The housing finance sector in India plays a crucial role in the loan market, comprising a substantial portion of secured loan portfolios held by banks and other lenders. The market for home loans is continuously growing, indicating sustained progress in the housing finance industry.

As per the findings by Mordor Intelligence, the Indian market for housing loans is significant, with an approximate value of ₹22.4 lakh crore (US$270 billion). The market is projected to reach ₹40 lakh crore (US$480 billion) by 2026, representing consistent annual growth.

The primary players in the Indian housing loan market are the following types of institutions:

• Public and private sector banks: These banks provide home loans as part of their comprehensive banking services. They generally have a more extensive branch network and offer lower interest rates due to their large scale and government support, especially the public sector banks.  Key players in the Indian housing loan market include the State Bank of India (SBI), HDFC Bank, ICICI Bank, and Axis Bank.
• Housing finance companies: These firms focus on offering home loans and are frequently viewed as more competitive in terms of interest rates compared to banks. Key HFCs in the Indian housing loan market comprise HDFC Housing Finance, LIC Housing Finance, Indiabulls Housing Finance, and L&T Housing Finance.
• Non-banking financial companies (NBFCs): An increasing number of NBFCs are providing home loans, offering a viable alternative for borrowers who may not meet the eligibility requirements of banks or HFCs. Accessibility for those with lower credit scores or untraditional income sources.
• Small finance banks (SFBs): These banks are a newer category of banks dedicated to offering financial services to underserved and unbanked populations. Some SFBs also provide home loans. They fill a critical gap in the market by servicing low-income groups and small businesses that might not be catered to by larger banks.

Growth trends in the housing finance market

Affordable housing plays a crucial role as a driving force in housing finance. The sector has witnessed impressive growth, with a total portfolio value amounting to trillions of crores up until now. This upward trend is predicted to continue due to the large population in need of homes. Moreover, the increasing urbanisation is also a significant factor. With more people moving to cities, there will be a higher demand for housing and the loans associated with it.

Also Read: The D&I advantage: How inclusion fuels growth in Vietnamese real estate

Also, when Real Estate Regulation and Development Act (RERA) came into existence, it transformed the Indian real estate sector. The Act has brought significant transparency to the housing market by requiring developers to publish all project details online, such as carpet area, amenities, approvals, and project timelines. This enables buyers to make informed decisions based on factual information, rather than just marketing claims.

As such, RERA encourages a standardised sales agreement format, removing hidden clauses and unjust terms that typically favour developers. Buyers now have a quicker and more streamlined process to lodge complaints against developers for delays, defaults, or quality concerns.

The government introduced numerous initiatives to narrow the gap between supply and demand in India’s housing sector. For instance, the Pradhan Mantri Awas Yojana – Urban (PMAY-U) scheme offers financial aid to underprivileged urban families who are constructing or purchasing a home. It provides interest rate subsidies on home loans and serves the economically weaker sections (EWS) and low-income groups (LIG).

The Pradhan Mantri Awas Yojana-Gramin (PMAY-G) scheme concentrates on rural housing, offering subsidies for the construction of new homes or the renovation of existing ones. It aims at rural households in the EWS and LIG categories.

The special financing window enables banks and HFCs to introduce special home loan products with simplified eligibility requirements and reduced interest rates, making homeownership more achievable. The relaxation of the External Commercial Borrowings (ECBs) guidelines has also simplified the process for developers to secure funds from overseas through ECBs.

This influx of capital into the real estate sector could potentially boost the housing supply. The government also provides several tax incentives for homebuyers, including deductions on home loan interest payments and principal repayment. This can substantially decrease the overall cost of purchasing a home.

Collaboration between banks and fintech boosting housing segment

Partnerships between banks and fintechs have significant potential to enhance inclusivity in the housing finance segment for consumers in India. Fintechs are proficient in leveraging alternative data sources such as rental payments, utility bills, and digital transactions to evaluate creditworthiness. This can be advantageous for individuals with limited credit history or those from the informal sector, who might be underserved by conventional banks that depend solely on credit scores.

Also Read: Unveiling the Power players: A look at last week’s investors in Southeast Asia, India

These organisations can also provide intuitive online platforms for loan applications, document uploads, and tracking application status, making the process easier, particularly for those new to traditional banking methods. They are also flexible and can design innovative loan products to meet specific requirements. This may involve flexible repayment plans, loan amounts tailored for smaller properties, or financing options for co-living arrangements.

How technology expands housing market potential

Technology can serve as a potent tool to unleash the full potential of India’s housing market. Property technology platforms can enhance processes for developers and builders. This encompasses online permitting systems, design and construction software utilising Building Information Modelling, and AI-driven project management tools. Such advancements can boost efficiency, lower costs, and potentially expedite project completion, resulting in a quicker growth in housing supply.

Emerging technologies such as 3D printing for housing and prefabricated modular construction can provide quicker and potentially more cost-effective methods for home construction. This could be especially advantageous for creating affordable housing units in remote areas.

Big data analytics can assist developers in pinpointing suitable locations for new housing projects by considering factors such as demographics, infrastructure availability, and market trends. This data-driven approach can result in projects that are more closely aligned with real demand.

The potential of the Indian housing loan market is unmistakable. With a burgeoning economy, increasing urbanisation, and government efforts to encourage homeownership, this market is set for substantial growth in the upcoming years.

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Choosing the right path for capital raising is crucial for any company’s growth and long-term success.

M&A vs IPO

To be successful in an IPO, a company must meet stringent quantitative and qualitative requirements to be listed on the stock market. IPOs are more suitable for companies expected to grow significantly from a macroeconomic and long-term perspective.

Mark Zuckerberg, the founder of Meta, mentioned that he has thought about M&A almost daily since starting the company. Ultimately, he chose an IPO because of the long-term management perspective and investor expectations, considering the transition from the existing Facebook social media platform business to the Metaverse market.

On the other hand, M&A is a good exit strategy for deep-tech or tech-based ICT service companies and trend-sensitive B2C consumer goods companies. For example, the emergence of generative AI, such as Apple’s smartphones and OpenAI’s ChatGPT, has created a new market that has never existed and exploded in growth. In this rapidly changing environment, M&A is not just a strategic option but a necessity for companies that want to launch new businesses and preempt the market quickly.

