Asia’s startup ecosystem has faced challenges in recent years, with factors such as geopolitics and higher interest rates affecting investor confidence. Many venture firms have scaled back their presence in China, once the largest venture market in the region. However, while the number of fundraising rounds has not seen a significant decline, the size of the rounds has decreased. Investors are now more cautious with their spending.
Despite these challenges, there are still investors who see great potential in Asia’s startup scene. Antler, a venture firm, launched a $285 million emerging growth fund called Antler Elevate Fund in 2023. The firm has been investing between $1 million and $10 million in Series A rounds and later stages globally. Antler has expanded its reach beyond Singapore, where it was established in 2018, to the U.S., Europe, Africa, and various Asian countries.
Magnus Grimeland, the founder and CEO of Antler, believes in Asia’s potential for innovation. He has witnessed rapid growth in tech innovation across all Asian ecosystems, which he claims is unparalleled in the world. Southeast Asia, in particular, has seen the emergence of multiple unicorns. Antler expects the Asian startup ecosystem to continue growing significantly in the coming years, making it one of the biggest opportunities globally. Grimeland highlights the almost 60x growth in activity and value creation in Southeast Asia over the past decade as evidence of this potential.
Antler focuses its investments on ecosystems where it can make a significant impact and where startups are experiencing rapid growth. Grimeland identifies Indonesia as a market with great potential for building successful global companies. Vietnam, on the other hand, boasts highly skilled professionals and established international companies, particularly in gaming. Malaysia serves as an excellent hub with significant activity in the early stages and ample funding in later stages.
Japan has traditionally had a smaller tech ecosystem compared to its potential, but Grimeland believes the country is committed to establishing one of the largest technology ecosystems globally. The Japanese government actively supports this effort. Korea, known for its presence in industries like shipping, automotive, fashion, and beauty, has a reputation for quality and influence.
Grimeland also praises India for its impressive job in building its digital infrastructure and digital commerce platforms. He notes the country’s great research and deep tech capabilities. India’s population of 1.4 billion people presents a massive opportunity, and the growth of tech companies in the country is an exciting development. Antler is also interested in backing companies in China.
Grimeland predicts that many Asian companies will venture into the global market, following the success of top Asian companies in areas like battery technology and chip manufacturing. He believes that Asia could be the birthplace of the next Google, Facebook, or Apple.
While Asia’s tech startup environment is slowly recovering from the funding challenges of previous years, Grimeland acknowledges that it may not return to the same level as 2021, which he describes as an abnormal year. However, he remains optimistic, stating that as long as investors back great founders who are building viable companies, those founders will be able to raise the necessary capital.
Grimeland sees AI as one of the biggest opportunities for startups at the moment. He believes that each new technology shift creates greater opportunities than the last, and AI represents the largest opportunity of this generation. He identifies three main areas with potential for AI: infrastructure, applications, and enablers. Grimeland predicts that the next trillion-dollar company could emerge in the infrastructure or application layer of AI.
In conclusion, while Asia’s startup ecosystem has faced challenges in recent years, investors like Antler see great potential in the region. The rapid growth of tech innovation across Asian ecosystems and the emergence of multiple unicorns in Southeast Asia are evidence of this potential. Antler is focused on investing in ecosystems where it can have a significant impact and where startups are experiencing rapid growth. Additionally, the rise of AI presents a massive opportunity for startups, with infrastructure, applications, and enablers being the key areas of focus.