-east Asia's unicorns could also opt for partial trade sales or spin-off listings of just one business arm in the near term, Mr. Robson added.

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