Asia is currently navigating through economic fluctuations, with shifts in the global market presenting complex challenges for even the most robust economies. As the US dollar strengthened against Asian currencies, there are emerging concerns about capital movement, reduced exports, and potential currency devaluation in countries closely tied to the dollar.

Economic challenges are increasingly apparent, particularly in China, which has recently lost its position as ASEAN’s largest export market. Across Southeast Asia, the economic situation is marked by significant inflation spikes, with Laos experiencing rates as high as 31 per cent. Meanwhile, unemployment rates show notable variation across the region, from 1.10 per cent in Thailand to 4 per cent in the Philippines.

Despite these challenges, businesses and investors are exploring innovative strategies to stimulate economic activity. One promising approach is the adoption of Web3 technologies, particularly the tokenisation of Real-World Assets (RWAs), which could provide new avenues for growth and resilience in these turbulent times.

How tokenised RWAs can improve Asia’s economies

RWAs are tangible and intangible assets that exist in the real world and have unassailable value in real-world trade and commerce. These include real estate, infrastructure, financial contracts, and intellectual properties. They can be tokenised or converted to digital tokens on a blockchain, unlocking a new frontier for Asian economies.

This tokenisation is not a mere concept. Companies such as MakerDAO, Mantra, and Polymesh have been tokenising real-world assets and enabling users to invest, trade, and otherwise utilise these to keep track of data and ownership.

Currently, the estimated total value of the tokenised asset market is around US$116 billion. However, this value is projected to multiply, reaching $3 trillion to $10 trillion by 2030. Asia has an enormous expanse of assets that can be tokenised and used to help drive economies.

Also Read: AI at work: Moving forward with employee engagement

Tokenised RWAs can help Asia navigate the ongoing Asian economic storm in several ways. They can help improve access to capital and enhance transparency and efficiency, which are crucial as economies make the most of their limited resources and unlock new investment opportunities.

RWAs on improving financial systems

As a capital access augmentation solution, tokenised RWAs help make traditionally illiquid assets easier to convert to cash or cash equivalents. Tokenisation enables the fragmentation of assets into smaller digitised units that are easier to trade. This process makes them more accessible to investors who have limited cash.

For example, owners of a large tract of land or a building can more easily convert their properties to cash by offering their tokenised assets to multiple investors around the globe instead of finding a single regional buyer to acquire the property. It creates democratisation for global investment opportunities, which is particularly advantageous for countries that large investors rarely consider.

Individual or small-scale investors can fund economic activity through tokenised assets that can be digitally transacted, and physical barriers can be removed.

On the other hand, RWAs empower transparency and efficiency in financial systems. They obtain a secure and tamper-proof digital ownership record, which is essential in building investor confidence amid economic uncertainties.

RWAs help investors avoid fraud found through traditional investment services while providing a way to streamline transactions. Also, efficiency and transparency benefits attract domestic investors and foreigners who previously hesitated to invest their money beyond territorial borders.

Lastly, RWAs help create new investment opportunities as they make it possible to offer investment schemes that were previously impossible because of the limitations of traditional finance. Through tokenised RWAs, anyone from around the world can, for instance, invest in a solar farm in China or an agricultural business venture in the Philippines.

To obtain funding, businesses looking for capital can offer their tokenised assets, new technology patents, or smart contracts for a guaranteed share of the net revenue facilitated by smart contracts.

According to global consultancy firm Roland Berger, “The tokenisation of real-world assets isn’t a thing of the future; it’s happening now. We estimate that the total market for tokenisation, by conservative estimates, will significantly exceed US$10 trillion by 2030. This is setting the stage for a financial ecosystem where digital tokens represent real-world assets, making them more accessible than ever before—not only to the privileged or institutional investors but to the public at large”​

RWA tokenisation for economic empowerment

The concept of tokenised RWAs may sound intimidating to those with little knowledge about modern investment opportunities. However, it helps broaden investment opportunities even for those who do not consider themselves tech-savvy.

Tokenisation companies like Go! SmartChain AI emphasises user-friendliness, providing a simple and rapid way to tokenise assets with minimal technical requirements. Processes are made more accessible for businesses, asset issuers and investors to lessen the restrictive requirements and procedures associated with traditional financial transactions and investment products.