Korean startups making waves: Success stories

The first case is ‘Stylenanda,’ acquired by global cosmetics company L’Oréal. The company initially sourced clothing from the Dongdaemun market, a famous fashion market in Seoul, South Korea, and sold it online.

Then, it grew into a full-fledged business through its platform. Although it started with clothing, it expanded its business to various categories such as cosmetics, beauty contact lenses, and fashion and beauty books. It is best known for selling its beauty brand 3CE to L’Oréal for US$416 million.

The second company is the Woowa Brothers, which runs a delivery service platform called ‘Baedal Minjok.’ A German company, Delivery Hero, has been aggressively acquiring delivery platform companies for ten years, and the Korean “Woowa Brothers” were eventually acquired by Delivery Hero for US$4 billion.

Also Read: NFTs for fundraising: What you need to know before jumping on the bandwagon

Third, ‘Have & Be,’ famous for its Dr. Jart+ skincare brand, continuously contacted and succeeded in entering the US cosmetics multi-shop called ‘Sephora’ with every new product release. After promoting the company and reaching a US$1.7 billion enterprise value, they signed an M&A contract with Estée Lauder. Estée Lauder initially acquired 30 per cent of the shares and later acquired 70 per cent in the form of earnout (a method of purchasing additional shares based on business performance after acquisition).

Enhancing capital market communication for successful investment and cross-border M&A

Beyond practical and detailed preparation, companies should put significant effort into communicating with the capital market. Startups often raise investment in stages, from seed investment to Pre-A, Series A to Series C-D. In this process, it is essential to actively communicate with the capital market, i.e., investors, from the very beginning of the company’s operation to share its technology and business model.

Additionally, for cross-border M&A with overseas global companies, it can be beneficial to participate in startup and technology exhibitions related to your field, such as CES, SWSX, and MWC, to promote your company to global investors and global conglomerates. Participating in these exhibitions increases communication with overseas companies and promotes the company through media outreach, investing more effectively.

Navigating diverse M&A practices: Harmony, flexibility, and metrics

Starting with Japan, it tends to be very cautious regarding M&A. One of the most essential concepts in Japanese culture is the word “和” (harmony). Japanese companies prioritise business relationships over equity and post-merger returns, so M&A is often considered only after the collaboration phase. Large equity transactions involving a change of control are rare in Japan.

In China, it’s not impossible to sell and buy companies’ tangible and intangible assets. Still, the government owns these assets, so sudden changes or sanctions may occur depending on the government’s political direction.

Chinese companies often view contractual terms and conditions as flexible items rather than obligations at any time. Private equity firms in Hong Kong and Singapore usually handle M&A deals on behalf of the acquiring company, successfully closing the deal by completing the conditions.

The M&A process in the US is relatively straightforward due to the long history of capital markets. As the phrase “Money talks” describes the U.S. capital market, both sides focus on “money” numbers, such as the percentage of equity, the purchase price, and estimates of future profits after the acquisition. If you want to make a deal with investors or companies in the US, you need to focus on objective numbers and metrics to close the deal.

Understanding earnouts: A key strategy in US and European M&As

One essential concept to familiarise yourself with when conducting M&A with U.S. and European companies is ‘Earnout.’ For example, in the case of the beauty company Have & Be, Estée Lauder acquired only 30 per cent of the company.

Also Read: Unlocking the secrets to successful fundraising: 5 essential reads for startup founders

After observing the company’s operations and seeing that it met its revenue growth targets, Estée Lauder bought more shares. Eventually, Estée Lauder acquired 70 per cent of the company, including the shares held by Haveandbe’s majority shareholders, making the M&A possible.

The same was true for Woowa Brothers, acquired by the German company Delivery Hero. Delivery Hero initially purchased only the shares of financial investors, such as venture capitalists. They later purchased additional shares of Chairman Bongjin Kim through the earnout method. The earnout method is standard in global M&As in the Americas and Europe, so it’s worth knowing in advance.

Leveraging M&A strategies for sustained growth and global expansion

Companies like GE, Google(Alphabet Inc.), Microsoft, and Apple have grown into the companies they are today through M&A strategies, and they continue to run global businesses in new fields. In the past, companies used to take a greenfield approach to growth by investing their own CAPEX, building factories, hiring people, and growing their businesses individually. However, companies develop through various M&As, such as joint ventures, selling their own companies, spin-offs, and M&As with other companies.

Considering various M&As more actively can be a significant driving force for company perpetuation and growth and a breakthrough for global corporate growth, even in the current challenging capital market.

Special thanks to Chester Cheol Joong Kim, the Founder and Managing Partner of SU&Partners, Korea’s top-tier cross-border M&A Advisory and CEO of SU&Financial Investment,’ for his valuable contributions to this article.

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Southeast Asia’s (SEA) startup landscape has long been characterised by its robustness and potential for growth. With Singapore home to 20 unicorns and close to 300 startups anticipated to go public in Southeast Asia by 2030, the region’s entrepreneurial success is evident.

Yet, the reality is that startups today face a much more challenging landscape than ever before, with tech startups facing a continued drop in funding as one example in addition to a heightened need for startups’ effective adoption of emerging technologies to maintain competitiveness.

As a critical gateway to AI — from Generative AI to discriminative AI applications to deliver intelligent and incisive insights — the cloud remains a vital part of the puzzle for startups retaining their edge amid a dry funding landscape and saturated business environment.

Moreover, the scarcity of specialised tech talent, especially with AI evolving at such a rapid pace, makes it an urgent priority for startups to glean benefits from the cloud in enabling more efficient and advanced processes and, therefore, a faster go-to-market time for their solutions.

More AI, but where’s the talent?

AI, serving as a paramount catalyst for innovation with its potential to revolutionise industries and economies, has seen a ravenous appetite in SEA — with large corporations alongside startups across various industries embracing it in their workflows.

In fact, projections indicate that AI could inject a US$1 trillion boost to the SEA economy by 2030. With that, countries in the region are proactively integrating AI into pivotal sectors such as government, healthcare, and transportation.

Among these, startups emerge as prime beneficiaries of AI integration into their operations. By leveraging AI-driven solutions, employees can be liberated from repetitive tasks, streamline business processes, and cut labour costs, ultimately enhancing productivity. This transformative technology has reshaped business operations, enabling accomplishing more with fewer resources and at an accelerated pace.

