Why we're excited about Southeast Asia
📍 A Promising Land
Southeast Asia is a bustling region with a young workforce, a growing middle-class, and active consumers. The region is seeing more enthusiasm from high-profile investors like Golden Gate Ventures (investors in Carousell and Go-Jek), and East Ventures (investors in Tokopedia and Traveloka).
Gone are the days of investors 'turning a blind eye'. The combined value of startups currently sits at $108B but is projected to rise even more in 2021.
Indonesia and Singapore alone houses 6 unicorns – the tech ecosystem in these countries are now worth $60B and $35B respectively
📈 Building capacity
Even with the pandemic, Southeast Asia continued to show significant growth compared to its EU and US counterparts.
Rising demand in digital services– being forced to remain indoors caused a sudden surge in demand in digital services, specifically in e-commerce and food delivery. Southeast Asia is predicted to hit $100B for 2020, and $300B before 2025 in GMV alone.
Exponential growth rates – The region is witnessing growth at an exponential rate of $9.34T or 2x growth in the past decade. Leading the GDP growth in 2020 are Indonesia, Thailand, and Malaysia. According to ADB’s Economic Forecasts, the region is projected to grow at 6.8% in 2021.
Surge in online consumers spend – The market pivoted quickly to the digital space in response to the pandemic. We saw a rise in the number of online payments, attributed to the number of smartphone and internet users in the region. In 2020, the total number of internet users in Southeast Asia grew, now making up 70% of the population. An increase in consumers in the digital space also means a rise in the discovery of new apps.
✍️ Collective action
At a policy level, national governments are making significant strides that create a conducive environment for the startup ecosystem to thrive:
Latest policy reforms in Indonesia are widening the window for more startup participation. Policies are improving processes that allow ownership and foreign investments. Indonesia is set to be the seventh-largest economy by 2030.
Hailed as the "entrepreneurs paradise", Singapore continues to live up to its name backed by a government with startup-friendly policies. Their policies range from subsidies to incubation. Both the government and citizens see the importance of collaboration, manifested through their 55,000 (and rising) startups.
The Philippines' "Innovative Startup Act" enables the startups to connect with both local and foreign entities and investors.
💪 Strength in numbers
Internet users in Southeast Asia continue to grow. Between 2019 and 2020, internet users in Indonesia increased by 25M, Vietnam by 6.2M, and 1M in Myanmar.
The digital population currently totals 400M internet users in 2020, up 40 million from last year, meaning 70% of the region's population is now online.
Startup funding is on the rise with Myanmar leading ($38.5B), Singapore ($10.9B), and Indonesia ($5.5B)
Data as of January 2020
💬 So what's next?
The numbers project a good future, the government is on board, and investors are rising in tides.
At Cognity Labs, we're excited to ride and contribute to the wave of growth in the region.
We're on our second accelerator cohort, to ensure that every founder has the opportunity to partake in this growth.