Also Read: Real world tokenisation fireside chat with Anndy Lian: Unpacking the landscape

Anthony Diaz, Founder and Chief Executive Officer of Go! SmartChain AI notes how tokenisation and blockchain technology provide better resource access. This new technology gives individuals representation and access to financial systems and investment opportunities, especially in developing economies.

“This approach democratises access, allowing for more inclusive participation and fostering economic empowerment by giving individuals in these communities a stake and a voice in ecosystems that were previously beyond their reach,” Diaz says.

Adding to their innovative approach, Go! SmartChain AI has developed an AI-driven RPG that gamifies social achievements, fitness goals, and wellness habits in nutrition. This platform allows children and adults to earn rewards while engaging in activities promoting economic empowerment and healthy living.

Understandably, many will continue to doubt the viability of RWAs. RWA tokenisation doubters may find it reassuring that tokenisation companies have already built an ecosystem that relies on the reliability and reputation of established tech players.

Go! SmartChain AI has partnered with Google Cloud to support enterprise and large-scale activities fueling the tokenisation of global assets. The platform also benefits from the NVIDIA Inception Program, which boosts its AI and data science capabilities, which are crucial for refining asset management and personalisation algorithms.

Users of Go! SmartChain AI will experience seamless payments and manage RWA assets securely through integration with Google Wallet, using an interface they are familiar with. Additionally, Go! SmartChain AI will incorporate Google Fit to use health data for personalised wellness tips, real-time fitness tracking, and rewards for achieving health goals, making health management both convenient and innovative.

Weathering the storm

Tokenised RWAs present a silver lining that provides challenged economies with new ways to navigate an economic storm. The democratisation of capital and the creation of new investment schemes enable the flow of funds from various sources to help struggling businesses and support innovative ventures.

Meanwhile, the advantages of transparency and efficiency also help build trust in investment opportunities. As tech-savvy Asia faces economic uncertainties, it makes sense to turn to new technology through RWA tokenisation.

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Niv Della Beauty Innovations, the Filipino beauty and skincare company behind the D2C brands Colourette and Fresh Formula, has closed a US$2 million funding round.

Singapore-based DSG Consumer Partners led the round, with participation from existing investor Foxmont Capital Partners.

Also Read: Foxmont backs Filipino D2C cosmetics startup Niv Della’s seed round

The funds will be used to hire key talent to propel Niv Della’s strategic initiatives forward. Product development efforts will also be amplified, along with the launch of more campaigns, including beauty events, social media campaigns, and collaborations.

Founded in 2015 by entrepreneur-turned-content creator Nina Dizon-Cabrera, Niv Della provides makeup products suited for the Filipino lifestyle, skin tones, and the country’s hot and humid climate. Its shade ranges and diverse marketing campaigns highlight its commitment to inclusivity.

The startup has launched a product line with 7-Eleven nationwide and is available in 80 physical stores in leading department stores around the country.

“Colourette and Fresh Formula celebrate the modern Filipino with each brand’s unique DNA,” said newly appointed COO Stephanie Tanjuatco.

“The company grew rapidly by recognising untapped needs in the Philippine market, and I definitely believe the company can achieve exponential growth; this fundraise will help us achieve it by amplifying our voice to reach more consumers,” added Tanjuatco, who joined the company at the end of 2023.

Also Read: How technology can influence the beauty and cosmetics industry

In 2022, Niv Della raised an undisclosed sum in seed capital from Foxmont Capital Partners.

The Philippines has emerged as the fastest-growing e-commerce industry in the world. The beauty and cosmetics industry’s young and tech-savvy population create a vast opportunity for homegrown beauty brands like Colourette to reach new heights and gain market share.

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Image Credit: Niv Della.

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D3 Labs, a provider of blockchain solutions for enterprises in Indonesia, has announced a partnership with Tether, a global blockchain platform designed to facilitate the use of fiat currencies in a digital manner.

This partnership aims to assess the deployment of a cutting-edge blockchain-based asset management platform and Web3 ecosystem to transform the fintech industry in Indonesia.

Also Read: What are the possible investment strategies after ETH spot approval?

The parties will also explore new use cases for USDt and EURt tokens, with the possibility of driving their adoption at an institutional and banking level using Real-World Asset (RWA) solutions.