Yet, the primary challenge confronting startups lies in acquiring the right talent to propel their growth in the AI domain. Despite recent tech industry layoffs yielding a pool of skilled workers, the demand for talent remains unmet.

Startups, in particular, face the daunting task of attracting top-tier talent while grappling with limited resources. Although unable to match the compensation packages of larger corporations, startups still necessitate talent of comparable, if not superior, calibre.

Also Read: Unlocking success: These 3 startups reveal their product development strategies

Moreover, alongside talent acquisition hurdles, the absence of mentorship and adequate support systems poses another significant obstacle for startups striving to scale and succeed. Mentorship not only fosters organisational value but also plays a pivotal role in talent retention, with research indicating that 43 per cent of professionals view access to mentoring as crucial for remaining with an organisation.

The value of cloud

For startups embarking on the implementation of AI solutions, the cloud emerges as an indispensable ally. As the paths of cloud and AI development converge, the cloud assumes a pivotal role in facilitating the efficient and scalable deployment of AI technologies.

By harnessing the cloud, startups can unlock access to a wealth of AI tools and resources. Cloud platforms offer ready-made AI solutions and managed services, empowering startups to seamlessly develop and deploy AI applications.

Through the utilisation of these cloud-based AI tools, startups are empowered to scale their operations efficiently, adapt to market changes swiftly, and maintain agility in an increasingly competitive landscape — without necessitating extensive in-house expertise. This dual benefit reduces the dependency on specialised AI talent while accelerating innovation.

At the same time, the cloud facilitates startups in tapping into talent pools beyond their local boundaries. This is particularly advantageous for countries like Singapore with limited AI talent, as they can leverage cloud-based collaboration tools to connect with a rich talent pool in countries like India.

This diverse talent pool brings varied perspectives and expertise to the development process, thereby augmenting the quality of AI solutions. Furthermore, cloud-based collaboration tools can streamline communication and project management across dispersed teams, enabling startups to fully leverage remote talent.

With unparalleled benefits, the cloud enhances efficiency, agility, and cost-effectiveness and optimises resources – accommodating hybrid working patterns that persist even in today’s post-pandemic era. After all, by leveraging the cloud to access talent beyond their immediate vicinity, startups can effectively address the AI talent gap and expedite their AI initiatives with a skilled and diverse workforce.

Considerations for a sustainable, data sovereign AI-driven future

Indeed, AI serves as a catalyst for innovation; however, businesses must adopt a sustainable and holistic approach to fully capitalise on its potential. More than ever before, sustainability has emerged as a non-negotiable aspect that must be integrated into business operations, even for startups. The undeniable reality persists: data centres contribute significantly to global carbon emissions, accounting for as much as five per cent.

Also Read: Southeast Asia startup boom: From fish farming tech to metaverse worlds

Now, with 73 per cent of AI workloads predicted to shift to the cloud by 2026, energy demands are set to soar due to the substantial increase in data generated and a surge in demand for computing power. Yet, it remains critical to note the role of data centres in supporting the region’s digital growth, especially as businesses increasingly leverage emerging technologies that are computationally intensive.

On the flip side, as global connectivity continues to intensify, the widespread transfer of personal data across borders becomes more prevalent. While countries like Indonesia have implemented their own data protection laws, necessitating businesses to adopt localised approaches to data storage and processing for compliance amid multi-country operations, jurisdictions with well-established privacy regulations, like Australia, continue to amend their laws to align closely with European privacy standards.

The complexities of data laws across regions often leave companies struggling with regulatory discrepancies, complicating compliance endeavours and hindering local customers from maximising the benefits of cloud services.

Choosing the right cloud provider

Startups aiming for success in their AI endeavours should prioritise cloud providers based on the alignment of their programmes with the specific needs and goals of participating startups. It is crucial for startups to meticulously assess and compare various programmes to ensure they select one that offers a comprehensive blend of resources, support, and opportunities tailored to aid their AI initiatives.

The ideal startup programme should not only grant exclusive technological access but also provide mentorship and support. This ensures that startups receive close technical guidance and access to specialised knowledge necessary to fully leverage tools like the cloud.

At the same time, startups should prioritise selecting cloud vendors that integrate sustainability across all aspects of their business ecosystem. Opting for cloud providers with greener data centres, which balance power and scalability while mitigating the environmental impact of emerging technologies, is essential.

Furthermore, cloud providers should offer businesses enhanced support through local computing and storage capabilities to meet evolving data compliance needs. This provides immunity to extra-territorial regulations, ensuring compliance with local data regulations. In today’s dynamic regulatory landscape, such measures enable businesses to align their data storage and usage practices with compliance standards, mitigating the risk of infringements and substantial fines.

Ultimately, while AI presents boundless opportunities for innovation and growth, its realisation hinges on a sustainable, collaborative, and inclusive approach. Particularly in today’s volatile job market, the integration of AI becomes increasingly critical for startups.

Thus, startups aiming to thrive digitally must prioritise building a robust and adaptable infrastructure. This not only enables smooth AI integration but also fosters collaboration and inclusivity across every aspect of their operations.

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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.

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Dear reader,

The planned job cuts at ByteDance in Indonesia highlight the turbulent landscape of the tech industry, driven by the recent US$1.5 billion merger between TikTok Shop and Tokopedia. This strategic consolidation, aimed at eliminating redundant roles, mirrors broader trends across the sector as companies grapple with economic challenges.

Approximately 450 jobs, or 9 per cent of the staff, predominantly in advertising and operations, are at risk, reflecting ByteDance’s focus on streamlining operations.

Indonesia has been a significant market for TikTok Shop, competing fiercely with Shopee and Lazada. The merger with Tokopedia was essential for ByteDance to navigate local regulatory landscapes. However, this consolidation brings about tough decisions, including workforce reductions, a move indicative of the pressures faced by large tech firms globally.

The GoTo Group’s response to the Indonesia Stock Exchange underscores its non-controlling minority shareholder status, emphasising that operational decisions rest with Tokopedia’s management. This statement follows the departure of Tokopedia’s founding CEO and longtime COO from GoTo’s board of commissioners, signalling potential strategic shifts.

Overall, the layoffs reflect the broader economic downturn affecting major Chinese tech companies, compelling them to restructure and optimise efficiencies amidst a challenging global market.

Sainul,
Editor.

