Trends that Shape the Future for Startups in Southeast Asia

Reasons why Southeast Asia is a promised land for startups. What makes the area’s ecosystems grow at an unprecedented pace. Top ASEAN industries for innovation and examples of succeeding projects

The booming growth of the Southeast-Asian startup ecosystem marked it as the ‘golden era’ of local innovation. The region earned the name of a ‘promised land’ for startups. 

Indeed, the forecasts by Google, Temasek, and Bain & Company predict that from 2020 to 2025, the Southeast-Asian Internet economy will grow 3 times, expanding to $300 billion. 

Here are a few factors making such a drastic development possible.

  • Investment. In H1 2021, the amount of money invested in regional startups rose to the record-breaking 393 deals totaling $4.4 billion. In spite of the roaring COVID-19 outbreak, it showed a 20% increase compared to the same period of 2020, when Southeast-Asian startups received 327 investments.
  • Startup exits. There are a number of IPOs, M&As, and other exit events in the local ecosystem. For example, in December 2021, the Singapore-based giant Grab went public (via SPAC) at a valuation of around $40 billion. In May 2021, two of the largest Indonesian startups Tokopedia and GoJek announced merging into 'GoTo Group', later following with an $18 billion M&A.
  • Unicorns. Regional startups turn into huge companies at an increasing rate. By the end of 2021, there were 40 unicorn startups in Southeast Asia, and the last year alone brought 21 billion-dollar startups to the list. 

In this article, we’ll point out local industries with the most growth potential, illustrated with examples of developing businesses. Then, we’ll also analyze what lies in the future for the Southeast-Asian startup ecosystem. 

But first, let’s clarify what the region is composed of.

Short introduction to Southeast Asia

Southeast Asia is a subregion of the Asian continent situated between China, India, and Australia. It consists of 11 countries: Brunei, Cambodia, Timor-Leste, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam. 

All Southeast-Asian countries are vastly different in their history, economic development, and culture. Their individual startup ecosystems also vary greatly in revenues, modernization levels, and investment possibilities. For instance, the Singaporean startup ecosystem is a beast of its own, while in other countries, the networks for innovation have only started to emerge.

Another term to denote the region is ‘ASEAN’, the abbreviation for the Association of Southeast Asian Nations. It is a political and economical union of the 10 countries named above, excluding Timor-Leste. However, ASEAN should not be confused with Southeast Asia since the latter is a purely geographical term.

Reasons behind Southeast Asia’s prosperity as a startup hub

In his article for e27, James Murphy predicted that by 2024, the region of Southeast Asia will produce at least 12 new unicorns. But what makes innovation such a promising business direction? We’ve singled out the key factors that could turn the ASEAN startup ecosystems into a new Silicon Valley.

Young populace

Since Southeast Asia is a developing region, its population is mostly youthful — and young people tend to be digitally competent, venturesome, and tech-savvy. The 2019 report by the World Economic Forum stated, “ASEAN’s youth have a strong preference for entrepreneurial settings.” It means that many citizens of the region want to launch their own business, and because of growing levels of E-literacy, a considerable share wants it to be innovative.

Developing nations also provide a strong reproduction boost. InformationAge assessed that by 2040, around a billion new consumers will enter the market, “making Asia the thriving nest of business productivity.” Consequently, there will be more young people on the Internet who will bring yet more concepts, ideas, and high-tech approaches to the global economy.

Governmental support

A well-established state support is known to be a backbone of any prosperous startup ecosystem. Thankfully, ASEAN governments understand the necessity of tech development, as well as its significance in any country’s economic growth. Nation states across the region facilitate or fully endorse the innovation, encouraging founders to launch, grow, and scale their businesses.

Here are some examples of how Southeast Asian governments support startups.

  • In Thailand, the state aims to turn the country into the next Silicon Valley by handling loopholes in legislation and offering easier access to funds. 
  • The Indonesian government rolled out a ‘10,000 startups’ program that provides financial, technological, and marketing support to new businesses.
  • In Singapore, there are several attractive schemes and grants that the government offers to founders of new projects.

Restrictions in Chinese tech sector

China’s tech crackdown forced investors to search for lucrative projects next door. Strict regulations imposed by the Chinese government averted both innovation and funding from the country, so the financial resources released after disruption were directed towards Southeast Asia. 

This is another reason why local startups saw unprecedented capital injections. Overall, encouraged by still-growing investors’ interest, local startups no longer hide behind their more established peers from China. 

