Tech start-ups see Asia as new Silicon Valley
While it is common for Australian start-ups to head to Silicon Valley, to chase funding and growth opportunities, an increasing number of innovators are looking to Asia.
Asian markets are growing wealthy more rapidly than anywhere else. The Brookings Institute says Asia will host 64 per cent of the global middle class by 2030.
While that future still seems distant, recent years have seen the emergence of a number of Asian incubators and investors.
Singaporean investment company Jungle Ventures has made 16 investments in companies stretching from India to New Zealand. Founder Amit Anand said he was interested in businesses that could grow quickly across the region.
"Everybody thinks that Silicon Valley is where the big markets are," Mr Anand said. "But south-east Asia is starting to prove a very attractive market. If willing entrepreneurs commit themselves, there is a lot of opportunity to be unlocked.
"Our hypothesis is that Asia, and particularly south-east Asia, is going to see a lot of $100 million-plus companies being made on various opportunities in internet, mobile and biomedical and so forth."
Some markets are more developed than others. Chief executive officer of the Merah Putih Incubator (MPI) in Indonesia Antonny Liem said that while his country had massive potential, internet penetration was still only 18 per cent.
"In Indonesia the internet is still very young, and it is hard to look at the exit horizon for return-on-investment, and IPO is definitely not on the horizon," Mr Liem said. "So if you talk about Indonesia, it is all about market size, about untapped potential, and it is a question of timing."
Sydney-based outsourcing service Airtasker is competing for a spot at Echelon. Founder and chief executive Tim Fung said that the opportunity in Asia was massive.
"That said, the US is quite a big market right now and is probably closer to Australia culturally, and of course language-wise," Mr Fung said. "Asia seems to also have a little less market competition in many segments, compared to the flood of companies in the US."
Similarly the co-founder of smartphone taxi dispatch and payment platform goCatch, Ned Moorfield, said while Asia met his criteria of having a large number of highly populated cities with huge volumes of taxi trips, the lower penetration of credit card ownership presented a challenge.
"Rolling out into these markets will require integrating local payments providers into the app," Mr Moorfield said.
Frequently Asked Questions about this Article…
Echelon Ignite is a pitch contest held in Sydney where 11 Australian technology start-ups compete for a chance to pitch at the larger Echelon conference in Singapore. For start-ups, winning offers exposure to Asia's start-up and investment community and potential regional growth opportunities.
Start-ups are eyeing Asia because the region is growing wealthy quickly and developing strong investor networks. The Brookings Institute projects Asia will host 64% of the global middle class by 2030, and Asian incubators and investors are becoming more active, creating fast-expanding markets and regional scaling opportunities.
The article mentions Singapore-based investment firm Jungle Ventures (founder Amit Anand), which has made 16 investments across markets from India to New Zealand, and Indonesia’s Merah Putih Incubator (MPI), led by chief executive Antonny Liem.
Jungle Ventures has said it’s interested in businesses that can scale quickly across the region, and expects south‑east Asia to produce many $100 million‑plus companies in areas such as internet services, mobile and biomedical sectors.
Opportunities include large and fast‑growing consumer markets, a rising middle class, and in some segments less direct competition than in the US. Founders in the article noted massive market potential in Asia and many densely populated cities that can drive volume for services like on‑demand platforms.
Challenges highlighted include varying levels of internet penetration (Indonesia was noted as about 18%); a long horizon to exits or IPOs in some markets; and lower credit card ownership, which means companies often must integrate local payment providers to make services work.
Airtasker founder Tim Fung said the US is culturally and linguistically closer to Australia and is a big market today, but Asia offers massive opportunity and sometimes less competition. goCatch co‑founder Ned Moorfield said Asia meets his criteria for large, highly populated cities with heavy taxi demand, but payment infrastructure (like low credit card penetration) is a notable hurdle.
Pay attention to the start‑up’s regional scaling plan, the specific market’s internet and payment infrastructure (for example, reported internet penetration and credit card usage), the strength of local investor or incubator support, and realistic timelines for monetisation and exits. These factors help indicate how well a start‑up can convert Asia’s market opportunity into returns.
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