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NEWS

ByteDance to lay off 450 employees in Indonesia
This decision will mainly affect the advertising and operations teams, with ByteDance aiming to eliminate duplicate roles following the TikTok Shop and Tokopedia merger. In total, ByteDance’s combined e-commerce team in Indonesia is around 5,000-strong.

GoTo stays mum on ByteDance’s layoff plans as former chiefs leave board
Bloomberg reported on Wednesday that ByteDance’s planned job cuts may affect about 450 of the firm’s 5,000-strong team in Indonesia – or about 9%; Local media reports, however, indicated that ByteDance might slash up to 70% of Tokopedia’s workforce.

Anchanto grows revenue by 39% in 2023, aims for full-year profits by 2026
The Singapore-based e-commerce-focused SaaS firm posted revenue of US$11.3M revenue for FY2023; The company managed to narrow its net loss by 12.7% to US$4.3M; Anchanto helps brands, retailers, and logistics providers manage end-to-end ecommerce operations.

BayaniPay boosts Series A round to US$9.6M with fresh US$3M capital
The investors are Wavemaker Partners, PTGB, and Talino Venture Studios; BayaniPay’s mobile-first service empowers global professionals working abroad to financially support their families and communities back home.

Singapore to trial battery swapping, mobile charging for electric heavy goods vehicles
Port operator PSA Corporation will operate one battery-charging and battery-swapping station at its Pasir Panjang port terminal, serving six terminal electric prime movers and two on-road electric inter-gateway hauliers.

VinFast’s India factory to open ahead of schedule: founder
In January this year, VinFast announced an agreement with the Indian state of Tamil Nadu for a US$2 billion investment into the country; The company will also start building a factory in Indonesia within the next two months.

OpenAI closes in on US$3.4B in annualised revenue
This is more than double the US$1.6B it reportedly hit in late 2023; The bulk of OpenAI’s annualized revenue – around US$3.2B – reportedly comes from its products and services; Another US$200M came from offering its AI models through Microsoft Azure.

Arches scores US$3M financing to democratise expert knowledge sharing
The investors include KUSABI, Visional, and SMBC Venture Capital; Arches is a one-stop platform offering expert interviews, research, consulting, and talent placement; It connects decision-makers with vetted experts across Asia and beyond.

HK property tycoon Adrian Cheng leads US$8M round in celeb fandom startup Stanly
Besides C Capital, AppWorks, Goodwater, and Palm Drive Capital also co-invested; US-based Stanly connects fans with artists through digital fan clubs and exclusive content.

Vertex Ventures invests in Japanese firm StayX
StayX converts single-use rooms into multiple-use rooms; It covers various business aspects, such as attracting customers via the Internet, real-time inventory management, price adjustments.

Wavemaker Impact backs farm waste-to-energy startup Octayne
By prioritising Net Zero, Octayne strives to eliminate coal dependency in Southeast Asia without affecting the region’s development ambitions and encouraging the adoption of alternative fuels into existing infrastructure.

AgriG8 gets Better Bite Ventures’s backing to decarbonise rice production in SEA
AgriG8’s digital platform allows access to finance and incentivises methane-reducing farming practices, while the gamified smartphone app CropPal helps them report emissions-reducing practices they have implemented.

Indian beauty unicorn Purplle raises US$100M from Abu Dhabi wealth fund
PE fund Creaegis is also expected to join this round; To date, 3-year-old Purplle has raised close to US$400M in disclosed funding from Peak XV Partners, Blume Ventures, and Goldman Sachs.

Meet the 16 startups that demonstrated in AppWorks’s 28th demo day
The batch featured companies connecting social commerce with offline channel logistics, innovative payment solutions, and new applications for blockchain and AI; As many as 20 per cent of participating startups were founded by female founders.

FEATURES & INTERVIEWS

Korean brothers’ startup Nibertex develops chemical-free fabric for sustainable textiles
Nibertex’s PFAS-free membranes help reduce environmental pollution and potential health hazards associated with traditional waterproof textiles.

See you in the Philippines: Why the local startup ecosystem is getting all the attention today
The Philippines has seen “a surge of activity from multiple local conglomerates … mirroring Indonesia’s trajectory in 2017-2019”.

FROM THE CONTRIBUTORS

Decoding the potential of India’s home loan market
Technology can unlock the full potential of India’s housing market by using property technology platforms to enhance processes for developers and builders.

Can co-working spaces change Malaysia’s work habits?
In recent years, the users of co-working spaces have been SMEs and startup businesses, proving to be a majority of the users in the co-working space.

Southeast Asia’s marketing renaissance: How up-and-coming marketers are leading the charge
A defining characteristic of the current marketing renaissance in Southeast Asia is the unwavering commitment to continuous learning.

How your business can benefit from the NFT phenomenon
It appears that NFTs will remain successful for the foreseeable future; do they, however, make sense for your company?

Did the JPEX case in 2023 irreversibly damage HK’s reputation as a crypto hub forever?
While Hong Kong’s status as a crypto hub took a hit, its overall international financial reputation remained largely intact.

Redefining SocialFi through privacy-enhanced social networking
SocialFi platforms revolutionise engagement by rewarding user participation, standing in stark contrast to traditional social media’s one-sided value extraction.

How startups can overcome the AI talent death
Cloud-based AI tools allow startups to scale operations, adapt to market changes, and stay agile without extensive in-house expertise.

How M&A can supercharge your startup’s success
M&A is a good exit strategy for deep-tech or tech-based ICT service companies and trend-sensitive B2C consumer goods companies.

Confessions of a founder: There’s no fun in fundraising in 2024
If you’re having a really tough time fundraising, there’s a fair chance that it’s not your fault. Part of it lies in the funding climate these days so don’t beat yourself too much over it.

FROM THE ARCHIVES

Why these startups focus on informal plastic waste workers in the fight against climate crisis
In many parts of Asia, plastic waste is commonly processed by informal workers who are part of the marginalised society.

Navigating global expansion: Essential tips for entrepreneurial success
For successful global expansion, entrepreneurs must consider these factors to navigate challenges and maximise benefits effectively.

Hacking your way into angel impact investing with just US$10K
As the Head of Special Projects at Top Tier Impact, I will give you these much-needed tips on how to start angel impact investing.

Embracing global entrepreneurship: Redefining startup success beyond Silicon Valley
Throughout our quest to support founders, we have found that a collaborative and strategic approach is always required when building startup communities.

