Dear Pro member,

Funding into Southeast Asia’s tech startup space fell 71% from US$8 billion in the first half of 2022 to US$2.3 billion in H1 2023, as per a Tracxn report. The decline was driven mainly by a 72% plunge in late-stage investments.

H1 2023 is the least funded half-year since 2020. The region’s tech startup ecosystem witnessed its highest funding in 2021, after which there was a steady decline. Investments into this region fell by 39% in 2022 from 2021. Some of the primary reasons for this downward trend could be the rising interest rates and the current macroeconomic environment.

Fintech, enterprise applications, and retail were the top-performing segments in H1 2023. However, these industries witnessed a drop in funding. Two segments that observed upticks are auto-tech and insurtech.

The overall trend doesn’t inspire confidence in the region’s startup ecosystem. However, things could be reversed as the world emerges from the shackles of the current macroeconomic environment.

This is the top story of this week’s Ecosystem Roundup. Get a glimpse of the latest major happenings in the region’s startup ecosystem.

Sainul
Editor.

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Singapore tops SEA for tech funding in H1: report
The city-state attracted US$685M for Q2 2023, bringing its total H1 gains to US$1.2B; Total funding into SEA startups fell 71% to US$2.3B in H1 2023 from US$8B in H1 2022.

Thunes pockets US$72M at a US$900M+ valuation
The investors are Visa, EDBI, and Endeavor Catalyst; Thunes’s platform allows businesses and their customers to send and accept payments globally; It powers payments for clients such as Grab, PayPal, and Uber.

China’s XVC leads US$20M round of Indonesian BNPL firm Finture
Other backers are SWC Global, MindWorks Ventures, Antao Capital, and Tortola Capital; Finture connects customers to licensed financial institutions that provide instalment payments.

Ola advances IPO plan as electric Scooters take off in India
The Bengaluru-based firm has 38% share of India’s e-scooter market; Ola Cabs got as far as selecting banks for a US$1B IPO in August 2021, but that never materialised; It is backed by SoftBank and Tiger Global.

Hydroleap nets US$4.4M to enter Australia, Japan, Indonesia
The investors are Real Tech Holdings and the Government of Victoria; Hydroleap is an industrial wastewater treatment company offering an automated modular system without any chemicals.

Truck transport network in Thailand APX gets funding
ORZON Ventures is the lead investor; APX provides door-to-door cargo transportation services through its network with modern platforms for LTL (less-than-truckload) and palletised cargo services.

Tesla enters Malaysia with Model Y SUV
The move allows the US firm to capitalize on the red-hot ASEAN EV market, which is expected to rise from US$859 million this year to a staggering US$3.5 billion in 2028.

Low-code platform ToolJet raises funds from Microsoft, GitHub
ToolJet helps companies build internal tools quickly and with less engineering effort; The company said that its platform is used by companies, including GoTo Group, Byju’s, and Sequoia

Threads now has one-fifth of the weekly active user base of Twitter
The app has now achieved over 150M downloads, by its current estimates — which is 5.5X faster than Niantic’s Pokémon Go, which had held the record for largest app launch title since its July 2016 debut.

How Flexxon solve AI’s cybersecurity problem through hardware-focused approach
When it comes to its role in the cybersecurity industry, AI is often touted as an effective solution when infused with anti-virus software and firewall protection, says Flexxon CEO Camellia Chan.

Top news stories e27 published last week
From Radical Fund’s US$40M first close to the unveiling of the 55 finalists of SMU’s LKYGBPC competition, SEA witnessed quite a few activities in the last week.

3 key strategies to master the art of value proposition pitching
Many business owners lack a compelling value proposition that engages, intrigues, and converts conversations into potential leads.

Optimising finance made easy: Embracing AI-driven investment
AI-driven investment has emerged as a powerful tool for optimising finance, revolutionising the way we approach investment strategies.

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In an email interview with e27, Kiyan Foroughi, co-founder and CEO of Needle, explains the specific problem faced by e-commerce brands today that the company aims to help solve with AI.

“The average new D2C e-commerce brand must find and transact with customers on multiple platforms channels like Facebook, Google, Tik Tok, Shopify and Amazon marketplace–this is both time-consuming and costly. On average, they are using over ten tools to analyse and market their brand and products, which is a ton of data to make sense of and a lot of decisions to make. They are also spending up to US$3,000 a month for generic marketing campaigns with little-to-no ROI. All the while, this same D2C brand is competing with many others as customers have tons of options to choose from,” Foroughi writes.

