Southeast Asia serves as a gateway to global markets, including China, EU and the US. Economic pressures are expected to drive a wave of mergers and acquisitions, particularly in sectors like marketplaces and traditional industries, as companies join forces to innovate, expand their market share and grow globally.
Founders expanding across Southeast Asia's diverse markets must navigate different cultural nuances, business environments, and regulatory frameworks. SEA countries have sought to improve the ease of doing business by increasing alignment between governments. Indonesia, Singapore, Malaysia, Thailand, and the Philippines have linked their payment systems to allow cross-border payments via QR codes.
Sustainability is another key issue in Southeast Asia. The regions' largest stock exchanges are encouraging sustainable investments through the establishment of the ASEAN-Interconnected Sustainability Ecosystem and the publication of a core set of ESG metrics.
Southeast Asia's startup ecosystemremains robust despite facing significant challenges in recent years. The most pivotal threat was the COVID-19 pandemic, which severely impacted businesses and the global economy. However, startups are now thriving, particularly in industries that have embraced new technologies and are integral to the Internet economy. Staying updated with the latest trends and connecting with key players in the ecosystem is crucial for continued success and growth.
Indonesian startups received the largest share of investments in Southeast Asia. From January 2020 to December 2023, US$25 billion in investments have been deployed in SEA, and Indonesia captured 40% of that capital, totaling $10 billion. Out of the top 10 startups that received the most funds in the region, 5 hailed from Indonesia. These include Grab, taking the number 1 spot, followed by GoTo, J&T, Bukalapak, and Traveloka. GoTo and J&T themselves have raised $9 billion and $2.5 billion respectively, making their way to become deacons with market capitalizations valued at US$35 billion and US$22 billion respectively. The opportunities in Indonesia are so big and bountiful; making it one of the best reason to build a presence in Indonesia.
Malaysia, strategically located in the Asia-Pacific region, is on the brink of realizing its startup potential. The government’s initiatives, including the Shared Prosperity Vision 2030 and the MYStartup platform, are designed to nurture startups and drive growth. With Kuala Lumpur as the central hub and George Town emerging as a promising site, the country is making strides in digital innovation, supported by the Malaysia Digital Economy Corporation and the successful launch of its first unicorn, Carsome. Looking ahead, Malaysia aims to create five more unicorns by 2030, with strong backing from private sector programs like ScaleUp Malaysia’s 100 Soonicorns. The future holds significant opportunities for Malaysian startups to scale internationally.
Despite its small market, Singapore has a booming startup ecosystem built on its stable economy, robust infrastructure and business-friendly environment. The Singapore government continues to provide ample support; in 2018, it set up Startup SG to enable the startup community. Another government agency, Enterprise SG has been steadily attracting investors and the country is expected to raise a total of US 10.24 billion in venture capital in 2024. Currently, Singapore is home to over, 4,000 startups and 14 unicorns, with more expected to follow.