Gen AI in banking: How to ensure a successful transformation for an age-old industry
The integration of Gen AI introduces a complexity that disrupts the established balance between business and technology within financial institutions.

Navigating the AI landscape in 2024: Why there is an urgency for enhanced governance
There are two points that stand out in 2024, starting with how AI will experience a shift from a “nice-to-have” to a “must-have”.

Fintech Nation integrates thought leadership and community into its startup support initiatives
This year, Fintech Nation wants to invest in more companies, doubling last year’s number of five companies.

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The post Ecosystem Roundup: ByteDance to cut 450 jobs in Indonesia | OpenAI closes in on US$3.4B in annualised revenue | BayaniPay adds US$9.6M to Series A appeared first on e27.

This week has been a remarkable one for Southeast Asian startups, showcasing the region’s vibrant entrepreneurial spirit and innovative potential. Companies across various sectors have successfully secured significant funding to fuel their growth and expand their services.

Highlights include Indonesia’s Paper.id, Thailand’s Seaplane Asia, Singapore’s Octayne Green Fuels, Hong Kong’s Stanly, and Indonesia’s McEasy.

These startups, alongside others like Deemples, AgriG8, BayaniPay, Arches, and masturi, are driving forward with innovative solutions in fintech, logistics, green technology, and digital interactions.

The diverse array of industries represented and the substantial investments received underscore Southeast Asia’s dynamic startup ecosystem and its growing appeal to global investors.

Below are the details of the companies and the investments they raised:

Paper.id

Paper.id is an invoicing platform to help Indonesian businesses with receivables and payables. The company has been using AI and machine learning to improve B2B payments.

Currently, Paper.id caters to over 600,000 SMEs from various industries in Indonesia. The clients include logistics firm J&T Cargo, which uses Paper.id’s services to handle over 5,000 invoices a month.

Amount raised: Undisclosed
Round: Series B
Investors: Square Peg, SMBC Asia Rising Fund, Argor Capital.

Stanly

Stanly connects fans with artists through digital fan clubs and exclusive content. Founded in 2023 by Rebecca Leung, Popular Culture, and Liberty City Ventures, Stanly aims to encourage direct interactions between fans and artists. Since its launch, Stanly has attracted over 200,000 members. The number of fans on the platform has grown by 30x since February 2024. The platform hosts 50 fandoms, including those of Taylor Swift and BTS, with 300 more coming soon.

Amount raised: US$8 million
Round: Pre-Series A
Investors: C Capital, AppWorks, Goodwater, Palm Drive Capital.

Seaplane Asia

Seaplane Asia is a seaplane and lifestyle company in Thailand. Established in 2019, Seaplane Asia provides air charter and amphibious seaplane services to connect remote islands and coastal areas. Its services aim to enhance accessibility, reduce travel times, and minimise environmental impact.

Besides travel and tourism, Seaplane Asia’s seaplanes are equipped for medical evacuations, search and rescue operations, cargo and logistics, monitoring missions, and corporate charters. Its portfolio includes brands like Siam Seaplane and Siam Scenic in Thailand, Samra Seaplane in Cambodia, and the lifestyle brand Jetboard Asia, which exclusively distributes high-end electric-powered water sports and boats.

Amount raised: Undisclosed
Round: Unspecified
Investors: TK & Partners, A2D Ventures.

McEasy

McEasy is an Internet-of-Things (IoT) and SaaS startup focused on transportation and supply chain solutions in Indonesia. Founded in 2017 in Surabaya (East Java) by Hendrik Ekowaluyo and Raymond Sutjiono, McEasy aims to transform Indonesia’s transportation and supply chain ecosystem. The mission is to create an end-to-end digital ecosystem that integrates and streamlines logistics operations.

Its McEasy Platform (MEP) offers a suite of solutions to address challenges in the nation’s logistics ecosystem, including IoT mobility for fleet management, end-to-end logistics delivery solutions, and vehicle spare parts and maintenance solutions.

The startup claims it has partnered with 1,500 companies over the past 18 months.

Amount raised: US$11 million
Round: Series A
Investors: Granite Asia (formerly GGV Capital Asia), East Ventures

Deemples

Deemples is an online golf booking platform in Malaysia. Its core mission is to create the premier golfing experience empowered by tech to allow its community to play anytime, anywhere, with anyone. It claims to have logged over 50,000 games on the platform to date.

At present, the app is available for golf courses in Malaysia, Indonesia and Singapore. Deemples is available on iOS, Android, and Huawei App Gallery.

Amount raised: US$2 million
Round: Unspecified
Investor: V Ventures

Octayne

Octayne Green Fuels is a farm waste-to-energy startup in Singapore. It converts underutilised waste biomass into a low-cost and scalable drop-in replacement for coal. By prioritising Net Zero, it strives to eliminate coal dependency in Southeast Asia without affecting the region’s development ambitions and encouraging the adoption of alternative fuels into existing infrastructure.

To achieve this goal, the company will tap into the exceptionally large agricultural sector in the region, which currently generates over 400 million tons of post-harvest crop residue–to convert largely unutilised biowaste into a renewable and sustainable fuel source.

Amount raised: US$525,000
Round: Pre-seed
Investors: Wavemaker Impact.

AgriG8

AgriG8 is a Singapore-based startup that aims to decarbonise rice production. Co-founded by Chen and Joshua Tan, AgriG8 supports smallholder farmers in rice-growing Asian countries and helps them adopt practices that can reduce methane emissions.

Its digital platform allows access to finance and incentivises methane-reducing farming practices, while the gamified smartphone app CropPal helps them report emissions-reducing practices they have implemented.

Additionally, AgriG8 uses satellite images combined with machine learning to validate water management practices associated with methane reduction. Its water management system, called alternate wetting and drying (AWD), combined with other solutions can lead to a 55 per cent reduction in greenhouse gas (GHG) emissions.

Amount raised: Undisclosed
Round:
Investors: Better Bite Ventures, The Trendlines Group of Israel.

BayaniPay

BayaniPay is a payments process automation company based in the US and the Philippines. It is a collaboration between Talino Venture Studios, The Asian Journal, East West Bank, and Wavemaker Partners. Its mobile-first service empowers global professionals working abroad to financially support their families and communities back home.

