Name: Unicorns are thriving in Southeast Asia despite complex geography and cultural diversity
Uploaded: 2021-07-30
Duration: 10 min 51 s
Description: Region’s founders and investors scramble to go local at scale

Region’s founders and investors scramble to go local at scale

Unicorns are thriving in Southeast Asia despite complex geography and cultural diversity

International

Unicorns are thriving in Southeast Asia

we want to have a great discussion about the startup scene in Southeast Asia, which, you know, I think just from my editorial vantage point is just about the most fascinating venture market in the world right now. Lots of activity going on. Um, but I'm curious to try to get a sense of how big it is then, you know, with start ups, we always talk about unicorns. Um, I just spent a little bit of time going over the CB insights list of how many unicorns there are globally. Uh, CB insights says, as of july, there are 765 with more than two trillion uh, market capitalization. And I've seen a lot of different lists going around about how many of those are from Southeast Asia. It seems to be about a dozen feeling. Do you have a different number that you kind of keep in mind when you look at the reason? Yeah, there's there's so many ways of measuring, right? And I think because of that, that isn't quite one fixed weight in terms of how you calculate a unique on whether or not you actually the ones have already been listed or not personally. I think I've seen a number trending closer to 21 of the last numbers I start in April this year was something like 17 but at five minutes start ups, I guess we also take note a little bit more around the unicorns that we do have in our portfolio which is in Asia for in Southeast Asia moses your company send it is in that category. I mean if we think of companies that have got a sort of estimated valuation of around 100 million or more. So I see you on most of those lists um mm You know, uh What's your sense of how many other similar companies like you are there are out there that are over 100 million evaluation uh, in Southeast Asia as an infrastructure business. We see companies on the rise and we get to share or be a macro index of what's happening in Southeast Asia, were in Indonesia. And the Philippines are kind of two biggest markets by head count. So we we see what's riding this rising tide raises all ships. So we just see this massive influx of centers and soon to be unicorn coming to Edwin. How does it look from your vantage? Uh, Enterprise Singapore and maybe you can just say a word quickly for people who may not know what enterprise Singapore is and what it does. Yeah, sure. Thanks. Well, Enterprise Singapore is a government agency of the Singapore Government as the names like this. And our main mandate is to help and support the growth of Singapore based smes and startups in terms of the next generation, the centers of unicorns. Um, we think we have a decent pipeline of another, you know, 30 or so that that could come to the fore quite soon. And the interesting thing is, it's not just in, you know, the traditional what we call B two C or uh sort of tech startups, right? Or B two B even, we're also starting to see ELISA from our local ecosystems from what we call deep tech startups, uh biotech companies, medical device companies, uh alternative energy type of companies that are kind of getting some traction. And we think that the next two or three uniforms will probably come from from some of a broad range of sectors. You tell us a little bit about how this all looks from, from your vantage point, uh far away, I mean, China obviously has a has a much more mature, developed uh seen by now, but you're keenly interested in the, in the market in Southeast Asia. How what do you see that strikes you? Is interesting and attractive. Still, South Southeast Asia is becoming a a conversion point of different strategy, different capital emerge into one region to test out different uh, investment approach. Uh, different way to bring up the unicorns or the scallops. I think different, different companies have their own strength. Indonesia has the natural advantage of being the largest population in Southeast Asia, Singapore being the hub. So I think everybody is trying to compete in certain way. Like, like, like you asked, how many important do you have for the home and do I have? Um but eventually I felt the region will be more successful at the homogeneous market because I don't think there's any unicorns, but today uh is created based on soul market in Singapore. I likewise, you see the lack of Indonesia unicorns are taking money or approach or support from um in all over the world, you know, being softbank in china to be in china in the U. S. One of the things that we've seen is that particularly recently, where there's a lot of uncertainty about whether or not chinese companies are going to be allowed to lift on on Wall Street. And too many people uh Southeast Asia is starting to look very attractive as as an alternative. You know, even I'm curious to just get your view as to, um I mean it's a complicated market, more than 10 different, you know, separate markets here. They're all very diverse. We