Southeast Asia eyes significant growth in mature start-ups

"Mature Start-ups Growth"

The Southeast Asian entrepreneurial environment is set for significant financial growth this year, with investors particularly interested in stable, mature businesses following a decrease in regional start-up investments. The recovery, projected for 2024, is expected to be driven by cautious investment strategies. Countries like Singapore, Indonesia, and Malaysia are predicted to thrive, primarily due to their resilient financial sectors, growing technology scenes, and encouraging economic policies. As these countries evolve to meet the changing economic scene, it’s anticipated they’ll lead in using digital technologies and FinTech innovations.

According to Edward Ismawan of the Indonesian Association of Venture Capital for Startups, investors are favoring start-ups that show both profitability and innovative prowess. Lawrence Loh of the National University of Singapore Business School notes a trend towards investing in businesses that have made it past the conceptual stage, also indicating a desire for unique ideas paired with a viable business model and proven profit record. He adds that the rising investor interest in start-ups beyond the planning phase is due to their relative security compared to businesses at the start-up stage.

In recent global rankings by Startup Genome, Singapore climbed ten spots to 8th place in 2021, surpassing regional rivals Shanghai, Seoul, and Tokyo.

Southeast Asia’s promising growth in mature start-ups

This rise suggests an investor preference for well-established start-ups prepared to begin commercial operations. Experts suggest Singapore’s unique mixture of tech-savviness, friendly regulatory environment, and steady economic policies are drawing these mature start-ups.

An exemplar of this trend, Singapore-based insurtech firm Bolttech recently raised US$246 million in a successful Series B funding round. The company’s robust business model, which enables the trading of insurance plans, and its recent approval to operate in the US, hint at its potential for expansion.

Simultaneously, Indonesia is seeing a surge in investments in environmentally friendly start-ups, in line with the country’s pro-sustainable policies. The combination of Indonesia’s sizable, digitally interconnected population and a growing emphasis on sustainability is spurring the growth of green enterprises. Financial analyst Adi Wijaya forecasts a rosy future for businesses focusing on credit loans and marketplaces in response to current market needs, particularly in the fintech sector.

The COVID-19 pandemic has hastened the digital transformation across various sectors, with start-ups, especially in e-commerce, online education, and telemedicine, on the rise during this period. Wijaya’s comments highlight the potential for growth and substantial income-generation within the credit loan and marketplace sectors for start-ups with inclusive lending solutions.