Major international tech companies are now vying for investment opportunities in Southeast Asia as internet businesses become rampant in rapidly developing nations.
Countries such as Indonesia are now becoming the central battleground in the region as tech companies race to acquire market share.
American companies such as Google, Facebook, PayPal, and Microsoft have recently invested billions of dollars in Indonesia, buying stakes in the country's increasing unicorns - startups valued over $1 billion.
"Indonesia, specifically, is the fourth-largest internet population in the world, has a high number of exciting tech start-ups and is the largest market by population," venture capital company Lightspeed Venture Partners said in a statement.
While Indonesia has become a popular destination for investors to make inroads in Southeast Asia, other countries such as the Philippines, Thailand, and Vietnam are also becoming potential candidates. Analysts said that these countries have seen a massive boom in first-time internet users, which have contributed greatly to their GDPs and bullish tech growth.
Chinese tech companies such as Alibaba and Tencent have also recently made significant investments in Indonesia. For the most part, American companies have remained cautious and are only investing in heavily funded tech startups rather than smaller enterprises.
Earlier in the month, Google and Singapore's Temasek led a funding round for Indonesian e-commerce company Tokopedia, raising a reported $350 million. The company is already backed by China's Alibaba Group and Japan's SoftBank Group.
Microsoft also made an undisclosed investment in Indonesian e-commerce company Bukalapak this month, raising its valuation to around $3 billion. Bukalapak is currently being backed by China's Ant Group, which holds a 19.4% stake in the company.
Earlier in the year, PayPal and Facebook both invested an undisclosed amount in Indonesian ride-hailing company Gojek. Google is also an investor in the company along with Temasek and Tencent Holdings.
The heavy investments made by both Chinese and American companies have become an extension of the tech war being waged by both nations. Analysts said that while the battle is still far from over, China seems to have the advantage as it has been the first to invest and has mostly penetrated Southeast Asia.
"That battleground is like a 10-year-long battle, so there's no clear winner, but I would say China has definitely demonstrated a better adaptability," analysts have noted.