have um many different sets of regulators incredibly complicated. How how do you scale regionally in a market? And what advice do you give the companies that you choose to invest? Yeah. So when we look at investing in companies, obviously one of the really, really big and key criteria is scalability, right? Your total market size. I think each of the countries have their own state, um and their own approach to it, but so pushing from two points of the number one is really from a startup point of view. And then secondly, even as a country wanting to build up an innovation within the country itself, that point of view and what types both of them is actually market access. Even if you're in Singapore, the first thing, the first market they think of going to is the adjacent markets, whether it's Indonesia that is Malaysia or whether it's maybe Hong kong without really thinking true as to whether or not the solution that they have and the U. S. B. That they have, is it better off working in us perhaps? So for us, when we look at startup is all about that, do you have a larger market access? And how do you get access to those new markets? I do hear that there's a bit of a debate about whether it's an advantage or something of a handicap to be an Indonesian start out. The pro argument says yeah of course you would want to start in Indonesia because it's such a large share of the Asean GDP and it's the place where you can get scale fastest of all. The con argument is that you get bogged down just focused on Indonesia and you neglect the kind of regional expansion and the relationships with regulators that you need to be able to uh expand more broadly. How do you, how do you see that that dilemma? Yeah, great question For us. I think the dilemma part is, um, I think we've managed to break out of our Philippines business has been growing uh, superbly well over the last 12 months and I think we're on track to be number one, number two within a year and a half. So I think that's exciting for us. Um, and I think that has been actually taking the learnings from Indonesia, implying that in our market and by that, I mean, most people tend to start in a in one country or assuming some sense of homogeneous populations, the ways of interacting. And I think that's really untrue. And you see companies like we talked a bunch of friends who entered the Philippines dumped a bunch of VC money disappeared after two years because they thought it was copy paste look like something's changed the language, but that should work As a B two B business as an infrastructure business approach is totally different. We go to each country and we say, what are the payments problems that exist? What B2B issues exist that have not been tackled before. Um let you know this will paint exists, but let's find a localized onset away is one of quite a number of chinese companies prosperity active in investing and trying to partner in Southeast Asia. What do you see as the appeal of this region and how uh different is it from hallways, home market experience from our perspective, our job in far away in this region, at least from from this startup perspective, we, you know, we're trying to contribute to the ecosystem or the start of ecosystem by being a, being a platform essentially is to bring in different stakeholder into the answer this table right, You're working with the vCS, working with the government, working with the universities and working with our enterprise clients and the startups. So our job, it really has been a platform. But let me ask you about this question of where is the best place to get started in Southeast Asia? I mean, your mandate obviously is to encourage as many people as possible to locate in Singapore. What are the advantages of setting up shop in uh in Singapore? And does it have an edge as a as a kind of regional headquarters over some of the other larger surrounding economy? Well, thanks clear. Uh naturally, I would say yes, um it's a natural place to start, right? But I mean, we we we do have a fair amount of uh support programs, I mean, if I take a couple of steps back, I think uh dealing with earlier, uh Singapore is very small market, small city state. So for us, for many companies, nobody will come to Singapore purely for our own domestic market. Right? And even as a local founder, when you start the mantra is always, you know, make sure that you go out sooner in your business life cycle so that you address your overseas market as quickly as possible in terms of money. But the other thing that Singapore is known for, uh, the, we managed in 2020 last year, I think there was something like 5.5 billion Singapore dollars worth of venture capital, you've done here in Singapore and the year before it was 1.5 billion. Uh, so despite Covid, uh, you know, we were still closing a fair amount of abuse there, about 100 and 50 VCS people who invest up to CVS CVS be active in Singapore. And they, they have a regional agreement. So they also look at deals coming up from Indonesia, from Vietnam, from Thailand, uh, and, um, we don't really see this as a, as a competition, per se. Uh, the way I look at it, it's, uh, different markets for, uh, having on different strength.