This is why Needle aims to tackle the problem by helping D2C e-commerce brands prioritise, plan, and implement marketing campaigns and assets. It will eventually bring overall marketing costs down and drive ROI.

“Our solution helps founders analyse all of their data. It connects all the different sources of data you have (e.g. Shopify, Google, Facebook). Then, our AI gets to work by doing growth modelling, sensitivity analyses, and comparing against various models of companies with similar archetypes. This helps identify the most impactful goals for your business and marketing to grow,” says Foroughi.

After that, the platform provides personalised recommendations identified from its ever-growing tactics database. These recommendations are tailored to help users achieve goals more effectively.

“Lastly, we also assist in executing these recommendations using generative AI. We can create specific emails based on the recommendations and even prepare and set up advertising campaigns for you to review and launch,” the CEO says.

Also Read: GM.co merges the best of Web3 and e-commerce to provide a better shopping experience

“In the end, our customers, typically comprising a marketing team of one to two individuals, including the founder, can now accomplish the work of a team twice their size. Using Needle, our early customers have grown their baseline revenue to 1.5x over five months.”

Based in Singapore, Needle is co-founded by a diverse team of entrepreneurs, founders, and operators who have sat at the intersection of e-commerce, growth strategies, and capital for the past 20 years. Its founders are Foroughi, Serene Gan (COO), Jeannie Nguyen (CGO), and Rachelle Yee (Head of Product).

“Our co-founders originally met at a growth agency where our team helped hundreds of brands grow and reach millions of customers, including Razer, RedDoorz, and Tiket. As data became more accessible through APIs and AI technology advanced, we realised the potential to turn our service into a product that could help millions of brands instead. We decided to productise (i.e turn a service done mostly by spreadsheets using software and AI) and enhance our offering, and that’s how Needle came to be.”

Moving the Needle for young e-commerce brands

When asked about the profiles of their users, Foroughi says that they primarily consist of founders of young e-commerce brands, particularly in the fashion, home, and beauty sectors.

These founders typically lead teams of three to 15 individuals, with the responsibility for growth and marketing still largely falling on their shoulders. Examples of young D2C brands that Needle has been working with include August Society, Indosole, and Our Bralette Club.

“Currently, we are finding a lot of traction in the US. We have acquired most of our customers through community marketing efforts targeting Shopify entrepreneurs and word-of-mouth. Additionally, we receive referrals from partners such as design and development agencies who frequently work with the same brands we serve,” he says.

Also Read: How cruelty-free, Halal-certified D2C cosmetics brand RADC achieved 4X growth in 2022

In terms of revenue model, Needle expects to have a freemium subscription model as we find that it is a model that our customers are familiar with for products they use frequently.

“We see Needle as a product that brands will use daily as they ideate, plan, and execute marketing campaigns. The pricing for each subscription tier will likely increase with the amount of usage (e.g. the more data points and tools our customers use to connect, the more generative AI features used),” the CEO says.

“In addition to the freemium model, we may also explore other revenue models where we have a more vested interest in the success of our customers. This could involve taking a percentage of the revenue or a share of the uplift we have generated for their businesses. We are open to experimenting with different approaches to ensure incentives are aligned, and we have skin in the game as well.”

As AI becomes increasingly popular across various industries, Needle looks for opportunities that will allow them to help businesses simplify tasks.

“We also aim to assist in areas where setting up or execution requires a skillset not possessed by many of our target audience, such as more technical marketing-based advertising campaigns,” Foroughi says.

“Our current belief is that the companies that will succeed in AI are those that deeply understand their customers, possess extensive and high-quality data and have the agility to adapt to various use cases. We aspire to be one of those companies.”

Also Read: Asa Ren closes US$8.15M financing round to provide D2C DNA tests in Indonesia

What is next for Needle

Recently, Needle has completed an oversubscribed pre-seed funding round of US$1.2 million led by Iterative with the participation of Ethos Fund and Goldbell Financial Services. Notable angel investors, including Rainforest CEO JJ Chai also contributed to the funding round.

“This funding will allow us to make hires in areas of engineering, data science and AI trainers in order to keep improving our product,” Foroughi says.

“Our primary focus for 2023 is to continue refining and enhancing Needle through our early customers. We consider our early customers during this pilot phase as ‘design partners’ with whom we collaborate closely to co-create Needle into the ideal AI marketer that meets the needs of their brands.”

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Image Credit: Needle

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Meta, the parent company of Facebook and Instagram, has recently introduced an exciting new contender in the realm of social media – a platform named ‘Threads’. Demonstrating a staggering momentum, Threads has gathered over 60 million registered users in a scant two days since its release.