Influx of the US money

Amidst the pandemic, many American investors discovered startup ecosystems in other countries. Given that the US market is 1) oversaturated with offers and 2) divided between top tech giants, it’s not easy for a new project to lift off from competition. So no matter the niche, product, or business model, the valley of death keeps breathing down every new startup’s neck. 

Besides, there’s just too many projects to invest in. The wider choice of innovation means there are more chances to fail if you decide to bet your money on one. The higher risks and tougher market conditions make investors squirmy — after all, they just want faster, more stable returns. This is why many started to pay attention to startups in other countries, including Southeast Asia.

Nowadays, the investment amounts that come into ASEAN countries are extraordinary. The experts warn it might produce a bubble where too much money is chasing after too few deals. Some local companies get irrational valuations, but still, the risks of the burst are relatively insignificant compared to the Dot-com bubble 2.0 emerging in the global IT sector.

ASEAN startup trends to watch in 2022

Let’s cast a glance over the most notable trends in the ASEAN market where ambitious startups disrupt the old ways.

Investment apps

The start of 2021 saw a series of early-stage rounds raised by investment apps, mostly targeting millennials and first-timers in retail investments. However, they quickly followed with larger funding rounds: the investors’ interest mirrored that of consumers who experienced many financial shocks during the COVID-19 outbreak. 

The highest-ever demand for convenient investment tools is a result of people’s desire for alternative sources of income. During the pandemic, the labor market proved unstable, so citizens need other ways to keep their savings. Equally important factors are the populace’s rising awareness of fiscal instruments and overall availability of plug-and-play investment tools that are easy to understand.

Here are some examples of investment apps coming from Southeast Asia.

  • Pintu is a crypto-focused app from Indonesia, an exchange that raised $35 millions during Series A.
  • Bibit is an AI advisor for millennials and novice investors. The startup facilitates building a portfolio by tailoring it to each person’s risk profile and investment goals.
  • Ajaib is an Indonesian fintech startup that became a unicorn just 2.5 years after launch. It helps private investors trade stocks and runs financial literacy courses in Indonesia. 
  • Syfe is an investment platform from Singapore that offers an easy way to invest in US stocks and exchange-traded funds. It received $40.33 million in Series B funding.

SME-focused services

The Indonesian government reported there were 62 million small to medium-sized enterprises (SMEs) in the country. But this number is likely underestimated: the statistics rarely account for all family-run businesses and solo owners/freelancers.

Naturally, for many SMEs, Excel spreadsheets are among top used tools in their arsenal. But those who got tired of its highly limited potential are ready to pay for high-tech solutions to handle their accounting. It presents a compelling opportunity for FinTech startups.

Examples of SME-focused services:

  • BukuWarung and BukuKas — two competitors developing similar FinTech apps. They both started as SMEs assistants in digitization and bookkeeping, but they were looking forward to growing into full-fledged financial service to provide loans, assess creditworthiness, etc.
  • GajiGesa and Wagely — Earned Wage Access and payroll management platforms from Indonesia. The former one raised $6.6 million in an A-round funding series. Its competitor Wagely raised $5.6 million in strategic funding led by Integra Partners.

Social commerce

The largest cities of Southeast Asia are fully covered with a net of plentiful ecommerce services. Nevertheless, the remote regions’ options are much more restricted. The reason is in logistical infrastructure: its fragments are dispersed unevenly across the territory, so transporting goods to places sticking out of the main logistical routes would be slow and expensive.

That’s where the social commerce model comes in handy. Instead of individual single-household purchases, goods and food are ordered in batches by groups of consumers inhabiting the same community. It lowers logistical costs, thus enhancing the efficiency and affordability of the supply chain. 

Here are some social commerce startups:

  • Evermos is an Indonesian social commerce startup that specializes in halal and other products for Muslim customers. In September 2021, the company announced it had raised $30 million in Series B.
  • KitaBeli specializes in selling fresh produce and FMCG outside of Indonesia’s major cities, including people who have never shopped online before. It raised a $10 million Series A in March.

Artificial intelligence

In the sphere of artificial intelligence, founders from ASEAN countries develop strong applications that optimize and streamline business processes in any direction. 

  • is a startup from Indonesia, a provider of a leading technology in conversational AI. Its B2B model supports other companies in ensuring smoother experiences for their clients. 
  • A Singaporean software startup automates and advances AI used for echocardiography and medical imaging.

