By Neil Foo
Kuala Lumpur — Since 2010, Venture Capital (VC) has invested in Southeast Asia, with an investment of USD 8 billion (RM32 billion) in 2018 and USD9 to 10 billion (RM360-400 billion) in 2019.
Jakarta has surpassed Singapore to become the hotspot equity capital of Southeast Asia.
At the same time, Digital and AI-based start-ups will begin to flood Southeast Asia based on current technological trends.
A few notable Southeast Asian startups include Grab, Gojek, Sea (former Garena), Tokopedia, Lazada, Traveloka, Razor, VNG, Bukalapak and the list goes on.
Grab and Gojek managed to secure 85% of funds flow, which means VCs are more interested to invest in mid-to-late companies instead of infant start-ups, this trend is expected to continue.
Online travel agency giant, Expedia has invested USD350 million (RM1.4B) in Indonesia’s online travel portal, Traveloka which has exceeded 20 million downloads. This round of financing has reached its goal of USD400 million (RM1.6B), with a valuation of about USD2 billion (RM8B).
Southeast Asia even managed to attract investors outside the region such as Alibaba, Tencent, Jingdong, Sequoia Capital, Didi Chuxing, Softbank, HSBC, Toyota ,Nissan and many more.
Alibaba injected USD1 billion (RM4 billion) into Lazada and USD500 million (RM2 billion) into Tokopedia. In addition, Tencent also invested USD1.2 billion (RM 4.8 billion) in Indonesia’s Go-Jek, while Didi Travel and Softbank invested in Singapore’s Grab at a high price of USD2 billion (RM 8 billion).
Sequoia Capital and Softbank both invested in Malaysian P2P online loan company Funding Societies with more than RM100 million.
Singapore VCs are more inclined to support business models with light asset. Traditional physical store business models that fail to penetrate the borderless online market are of little interest. They are interested in new retail O2O (online and offline) model.
At the same time, they are also interested in promoting Precision Marketing which is driven by AI artificial intelligence, Programmatic Digital Advertising, and 3D printing technology that has the potential to boost a company’s growth element.