Beyond Singapore and Indonesia, SEA startups are working their way out of global crises

Beyond Singapore and Indonesia, SEA startups are working their way out of global crises

This article was first published on March 15, 2023.

A recent DealStreetAsia and Enterprise SG report revealed that, despite the slowdown, Singapore continued to dominate equity funding in Southeast Asia (SEA) throughout 2022. It topped the position with 56.3 per cent of deal volume, followed by Indonesia at 22.4 per cent.

This is undoubtedly good news for startups in these countries, but it also leads to another pressing question: How about the rest?

This might feel like a double attack for startups based in SEA countries apart from Singapore and Indonesia. In addition to figuring out how to build a sustainable business, they also have to deal with the concern that there are not as many funding opportunities.

This is why e27 reaches out to four startups in Malaysia, Thailand, and India to understand how they plan to deal with this situation. We learn about the milestones these companies have achieved, the strategies they use to seize opportunities, and the next big thing they want to achieve.

Here is the edited excerpt of the interviews.

Ryuji Wolf, CFO, Sunday, Thailand

Despite having all its shareholders based in Singapore, insurtech company Sunday started out in Thailand in 2017 before expanding to Indonesia last year. The company focuses on key insurance verticals: Health (being the company’s largest focus, Sunday mostly caters corporations), auto (particularly EVs), and gadgets (as the company is an official insurance partner of telco giant dtac).

Also Read: Thai startup GoWabi aims to be the go-to platform for all health and wellness services in SEA

“hese segments are where we are very focused on even though the markets are challenging right across the board. These are verticals that have continued to grow quite meaningfully,” he explains. “Particularly on the health side, if anything, from our perspective, COVID-19 has only increased awareness right around health insurance. So, we have many corporate clients that are coming to us, and they’ve never had employee benefits or health insurance for their employees before.”

Sunday credits their ability to survive through the challenging time to their timely Series B funding round.

“Some companies are better positioned than others. Now, we did our Series B towards the end of 2021. So, I think we were pretty well-positioned. This was before the markets really started to dry up. A lot of the companies that were able to access the markets before 2022 are probably better positioned through 2022 and going into 2023,” he says.

Wolf also shares the things that the company has done differently.

“What we’re doing now is … taking a step back or two and looking at our business, each of our operations, each of our entities across the two markets that we are operating in (Thailand, Indonesia). I think we’re being a lot more diligent, thoughtful, and strategic in terms of how we deploy our capital. The great thing is that in the underlying market that we operate in, it’s just continuing to grow,” he explains.

“This is an ongoing exercise that we do and I would hope many companies are doing this as well: Looking at your capital base and identifying ways to further extend the longevity of that capital base. So, what that means is just the continued exercise of optimising your operation. I’m not saying it’s cutting people or getting rid of some of your talent. At Sunday, we haven’t gone through that at all, and we don’t have any plans to get rid of our talent.”

Sharala Devi Balakrishnan, CEO, Center of Applied Data Science (CADS), Malaysia

According to Balakrishnan, the recession is a trying time for entrepreneurs as it can impact businesses in several ways. On the other hand, she also stated that digital business transformation activities have boomed over the years and accelerated even further with the recent pandemic.

Also Read: How GHARAGE leverages resources of its German parent to help Asian startups expand into Europe

“The good news is CADS.AI has been at the forefront of driving digital transformation and accelerated enterprises into Data-Driven Organizations by empowering data-driven decision making, expanding workforce data literacy and enhancing analytics for hiring. While the CADS AI platform can be a valuable tool for businesses during tough economic times, it’s important to note that raising funds for tech companies like CADS is challenging during a recession. Investors are more cautious and averse to investing during uncertain economic downturns,” she says.

“As an entrepreneur, we seek out new funding sources or capital to keep our businesses afloat during a recession. This includes reaching out to investors, exploring government funding programmes, or considering alternative financing options.”

Balakrishnan says that having a strong management team is particularly important. “The CEO ensures the company’s financial health, identifies new growth opportunities and builds relationships with investors and stakeholders. The day-to-day operations and building of the platform must continue without interruption. While they are busy building the business, I am focused on securing funding and participating in programs like 100 Soonicorns to accelerate the company’s growth.”

