Golden Gate Ventures, a Southeast Asian venture capital fund founded by Silicon Valley natives, marked its 10th anniversary yesterday (July 15) with the release of a special edition report “Southeast Asia Startup Ecosystem 2.0 ”.
It delves into the developments that have shaped the home ecosystem in the region over the past decade, as well as the predictions for the next decade.
“The Southeast Asia Ecosystem 2.0 report traces the region’s meteoric rise to become a formidable force on the world stage in the last decade and what the next ten years will bring. In many ways, this reflects the history of Golden Gate Ventures, ”said Vinnie Lauria, founding partner of Golden Gate Ventures.
In the last decade, the firm VC has launched four funds and has been part of the journey of its portfolio to become unicorns.
SEA 2.0 startup ecosystem
SEA’s start-up scene grew the fastest in terms of capital inflows in the last decade, with total annual invested capital increasing 50-fold, from US $ 130 million in 2010 to US $ 7.7 billion. dollars in 2020.
The close of the decade also culminated in 15 megacords of more than US $ 100 million each, representing more than half of the total capital invested. Food and transportation, fintech technology and logistics were among the verticals that generated the most investment.
Meanwhile, the top three verticals with the highest number of companies with more than US $ 50 million in the last ten years are e-commerce, fintech technology and entertainment and media.
The last decade also meant the emergence of “1.5 and 2nd generation entrepreneurs”.
First-generation entrepreneurs usually came from companies, as there was no existing start-up group, Golden Gate Ventures explained.
However, after 2015, the mega rounds raised by Grab, Gojek and Rocket Internet companies increased funding through the stages, fostering diversity in terms of culture, training and experience, among the new generation of entrepreneurs. .
This led to the rise of “Generation 1.5,” former senior employees of high-growth technology companies. Since it takes an average of 8.3 years from start to exit, we are within reach of seeing the 2.0 generation take off.
What is also noteworthy is that the road to success has been Indonesia or regional. Indonesia has been the market requirement for 75% of unicorns in SEA, while less than half of unicorns go to only one market.
Unicorns at SEA from 2021 include Bigo Live, Bukalapak, Carro, Gojek, Grab, Lazada, OVO, Patsnap, Razer, Sea Group, Tokopedia, Traveloka, Trax, VNG and VNPay.
Which depends on the next decade for SEA
With a continued increase in e-commerce adoption, mixed with per capita GDP growth over the next decade, social commerce is projected to increase as a percentage of global e-commerce, similar to what has evolved in China over the past decade. ‘last decade.
They will also spend strong years for medtech technology. In a post-pandemic world, medical technology will be an upward trend as a means to provide health access to a large demographic population and improve infrastructure challenges in the SEA.
Medtech’s fundraising at SEA is expected to exceed US $ 1.5 billion by 2025. These industries include healthcare, home healthcare, medtech AI, biotechnology, medtech information systems and the like. .
Despite the maturity of the fintech ecosystem in more developed markets, ASEAN countries are detecting upward potential with their growing Internet population and observable consumer base, which present an attractive opportunity for portfolios. electronic and neobank.
Although digital portfolios currently capture a modest share of general payments market, the region is expected to move to digital infrastructure and fintech-only unicorns to appear.
Finally, there will be an exponential rise in B2B SaaS startups. Similarly in the United States, B2B and B2B2C startups will capture a larger share of total deployed capital, averaging 40% by 2030, with US $ 30 billion invested in B2B over the next decade.
In addition to Singapore and Indonesia, Golden Gate Ventures predicts that Vietnam will emerge in 2022 as a major home ecosystem in SEA.
It has already consolidated its growing prominence and Golden Gate Ventures expects to see stronger signs of SEA-focused venture capital funds devoting more effort to early-stage investments in Vietnam.
The next decade will also experience an IPO boom. The number of IPOs in SEA is expected to grow to 300 by 2030 as more local businesses seek to exit national public markets.
Finally, as large technology companies compete for the highest spot in their verticality, Golden Gate Ventures is betting on mega-mergers with SEA.
The SEA start-up ecosystem will enter a new phase of maturity in the next decade, marked by a sharp rise in IPOs in the region and more accumulations of mega-mergers. The founders will have to operate at a much higher level than before, as SEA’s growth rate will be faster in the next decade than in the previous one.
Startups will need to be much more polished and scale faster. CV companies will also have to offer much more than funding, experience and connections. It will be a speed ecosystem.
– Michael Lints, partner at Golden Gate Ventures
Featured Image Credit: Grab / Reuters / Mashable