A comprehensive look at Southeast Asia’s vibrant tech investment landscape and what to look forward to in the year ahead.

In a report by CB Insights, tech companies in Southeast Asia were reported to have collectively received a record US$6.5 billion in disclosed equity funding, with over 500 deals closed in 2017. The transport and logistics sectors, for example, were recipients of the largest funding last year, with Grab and Go-Jek garnering US$2 billion and US$1.2 billion respectively. At the same time, disruptive e-commerce and video streaming services such as Pomelo and iflix are rapidly expanding and building strong niches in the region.

The numbers say it all – Southeast Asia’s tech start-up scene is reaching an inflection point and is poised for unprecedented growth in the year ahead. But as start-ups in Southeast Asia continue to grow, so do huge opportunities for regional investors to help sustain the growth of these promising businesses that can continue to scale and plug gaps in their economies. Corporations, governments and the community can also help boost the region’s start-up ecosystem – be it through funding or collaborations.

Planting Digital Roots

Southeast Asia is home to 640 million people and is fuelled by the rise of a generation of millennials that currently accounts for one in four of its population. This has led to challenges and nuances that start-ups are finally beginning to overcome with their digital brands surging to prominence.

With the help and pervasiveness of the internet, geographical boundaries are increasingly blurred, and consumption habits are becoming more homogenous. While Southeast Asia was once regarded as an impenetrable fortress of individuality and acute cultural differences, it is now more connected than ever, with its diverse people having access to the same information and trends from around the world.

Apart from this, deep tech (including artificial intelligence machine learning and big data) is finally getting its time in the sun, with increased interest from investors and start-ups to build systems that are cutting-edge and unique. There is much curiosity around the extent to which these intelligent platforms will be able to provide solutions to everyday problems and play a bigger role in day-to-day life.

Gazing into 2018

Building on the success stories of digital start-ups in this region over the past year, 2018 will continue to see more small and medium enterprises transition into digital-first models. With a younger, more tech-savvy generation entering the workforce, more companies and traditional industries are beginning to see the importance of adopting technological solutions and digitalizing their processes. The lure of big data and rising cost of manpower in the region are also pushing companies to explore more digitally innovative options to scale their businesses beyond national boundaries.

Governments in Southeast Asia are also looking to make more long-term investments in developing the digital infrastructure of their countries. For example, there has been huge interest in incorporating smart city-related technologies to transform local experiences and allow companies to do business on a global scale. With more incentives and motivation coming from governments, the acceleration of digitalization in this region may well continue through 2018.

Investing In Southeast Asia

With a barrage of information and new technologies rolling out every day, investors may question how to cut through the noise and make wise investment decisions. But while technology will always evolve, what remains consistent is the building and value of interpersonal relationships. It is important for investors to understand that behind every business is a person and a team, and taking time to understand and learn from them goes deeper than a standard checklist of criteria. This is what differentiates a great investment from a good one.

While the region is progressing rapidly on the technological front, large segments of Southeast Asia’s population are still trapped in poverty and lack access to basic amenities. This means that both investors and technopreneurs have immense opportunities to solve real problems on the ground. Rather than doing what has been done before, start-ups in Southeast Asia have the potential of introducing progress that is relevant and socially impactful at the same time. With this in mind, as promising as Southeast Asia’s venture landscape looks, investors would do well to approach investing in the region with a good deal of heart.

About The Writer

Amit Anand is the Co-Founder and Managing Partner of Jungle Ventures, a leading Singapore-based technology investment firm focused on growth markets. A Kauffman Fellow with over 15 years of experience in Asia, Amit previously held management positions for public listed tech giants such as Progress Software Corp and software start-ups such as Fiorano Software Inc. Amit has also founded award-winning new media start-ups such as ettaminA studios and actively consults for over a dozen others across India, Australasia and US. A frequently invited mentor at institutions such as Ideas Inc and Singapore Management University Innovation Centre, Amit also serves on the boards of Pomelo, TradeGecko and PaySense, amongst others.

This article was first published on the MillionaireAsia Issue 47 - March 2018

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