This month, BayaniPay will launch Bayani GlobalPay, an embedded banking service designed to enable businesses and major billing entities to reach their customers efficiently worldwide.

Bayani GlobalPay features two embedded banking solutions: GlobalPay, a white-label service that provides non-financial institutions with a custom payment platform, and GlobalPay Express, an all-in-one payment portal for payment management.

Amount raised: US$3 million 
Round: Unspecified
Investors: Wavemaker Partners, PTGB, Talino Venture Studios

Arches

Arches is an expert knowledge-sharing platform based in Japan and Southeast Asia. A one-stop platform offering expert interviews, research, consulting, and talent placement, the platform connects decision-makers with vetted experts across Asia and beyond.

Clients gain discounted access to experts in exchange for contributing to the knowledge repository, democratising access to specialised information that was once the exclusive domain of a select few.

According to Arches, its ‘Expert Matching’ service has connected over 300 clients in over 20 countries with a network of over 100,000 vetted experts.

Amount raised: US$3 million 
Round: Unspecified
Investors: KUSABI, Visional Inc., SMBC Venture Capital

masturi

masturi is the Japanese company behind StayX, a software solution that converts single-use rooms into multiple-use rooms.

It was established in August 2016 in Shinjuku-ku, Tokyo, by CEO Keita Yoshida.

StayX maximises the value of unused space. A single space can be flexibly transformed to accommodate a variety of uses.

For example, a rental property that could only be rented out for two years can be transformed into a facility that can be operated on a one-night or one-month short-term rental basis.

Its software covers various business aspects, such as attracting customers via the Internet, real-time inventory management, price adjustments, and AI-based janitorial management, enabling unmanned facility operations.

Amount raised: US$8.65
Round: Series D
Investor: Vertex Ventures Southeast Asia and India.

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AgriG8, a Singapore-based startup that aims to decarbonise rice production, has secured an undisclosed investment from Better Bite Ventures, a local early-stage VC firm, and The Trendlines Group of Israel.

“This investment will fuel our regional pilots of an inclusive financing solution that encourages sustainable practices among rice farmers and improves their livelihoods,” said David Chen, co-founder of AgriG8.

Co-founded by Chen and Joshua Tan, AgriG8 supports smallholder farmers in rice-growing Asian countries and helps them adopt practices that can reduce methane emissions.

Also Read: Rize seeks to decarbonise rice cultivation in Asia with US$14M Series A raise

Its digital platform allows access to finance and incentivises methane-reducing farming practices, while the gamified smartphone app CropPal helps them report emissions-reducing practices they have implemented.

Additionally, AgriG8 uses satellite images combined with machine learning to validate water management practices associated with methane reduction. Its water management system, called alternate wetting and drying (AWD), combined with other solutions can lead to a 55 per cent reduction in greenhouse gas (GHG) emissions.

AgriG8 has completed the pilot in central Thailand and will start the next pilot in Tra Vinh, Vietnam, and Battambang, Cambodia, during the next planting season.

Rice production has the highest carbon footprint among crops globally. It is responsible for up to ~2 per cent of all greenhouse gas emissions, on par with the global aviation sector.

According to PwC and Temasek (source), rice is one of the five major sources of greenhouse gas emissions in Asia’s food and agri sector – together with meat and dairy, deforestation related to palm oil production, fertiliser use and food waste.

Also Read: Better Bite Ventures launches US$15M fund for early-stage alt-protein startups in Asia

In Vietnam, rice contributes more to emissions than the entire transport sector combined.

Reducing the carbon footprint of rice production is necessary for governments across Asia and many food companies globally to reach their net-zero targets.

Last month, Rize, another agritech platform that aims to make sustainable rice cultivation viable through innovative and data-driven practices, closed its US$14 million Series A funding round, which was co-led by Breakthrough Energy Ventures, GenZero, Temasek, and Wavemaker Impact.

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Image Credit: AgriG8

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Taiwan’s AppWorks Accelerator has unveiled the 16 startups that participated in its 28th demo day in Taipei.

The batch featured companies connecting social commerce with offline channel logistics, innovative payment solutions, and new applications for blockchain and artificial intelligence (AI).

As a batch, AW#28 hosted 38 innovative startups, with founders hailing from 17 different countries and regions, including Greater Southeast Asia, the UAE, South Korea, the US, France, Finland, and beyond.

Also Read: Pavilion Capital, AppWorks invest in US$21.3M Fund II of Philippine VC Foxmont Capital

As many as 20 per cent of participating startups were founded by female founders.

AW#28’s demo day featured the following companies:

ADPList: A global mentorship platform to access knowledge from experts (Singapore)

XO: AI-powered and blockchain-verified conversational platform for Gen Z (Taiwan)

Borong: B2B bulk e-commerce platform (Malaysia)

EQUO: A one-stop-shop omnichannel platform of curated, high-performance, quality products for the conscientious consumer (Vietnam)

Orderfaz: Shopify for social commerce sellers (Indonesia)

Event Horizon: DAO meta-governance layer (the US)

Return Helper: End-to-end solution for cross-border e-commerce returns (Hong Kong)

ShipAny: Smart logistics gateway for e-commerce (Hong Kong)

ABConvert: Specialised A/B testing tool for e-commerce (Taiwan)

Ajourney: One-stop HR and payroll platform for businesses in Southeast Asia (Singapore)

Quantlytica: AI-powered crypto asset management infrastructure (Finland)

Olli: AI-powered operating system for toy manufacturers to turn toys into children’s personalised companions (the US)

Qiro Finance: On-chain private credit protocol (Singapore)

Exchequer Finance: Allows projects to self-insure token risk, incentivising users with time premiums instead of tokens (Singapore)

Also Read: Why Asia provides exciting opportunities for Artificial Superintelligence Alliance to scale

Jomud: Digitised career consultation using AI for university (Hong Kong)

Cheko: Bridging students with subject experts for homework assistance (Philippines)

“With the addition of AW#28, we have now nurtured 563 active startups in 14 years. Among them, 30 per cent have successfully raised Series A funding or beyond, and nearly 100 can be considered large enterprises with revenue exceeding US$6 million or have successfully completed IPOs/IEOs. Additionally, there are nearly 100 hidden champions that have achieved sustained profitability through bootstrapping,” said Jamie Lin, Chairman and Partner of AppWorks.