They will also evaluate the development of comprehensive educational blockchain-related events to foster innovation and collaboration within the local blockchain community.

The partnership will also facilitate discussions on collaboration opportunities with industry participants in Indonesia to promote the crypto ecosystem, highlighting the benefits of Bitcoin, Stablecoins, Blockchain, and P2P technology.

Chung Ying (CY), CEO of D3 Labs, said: “We are confident that our efforts will potentially bring significant advancements to the fintech landscape, particularly in asset management. The upcoming launch of SeaSeed Network will enable revolutionary use cases in the Web3 ecosystem. This MoU is pivotal in driving blockchain education across Southeast Asia and beyond.”

D3 Labs aims to leverage programmable assets and blockchain technology to revolutionise the financial landscape. Powered by blockchain technology, programmable assets can bridge the gap between underserved individuals, businesses, and the formal financial sector. They provide broader access to digital financial services, enabling seamless and secure transactions while removing barriers such as geographical limitations, high costs, and lack of transparency and documentation.

“This MoU with D3 Labs could potentially expand our footprint in Southeast Asia as part of our commitment to fostering a thriving blockchain ecosystem and exploring new opportunities for growth and development,” said Paolo Ardoino, CEO of Tether.

Also Read: Tether under scrutiny: A deep dive into cryptocurrency crime allegations

Launched in 2014, Tether facilitates the digital use of traditional currencies (a familiar, stable accounting unit) to democratise cross-border transactions across a blockchain. It allows customers to transact with traditional currencies across a blockchain without the inherent volatility and complexity typically associated with a digital currency.

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Image Credit: D3 Labs.

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With Southeast Asia experiencing unprecedented growth in startup activity and investment, understanding the future of venture capital is crucial for entrepreneurs, investors, and ecosystem players alike.

As part of e27‘s flagship conference, the Echelon X panel discussion, titled ‘Unveiling VC 2.0 or Navigating the Chaos? Decoding the Future of SEA Venture Capital in 2024’, delved into the evolving landscape of venture capital in Southeast Asia, exploring the trends, challenges, and opportunities shaping VC 2.0.

Moderated by Jeremy Au, an investor and podcaster from BRAVESEA.com, the distinguished panellists included Audra Pakalnyte, Partner at First Move; Ray Alimurung, Partner at Kaya Founders; and Ankit Upadhyay, Founder and CEO of A2D Ventures.

The discussion highlighted the potential of early-stage startups, regional resilience, and diversification opportunities, highlighting the importance of understanding local markets for fair valuations, balancing founder dilution with investor stakes, and having supportive regulatory frameworks to foster innovation and technology adoption.

Evolution of venture capital dynamics in Southeast Asia

A distinct approach to VC fundraising emphasises a localised strategy rather than dependence on US-based limited partners (LPs). With significant funding sourced from the Philippines and occasional support from Singapore and the US, VCs in the region remain resilient amid fluctuating US interest rates.

The confidence in Southeast Asia’s resilience fosters a trend towards establishing smaller pre-seed funds. This strategic diversification aims to mitigate risks while capitalising on the lucrative potential of early-stage investments. The 500 Rise report, which forecasts robust growth in Southeast Asian economies, affirms the region’s appeal for long-term investment, particularly in the nascent pre-seed stage.

The evolving landscape sees non-institutional entities like family offices and micro LPs becoming increasingly pivotal in early-stage funding. This diversification counters conventional investment challenges, buoyed by a surge in angel investments despite market downturns.

Impact of technological advances

Upadhyay observes a growing trend in Southeast Asia, where derivative AI products are gaining traction. While these may not match the scale of large-scale models like GPT-5, regional founders are innovating with hyper-localised solutions. This includes applications like GPS-enabled speech-to-text technology tailored to address regional challenges effectively. Upadhyay remains optimistic about these localised innovations, foreseeing enhanced efficiency as broader AI capabilities evolve.

Investors like Pakalnyte stress the importance of discernment in AI investments, emphasising practical applications over hype. Despite strides in talent development and regulatory frameworks, the region faces challenges in deep AI expertise. Pakalnyte advocates for investments that demonstrate genuine technological advancement and tangible benefits across sectors.

