Southeast Asia has become one of the world’s most closely watched startup ecosystems.
From fintech and e-commerce to logistics, SaaS, AI and digital financial infrastructure, the region has produced companies that have grown from local experiments into billion-dollar businesses. But for founders, there is another side to the story.
Raising venture capital in Southeast Asia has never simply been about having a great idea. Investors are seeing more startups, more sophisticated founders and increasingly ambitious business models. At the same time, the funding environment has become more selective.
So what actually makes a startup stand out? The answer isn’t always revenue. And it isn’t necessarily a huge market-size slide either.
Talk to experienced investors across the region and a few themes come up again and again: the quality of the founder, a deep understanding of the problem, evidence of product-market fit, strong economics, the ability to execute, and a credible path to becoming a much bigger company.
To understand what investors are really looking for, I looked at the views of several investors who have spent years backing technology companies across Southeast Asia. Their advice offers a useful reality check for founders preparing to raise their next round.
Peng T. Ong: Founder and Managing Partner, Monk’s Hill Ventures
Peng T. Ong has been investing in technology companies for years, but his approach to evaluating startups is remarkably straightforward. In a 2023 essay titled What I Look For in Startups, Ong laid out the characteristics he believes can help a startup scale quickly and significantly.
What he looks for
One of Ong’s biggest priorities is defensibility. He argues that startups should be able to accumulate differentiated, proprietary information as they grow. The idea is simple: the company should become harder to copy as it gets bigger, rather than simply becoming bigger.
Economics matter too. Ong specifically highlights positive unit economics and strong gross margins. His preference is for businesses that can potentially achieve gross margins above 50 per cent, although he also recognises that some businesses can become attractive through large absolute gross profits even when percentage margins are lower.
Then there is retention. Ong introduces the idea of R + K, where R represents retention and K represents the virality coefficient. His argument is that startups should aim for a product where retention and organic growth can eventually reduce dependence on continuously spending money to acquire customers.
He also looks for natural lock-in. A product becomes increasingly valuable when customers have a reason to stay whether because of accumulated data, workflows, relationships or other features that make switching difficult.
And then comes what Ong calls “hyper-kaizen”: the ability of a company to continuously make significant improvements to important business metrics.
But perhaps his most interesting point is about the founder. Ong describes the ideal entrepreneur as a “philosopher-warrior-nurturer.” The philosopher understands the deeper “why” and thinks clearly about the business. The warrior turns that thinking into action. And the nurturer builds the people and culture needed for the company to keep growing.
The takeaways for founders
The takeaway is bigger than simply “grow fast.” Investors want to see whether your growth is creating a stronger company.
Are customers staying? Are your economics improving? Is your product becoming harder to replace? Are you building proprietary advantages? And ultimately, are you the kind of founder who can keep improving the company as it gets more complicated?
For Ong, those questions are just as important as the headline growth numbers.
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Khailee Ng: Managing Partner, 500 Global
Few investors have been as closely associated with Southeast Asia’s startup ecosystem as Khailee Ng. Ng joined 500 Global after building and exiting two startups and went on to lead the firm’s first Southeast Asia-focused fund. 500 Global says he has led more than 300 investments across Southeast Asia, including early investments in companies such as Grab, Carsome, Carousell, Bukalapak and FinAccel.
What he looks for
Ng has a particularly important message for founders: founder-market fit can matter just as much as product-market fit. In a 500 Global interview, he explains that the firm wants founders who genuinely care about what they are building and have a personal advantage when it comes to understanding the problem.
That makes sense. Two founders can build similar products, but the founder who has spent years living the problem may understand the customer, the industry and the market in a way that competitors cannot easily replicate.
Ng also wants founders who are willing to build ambitiously. That doesn’t necessarily mean saying you want to become the “Uber of Southeast Asia.” In fact, Ng has challenged the assumption that every Southeast Asian startup must follow the same regional expansion playbook. In a later 500 Global interview, he argued that founders should question the assumption that a Malaysian company automatically needs to expand to Singapore and Indonesia market.
The power of being hyperlocal
There is another lesson from Ng’s experience with Grab that deserves attention. In a 500 Global analysis of Grab’s rise, Ng describes the company’s execution-oriented and hyperlocal approach as a major strength.
Grab didn’t simply build one product and assume that every market would behave in the same way. Instead, the company developed deeply local leadership teams that understood individual markets and had the relationships needed to operate within them. That approach helped Grab navigate the complexity of Southeast Asia while building a much larger regional business.
The takeaways for founders
There is an important paradox here. To build a regional company, you often need to become more local, not less.
Founders sometimes think regional expansion means standardising everything. But in Southeast Asia, localisation can be a competitive advantage. The companies that win may be those that combine a common technology platform with a deep understanding of individual markets.
Don’t confuse regional ambition with regional expansion for its own sake. Your investors want to know how big the company can become, but the path doesn’t have to look the same for every startup.
The right question isn’t: “Which Southeast Asian country should we enter next?” It is: “Where does our business have the strongest opportunity to build a large, defensible company?”
That might be Indonesia. It might be Singapore. It might be the United States, India, Bangladesh or somewhere else entirely. The business model should determine the expansion strategy not the other way around. Depending on the business, another international market might actually make more sense. That is a useful distinction.