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Social media platforms like MySpace, Friendster, Facebook, and Twitter reshaped communication with the infinite connection of the internet. However, these platforms are centralised protocols. Because it all connects to one server, this often leads to privacy breaches, data misuse, and lack of user control. As social media platforms intensify their rules on users, people are actively seeking better and more secure alternatives.

Enter social finance — SocialFi for short. SocialFi runs on blockchain technology and functions in a decentralised network, giving more freedom to users and better security for both people and personnel. As a reward for using a SocialFi platform, users can earn money just by existing on it. As of April 2024, 5.07 billion people have social media accounts. This number makes SocialFi projects able to appeal to a wide audience, which could lead to mass adoption.

SocialFi is rapidly experimenting with diverse social media functionalities, potentially beginning a new era of digital interaction that gives more power and liberty to the people.

Leveraging zero-knowledge proofs for enhanced privacy in SocialFi

SocialFi relies on zero-knowledge (ZK) proofs. Providing anonymity in SocialFi, zero-knowledge proofs (ZKP) facilitate secure and private user identity verification. Their integration represents a major advancement in how user identity is safeguarded, managed and secured online.

According to research by Protocol Labs, the ZK proof generation market will reach a US$10 billion value by 2030, with an expected demand for nearly 90 billion ZK proofs to power Web3 services.

Also Read: Financial world is the first to be transformed by Web3: Saison Crypto’s Qin En Looi

“The ZK proof market is up-and-coming and already moving towards tangible use cases. Identities are at the heart of the rapidly expanding decentralized social layer, including decentralised social media, DAOs, reputation systems, and on-chain gaming,” Kitty Horlick, Director of Rarify Labs said, “Moreover, the use of ZK proofs is accelerating due to the urgency with which identity credentials are needed both within Web3 and Web2 as AI-generated bots and deep-fakes make it increasingly difficult to discern humans – and human-generated content – from machines and AI-generated content.”

For example, SocialFi platform AsMatch has a unique approach to social connectivity, emphasising matches based on shared interests. The platform uses ZK proofs for identity checks like zkKYC. It integrates Manta Network’s zkBAB and zkGalxe for decentralized and trustless KYC verification on-chain.

Additionally, the platform goes beyond the concept of typical social media by nurturing connections and enabling trade among users. The platform’s ZK badge system allows users to verify financial credibility, such as “whale” status, or individuals or entities with significant holdings of digital assets.

Rewarding community participation

SocialFi platforms revolutionise engagement by rewarding user participation, standing in stark contrast to traditional social media’s one-sided value extraction. These platforms, such as Friend.tech and AsMatch, leverage NFTs and digital assets to reward user contributions ranging from content creation to community involvement. This model not only motivates active participation but also fosters a sense of trackable ownership and social time investment among users.

Through such mechanisms, SocialFi introduces a sustainable ecosystem where contributions tangibly value and reward users, marking a significant shift from conventional models that monetise user input without providing direct benefits to the contributors themselves. Friend.tech, a decentralised social network, encourages user engagement through a system called “Keys”, enabling individuals to tokenise and monetise their social influence for access to private chat rooms and exclusive content.

Also Read: Why Asia is dominating the fight for Web3 gaming

Innovatively expanding on this concept, AsMatch, the first Social L3 on Manta Network powered by Polygon CDK and Celestia DA, democratises SocialFi with a community-first approach. AsMatch supports the everyday user by offering rewards for interactions within the platform. Users can elevate their engagement by minting and bonding the zkPortrait, a unique AIGC zkSBT that serves as a Decentralised Identity (DID).

AsMatch’s complete decentralisation and secure, private communication systems underscore a commitment to user empowerment and reward, ensuring that each interaction is valued and recognised in the Web3 space.

Critical role of innovations

The decentralised social media sector has matured, offering Web3 counterparts to traditional platforms. Mastodon serves as a decentralised version of X (formerly Twitter), operating through independent servers. Meanwhile, DTube‌ enables a community-driven video-sharing service that rewards content creators with cryptocurrency, ‌democratising the content creation and curation process.

However, the landscape still needs further development. The mainstream appeal of social media has led to 1.4 billion hacked users monthly. As malicious attackers change their methods, so does cybersecurity. Innovations like ZK proofs are going to be crucial for enhancing SocialFi platforms’ overall security and data integrity, improving user satisfaction with verified digital identities.

In the future, it is expected that the Web3 social sector will exceed US$101.2 billion by 2033. These innovations will shift toward enhancing user control, privacy, ownership, and monetisation.

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In 2023, Hong Kong’s financial headlines centred around cryptocurrency, painting a predominantly negative picture. Seven per cent of coverage related to Hong Kong in global tier-1 media across 2023 was negative, according to a financial hub analysis by CARMA.

In comparison, two per cent of Singapore’s coverage was negative, while Dubai had a statistically negligible percentage of negative coverage. We question if this reinforced Hong Kong’s image as an unfavourable destination for talent and global crypto firms.

Crypto news dominated Hong Kong’s media coverage in 2023. In the first half of the year, there was a surge in positive coverage regarding Hong Kong’s efforts to boost crypto trading.

This included significant events such as the licensing of crypto exchanges like Huobi and OKX, the green light for the first retail cryptocurrency exchange, and the legal recognition of cryptocurrency as property.

However, attention shifted dramatically in the latter half of the year as the media extensively covered the JPEX scandal.

Amidst a year marked by turbulence in Hong Kong, we explore the significance of a financial hub maintaining a robust reputation as portrayed by the media.

What was the crypto media landscape like for Hong Kong in 2023?

Domestically, the Hong Kong media extensively covered the scandal, considering it the largest cryptocurrency fraud case in the region, involving HK$1.5 billion (US$191 million).

Local media outlets attributed responsibility to celebrities, key opinion leaders, and brands for failing to conduct proper due diligence before associating with JPEX.

Apart from the JPEX scandal, other crypto news included the Hong Kong BC Technology Group exploring the sale of its crypto platform, OSL. Today, we know that, ultimately, it did not take place. However, those rumours alone captured a large volume of attention and media mentions.

Also Read: How this 12-day programme by SMUA equips you to detect potential FTX-like scams in future

Financial coverage related to Hong Kong thus portrayed a grim outlook for the region.

Reputation plays a significant role in attracting top talent and skilled professionals who prioritise security and stability.