What opportunities do they plan to seize this year?

“Many tech companies have been forced to make difficult decisions, including laying off employees. In some cases, these layoffs have been significant, with some companies letting go of 10% or more of their workforce,” she says.

“With Asia’s two billion workforces, there is a tremendous opportunity for the CADS AI platform, a SaaS solution, to create a data-literate workforce in this region. Skill mobility and data literacy are two key trends expected to shape the future of the workplace in 2023 and beyond. According to a study by LinkedIn, data-related skills are in high demand, and workers with these skills have an 87 per cent chance of being employed and retaining their jobs in the company. Organisations prioritising skills mobility and data literacy will be better positioned to attract and retain top talent and remain competitive in a rapidly changing business environment.”

Also Read: These 15 startups might just be part of this year’s TOP100

Kuna Kathigesan, Group CEO of the Commerce.Asia Group of Companies, Malaysia

Kathigesan dubs the pandemic as a “shot-in-the-arm” for both the e-commerce industry and the Commerce.Asia Group of Companies.

“Our Commerce.Asia Group, in turn, successfully rode on the e-commerce trend of it becoming mainstream and capitalised on the upward trajectory. Today, we believe that ‘the sky’s the limit’ which is why we are hiring aggressively, investing in R&D and also collaborating with our sibling group Netccentric-Nuffnang for growth marketing, so that we realise another record breaking year for Commerce.Asia. In 2021, we posted group gross merchandise volume (GMV) of US$1.5 billion (MYR6.7 billion) throughout Malaysia, Thailand, and Vietnam through more than over 92,000 active sellers,” he details.

“The reality is that, today, consumers have become more discerning. They are more focused and cautious when buying now, mainly due to being less dependent on online sales unlike during pandemic. Most of them are already working from office and most of consumer products can be bought while they are back from work, or when out shopping with their families. Furthermore, being ‘locked up’ for two years has its psychological impact. People just want to go out and buy their stuff and also window shop. This could be impulsive. In other words, ‘revenge shopping’ has emerged in a big way.”

He predicts that in essence, the growth of online sales will start picking up somewhere in H2 2023, “since we can see month-on-month growth of online sales has started picking up. We saw some categories had a significant drop during the pandemic but is now regaining its momentum.”

When speaking about the strategies that the company is using to seize opportunities during this situation, Kathigesan highlights Commerce.Asia’s ‘end-to-end’ e-commerce ecosystem and how it works with each other.

“With the latest digital innovations and technologies, I also aim to take Commerce.Asia to the next level such as through Web 3.0 and blockchain technologies,” he says.

“And with Tik Tok and Social Commerce growing among Gen Z, Commerce.Asia is also in a position of strength through Nuffnang Live Commerce with its 20,000 active influencers. This enables our joint venture with the Nuffnang Group to enable fully integrated and seamless end-to-end live commerce experiences with their experience and strength of social influencer and content marketing. This platform is API integrated with Facebook and Tik Tok to provide a seamless user interface from live video production and streaming to automated order management, online payment and fulfilment.”

Also Read: Successful business models for tech startups in Southeast Asia

It is also working closely with governmental and non-governmental agencies to achieve its goal and agenda.

“The support given by agencies such as MDEC so far is truly overwhelming and we look forward to working longer and closely with them. Not to forget other agencies that we are exploring partnerships and collaborating as well – locally and across the region,” he says.

He also shares more details of the company’s plan for 2023.

“At our end, we are aiming to help them expand their businesses and digital growth to other SEA countries so that our customers continue to grow their businesses regionally and not only confined to the local market while also enabling them with omnichannel capabilities.

We are also fortunate that the Executive Chairman and majority shareholder of Commerce.Asia is Ganesh Kumar Bangah, synonymous with being one of Malaysia’s and the region’s leading ‘serial entrepreneurs’. As a result, we have nurtured a ‘culture of innovation’ within our group – which is why we would continue innovating to help our customers – our ourselves – realise our fullest potential. This includes implementing the latest technologies such as robotics, artificial intelligence, machine learning, advanced analytics and to continue leveraging and capitalising on popular consumer platforms such as TikTok, Facebook, Instagram and others.”