Fintech, ecommerce & DeFi

Financial technology, ecommerce, and decentralized finance (DeFi) are also trending in the Southeast-Asian market. The world shifts away from traditional finance and trading, so the regional founders launch apps and businesses that make financial tools and electronic commerce accessible. 

Investors eagerly answer to the skyrocketing demand for such services. For example, in 2021, the ASEAN DeFi startups raised $1 billion in equity funding. It’s 6 times the amount they raised in 2020. 

  • Advance is an application from the Philippines that enables Filipino workers to get zero-interest credits from their employers. 
  • Shopinks is a Singaporean startup working with sellers that helps them increase engagement through chatbots and personalized emails.

Ecommerce aggregators

Ecommerce aggregators are startups that acquire smaller brands in the sector of the Internet trade. This direction is highly popular in Europe and the US, and it attracts lots of investment. But in the Southeast-Asian market, it took a bit longer for ecommerce aggregators to emerge, which is a surprise considering that many suppliers and online stores are based in Asia.

Two biggest ecommerce aggregators that launched recently were supported by venture capital funding. In a few months, they both raised follow-up rounds, establishing the trend and signaling to other investors the high demand for this business model.

  • Una Brands is an aggregator that looks for brands across all marketplaces and platforms, including Rakuten, eBay, Shopee, etc. 
  • Rainforest is a Singaporian marketplace that provides its services to Asian sellers on Amazon.

Health technology

As a result of the pandemic, there was a great momentum for medtech startups and development of health technology.

  • Doctor Anywhere and Doctor On Call are regional telemedicine providers that connect medical specialists and patients online. The influx of COVID-19 cases and the strain it put on the healthcare system reduced the number of available in-person appointments. Seeing the new trend, startups tried to fill in the void and ensure accessible care at the touch of a button. 
  • Pharmacity and other digital pharmacy platforms deliver medications to homes of their users. Citizens learned that a contactless delivery is a more preferable and safer option to actually visiting a brick-and-mortar pharmacy, so medicine delivery services quickly caught up to the demand.
  • Malaysian project Naluri offers digital mental healthcare solutions, answering to the significant decline of the populace’s mental health caused by corona lockdowns. 


Green economy and environmental efforts are another focus for Southeast-Asian founders. The continent is especially vulnerable to the climate crisis, so many startups are searching for a way to relieve at least some weight.

  • Duitin is an Indonesian startup that operates 2,000 waste management sites across the country.
  • Lockists is a shared transportation platform from Taiwan aiming to improve air quality and encourage businesses to reduce their car use.

What to expect from Southeast Asia startup ecosystem

The superfluous expansion of the startup ecosystem in the region brings a few thoughts on what is about to come in the next 2–5 years. 

First, even though Grab went public via a SPAC, it’s hardly possible for other startups in Southeast Asia to do the same. In the short-term perspective, at least. It is contrary to how startup IPOs go in the USA and Europe where everyone is trying to jump into the steps of projects that recently got listed.

The explanation behind it is that the ASEAN market is not as mature in terms of assets. However, there might be more exits and M&As since investors and funds are looking for high ROIs in Asian countries with young and emerging startup ecosystems.

Second, being a fast-developing and overall technologically competent region, Southeast Asia has quite a unique hierarchy of needs. For local citizens, the most cherished values are food, education, and traveling. Hence, startups that cater to these specific demands will expand and prosper — and keep prospering as long as they fulfill the populace’s needs.

Fuelled by the pandemic, the ASEAN governments offered extensive support to startups in the spheres of digitalization and fintech — the main ones tending to the repercussions of the disruptive event. The avalanche has already started, and the region is going to see more e-wallets, QR codes, open banking, and other solutions to fill in the gaps in financially underserved areas.

Third, the sector of small and medium-sized enterprises (SMEs) is another big one to watch, since it’s also undergoing digitalization. The growth, however, is not happening evenly: in Vietnam and the Philippines, the markets are only emerging. With their governments’ regulatory and/or infrastructural measures to support innovation, there will likely be expansion of grocery businesses, consumer banking, and all types of ecommerce.

Final thoughts

Having proved viable as a new international hub for startups and innovation, the ASEAN region is emerging as the Silicon Valley of Asia. Investors’ appreciation of the unique startup ecosystem keeps rising. Their interest is evidenced by figures: in 2021, the total funding surpassed $25.7 billion.

There is high potential for further growth since local startup ecosystems are dominated by youth. With the rising level of digital literacy and increasingly diverse consumer demands, the market searches innovative solutions to accommodate different needs.

Tracker in startup studio Admitad Project