Throughout 2023, Hong Kong experienced a brain drain as skilled workers migrated to Singapore or other hubs, highlighting the impact of reputation on talent retention.

What were the spillover effects of the JPEX crisis?

Despite these challenges within the cryptocurrency realm, the industry still thrives.

Globally, the media’s response to the crypto scandal in Hong Kong was not one of shock, given the prevalence of similar scams in the crypto and fintech sectors worldwide.

Consequently, while Hong Kong’s status as a cryptocurrency hub took a hit, its international reputation remained largely intact. It is unsurprising that Hong Kong, being a global financial hub, became a target for such scams.

Notably, Consensus, the premier cryptocurrency event, announced that its 2025 edition would be hosted in Hong Kong, underscoring the city’s enduring prominence in the crypto sphere and suggesting that its reputation as a crypto hub has not suffered irreparable harm.

In neighbouring hubs like Singapore, firms like Coinbase and Ripple secured licenses in the same quarter.

Similarly, over in Dubai, the media reported on crypto.com receiving a licence to operate in the country.

Strengthening reputation through media intelligence

The reputation of a city (or an organisation) is at stake when confronted with a public-facing or high-visibility crisis. While the causes of such crises may vary, what truly matters is how we choose to react and respond.

In today’s corporate landscape, reputation management has gained significant importance, prompting CEOs to prioritise it alongside other critical business units.

Also Read: Temasek says FTX could have duped it

The ability to reclaim your narrative is key when a crisis happens. Every statement issued or message released is a step towards taking back control. With news breaking at the speed of light, it’s crucial to rely on intelligence and analysis to effectively address and manage the incident.

Media intelligence, which examines and evaluates media coverage, offers a roadmap of reputation pillars and areas of visible recognition and helps assess the extent to which a crisis might tarnish reputation. In-depth analysis of the collected data then guides the development of strategic recovery approaches.

In-depth analysis of the collected data then guides the development of strategic recovery approaches.

The Hong Kong government, for instance, made concerted efforts to mend its public image by implementing initiatives to boost the public’s understanding of crypto.

Cultivating trust and a positive reputation fosters consumer loyalty. Trust encourages consumers to exhibit greater levels of forgiveness, particularly during challenging times.

The findings were based on CARMA’s report.

The content of the report was collected using a selected set of keywords and search queries, focusing on global tier-1 online media. CARMA analysed 41,000 articles in total from 1 January to 31 December 2023, that featured major mentions of each city: Singapore, Hong Kong and Dubai.

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Hello founder,

Are you having a tough time with fundraising this year so far?

I totally get it.

Oh yeah, before I forget, let me introduce myself. I’m Jackie, co-founder of BorderDollar — we’re a non-LLM startup in the B2B embedded financing space. I know, right — fintech is so 2018, and LLMs are still the rage these days. But hey, my co-founder and I are retro like that.

That said, while I’d like to say that “startup founder” is my main job, these days I just drive a bus. Speaking of which, here’s my bus.

Come onboard, the Struggle Bus is a bit crowded but there’s still space for you. Just make some space for AI founders that missed the 2023 bandwagon — we’ll pick them up in a bit.

Where are we going? We’re gonna go on a journey and discover why it’s been so hard to fundraise this year.

The destination? An abyss of despair and darkness (probably). And maybe just a glimmer of hope at the end of the tunnel.

Also Read: Understanding fundraising and VCs: Essential reads about cap tables, exit strategies, and job titles at a VC firm

Regardless, it’s useful information for existing founders and those who are about to embark on their fundraising (don’t do it, fellas).

2024 is a terrible year, and I miss 2021

To understand what’s going on, here is a very handy image from KPMG (thanks nerds) on the state of funding in Asia between 2018 to Q1 2024. If you’ve noticed, life was increasingly good between 2018 to 2021 when both the number of deals and total funding amount were high.

Without going too deeply into details, this happened because the interest rates were low during 2021, which meant LPs had to allocate money to things that had higher returns, i.e. startup investments, to hedge against inflation. A greater appetite for risky bets meant that anyone with an idea scribbled on a napkin could have received pre-seed or seed funding in those days.

Post-2021, you can see that the trend is reversing, i.e. the graph went down for both deal numbers and volume across all stages. This is because interest rates increased again after 2021, and we didn’t see any high numbers of M&As and IPOs after that. Without M&As and IPOs, LPs don’t get their money, and if LPs don’t get their money…no money goes back to VCs, and subsequently, that means no money for startups (you).

Gone are the days when T*g*r Gl*b*l literally chased founders with term sheets — these days, it’s courting a VC for six months only to get a “no, you’re a bit too early for us” even though you’re post-revenue and have somewhat of a product market fit.

What’s that? Haven’t you got the memo? Pre-Series A metrics are the new seed metrics now. Your peers, whom you thought were amazing, are also going through this pain. Expectations have gone up sky-high, and that means you have to have tons of traction, signals, or tailwinds to help them build conviction in you.

How to survive 2024

My point is that if you’re having a really tough time fundraising, there’s a fair chance that it’s not your fault. Part of it lies in the funding climate these days so don’t beat yourself too much over it.

Also Read: If there is one thing investors are afraid of, it is lack of commitment from founders

To founders out there onboard the Struggle Bus, here are things you can consider to survive the following months until things get better:

• Get more revenue (crazy idea, I know)
• Charm angel investors (hit up your rich, bored, and supportive friends for checks of $5-50k)
• Find a side hustle (no problem for those who already have day jobs)
• Increase your luck surface area by telling the world that you exist (like writing an e27 article 🙂 or posting on LinkedIn)
• Become an indie hacker (let’s get SaaS-y)
• Reach out to your fellow founders and have a pity party (make sure they’re not alone in this)

Hey now, are those tears I see? Wipe your tears, and don’t despair too much, founder. Here are some comforting words from your bus driver.

Firstly, if you look back at the graph above, you will notice that VC investments do pick up in Q3 and Q4. There are many reasons for this, but if it’s of any comfort, we’re (at the time of writing this) a month away from Q3. Hang in there, bro/sis.

Secondly, if you can survive this, you can survive anything. No, seriously — those who find a way to survive under such unfavourable circumstances will be unstoppable. The implication is that you’d be forced to figure something out to survive.

You’ll be better for it, I promise you. Now go, stop reading this article and get back to work.

Don’t forget to update your progress with your potential investors as well.

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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.

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