Why global capital loves SEA (and how boring B2B software wins) 

This article summarizes an episode of Unfair Advantage by Tin Men Capital’s video series featuring Hugues Delcourt, senior advisor at Delcourt, Kim & Associates.

Image credit: Timmy Loen

Southeast Asia’s biggest financial advantage is not its fast economic growth, but its political neutrality, which helps businesses avoid global trade conflicts.

Hugues Delcourt, senior advisor at Delcourt, Kim & Associates and limited partner at Tin Men Capital, and investor Murli Ravi argue that making money in this safe haven requires careful manager selection. It also requires a focus on actual cash exits and investing in basic business software.

Geopolitical neutrality triggers broader bidding wars

This safe haven status directly benefits software companies, as global political divisions make Southeast Asia a safe zone for capital flow and enterprise acquisitions.

Ravi captures the shift by noting that some Asian investors say they are not going to “touch the U.S. or Europe because of geopolitical reasons.”

Maintaining this unaligned status gives local startups several financial advantages:

• Frictionless capital: Investment groups from opposing factions can co-invest without regulatory friction.
• Unrestricted auctions: B2B companies preparing for sale can solicit bids from a worldwide pool of corporate buyers.
• Valuation protection: Enterprises avoid being discounted or excluded from major markets due to their geographic origins.

Preparing a business to pass international background checks can reduce concerns about its origins before negotiations begin, potentially helping preserve its value during a sale.

Manager selection outweighs regional hype

While these international auctions can create exit opportunities, investors still need to evaluate managers against strict criteria rather than relying on regional hype:

• Separate luck from skill. Review how much past success came from value creation versus a rising market.
• Demand cash realizations. Verify the manager has sold companies for cash instead of inflating paper valuations.
• Cap venture exposure. Limit high-risk investments by keeping them between 7 and 15 percent of a portfolio.

Relying on a rising tide to lift startup valuations is a flawed strategy, which is why Delcourt demands proof of success in “not only investing, but exiting” companies across markets.

Digitization returns hide in unglamorous workflows

To ensure managers can execute these cash exits, they must target B2B operations where manual errors destroy profit margins.

Delcourt advises investors to “go for boring” because the best targets are where processes remain “paper-based, fragmented, and relationship-driven.”