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Startups in Southeast Asia are thriving amidst global challenges, expanding beyond Singapore and Indonesia

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).
“These 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 optimizing 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.
“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.

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. Organizations prioritizing skills mobility and data literacy will be better positioned to attract and retain top talent and remain competitive in a rapidly changing business environment.”

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 capitalized 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 realize 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…


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