Southeast Asia’s tech sector has traditionally been driven by two of the four ‘tiger’ economies: Hong Kong, Singapore, South Korea and Taiwan. But the region’s other players are showing sharp claws too.
It should not be such a surprise. The region, after all, contains eleven countries and over 600 million people. But meek economies, bad infrastructure and even worse governments have pinned back many of its nations for years.
According to Silicon Valley startup guru Dave McClure, that has begun to change. This month McClure turned his sights to Southeast Asia, as his Geeks on a Plane tour travelled through Singapore, Bangkok, Jakarta and Manila. It highlighted some of the visited countries’ best tech assets, while putting entrepreneurs in touch with investors, and discouraged them from worrying about any stigma they believe their home countries carry.
A 2012 survey by The Next Web showed that 87% of the worldwide Internet audience is now outside the U.S., compared to just 34% in 1996 and it’s easy to forget how much the less developed nations contribute to this. Thailand, for example, is Facebook’s ninth largest country in the world. And the Philippines, while lacking in web coverage, is known as the “texting capital of the world.” More SMS messages are sent there each day than the U.S. and Europe combined.
McClure this week visited the Philippines’ Cebu City, where he rounded up talent from across the country at similarly-named Geeks on a Beach. And the expert is beaming about several companies he encountered – including one on the roster of his own incubator, 500 Startups. “Obviously we are biased towards our own portfolio, and I visited ZipMatch today while in Manila…they are doing great. (I’m) also impressed with Paul Rivera & Kalibrr, although they’re not in our portfolio…yet!” Payroll Hero is also growing quite nicely. Any of those three are great stories.”
Even Myanmar, crippled for so long by a succession of brutal governments and shattered infrastructure, has received huge boosts in the past 12 months. It now has a Burmese-language search engine, and a comprehensive 3G network rolled out this month by Qatari telco Ooredoo.
“The opening of one of the final frontiers of the mobile telecommunications industry offered a unique opportunity to work with the Union Government of Myanmar, as they sought to leapfrog their country technologically, socially and economically,” says Dr Nasser Marafih, Ooredoo group CEO.
Of course, seed investment money is scarcer, and in smaller numbers, in these countries. And problems such as spotty Internet coverage and corruption still dog most of the region. But rapidly increasing smartphone penetration, stabler networks and affordable, well-educated tech talent is making Southeast Asia a burgeoning investment pool.
“There will be nearly two billion dollars in venture capital investments across Southeast Asia over the next two years,” Chok Ooi, CEO of New York-based Agility, told Malaysia’s Astro Awani this month. “It’s a no brainer for us to shore up our presence in the market. With our track record helping Silicon Valley and New York startups succeed, we believe we can help transform the next big idea into reality in the vibrant Southeast Asia startup ecosystem.”
“Overall Southeast Asia seems to be growing fast,” adds McClure. Each country has its own niche.” In Southeast Asia, it’s not only the tigers that can roar.