We are a firm believer in the idea that innovation, year on year, is going global, measured by where innovative solutions are emerging from, where demand for them resides, and who is providing the capital for the next-generation of new businesses, transitioning us toward a very different 21st century.
Recent years have seen a venture capital industry boom in China, we have seen Slush in Finland becoming one of the biggest tech/innovation conferences in the world (20K people, >2,000 startups, >130 countries represented). And where can you find a country in the world today where innovation and entrepreneur-ism is not a key part of a national future competitiveness strategy?
“It seems like everyone is raising new funds in Singapore and Southeast Asia right now,” remarked one of our analysts to me the other day, as I returned from holidays. (He knows it is a part of the world I am very focused on right now, as we build towards Cleantech Forum Asia on November 13-14 and the release of the first APAC 25, a new sister list to our about-to-be 10 years old Global Cleantech 100).
“Looks like our timing is good,” he finished.
I hope so!!
He was picking up on a steady flow of news during August which included: Myanmar-focused PE firm Anthem Asia made a first close of its debut vehicle, Myanmar SME Venture Fund, with $34.5M in commitments from three institutional investors; Ho Chi Minh-based VinaCapital launched VinaCapital Ventures, a tech-focused venture capital fund targeting $100M; and in Singapore, August saw Tin Men Capital announce the first close of its maiden $100M VC fund, and Openspace Ventures, best known for being an early backer of Indonesian ride-hailing unicorn Go-Jek, announce a final close of $135M on its second fund.
Talking of ride-hailing unicorns, only 2 months ago Grab announced the formation of its CVC/innovation arm, Grab Ventures, aimed at discovering and supporting 8 to 10 growth-stage startups over the next 2 years with a focus on transport, food, logistics and financial services.
Is the ASEAN region an emerging hot-spot for innovation and (corporate) venturing activity?
We believe this trend is highly relevant to us – and so to you – for a couple of reasons. It shows that LPs, be they local or regional (in the form of sovereign wealth funds, corporates, family offices, and institutions), are interested and confident enough in the ASEAN region and the robustness of its economic growth potential to invest into its relatively young, but rapidly growing venturing scene. Such LPs have also been investing in funds elsewhere in the world, with businesses whose innovations could have big impact in the region and on the development goals of the UN’s SDGs as they apply to Southeast Asia. I don’t need to tell you how in vogue impact investing is right now, do I?
It also shows – admittedly at different stages and in different ways across the region – that this large and growing economy is going through its own cycle where the rise of the digitally-enabled consumer (note there are already today more internet-connected consumers in Southeast Asia than the US), coupled with urbanization and the rise of a middle class, gradually leads to stronger attention to the B2B world and all its inefficiencies, and to bringing power, mobility and clean water to all. In short, smart development. (Note, in another summer announcement, McKinsey launched a smart cities in Southeast Asia report concluding that, in addition to economic, social and health benefits, so-called “smart solutions” could eliminate up to some 270,000 kilotons of greenhouse-gas emissions annually.)
Today, the majority of the region’s venture funds and most of the startups are more focused on the consumer app, mobile, gaming, enterprise technology scenes. But already today we can see in the region the pioneers in cleantech (e.g. TRIREC) and deeptech (e.g. Creative Ventures), and the crossover of the generalist VC investors with the intersect of digital within the world of energy, power, transport, logistics, etc. We can see corporate leaders across Asia forming CVCs and open innovation activities (e.g. SP Group, PTT), now being joined by new unicorns like Grab – and we know and hear of more emerging CVCs. And we can see Singapore’s Smart Nation programs and TEMASEK, its sovereign wealth fund, taking a stronger interest in sustainability and liveability issues.
I may not persuade so many of you to come get ahead of the curve with us in November and find out the relevance for yourself, but at a minimum, I hope to have persuaded some of you from hereon to join the two of us in keeping a closer eye on the economic rise of the ASEAN region and its innovation and venturing scene.
Cleantech Forum Asia takes place on November 13-14, the first event of our AsiaConnect Week.