Tech in Asia Explains: Why IPOs flop

A few years ago, Southeast Asia’s startup scene only had two publicly listed tech companies of note – gaming firm Razer and internet conglomerate Sea Group, both of which went public in 2017. 

Now, that number has increased. Several of the region’s biggest unicorns – including Grab, GoTo Group, Bukalapak, and PropertyGuru – have made their debuts on the public markets in the last year or so, marking an exciting turning point for Southeast Asia’s startup ecosystem. These IPOs are a cause for celebration – after all, they’re indicators that the region’s startup scene is maturing and is capable of producing tech companies that can play on a bigger stage. 

Since then, however, things haven’t exactly been rosy. Many of these publicly listed tech firms have seen their share prices go on a rollercoaster ride and even plummet over the last few months, leading to some dubbing these listings as “IPO flops.” It’s also calling into concern the long-term sustainability of these companies, especially as stock markets across the world turn bearish. 

This has led to some questions: What exactly is an “IPO flop?” Do these tech companies have a bigger problem on their hands or are they victims of the larger macroeconomic environment? And what do these stock market performances mean for other startups in Southeast Asia? 

In this episode of Tech in Asia Explains, David Kuo, co-founder of The Smart Investor, and Simon Huang, chief analyst at Tech in Asia, share their perspectives on why these tech IPOs have flopped.