Fri. Jan 21st, 2022

If someone who covers Southeast Asia startups and funding stories, the best word I can think of to describe 2021 is “whoa!” This was the year when global investors not only started paying close attention to the region’s tech ecosystems, but also started putting real money into them.

Backed by international LPs, Southeast Asia-focused venture firms such as Alpha JWC, AC Ventures and Jungle Ventures have raised their largest funds to date.

The Ken reported that US companies such as A16z, Valar Ventures, Hedosophia and Goodwater Capital were also setting up (or planning) regional offices as exits such as the Grab and Sea IPOs fueled interest in Southeast Asia’s startup ecosystems. A comprehensive report from Golden Gate Ventures also predicted a record number of exits, partly due to an increase in B and C rounds.

I always feel a bit stupid to use the term ‘Southeast Asia’ because the region is so large and complex. It’s the easiest option if I’m going to be brief, but Southeast Asia is made up of 11 countries and there are, of course, huge differences between Singapore, Myanmar, Laos, Vietnam, the Philippines, and Indonesia, for example.

As a global financial center, you could argue that Singapore’s startup ecosystem is a separate category compared to its neighbors. And Indonesia in particular deserves special attention, as the fourth largest economy in the world and the most populous Southeast Asian country with 273.5 million inhabitants. Both countries produced quite a few unicorns in 2021. In Singapore, for example, Ninja Van, Carousell, Carro and Nium were among startups that achieved unicorn status.

In contrast, while Singaporean startups tend to focus on other Southeast Asian countries (or, in the case of Nium, the United States and Latin America), the Indonesia-based founders may have medium or long-term plans for international expansion. , but most of those I spoke to plan to focus on expanding in the country for at least the next year or so. Indonesia is not only very large, but also geographically complex, with more than 17,000 islands, of which about 6,000 are inhabited. Startups usually start in the Greater Jakarta area before expanding to other Tier 1 cities like Bandung and Surabaya, but many are looking to smaller cities, especially fintech and e-commerce startups.

Here are a few sectors that got off the ground in 2021 that are worth keeping an eye on in 2022:

Investment apps

A suite of investment apps, many aimed at millennials and aspiring retail investors, raised small early-stage rounds in early 2021, only to quickly raise much larger follow-on funding a few months later. Some examples include Indonesia-based crypto-focused Pintu, robo-advisor Bibit, Ajaib and Pluang, and Singapore-based Syfe.

While the percentage of retail investment in Indonesia is still relatively low, that number is growing due to increased interest in financial planning during the pandemic and the popularity of stock influencers, despite concerns about its legitimacy from some.

Indonesian SME-focused startups dig deeper into fintech

According to government figures, there are 62 million SMEs (small to medium-sized enterprises) in Indonesia, but several founders told me that this is probably an underestimate, especially since family businesses or solo entrepreneurs are often underestimated. Regardless of their exact number, SMEs, many of which use Excel spreadsheets or paper ledgers to handle their accounting, present a lucrative opportunity for tech startups.

Most notably, BukuWarung and BukuKas, two competing accounting apps, have both raised significant amounts this year. The two startups are similar in that they initially aim to help SMEs digitize, but eventually plan to expand their product offerings into financial services such as working capital loans, using data that users have already entered into their software. to assess creditworthiness.

Some other startups targeting SMBs include wage earner access and payroll management platform GajiGesa and Wagely.

social trade

People living in Indonesia’s largest cities have a wide selection of e-commerce platforms to choose from, but the selection is much less in more remote regions. This is partly due to a fragmented logistics infrastructure (but startups are also working on this, including SiCepat, Advoctics, Kargo and Waresix), making it expensive and time-consuming to receive goods.

That’s where social commerce startups like Super, Evermos and KitaBeli come in, hoping to replicate the success of Pinduoduo in China and Meesho in India. All of them focus on everyday necessities such as fast-moving consumer goods and food, and use the social trade model to make the supply chain more efficient and affordable, as orders are made in batches by people living in the same communities. In this sense, they can also be described as at least partially logistics startups.

Ecommerce Aggregators

Startups acquiring small e-commerce brands like Thrasio have been raising money in the United States and Europe for years. But e-commerce aggregators took a little longer to reach Southeast Asia.

This year, two ecommerce aggregators officially launched with venture capital funding there, and both picked up follow-up rounds a few months later. While many e-commerce aggregators target Amazon sellers, Una Brands calls itself “industry independent.” There is no dominant market in APAC, so it has developed a system to find brands on platforms such as Tokopedia, Lazada, Shopee, Rakuten, and eBay. On the other hand, Rainforest targets Amazon based sellers in Asia, but differentiates itself from other aggregators with the aim of becoming the online version of consumer goods conglomerate Newell Brands. With so many ecommerce vendors in Asia, expect both Una Brands and Rainforest to grow and other aggregators to launch.

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