Forget the unicorn – the $50M exit is the new SEA dream

This article summarizes an episode of Tin Men Capital’s video series featuring its co-founders, Jeremy Tan and Murli Ravi.

Jeremy Tan (left) and Murli Ravi, co-founders of Tin Men Capital / Photo credit: Tin Men Capital

Jeremy Tan and Murli Ravi, co-founders of Tin Men Capital, have been watching Southeast Asia’s B2B technology landscape since 2017 and argue the market is finally moving beyond its obsession with unicorns.

They see a more practical future built on smart spending, acquisitions, and pressure on local giants to either innovate or get left behind.

B2B provides a resilient alternative

Tan believes the B2C model’s reliance on heavy funding makes it fragile within Southeast Asia’s market. In contrast, he believes B2B software offers a more stable path. With better profit on sales and predictable revenue, software companies can grow without constantly chasing the next funding round.

The old playbook is broken
Ravi explains that because the consumer market is often a “winner-takes-all” scenario, capital can be a decisive weapon. He contrasts this with their areas of interest, which are not structured in the same way.

Tan adds that the recent market correction exposed the flaws in this approach. “The downturn that we last saw starting in 2021-2022 highlighted some of the downsides of investing using power law and using growth at all cost, usually linked with a lot of unicorn hunting as well as B2C models.”

Better profit on sales means more freedom
The economics of B2B software are more forgiving. High profit on sales gives founders breathing room and control over their own destiny.

Tan explains, “[B2B software’s] margins are quite high. Anything from a blended IoT margins of 70% gross to 80-90%. That in itself means that it’s very capital efficient, allows you to plan your cash flow forward, and [you are] less beholden to the capital markets.”

You don’t need a large amount of cash
This financial independence stands in contrast to other tech sectors, like hardware, where building a product requires a large upfront investment.

Tan argues, “to play the hardware game you need a lot of capital, which I don’t have. There are opportunities in the space in Southeast Asia but at the same time it doesn’t need so much capital for us to succeed.”

The media obsesses over the wrong metric

A focus on efficient growth changes the definition of success. Tan points a finger at the media for its obsession with billion-dollar “unicorn” valuations, a narrative he believes pushes founders toward bad decisions.

The real stories are going unreported
Headlines tend to highlight only the largest deals, creating a misleading picture of the overall market.

Tan says, “the media doesn’t report anything less than a billion. I think that’s one of the follies of operating in this region, or maybe worldwide, where size matters. Actually, it is returns or multiples of returns that [matter].”

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