Companies around the world have been impacted by a chain of catastrophic market events over the past few years. From the COVID-19 pandemic to the US banking crisis, ‘black swan events’ have been thrust into the spotlight. Popularised by economist Nassim Nicholas Taleb, the term black swan events describes unpredictable one-off events with severe consequences.

One such example is the financial aftermath of the pandemic. Despite a lengthy three-year recovery period,  Asia’s growth is expected to decline to 4.2 per cent in 2024  — the lowest in the past two decades (apart from 2020).

With increasingly frequent macroeconomic shocks, companies must prepare for disruption to be part and parcel of everyday operations. Considering the high-interest rates and the slowdown of two of the world’s largest economies, China and the United States, 2024 may turn out to be another year of market turbulence.

It’s time for businesses to consider black swan events as something to be expected. In 2024, small- and medium-sized businesses (SMBs) and large enterprises must consider how they can strengthen their business resilience and navigate the era of a poly-crisis world.

Building a borderless workforce

For companies to thrive and scale in this new era of business, companies and their leaders that shift away from traditional business models and embrace a global mindset will be better set to capitalise on future growth opportunities. According to recent survey findings, 66 per cent of leaders worldwide stated having employees in multiple countries is part of their business strategy, including 28 per cent who say it is central to that strategy.

Also Read: The growth of business messaging: How it’s improving business performance in Southeast Asia

In an increasingly volatile world, tapping into global talent pools is not only a way to increase diversity but also a survival strategy.  An ‘anywhere workforce’ means businesses can reduce over-reliance on a specific type of talent and have better access to the skill sets they need, regardless of location.

When employees are equipped with a broader range of skills and work across multiple locations, businesses are no longer confined to a specific market and become more resilient against frequent business disruptions.

The same survey also found that employees prefer to work in global teams — 93 per cent of Singaporean employees want to work for a global company, and 90 per cent believe that global companies offer more opportunities for their career growth.

Furthermore, it can help increase cost savings and revenue growth; APAC-based pharmaceutical company Amoy Diagnostics (AmoyDX) was able to achieve a revenue of US$13.8 million by the end of 2022 after expanding its talent pool internationally.

Regular scenario planning is imperative

Scenario planning is a strategic tool for businesses to analyse alternate future events and create flexible long-term plans. Against the backdrop of wildly unpredictable and more frequent black swan events, effective scenario planning is increasingly complicated and should be a regular exercise for businesses so they are well-equipped to mitigate risks from potential uncertainties.

Also Read: Financial literacy in Southeast Asia is set to match industry growth

Instead of relying on traditional scenario planning, leaders can turn towards leveraging artificial intelligence technologies as a viable solution to consider possible hypothetical scenarios, evaluate their potential impact on the business, and identify ‘fail-safe’ critical decisions that will spur the business’s growth trajectory.

Forming the right strategic partnerships

Staying ahead of the competition often means accelerating speed to market in today’s business landscape. Navigating and adhering to unique expansion and employment compliance laws and regulations in individual markets can be complicated and time-consuming. In fact, 32 per cent of leaders are deterred from recruiting and hiring in international job markets due to regulatory complexities.

Employment of Record (EOR) partners can support businesses in building global teams and streamline cumbersome and time-consuming processes when entering new international markets. This speeds up the compliance process, allowing businesses to remove entity requirements and overcome different employment regulations.

By tapping a strategic global growth partner with HR, compliance, and legal experts in the region, businesses can better tackle ongoing challenges and accelerate global growth strategies. Through a collaborative approach, businesses can focus more on scalability and expanding their workforce.

Charging full steam ahead

In a globally interconnected world, encountering another black swan event is not ‘if’ but ‘when’. Building a global workforce, prioritising contingency planning, and expanding strategic partnerships are all essential strategies to circumvent everyday business disruptions and build the resiliency needed for long-term success.

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The post Why businesses need to rethink ‘black swan events’ to succeed in 2024 appeared first on e27.

In 2022, Artem Ventures closed the TIM Ventures fund from multinational insurance company FWD Group. Over its first year of deployment in 2023, the fund achieved key milestones, including curating and investing in 12 startups actively working on social impact and financial inclusion issues.

It also created and ran value creation programmes for startups and the wider ecosystem aimed at capacity building and sustainability development.

“We draw from our corporate venture fund and fund-of-funds backgrounds to invest in promising startups at a nimble pace while incorporating high standards of governance in overseeing our startups and operating our funds. Being cognizant of our corporate LPs’ interests allows us to invest with a view of marrying their financial and strategic objectives through startup investments,” Artem Ventures Managing Partner Low Zhen Hui says in an email interview with e27.

“We are also likely the only, or one of the only, VC firms that adopt International Private Equity and Venture Capital guidelines in valuing our investees according to their liquidation rights, financial performance, and market comparable movements.

Artem Ventures is a VC fund management company currently managing a fund in partnership with FWD Group that invests in early-stage fintech and insurtech companies.

