Southeast Asia appears to be emerging as a serious startup development ecosystem alongside India, while China is losing a few of its luster as an investment destination amid a backlash against web giants. 12 as many as 15 enterprise capital-backed start-ups within the region have recently managed to lift funds value at the least USD 1 billion, obtaining the title of “unicorn”. Today, the whole variety of VC-backed unicorns within the region has reached 27, chasing India, which added 30 unicorns this 12 months alone, bringing the whole variety of unicorns to the highest 50. Funding raised by Southeast Asian startups in the primary nine months of 2021. from Venture capital and other investors totaled $17.2 billion, based on DealStreetAsia, greater than doubling the $8.5 billion total for the last 12 months.
Meanwhile, Indian startups attracted about $24 billion in VC investment in the course of the same period, almost doubling the $12.4 billion total in 2020, based on PitchBook Data. Both Southeast Asia as a region and India are experiencing high economic growth due to favorable demographics and a growing middle class, which is the principal driving force behind mobile and Internet penetration. While the Covid-19 pandemic has accelerated the expansion of the net economy all over the world, the one in Southeast Asia is especially impressive. According to a recent report by Facebook and Bain, six major Southeast Asian economies – Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam – have added about 70 million latest “digital consumers” because the start of the pandemic, » defined as those that actually buy goods and services on the Internet, from 280 million to 350 million.
This compares to India’s 150 million digital consumers, whose average income is lower than Southeast Asian consumers. In other words, Southeast Asia’s total online retail economy is way larger than India’s, regardless that it has lower than half the population. “I saw this rapid digitization of small businesses first in India and then in Southeast Asia, and now they are growing in parallel,” Bhushan said. In fact, six of the 15 latest unicorns in Southeast Asia are B2B firms corresponding to e-commerce logistics providers and mobile payment gateway services for retailers.
The availability of capital for Southeast Asian startups seems promising for now. “In addition to these international political factors, Southeast Asia itself is entering its best period,” Lightspeed’s Bhushan said, pointing to the “knock-on effects” of unicorn success stories on newer firms. There appear to be many more “next unicorns” being created in Southeast Asia.
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