Also Read: Funding the future: A guide for social entrepreneurs

Alimurung adopts a cautious approach towards AI investments in Southeast Asia. Reflecting on global trends from events like Y Combinator’s Demo Day, he notes a proliferation of AI startups, albeit with mixed success stories in the region. Kaya’s investment strategy prioritises AI applications that augment existing solutions, such as enhancing communication and data interpretation in B2B and freight forwarding sectors. This practical approach aims to leverage AI to streamline operations and solve specific business challenges effectively.

Promising sectors in Southeast Asia’s VC landscape

From a VC perspective, a consumer-centric approach is pivotal, with a strong focus on health tech and preventive healthcare solutions. This includes innovations in localised consumer products and services, such as beauty and healthcare offerings tailored to regional needs and the expanding middle class.

Strategic initiatives in Southeast Asia drive interest across diverse sectors. There’s a notable push towards enhancing tourism efficiency and rejuvenating traditional industries like agriculture and consumer packaged goods (CPG). Innovations in functional and alternative energy drinks underscore a broader shift towards sustainable agricultural practices and product innovation within the CPG sector.

In the Philippines, the startup ecosystem presents abundant early-stage opportunities across various sectors. Investment strategies emphasise vertical marketplaces, B2B solutions, and critical gaps in sectors such as construction materials and agricultural inputs. Healthcare solutions targeting underserved markets and software-as-a-service (SaaS) platforms for SMEs further highlight growth potential and strategic investment priorities in the region.

Strategic approaches to startup valuation and metrics in VC investments

A balanced approach is crucial in navigating startup valuation. Founders are advised to conduct comprehensive market analysis, examining local, regional, and global benchmarks to gauge fair valuations. Avoiding outdated metrics from previous years, startups should aim for a valuation that aligns with current market trends and investor expectations. This ensures realistic expectations and minimises undue pressure on future performance.

Historically, startups have grappled with overvaluation during market peaks, which risks excessive founder dilution. Conversely, undervaluation can hinder growth potential and investor interest. It’s essential to align valuation with fund constraints and investment mandates to maintain equitable founder stakes and sustainable growth trajectories.

Ultimately, achieving a mutually beneficial valuation involves iterative discussions and adjustments based on market dynamics and negotiation strategies. Understanding these complexities is crucial for founders seeking to secure investments that accurately reflect their enterprise’s potential.

Predictions for Southeast Asia’s venture landscape by 2030

Looking ahead to 2030, stakeholders in Southeast Asia’s venture landscape foresee several transformative shifts and opportunities:

Evolving ecosystem and success stories

There’s a collective aspiration for increased exit stories across the region. Successes in exits are pivotal as they fuel the ecosystem by inspiring new founders and attracting reinvestment from both entrepreneurs and capitalists. This anticipated growth in exits is expected to bolster confidence and stimulate further venture activity, particularly in sectors like AI, agritech, healthcare, and consumer goods. Audra also anticipates advancements in regulatory frameworks, similar to those seen in fintech, which could facilitate broader adoption of innovative technologies.

Philippine perspective and foundational tech

The Philippines is in an advantageous position, being several years behind its regional peers like Indonesia. This lag presents an opportune moment for strategic investments, especially in foundational technologies. Key areas such as APIs for data integration across sectors (e.g., financial services, healthcare, government) are highlighted as critical for enabling the next wave of startups. Regulatory reforms that mandate data accessibility could unlock significant entrepreneurial potential akin to developments observed in more advanced markets.

Also Read: Echelon Philippines opens growth opportunities in the Philippines and beyond

Impact of AI and regulatory changes

AI emerges as a transformative force capable of enhancing operational efficiency and reshaping business landscapes across Southeast Asia. Despite current hesitancy among some businesses regarding tech adoption, the next five years are expected to witness a significant shift towards AI-driven solutions. This transition promises accelerated business processes and cost efficiencies, potentially altering market dynamics fundamentally.

Talent and innovation

The influx of talent is crucial for driving innovation in Southeast Asia. The current surplus of skilled individuals, driven by recent economic shifts, presents a unique opportunity for the region. This talent pool is poised to innovate regionally relevant solutions, fostering sustainable growth and attracting further investment.

