Tech start-ups see Asia as new Silicon Valley
On Wednesday, 11 hopeful Australian technology start-ups will battle it out in a pitch contest at the inaugural Echelon Ignite event in Sydney.
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.