Southeast Asia (SEA) is becoming home to a variety of startups, particularly for technology companies. Research shows the region’s investment ecosystem may rise to at least 10 new companies with a market value of over $1 billion each by 2024. Tech companies attracted most of the new capital, increasing the deal count in 2017 by 40 percent from 20 percent in 2014.
Southeast Asian Countries Offer Startup Opportunities
The growing economy of SEA is a major driver of the startup trends in the region. Capitals are pouring in as more investors believe in the opportunities brought by the countries with huge markets and youthful, mobile-savvy consumers.
Adrian Tan, Singapore-based WeWork Labs Southeast Asia head, said in an interview, SEA has a young, growing middle class, and rapid urbanization. These characteristics make the region a major driver for global growth. He adds the vitality and success cases in the region offer great potential, particularly for innovation and the digital economy.
A Variety of Startups Thrive in Southeast Asia
E-commerce is one of the industries dominating the region. Companies like Lazada, Shopee, Bukalapak, and Tokopedia are leading the industry, which is expected to grow to $88 billion by 2025. Online businesses in the region are also growing due to the direct-to-consumer business models provided by the consumers’ expanding trust for online buying and their infatuation with social media.
Apart from e-commerce, SEA countries also cater to a wide range of industries. You won’t run out of small business ideas to invest in, ones that would give you higher returns.
The top five most funded digital start-ups in the region in 2018 include:
- Grab ($5.8 billion) – it helps consumers book taxis, private cars, and motorcycles using their mobile phones. Four years since it was launched, the company expanded to six countries and garnered countless users.
- Sea (Garena) ($2.0 billion) – this is a leading platform provider for online PC and mobile digital content in SEA and Taiwan. It’s also the region’s exclusive operator for “League of Legends,” “FIFA Online 3,” “Point Blank,” and other popular titles.
- Tokopedia ($1.1 billion) – this platform aims to democratize commerce through technology. It has pioneered digital transformation in Indonesia since its foundation in 2009.
- Jobstreet ($586 million) – this is a leading online employment marketplace in Asia, which caters to employers and job seekers in Malaysia, the Philippines, and Singapore, among others.
- Go-Jek ($585 million) – this Indonesia-based company is the largest service provider of various complete services, such as transportation, payment, logistics, and food delivery. It connects users to over a million driver-partners, 200,000 food vendors, and 30,000 other service providers.
Before venturing a startup in SEA, you need to determine in which city you will incorporate it. Each country in the region has specific advantages, traits, and different perspectives on things they value.
Southeast Asian Countries Ideal for Startups
Cities in SEA have various tax incentives, subsidies, and other programs supporting small business entrepreneurs. If you’re planning to start a tech startup, here are the three most popular Asian cities to operate in:
- Beijing – the city is home to Zhongguancun, a technology hub founded 30 years ago. This hub incorporates about 9,000 technology companies and comprises China’s most significant hi-tech firms, like Baidu, JD.com, and Lenovo Group.
- Singapore – the city offers generous grants and tax incentives for businesses. The city also gives foreign entrepreneurs a two-year window to start a new business through its new scheme EntryPass. About 40 associations and chambers also help you upgrade your operations and develop your business abroad.
- Seoul – the city has the highest government backing per capita for startups because the South Korean government wants the city to be a major hub for startups. Major international companies, like Google and SparkLabs Global Ventures, have opened shops in the country.
The rapid economic growth of SEA countries makes the region an ideal destination for entrepreneurs. But since these countries offer many opportunities, expect to face tough competition. Create a strong business plan and strategy to achieve the same level of success many startups in SEA have achieved.