In conclusion, the evolution of VCs in Southeast Asia over the next few years promises significant transformation. More VC partners will bring deep operational and entrepreneurial experience, acting not only as financiers but also as mentors and coaches to founders. This approach aims to enrich the ecosystem by providing startups with strategic guidance and expertise.

The growing trend of early-stage VCs led by former founders or operators will further enhance decision-making capabilities and accelerate funding for nascent startups, potentially catalysing broader recognition and increased investment interest from larger VCs.

Ultimately, there is optimism that VCs will be increasingly sought after by investors and communities, highlighting their pivotal role in national development while ensuring relevance and resonance with early-stage founders through strong operational backgrounds.

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TikTok Shop surpasses Tokopedia to become the second-largest e-commerce platform in Southeast Asia in 2023, according to a Momentum Works report.

Shopee still maintained its dominant position with a GMV of US$55.1 billion, securing a 48 per cent market share.

TikTok Shop, which quadrupled its annual GMV to US$16.3 billion in 2023, is now at the same scale as Lazada and Tokopedia. TikTok Shop’s merger with Tokopedia pits it against Shopee at a similar scale.

Also Read: TikTok vs Shopee EC battle in SEA: Unveiling strategies for startups

There is more to this report; while Shopee, Lazada, and Tokopedia all reduced their workforce between 2022 and 2024, TikTok Shop has expanded its workforce to over 8,000 employees since December 2021. It means it optimises its investments for healthier growth in the region.

The findings were part of Momentum Works’s ‘The Ecommerce in Southeast Asia 2024’ report. which provides comprehensive insights into the region’s six key e-commerce markets, analysing the competitive landscape and ecosystem players, including logistics.

The report further revealed that Southeast Asia’s e-commerce market continues its impressive growth, achieving a total Gross Merchandise Value (GMV) of US$114.6 billion in 2023, a 15 per cent increase from the previous year, reveals a study.

Indonesia remains the largest e-commerce market in the region, contributing 46.9 per cent to the region’s GMV. This is a lower share compared to 54 per cent in 2022. However, the archipelago’s e-commerce growth rate of 3.7 per cent is the slowest in the region.

Vietnam and Thailand are the fastest-growing markets, with GMV increases of 52.9 per cent and 34.1 per cent year-on-year, respectively. Vietnam has now surpassed the Philippines to become the third-largest e-commerce market in the region.

The other three key markets, the Philippines, Malaysia and Singapore, all registered double-digit or very close to double-digit growth.

Also Read: The evolution and regulation of social commerce in Indonesia: The TikTok Shop ban

Temu, Pinduoduo’s global arm that shook up the e-commerce landscape in the US, has also entered Southeast Asia in 2023. While it is finding a way to enter Indonesia, its current cross-border model will not be welcome in the country. However, the platform might turn more attention to the region after ROl declines in other markets such as North America and Europe.

The report also highlighted four key trends shaping Southeast Asia’s e-commerce landscape:

Live commerce: Leading Key Opinion Leaders (KOLs) in Vietnam, Thailand, and Indonesia are achieving multi-million dollar sales in single live sessions.

Generative AI: E-commerce platforms in the region are beginning to adopt generative AI applications, enhancing user experience and operational efficiency.

E-commerce enablers: Faced with market constraints and reduced brand market shares on platforms, many e-commerce enablers are diversifying their business models.

E-commerce logistics: Third-party logistics providers are experiencing increased pressure as platforms begin to in-source parcel delivery services.

According to Jianggan Li, Founder and CEO of Momentum Works, “The competitive landscape of e-commerce in Southeast Asia remains dynamic and constantly transforming. With markets like Vietnam and Thailand showing remarkable growth and platforms like TikTok Shop rapidly expanding, it’s clear that innovation and adaptation are key to success in this region. The adoption of generative AI and the evolution of live ecommerce are reshaping the industry, and we are excited to see these trends drive continued growth and opportunities for businesses across Southeast Asia.”

Also Read: GoTo completes merger with TikTok Shop Indonesia

Headquartered in Singapore, Momentum Works builds, scales, and manages tech ventures across emerging markets. The company leverages its extensive knowledge, community, and experience to inform, connect, and enable the tech and new economy ecosystem. Key business areas include ventures, insights, immersions, and advisory services.

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