Driven by a nurturing ecosystem, tech-savvy population, and innovative thinking, APAC tech startups are booming at an unprecedented rate. Venture Capital (VC) deals in the region reached an all-time high of USD $152.68 billion in 2018 before seeing a drop in 2019-2020 and hitting the USD $116.91 billion mark in 2021. Meanwhile, Q1 2022 has already seen USD $32.62 billion worth of deals.
The new KPMG APAC report 2022, titled “Emerging Giants in Asia Pacific“, indicates 100 high-growth startups in 12 key markets operating in sectors like fintech, biotech, Software-as-a-Service (SaaS), blockchain, healthtech, and artificial intelligence (AI). Some key economic features considered include the country’s population, number of mobile subscribers, GDP per capita, and number of internet users. Southeast Asia, in particular, is primed for growth due to a considerable increase in middle-income earners, young and educated “digital natives”, and governmental support.
Startups in Southeast Asia record a sharper drop in deal volume than the first COVID-19 lockdowns in Q2 2022
Here is how the industries that the top APAC tech startups operate in look like today:
Fintech is one of the fastest-growing markets in the region, expected to reach USD $382 million by 2027. Southeast Asia’s capital investments have only increased by seven times since 2015(around USD $1.6 billion).
India-based Juspay is one of the top providers of mobile payment options. In March 2020, Juspay raised USD $21.6 million in a recent series B funding round led by Vostok Emerging Finance. The company plans to use the funds to further broaden its customer base and work with banks to improve the security of financial transactions.
A payment software for reducing the payment-related admin burden of growing businesses, Spenmo, is the top fintech company in Singapore. With Tiger Global Management leading and 19 other investors contributing, the company has raised a total of USD $121.40 million in four funding rounds.
Venture Capitalists in Southeast Asia are actively investing in the biotechnology industry, bringing the combined funds up to USD $6.2 billion. But other APAC regions like India and China are also seeing a fast-growing middle class, allowing for a multi-billion dollar opportunity for healthcare.
China-based medical platform BioMind, mentioned in the KPMG report, is one of the country’s top emerging giants. The privately-owned startup specialises in AI & Machine Learning, healthtech, and oncology by providing fast and accurate diagnoses for brain tumours and vascular diseases.
Software-as-a-Service is another booming sector receiving increased investment in Southeast Asia over the past decade. SaaS is software technology licensing and subscription, and startups in this industry are scaling up across many sub-sectors.
In the reservation systems for the Hospitality and Travel industries sector in India, Interglobe Technology Quotient is the leading SaaS provider. The company focuses on travel technology solutions and creates a seamless process for businesses using its technology. Pace Revenue, their largest investor, raised USD $2.9 million for the company in 2017.
Another rising sector, blockchain technology, helps business operations run safer and more securely. Many companies use blockchain to improve customer service or safely transfer money from one country to another.
Catheon Gaming, by the number of game titles launched, is the fastest-growing play-to-earn integrated gaming company worldwide. It has generated over USD $60 million and expanded to over 37 countries. Founder William Wu agreed to a recent partnership with Polygon Studios, a merger that will see improved speed and new opportunities for scaling.
The evolution of healthcare technology has undoubtedly produced revolutionary systems for the rapidly growing industry. In 2019, Southeast Asia hit USD $266 million in healthtech investments.
Elsewhere in APAC, the Australian telehealth platform Eucalyptus specialises in building digital experiences for patients. The company raised USD $30 million in a Series B round from global investors led by NewView Capital. The funds will help support mental health, weight management, and diabetes brands in the company’s digital health portfolio.
Artificial Intelligence (AI)
The region offers a rapidly growing landscape for AI solutions that assist companies to reduce costs, errors, and fraud and make data-driven decisions.
India-based AI & Machine Learning edtech platform Brightchamps leads the country’s top 10 startups in the 2022 report. The startup offers eLearning classes on coding and maths for children and has a nearly USD $500 million valuation. Led by Premji Invest, their last funding round in 2021 raised USD $51 million, which will fund the expansion plans to over 10 nations in 10 different markets. Co-founder Ravi Bhushan recently said that the company is growing solely on the money raised from customers, not investors.
With over 100 fast-growing APAC tech startups and a variety of booming industries, it’s no wonder Asia-Pacific has been called “the world’s growth engine.” Findings in the latest KPMG APAC report 2022 reinforce what was already evident: the region’s future is undoubtedly tech-oriented, and Southeast Asia is a significant player in its growth.