StartupOpinion

Investor’s Perspective on the Landscape of Startups in Southeast Asia this Year

At the beginning of every new year, it is just common to see people trying to predict about what people would do or how things will work throughout the year, like predicting about the trend of ad spending, technology, even game consumption. This time, Jungle Ventures’ Operating Partner Alexander Jarvis voiced out his prediction on how the landscape of startups in Southeast Asia (and India) would be this year.

On his personal blog, Jarvis divided his prediction into four categories: Investment Side, Valuation and Exit, Operating Environment, and Startup Side, as you can read below.

1. Investment Side

From the investment point of view, Jarvis predicted that there would be a shift of investment for both early and final stage investors. The availability of Series A funding, especially in Southeast Asia (SEA), will be apparent, particularly in Singapore and Indonesia, though it’s not followed by a positive trend on the growth of the number of investable startups. The advanced stage investment like Series B or C will be mushrooming as well, not to mention the incubators and accelerators.

2. Valuation and Exit

To be regarded as having an good valuation, companies will have to possess higher initial value. The amount of seed funding will also be increased, from around $500.000 nowadays to $1-5 million per company. Jarvis also predicted that there wouldn’t be a high exit this year, as founders will tend to sell their startups at early stage with considerably small value. Moreover, messaging giants are expected to acquire companies in segments they’ve yet mastered in order to perfect their own ecosystem.

3. Operating Environment

ASEAN market is predicted to start surfacing this year, but Jarvis assumes that there would be much more “discussion” rather than “benefit” out of it. The unclear regulations, such as the one on e-commerce, that still existed last year will be much more questioned this year. The competition for best talents will also be more fierce, opening the door for inflation. Thus, startups will start looking at the possibilities of importing foreign talents.

4. Startup Side

It is predicted that in 2015, there would be an increase of regional startups’ expansion, with Singapore, Malaysia, Thailand, and Indonesia dominating the trend. The famous Rocket Internet is also predicted to produce new startups. Jarvis assumed that startups that find difficulties in sealing the Series A funding will start complaining. In his opinion, the past two years have seen a ‘far from ideal’ condition where improper startups successfully closed the funding, thus damaging the ecosystem and intensifying the challenges of sealing the Series A funding in the future.

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