Starting a business in a new market is challenging, but three startup mentors share how budding companies can find development opportunities and partners, along with tips to craft a winning pitch.
Starting a business in a new market can be tough, but Southeast Asia (SEA) offers abundant opportunities and support for aspiring entrepreneurs. We speak to three startup mentors from Actavia Consulting, Co-creation Lab, and Pufferfish Partners on why the time to venture into SEA is now, and how Singapore offers startups substantial development and partnership opportunities – even amidst challenging times.
SEA offers startups healthy growth opportunities
Changing market conditions create new opportunities. Adaptable and innovative businesses can become great successes by digitalising and diversifying supply chains — just think of billion-dollar startups Uber and Airbnb that had their baptism of fire in the 2008 financial recession.
“Investors are cautious as we have yet to see the full economic repercussions of COVID-19, but we are seeing growing momentum in sustainability, agritech and smart city technologies,” shares Yann LeMoël, Managing Partner of Pufferfish Partners.
Confidence in the sustained growth of SEA’s internet economy remains strong, reports Google, Temasek and Bain. This is credited to the region’s growth in users, consumer trust, and funding. They also foresee sectors such as fintech, healthtech, edtech and B2B software as a service growing strong in SEA.
“In Singapore, key sectors – fintech, smart city, Industry 4.0 – have seen good projects that have gained international traction,” observes Patrick Veron, Senior Partner of Technology at Actavia Consulting.
Of course, for startups looking for opportunities in SEA, it’s not just funding that’s on offer.
“Partners bring more than money to the table. Mentors give you inputs on growing your product, and offer you development opportunities to penetrate regional markets and go global,” notes Julien Condamines, Founder and Managing Director of Co-creation Lab.
Singapore offers startups partners and development possibilities
To access these opportunities, startups can look towards Singapore, one of the most active investment hubs in the region. At US$21 billion (S$28 billion), Singapore’s startup ecosystem funding is ranked amongst the top 10 globally, double that of the global average.
“Singapore has put in place domestic and international competencies over the years to help companies and startups to mature, develop and grow. There’s a lot of support.”
Patrick Veron
Senior Partner of Technology
Actavia Consulting
With over 600 investors, 200 accelerators and incubators, and a high density of Asian regional headquarters, opportunities are widely available. “There are innovation calls or competitions every week from different incubators or accelerators,” reveals Yann.
For instance, Singapore’s nation wide Open Innovation Network has seen over 350 private and public sector challenge statements across industries calling for partners in healthcare, transport and logistics, built environment, tourism, and maritime.
Here is how startups can pitch themselves to the right partners
With the wide range of opportunities available, the real challenge for startups is to find suitable partners and convince them that you are the right fit.
What are partners and investors looking out for? Business fundamentals are a given, our mentors say; chiefly, crystal clear value propositions and business cases, and revenue generating models with shorter paths to profitability.
Given SEA’s investor diversity, audience awareness is especially important. Here, investors range from family offices to corporate VCs and government accelerators. The mentors recommend that entrepreneurs select potential partners based on their development matrix.
“Stay away from the Big Mac strategy. You need to understand not only cultural differences, but also market specificities to make sure that your product is relevant to this region.”
Julien Condamines
Founder and Managing Director
Co-creation Lab
For instance, early stage startup should focus their pitch to attract mature partners such as corporate venture capital funds, the mentors elaborate. These partners bring with them not only money, but also higher risk-appetites, the ability to co-create and localise products, and regional networks to help you scale. For more mature startups with customised and market-ready products, traditional investment partners will be a better fit, they suggest.
In addition, entrepreneurs must not only prove their foothold in their home market, but also defend their regional relevance. Local competitors might be able to offer similar solutions compared to foreign startups, sans the cultural hurdles, and investors will want to know why they should bet on you, points out Yann. To tailor your offerings to the region, consider how your distribution roadmap will reach SEA’s digital consumers, and how you will build traction and brand loyalty across SEA’s fragmented markets.
Tapping into local priorities can open doors to opportunities, advises Yann. “One of the things corporate investors here look for is whether startups have a local entity. Set this up as soon as you can through an accelerator or incubator. This opens doors to grants and networks in the local ecosystem,” he advises.