Also Read: Malaysia gets US$10.2M fund TIM Ventures to invest in insurtech, Islamic fintech startups

In selecting a potential investment, the company looks at factors such as the startup’s ability to deploy or adopt a strategy to drive impact towards the environment, society, and governance. Artem Ventures has vetted more than 750 companies and helped its portfolio secure further funding, market access, mentors, and advisors.

The company’s principles and approach to its investee companies focus on enhancing their capacity and capabilities to ensure the business can be sustainable and founders can adapt to any business cycle quickly. In this interview, Low explains exciting insights about the Malaysian startup ecosystem and the opportunities that Artem Ventures aims to seize.

The following is an edited excerpt of the interview:

What insight about the Malaysian startup ecosystem can you share with us?

Malaysian founders embody entrepreneurship passion coupled with strong resilience. If you re-examine past investment trends, Malaysia has never received the same fervent attention that markets like Indonesia, Thailand, and Vietnam have at various times.

This meant that our ecosystem is largely funded by local investors while foreign capital passed us by, forcing our startups to make every Ringgit work harder to achieve their goals.

What challenges are faced by startups in Malaysia? And how do you support your portfolio companies in getting through it?

One of the challenges that Malaysian startups generally face is insufficient capital to scale outside the country.

Also Read: How climate tech companies in Asia measure the impact of their work

While Malaysia is a fantastic starter market for startups (high internet connectivity, strong awareness of digital platforms, diverse population, large talent pool, and good ecosystem support), startups that have primarily raised funds within Malaysia eventually run into a chicken-and-egg issue around the Series A or B stages: they need capital to scale across the region, but their growth plan or traction is not convincing enough for foreign investors to put money behind.

Aside from our network of investors outside Malaysia, we aim to solve this innate issue by helping our founders develop a growth plan focused on regional expansion to land an attractive exit eventually.

What will be the most important trend in Malaysia this year? How do you plan to tap into the opportunity it provides?

We are still eyeing the fintech space as issues such as financial inclusion remain largely unaddressed. Embedded fintech will be an important tool for companies with market access to underserved communities and robust data collection and analytics capabilities to assess thin-credit users better.

What major plan do you have for Malaysian startups in 2024?

We are working on our next fund to invest in more tech and also non-tech sectors. We aim to inject more growth capital into the market and extend hands-on capacity building to more startups within our ecosystem.

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Image Credit: Artem Ventures

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Singapore-based chronic disease management startup Mesh Bio has raised US$3.5 million in Series A financing led by East Ventures.

Elev8, Seed Capital, and other existing shareholders also co-invested.

The funding will allow Mesh Bio to offer its digital twin technologies to healthcare providers and scale the deployment of these solutions across Hong Kong and Southeast Asia, mainly Indonesia and the Philippines.

Also Read: Mesh Bio raises US$1.8M seed to help doctors predict diseases before they occur

Dr. Andrew Wu, Co-Founder and CEO of Mesh Bio, said: “Southeast Asia presents myriad unmet healthcare needs, and our focus is to address these gaps effectively.”

The high prevalence of chronic diseases, from diabetes to heart disease, in Southeast Asia has pushed more general practitioners who lack specialist training in endocrinology to manage patients with chronic diseases.

Founded in 2018 by Wu and Arsen Batagov (CTO), Mesh Bio delivers digital solutions to help healthcare providers with patient management. Its solutions offer patient data and predictive analytics that equip doctors with information and intelligence about their patients and the diseases they live with.

The company develops clinical decision support analytics and automation solutions for managing chronic diseases such as cardiovascular disease. Its DARA Health Intelligence Platform enables data-driven care delivery, which improves patient engagement and health outcomes. It has been used by more than 120 medical centres across Singapore, Malaysia, and Indonesia for preventive health screening.

Also Read: WhiteCoat closes a tranche of Series B round, poised to break even in Singapore

This new investment comes three months after the startup received approval from Singapore’s Health Sciences Authority (HSA) to market its HealthVector Diabetes as a Software Medical Device (SaMD). A chronic disease management solution, HealthVector Diabetes is currently used in an implementation pilot at Singapore General Hospital (SGH), Tan Tock Seng Hospital (TTSH), and selected polyclinics for potential clinical adoption.

Mesh Bio previously raised a US$1.8 million seed funding round in October 2021.

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Southeast Asia’s total food delivery spend on platforms grew a modest 5 per cent year-on-year to reach US$17.1B in 2023, mirroring the growth rate observed in 2022, according to a Momentum Works report.

The growth was driven primarily by the region’s smallest food delivery market, Vietnam (+US$300 million or 27 per cent y-o-y), followed by Malaysia (+US$200 million or 9 per cent y-o-y).

Also Read: How a great back-end tech helped GrabFood capture half of SEA’s food delivery pie despite being a latecomer

Thailand and Indonesia registered low single-digit growth, while Singapore’s topline remained flat, according to the ‘Food Delivery Platforms in Southeast Asia” report, which offers in-depth insights into the region’s six core food delivery markets.