This extraordinary rate of adoption implies that Threads could potentially become a key influencer in the social media landscape.

Redefining social media landscape and empowering creative entrepreneurs

But what does this mean for ambitious entrepreneurs, small business owners, and freelancers, particularly those operating in creative industries?

Despite being in its early stages, Threads shows promising signs of becoming an effective platform for fast content sharing, encouraging informal dialogues, and increasing brand exposure. Notably, Threads doesn’t currently have a paid advertising feature, which implies that any endorsements or reposts about your business are likely to come across as genuine and authentic.

Adam Mosseri, the Head of Instagram, advocates that content shared on Threads should strive to inspire conversations and forge meaningful connections. This is a tremendous opportunity for businesses to engage with audiences on a more personal and impactful level. 

Adam Mosseri on Twitter

In essence, Threads is an oasis where posts that don’t quite align with your Instagram aesthetic can comfortably reside. Over the past few years, brands may have put in considerable effort to maintain consistency in their Instagram feed and stories.

Also Read: How to grow a global audience by leveraging social media

This commitment may have held them back from sharing organic, unfiltered content due to concerns about messing up the aesthetics of their feeds. However, Threads is set to revolutionise this aspect and encourage individuals or brands to post more freely and authentically!

Here are the current capabilities of Threads

• Post text (up to 500 characters)
• Share images and photos (up to 10)
• Share videos (up to 5 minutes)
• Include outbound links
• Create carousels
• Share .gifs (via the Giphy app)

However, do take note that Threads currently does not support the use of clickable hashtags or offer direct messaging capabilities. With Threads, businesses can swiftly generate content, foster casual dialogues, and secure authentic endorsements, all without the necessity of paid advertising.

It paves the way for sharing unfiltered content, offering a refreshing break from the constraints of meticulously curated aesthetics. As you adapt to the unique features of Threads, you can interact with your customers in novel and compelling ways.

Adapting to the unique opportunities each social media platform presents is crucial for businesses, and I am eager to see how Threads evolves and how it can revolutionise the dynamics of business-customer interactions in the digital landscape. This is a promising time for all businesses, so keep your spirits high and stay ready for new challenges and possibilities!

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Editor’s note: e27 aims to foster thought leadership by publishing views from the community. Share your opinion by submitting an article, video, podcast, or infographic

Join our e27 Telegram group, FB community, or like the e27 Facebook page

Image credit: Cristobal Herrera-Ulashkevich/EPA, via Shutterstock

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In today’s rapidly changing landscape, education companies face unique challenges in accessing traditional sources of financing. As the macro environment experiences downturns in venture and debt capital, education entrepreneurs must explore alternative avenues to secure the necessary funding.

Macro downturn and the need for alternative financing

The education sector, like many others, is intricately tied to the ups and downs of the economy. Last year, global edutech investments dropped 80 per cent from Q1 2022 to Q1 2023. And when economic uncertainty looms, venture and debt capital can become scarce, leaving education companies in a challenging position to secure the necessary funds for growth and innovation.

In times like these, education entrepreneurs must seek out innovative financing solutions that can bridge the gap and ensure the continued progress of the sector.

This need for alternative financing is not unique to education, but it carries particular weight within the industry. Education plays a vital role in society, shaping future generations and driving societal progress. It is during challenging economic times that the importance of education is magnified as individuals seek to upskill, reskill, and invest in their own personal and professional development. 

This surge in demand for education puts additional strain on education companies to meet the needs of learners while grappling with the limitations of traditional financing options.

Also Read: Pure ideas with no executions to prove do not attract savvy investors: Shao-Ning Huang of AngelCentral

Counter-cyclical nature of education

One key advantage of the education industry is its counter-cyclical nature, which sets it apart from many other sectors. While economic conditions may fluctuate, the demand for education remains consistently high.

In fact, during times of economic downturn, individuals often prioritise upskilling, reskilling, or pursuing further education as a means to enhance their employability and navigate the challenging job market. This surge in student demand presents a unique opportunity for education companies to tap into new markets and cater to the growing needs of learners.

Moreover, the surge in student demand during economic downturns presents an opportunity for education companies to expand their offerings and meet the evolving needs of learners. By embracing new technology and innovative learning models, education companies can deliver personalised and adaptive learning experiences that resonate with students.

This includes leveraging AI and machine learning to enhance content delivery, incorporating gamification elements to boost engagement, and harnessing data analytics to gain valuable insights into student performance and preferences. 