The company also plans to grow its payment gateway (Commerce Asia Payment) and leverage the 20,000 influencers in its network to promote clients’ products.

Also Read: Successful business models for tech startups in Southeast Asia

Keong Chun Chieh, CEO, Ominent Sdn Bhd, Malaysia

Keong Chun Chieh explains IGL Coatings as a brand to a young company that is committed to making a positive impact on the environment and society via our focus on environmental, social and governance principles.

“Our innovative nanotech-based surface modifier coatings for automotive care are designed to not only enhance the aesthetics of vehicles but also reduce their environmental impact by increasing their efficiency and durability,” he says.

For the company, the recession has decreased demands for luxury and non-essential goods, which sadly includes automotive care products.

“This has led to a decrease in sales and revenue for IGL Coatings. In addition to this, supply chain disruption due to the crisis in Ukraine resulted in longer lead times and higher costs for raw materials. These factors have negatively impacted the growth of IGL Coatings,” he explains.

But the CEO is optimistic that the situation will get better.

“When the economic situation is gloomy, the best thing to do is to focus on our foundation and increase collaboration. IGL Coatings will do this by increasing focus on our R&D work to expand into new verticals, improve cost efficiency and explore potential partnerships and collaborations with other companies,” he says.

“During a recession, it is crucial to reach and seek support by asking for help when needed, this is why I decided to participate in the 100 Soonicorns Programs to allow me to learn from peers and challenge my strategy.”

Also Read: Brand new days: How startups can approach growth in a post-pandemic world

What opportunities do they plan to seize this year?

“At IGL Coatings, we strive to expand into new verticals through our focus on R&D. We are proud to announce our exploration into the anti-corrosion market, leveraging our expertise in nanotechnology and dedication to sustainability and ESG principles. The anti-corrosion industry is a rapidly growing market, valued at approximately US$28.7 billion. With our unique nanotech coating, Ecoclear Aegis, we can offer an effective solution for preventing and mitigating corrosion on various surfaces, including metal and concrete. One of our early adopters, Favelle Favco, is among the world’s largest tower crane builders,” he says.

“We are confident that our expansion into the anti-corrosion market will not only contribute to our company’s growth but also create a more sustainable corrosion-resistant world.”

Maribel Colmenares Martinez, Director Marketing & Partnerships, upGrad

According to Martinez, for upGrad, its education technology growth accelerated during the pandemic.

“In fact, our firm entered the unicorn club on August 9, 2021, and continues to thrive due to digital transformation becoming a priority for individuals as well as organisations. We also continue to see an increase in demand from both learners and companies for more upskilling opportunities that are online, flexible, portable, and affordable, all of which upGrad can offer,” she explains.

In getting through the challenging time, the company understands the importance of upskilling and the role it plays in providing a platform to achieve it.

“We aim to assist both individuals and organisations in achieving their desired outcomes, such as securing a job, advancing in their current roles, or making a career transition for the individuals. At the organisational level, providing learning opportunities serves as an incentive for employees, aiding in their retention, and keeping their workforce up-to-date. Our focus on providing flexible, affordable, and accessible online learning opportunities enables us to support learners from all backgrounds in acquiring the skills they need to succeed in today’s ever-changing job market.”

With the support of backings from Temasek Holdings, IFC, and others, upGrad is looking to collaborate closely with CHROs of organisations to help them provide learning opportunities as an incentive for employees, helping them improve their retention rates, keeping their workforce up-to-date, and better able to achieve the outcomes set by their organisations.

“With the increased importance given to upskilling and reskilling, upGrad intends to partner with more industry leaders to create purposeful programs bridging the knowledge gap. We also aim to continue supporting our learners through their lifelong learning journey as their partner of choice,” Martinez says.

She also shares the company’s major plan in 2023.

“To increase our presence and student base across selected countries in APAC, and to increase the collaborations with organisations and their workforce. For this, we will be launching our Private Education Institution (PEI) in Singapore, with the aim of upskilling 5,000 digital-ready professionals by 2025. Our main key solutions revolve around management, data, and tech.”

Image Credit: peopleimages12

This article was first published on March 24, 2023

The post Beyond Singapore and Indonesia, SEA startups are working their way out of global crises appeared first on e27.

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