Golden Gate Ventures: Backing audacious founders
Golden Gate Ventures has been investing in Southeast Asia since 2011 and has built a portfolio spanning Singapore, Indonesia, Vietnam, Malaysia, Thailand and the Philippines. The firm’s portfolio includes companies such as Carousell, Ninja Van, Carro, Xendit and Funding Societies.
What they look for
Golden Gate describes its philosophy in unusually direct language: “We fund and learn from the audacious.” The firm says it works with founders on long-term vision and strategy, while also helping portfolio companies with areas ranging from product development and technical strategy to growth.
One important part of Golden Gate’s approach is its regional perspective. Southeast Asia isn’t one market. Consumer behaviour can change dramatically from country to country. Regulations differ. Payment systems differ. Logistics networks differ. Language and culture differ.
For founders, that means a successful business model cannot always be copied and pasted from one country into another. Golden Gate’s own approach reflects this reality. The firm says it has invested deeply across six Southeast Asian markets and maintains local relationships that can help companies expand across the region.
The takeaways for founders
When investors ask about your expansion plans, don’t simply show a map covered with flags. Explain why each market makes sense.
What is similar? What needs to change? What local partnerships will you need? How much will customer acquisition cost? And can the business maintain attractive economics while expanding?
The best regional startups aren’t necessarily the ones that enter the most countries. They are the ones that know where to expand, when to expand and how to adapt.
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Shiyan Koh: Managing Partner, Hustle Fund
Shiyan Koh has spent years looking at Southeast Asia from the perspective of an early-stage investor. As Managing Partner at Hustle Fund, she has written extensively about where she sees opportunities emerging in the region, particularly in AI, fintech and businesses with global potential.
What she looks for
Koh sees a particularly interesting opportunity in AI applications for industries that have historically been underserved by software. Her argument is that Southeast Asia has many industries where large language models and other AI technologies could create highly specialised software.
The opportunity isn’t necessarily to build another generic AI chatbot. It could be software designed specifically for farmers, call centres, medical coding, virtual assistants or other industries where local knowledge and specialised workflows create an advantage.
Koh also sees significant opportunities in fintech. She points to the region’s large underbanked population and the need for better financial infrastructure, including areas such as credit scoring and KYC.
But perhaps her most important message is about ambition. Koh argues that Southeast Asian founders should think about global potential from day one. That is partly because the region still has a relatively limited number of companies capable of producing very large venture outcomes. For startups with global ambitions, she believes the international strategy needs to be considered early rather than added as an afterthought.
The takeaways for founders
Don’t assume that being based in Southeast Asia means your company has to remain a Southeast Asian company.
Your initial market may be local. Your customers may be local. Your first product may solve a very specific regional problem. But if the underlying technology or insight can travel, the opportunity could be much larger. The key is to identify that potential early.
What Southeast Asian investors really look for
Put all these perspectives together and the pattern becomes surprisingly clear. Investors aren’t simply looking for the next big idea. They’re looking for evidence that the founder can turn an insight into a large, durable business.
- Founder-market fit: Why are you the person to solve this problem? Khailee Ng’s point about founder-market fit is particularly important here. If you’ve lived the problem, worked in the industry or spent years understanding the customer, explain that advantage.
- Product-market fit: Investors want evidence that people actually want what you’re building. That evidence doesn’t always have to be millions in revenue. It could be retention, engagement, repeat customers, strong growth or another meaningful signal that customers are pulling the product into the market.
- Strong economics: Growth purchased entirely through expensive customer acquisition isn’t enough. Investors increasingly want to understand your unit economics, gross margins and the path toward a sustainable business. Peng Ong’s framework makes this especially clear.
- Defensibility: What becomes harder to copy as you grow? Proprietary data, network effects, customer relationships, switching costs, technology, distribution or brand can all contribute to a competitive moat. But founders should be able to explain exactly why their advantage compounds over time.
- Execution: A brilliant strategy means very little if the team can’t execute it. Investors want to see founders who can build, sell, hire, learn and adapt. The ability to keep moving when something goes wrong is often more valuable than having a perfect plan.
- Local understanding: Southeast Asia’s diversity creates huge opportunities, but it also creates complexity. Founders need to understand the differences between markets rather than treating the region as one giant customer base.
- A credible path to scale: Finally, investors need to believe that the company can become much bigger. That doesn’t necessarily mean entering every Southeast Asian country. It means having a believable answer to one fundamental question: how does this become a very large company?
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Conclusion
The Southeast Asian startup story is still being written. The region has the talent, consumers, technology and entrepreneurial energy to produce much larger companies in the years ahead. But as the ecosystem matures, investors are becoming more selective.
The founders who stand out won’t necessarily be the ones with the flashiest pitch decks. They’ll be the ones who can demonstrate something much harder to fake: deep market knowledge, genuine customer demand, strong economics, exceptional execution and a reason to believe their company can become much bigger.
And there is one final lesson worth remembering. Don’t pitch Southeast Asia simply as a huge market. Show investors why your team has earned the right to win in it.
Explain the problem. Show the evidence. Demonstrate the economics. Tell them why your company is difficult to copy. And then show them where the business can go next.
Because ultimately, investors aren’t funding a PowerPoint presentation. They’re betting on the people who are going to build the company. And in Southeast Asia’s increasingly competitive startup ecosystem, that distinction matters more than ever.
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