The combination of crypto-enabled financing and innovative educational approaches positions education companies at the forefront of change, ensuring their relevance and competitiveness in an ever-evolving landscape.

Emerging economies and the education boom

Emerging economies, including Africa, Latin America, and Southeast Asia, are witnessing a remarkable boom in the demand for quality education. As middle-class populations rise and the importance of education becomes increasingly recognised, these regions offer a fertile ground for education companies to thrive.

However, one of the key obstacles faced by entrepreneurs in these markets is the limited access to traditional financing options. Local financial systems may be underdeveloped or lack the necessary infrastructure to support the growth and innovation of education companies.

Also Read: New research report: The nexus between elite university education and startup funding

By leveraging the decentralised and borderless nature of cryptocurrency, education entrepreneurs in emerging economies can unlock new avenues for financing their ventures. Cryptocurrency provides a democratised and inclusive financial ecosystem, allowing entrepreneurs to raise capital from a global pool of investors without the traditional barriers associated with geographical limitations or stringent regulatory requirements.

Unconventional paths forward

Partnerships like Open Campus, an education protocol supported by Animoca, Binance, GEMs Education and others, represent a transformative step in addressing the challenges of traditional financing in the education sector.

Moreover, crypto-based financing models offer greater accessibility and transparency, bypassing the need for complex and often restrictive financial intermediaries. This opens up opportunities for education companies to directly connect with investors, showcase their vision and impact, and secure the necessary funding to fuel their growth. 

By embracing cryptocurrency and blockchain technology, education companies can tap into global investors, access new funding sources, and drive the growth and impact of their initiatives. With the support of industry leaders and the application of innovative financing models, the education sector can foster collaboration, drive innovation, and ensure the availability of quality education for all.

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Editor’s note: e27 aims to foster thought leadership by publishing views from the community. Share your opinion by submitting an article, video, podcast, or infographic

Join our e27 Telegram group, FB community, or like the e27 Facebook page

The image featured in the article has been generated utilising an AI-powered tool

The post Breaking barriers: How crypto is disrupting education funding appeared first on e27.

Southeast Asia’s tech startups attracted 71 per cent less funding in the first half (January-June) of 2023 compared to the same period last year, as per the latest report released by market intelligence platform Tracxn.

The decline was primarily driven by a 72 per cent drop in late-stage investments, Tracxn said in its SEA Tech Semi-Annual Funding Report.

Funding into the tech space in H1 2023 dropped to US$2.3 billion from US$8 billion in H1 2022 (US$1.15 in Q1 2023 and US$1.17 billion in Q2). The US$100 million+ funding rounds also dropped to six in H1 2023 from 18 in the same period last year.

H1 2023 is the least funded half-year since 2020. After a peak in 2021, there has been a steady decline; investments fell by 39 per cent in 2022 from 2021, primarily due to the rising interest rates and the current macroeconomic environment.

Also Read: eFishery banks US$200M, targets to engage 1M+ aquaculture ponds by 2025

Fintech, enterprise applications, and retail were the top-performing segments in H1 2023. However, these segments witnessed a drop in funding in 2023 compared to H2 2022.

The fintech sector raised US$926 million in H1 2023, contributing almost 40 per cent of the funds raised by the SEA tech startup ecosystem during this period.

Two segments which observed upticks in funding are auto-tech and insurtech. Auto-tech funding grew from US$23.6 million in H2 2022 to US$317 million in H1 2023, while insurtech rose from US$98.7 million to US$262 million.

Only one company, eFishery, entered the unicorn club in H1 2023, compared with six new unicorns in H1 2022.

As for acquisitions, H1 2023 saw 29 deals compared to 43 in H2 2022 and 69 in H1 2022. Five companies from this space went public in H1 2023 as against just one in H1 2022.

In the SEA region, Singapore, Jakarta, and Petaling Jaya were the top-funded cities in H1 2023. Companies in Singapore attracted investments worth US$1.2 billion, while those in Jakarta and Petaling Jaya raised US$378 million and US$202 million, respectively.

East Ventures, SEEDS Capital, and Y Combinator were the most active investors in the SEA tech space in H1 2023. Y Combinator, East Ventures, and 500 Global were the top seed investors, while Gobi Partners, SMDV, and Peak XV Partners were the top early-stage investors.

In terms of late-stage investments, SoftBank, Avataar Ventures, and Prosperity7 Ventures were the top late-stage investors.

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Copyright: dragonimages

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