Beyond the Southeast Asia hype

Dear readers,

The optimism in Southeast Asia has never been greater. The latest Temasek-Google report, a joint study by Google, Temasek, and Bain & Company, predicts that Southeast Asia’s internet economy will triple within five years, while Asia Partners’ Nick Nash thinks 20 more unicorns will emerge in the region within a decade.

The positivity is well-founded. The past year has seen Indonesia’s Bukalapak and Ovo emerge as unicorns (both of them were well-represented at the Tech in Asia conference in Jakarta). More potential unicorns are waiting in the wings as well, with Zilingo hitting a valuation of US$970 million and Deskera entertaining an investment offer that would bring it closer to that coveted status.

That said, we would be remiss not to take a step and examine what might derail the hype. It seems Tokopedia is taking lessons from the beating that WeWork and Uber have sustained from the public markets. It’s aiming to breakeven by next year before an initial public offering.

Despite that, it faces challenges in reaching operational profitability outside of Jakarta. In second- and third-tier cities as well as rural areas in Indonesia, purchasing power is lower and infrastructure is less developed, and addressing these issues will require years of investments.

Southeast Asia’s venture capitalists are ready to step up to the plate. We looked at which are the top-performing VC funds in Southeast Asia, providing a rare deep dive into the indicators that separate mediocre investors from great ones. One thing is for sure: the next wave of top investors will be adept unicorn hunters, and that requires foresight and a thorough understanding of the opportunities in Southeast Asia that are ripe for the picking.

Do subscribe for more insights on the region, and don’t forget to check out the rest of our premium pieces from the past week:

Big spenders

• Being no. 2 isn’t a bad thing: Bukalapak’s Achmad Zaky
• Can GoPlay be a game-changer for Gojek?
• StickEarn raises $5.5m from Grab, others to take its vehicle ads to new places
• One Championship, JustCo, and Axinan on the growth conundrum

Startup action

• Ex-Lazada exec gets $33m funding for healthcare startup Alodokter
• HR and payroll startup Sprout gets $6m injection from NY-based Point72 Ventures, others
• Inside aCommerce’s plan to become profitable by 2020
• Singapore fintech firm Global Digital Payments raises $1m in seed funding
• Rising startups on Tech in Asia: endoscopic AI, eSIM provider, construction management

Evergreen

• Complete list of tech and startup events in Singapore
• Meet the 20 top-funded fintech companies in Southeast Asia

Stuff you may have missed

• The state of the super-app race in Southeast Asia
• Why these Lazada founders left the ecommerce giant to start a new kind of agency
• Circles.Life survived a crisis. It’s now looking to redefine the telco business

Cheers,

Terence
Chief editor