A look at SEA’s startup scene for next decade

Golden Gate Ventures, a Southeast Asia venture capital fund founded by natives of Silicon Valley, celebrated its 10th anniversary yesterday (July 15) with the launch of a special edition of the report “Southeast Asia Startup Ecosystem 2.0 ”.

It looks at the developments that have shaped the startup ecosystem in the region over the past decade, as well as forecasts for the next decade.

“The ‘Southeast Asia Ecosystem 2.0’ report traces the region’s meteoric rise to become a formidable force on the global stage over the past decade and what the next 10 years will bring. This reflects in many ways the history of Golden Gate Ventures, ”said Vinnie Lauria, founding partner of Golden Gate Ventures.

Over the past decade, the venture capitalist has launched four funds and has been part of the journey of its holding companies becoming unicorns.

SEA 2.0 startup ecosystem

The SEA startup scene has experienced the fastest growing capital inflow over the past decade, with total capital invested per year increasing 50-fold from US $ 130 million in 2010 to $ 7 million. US $ 7 billion in 2020.

total dollars invested by vc funds sea
Mega Agreements (> US $ 100 Million and) and Post Steps (C and above) increased total capital deployed / Image Credit: Golden Gate Ventures

The end of the decade also culminated with 15 mega-deals of over US $ 100 million each, representing more than half of total invested capital. Food and transportation, FinTech and logistics were among the verticals that attracted the most investment.

Meanwhile, the top three verticals with the highest number of startups with funding over US $ 50 million over the past 10 years are e-commerce, fintech and entertainment, and media.

entrepreneurs of generations 1.5 and 2.0
Some “1.5 and 2nd generation entrepreneurs” / Image credit: Golden Gate Ventures

The last decade has also seen the emergence of “1.5 and 2nd generation entrepreneurs”.

First-generation entrepreneurs usually came from companies, as there was no existing startup pool, Golden Gate Ventures explained.

After 2015, however, the mega-towers raised by Internet companies Grab, Gojek and Rocket increased funding through the stages, encouraging diversity in terms of culture, experience and expertise among the new generation of entrepreneurs. .

This sparked the rise of the “generation 1.5,” former senior executives of high-growth tech companies. As it takes an average of 8.3 years from start to release, we’re about to see Generation 2.0 take off.

What is also worth noting is that the route to success has been Indonesia or the region. Indonesia has been the market requirement for around 75 percent of unicorns in SEA, while less than half of unicorns target only one market.

Market coverage by 15 unicorns at SEA
Market coverage by 15 unicorns in SEA / Image credit: Golden Gate Ventures

SEA’s unicorns from 2021 include Bigo Live, Bukalapak, Carro, Gojek, Grab, Lazada, OVO, Patsnap, Razer, Sea Group, Tokopedia, Traveloka, Trax, VNG and VNPay.

What the next decade holds for SEA

With a continued increase in e-commerce adoption, coupled with growth in GDP per capita over the next decade, social commerce is expected to increase as a percentage of overall e-commerce, similar to what has evolved in China over the past decade. the last decade.

These will also be great years for medical technology to come. In a post-pandemic world, medical technologies will be a rising trend as a means of providing access to healthcare to a large demographic group and improving the infrastructure challenges in ESA.

Medtech fundraising in SEA is expected to exceed $ 1.5 billion by 2025. These sectors include healthcare, home healthcare, AI medtech, biotechnology, medtech information systems, etc.

Despite the maturity of the fintech ecosystem in more developed markets, ASEAN countries see further upside potential with its growing internet population and visibly unbanked consumer base, which present an attractive opportunity for e-wallets and neobanks.

ASEAN fintech landscape vs mature markets
ASEAN Fintech Landscape versus Mature Markets / Image Credit: Golden Gate Ventures

As digital wallets currently capture a modest payments market share across the board, the region is expected to take a leap forward in digital infrastructure and emerge exclusively fintech unicorns.

Finally, there will be an exponential increase in B2B SaaS startups. As in the United States, B2B and B2B2C startups will capture a greater share of total deployed capital, on average 40% by 2030, with $ 30 billion invested in B2B over the next decade.

In addition to Singapore and Indonesia, Golden Gate Ventures predicts that Vietnam will emerge in 2022 as a major SEA startup ecosystem.

It has already consolidated its growing importance, and Golden Gate Ventures expects to see stronger signs of SEA-focused venture capital funds putting more effort into startup investments in Vietnam.

ipo boom sea
Planned releases include PropertyGuru, Grab, Carro, Carousell / Image Credit: Golden Gate Ventures

The next decade will also see an IPO boom. The number of IPOs in SEA is expected to exceed 300 by 2030, as more local startups seek exits on national public markets.

melting sea
More mega-merger stacks to come / Image Credit: Golden Gate Ventures

Finally, as large tech companies compete for first place in their verticals, Golden Gate Ventures is betting on SEA mega-mergers.

The SEA startup ecosystem will enter a new phase of maturity over the next decade, marked by a sharp increase in IPOs across the region and more mega-mergers. The founders will have to operate at a much higher level than before, as the rate of growth of SEA will be faster in the next decade than the previous one.

Startups will need to be much more sophisticated and evolve faster. Venture capital firms will also need to offer much more than funding, experience and connections. It will be an ecosystem on speed.

– Michael Lints, partner at Golden Gate Ventures

Featured Image Credit: Grab / Reuters / Mashable

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