Asia tech is not a winner-takes-all market: KKR’s Louis Casey

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KKR, one of the most active private equity investors in technology businesses, sees a long runway for growth in the sector in Southeast Asia. Its tech portfolio in the region includes ride-hailing and e-commerce behemoth GoTo, real estate listings platform PropertyGuru and digital and financial services firm Voyager Innovations.

As it extends its mandate to back earlier stage, high-growth technology companies, it zeroed in on Vietnam-based business management software provider KiotViet last month. Its investment in the firm was its first in Southeast Asia from its Asia Next Generation Technology (NGT) strategy.

While the firm invested in KiotVet through its Asian buyout fund, it is in the market to raise its debut Asia-focused next-generation tech fund, according to its Sept 2021 investor presentation. It has previously raised two NGT funds focused on North America, Europe and Israel.

“Southeast Asia is an important part of our Asia strategy. It is incredibly dynamic,” Louis Casey, a Singapore-based member of KKR’s NGT team, told DealStreetAsia in an interview.

KKR expects its tech investments to accelerate in the region as new consumption trends and business models emerge on the back of rapid digitalisation, which the COVID-19 pandemic has accelerated.

“[T]he long-term fundamentals that underpin the technology stories in China, India or Southeast Asia are broadly consistent and are driven by highly favourable demographic trends and a very strong willingness to adopt technology,” Casey said.

On high valuations in Asia, he asserted that it reflects the market’s awareness of the size of digital opportunities. That said, incorrectly assessing the upside opportunity “is usually the biggest error an investor can make in this segment,” he said.

KKR, he added, sees opportunities in backing very large winners as well as companies in markets where many winners co-exist.

Excerpts of the interview:

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