The Global South, including Southeast Asia, India, Latin America, and Africa, has over 5 billion people. It is projected to grow its GDP 60 per cent faster than advanced economies over the next five years. Capria Ventures sees enormous potential in this region, particularly in Southeast Asia’s (SEA) tech startup ecosystem.

The rapid development of the Generative AI (Gen AI) landscape in this area exemplifies the potential for transformative innovation. Notable investments, such as Alami (Hijra) and wagely, illustrate the diverse opportunities within the firm’s portfolio focus.

Capria Ventures targets early-stage and early-growth tech startups in the Global South. Its focus sectors include job tech, fintech, edutech, climate tech, and SaaS.

One example of this focus is wagely, based in Indonesia, which offers earned wage access. It is utilising Gen AI interfaces to streamline employee education. Using AI-driven chat solutions, wagely aims to provide accessible information about their product, enhancing user understanding and reducing onboarding costs.

“We are looking at startups taking advantage of the Gen AI technology. This is a new, revolutionary technology that can be quite easily applied to lots of different use cases to improve businesses, to make them access bigger markets,” explains Dave Richards, Managing Partner, Capria Ventures, in a call with e27.

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“In other words, you can do more with less and reach out to bigger customer bases with this technology now.”

Capria Ventures observes that while challenges exist in the current funding environment, significant opportunities are also emerging. The funding winter has pushed founders to focus on efficiency—achieving profitability faster and scaling with less capital. Unlike the previous era, when startups could spend freely in the early stages, investors now expect profitability during growth.

Gen AI is a key tool startups can leverage to adapt to this shift. Importantly, applying Gen AI does not require specialised AI expertise. Existing developers can use accessible tools to prototype capabilities in just a few weeks, enabling startups to innovate efficiently despite financial constraints.

In supporting its portfolio companies, Capria Ventures provides hands-on support through an internal team of seven experts, helping them navigate and implement the best technology tools. With the rapidly evolving landscape of available tools and frameworks, the firm curates the most suitable options, coaching portfolio development teams on making informed selections based on cost, performance, and service sophistication.

To expedite the adoption of generative AI, Capria Ventures has developed a code framework with four dedicated developers who work directly with the portfolio companies’ developers. This one-on-one support helps customise and deploy tools efficiently, enabling companies like Wagely to rapidly implement suitable programming frameworks for their needs.

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The advantages of Gen AI

Capria Ventures invests in SEA, particularly in Indonesia and Vietnam, and expands into India, Brazil, Mexico, and Nigeria.

When asked about notable trends, the VC firm observes significant macro-level changes across these markets, with regional variations. In SEA, a shift from consumer-oriented products towards a B2B2C business model is becoming evident.

They also foresee opportunities for regional expansion, particularly as Generative AI helps overcome language barriers, enabling companies to swiftly adapt and expand into neighbouring countries such as Vietnam and the Philippines. This technology is expected to accelerate cross-border growth in the region.

Richards has some important notes for startups in the market who would like to pitch their business to Capria Ventures.

“If you want to stand out more to us, and frankly, to a lot of investors now, you will have to do your own research about how you can take advantage of Generative AI,” he says.

“Of course, this is not the only technology you will use. You also need to have a good business model and figure out customer support and all the other things. But this is a new tool, and if you are presenting that as a way of building a next-generation business, a business that could have been built before without Gen AI, then you are missing out on the opportunity and frankly, will not stand out as much as a company who is doing that.”

Richards also stresses that entrepreneurs are in a “great position” today with the rising popularity of Gen AI.

“In a startup, when you are starting from scratch, you do not have the burden of legacy … If you start from day one with some Gen AI as part of your strategy, in most cases, you can implement it faster than if you have to add it on to something that you have built previously.”

Also Read: Challenges of AI development in Vietnam: Funding, talent and ethics

Lastly, Richards predicts that there will be a significant increase in Series A funding round announcements in the upcoming year.

“In the next six to 12 months, quite a few startups that have raised their seed funding round and maybe some additional capital that have struggled to raise their Series A will come back to market out of necessity. Because they got profitable or more efficient,” he closes.

“So, you will see lots of Series A happening.”

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Image Credit: Capria Ventures

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