With continuous pressure to achieve sustainable profitability, most incumbents have continued to rein in food delivery subsidies and adopt differentiated strategies to compete. As of the end of 2023, Grab is estimated to account for 55 per cent or US$9.4 billion of the region’s food delivery GMV, a 6.8 per cent increase from the year before.

Foodpanda and Gojek are estimated to contribute 15.8 per cent (US$2.7 billion) and 10.5 per cent (US$1.8 billion) of the region’s GMV, a 12.9 per cent and 10 per cent y-o-y decline, respectively.

Shopee and Lineman showed notable growth and are estimated to contribute 8.8 per cent (US$1.5 billion) and 8.1 per cent (US$1.4 billion), respectively, to the region’s GMV.

Key highlights

Premium F&B brands face challenges despite regional spending on F&B recovering: F&B spending in Southeast Asia finally recovered to surpass pre-pandemic levels (US$125.2 billion in 2023 versus US$115.7 billion in 2019). However, many premium brands (notably in Singapore) found the year tougher than 2022, with many resorting to cost-cutting measures amidst macro uncertainties and inflation, which may have heightened price sensitivity among middle-class diners.

Entry of Chinese F&B brands en masse intensifies competition: 2023 saw an acceleration of Chinese F&B brands’ entry and expansion into Southeast Asia. This trend is exemplified by Luckin Coffee’s 30 stores in Singapore and Mixue’s close to 4,000 outlets across Southeast Asia; however, brands in multiple categories and sizes have also established a presence in the region. They have brought their know-how in in-store operations, marketing, user operations and franchise management. Expect more in 2024.

Major players have achieved some sort of profitability: Most major platforms have either achieved or are on track to attain adjusted EBITDA breakeven, with some targeting to achieve positive free cash flow in 2024. But as the Meituan and Uber experiences have shown, profitability might not be a constant state — platforms need to balance growth with sustained profitability constantly.

Also Read: How Ridge aims to introduce AI tech to small businesses in the F&B sector

Food delivery players continue to diverge in strategy, leveraging ads for revenue expansion: Major food delivery players have continued leveraging advertising products to lock in more merchant investments. Platforms are expanding their advertising product portfolios to cater to the distinct needs of various brands, including large F&B chains, small F&B merchants, and FMCG brands.

Room for growth in user base and operational optimisation in the region: Southeast Asia’s leading player, Grab, only has 5 per cent of the region’s population of 600 million as monthly transacting customers. Amid a flat sector topline, untapped populations in major cities, expansion into smaller towns, and catering to tourists present further growth opportunities for food delivery platforms. Platforms can and should also continuously optimise operations to reduce costs and grow their bottom line.

“With robust F&B consumption, low food delivery penetration and ongoing consolidation, there is much room for growth for food delivery platforms in the region. While focusing on their core capabilities, leading players also need to keep an eye on potential market changes and emerging challengers,” said Jianggan Li, CEO and Founder of Momentum Works.

Singapore-based Momentum Works provides insights into the digital ecosystem in emerging markets through research, consultancy, community engagement, and venture building.

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Today, Zora Health announced the launch of its integrated fertility care and financing platform in Singapore, with S$1 million (US$740,000) in funding.

With initial backing from venture capital firm Antler, this funding round includes the participation of angel investors such as Cheryl Goh (Founding CMO of Grab), Prajit Nanu (CEO of Nium), Alan Jiang (CEO of Beam), and Lisa Enckell (Venture Partner, Antler), along with Asa Liden (former COO of Pitch.com).

In a press statement, Zora Health said that 55 per cent of its investor lineup consists of women.

“The fertility treatment landscape is daunting to the women and couples seeking fertility care due to the multitude of service options and providers, complicated regulations and confusing pricing structures. Zora Health’s integrated approach addresses these issues head-on, simplifying the process for patients, healthcare providers and corporations in a fragmented market,” said Anna Haotanto, Founder & CEO of Zora Health.

Zora Health provides a comprehensive ecosystem that integrates virtual and in-person consultations, medical concierge services, fertility education workshops for corporations and fertility financing. The platform’s initial service offerings include egg freezing, in-vitro fertilisation (IVF), fertility testing and consultation services.

Also Read: How Singapore became a leading femtech startup hub in SEA

At a later stage, it also offers fertility financing.

One of its offerings includes programmes tailored for corporate clients seeking to cultivate fertility-friendly work environments and facilitate meaningful fertility discussions.

“Research has demonstrated that addressing fertility concerns can result in a 77 per cent increase in employee retention, with 89 per cent reporting improvements in their mental well-being. Zora Health aims to help employers attract and retain top talent, boost employee productivity, and enhance employee well-being through the implementation of these corporate initiatives,” Zora Health said.

Infertility is an escalating issue, affecting an estimated one in six people, as many as 48 million couples and 186 million individuals worldwide, according to the World Health Organisation.

The company said that it already has a waitlist of more than 180 patients and partnerships with more than 50 clinics in 16 cities in eight countries globally.

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Image Credit: Zora Health

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