Recently, Robocash Group published a study which reveals that from 2000 to 2022, the number of fintech companies in South and Southeast Asia was growing fast. Growth in key sectors, including Payments and transfers, e-wallets, digital banking and alternative lending, has been fueled by increasing levels of private equity raised through funding rounds. 

Statistics on funding attracted by fintech in SEA this year show that investment priorities are changing. In particular, such sectors as Insurance Tech, Health Tech and Marketing Tech are coming to the fore. Data from the same source, which shows the distribution of investments by sector and by year, also demonstrates the growth of these segments in 2023.

So, what does it mean?

First, this is a signal that the basic segments of the fintech market are becoming saturated. Although the potential of e-wallets, digital payments, and digital banking in the region is far from being realised, the degree of competition in these sectors is already quite high.

Also, the natural market expansion can be constrained by regulatory restrictions — as in the case of moratoriums on new digital banks and e-money providers in the Philippines. On the other hand, regional fintech remains highly attractive for investments. That is why highly promising sectors, which are still forming their full potential, come to the fore. 

What exactly attracts investors?

To have a better understanding of the current trends in regional fintech investments, let’s take a closer look at them.

Also Read: Finance your startup: 10 types of investors you should know

The aforementioned surge of interest in health tech is confirmed by large transactions — for example, US$33.5 million attracted in series B by the Vietnamese company BuyMed. The company owns a B2B platform that connects pharmaceutical manufacturers, distributors and clinics. US-Singapore company Holmusk also raised US$45 million in round B. Holmusk runs NeuroBlu, a clinical behavioural health database, which is used in drug development.

Another example is the Singaporean startup Qritive, which raised US$7.5 mln. The company uses artificial intelligence to detect pathologies such as cancer. As we can see, the range of activities is quite diverse, which reflects the growing popularity of the segment and big prospects for its rapid development.

Many companies attract investments to expand into new markets. These include Roojai (insurance, Thailand), Qoala (insurance, Indonesia), Advance (Philippines, salary payments), Pilon (Singapore, cloud financial systems), Jenfi (Singapore, digital startup investments), bolttech (Singapore, insurance), BetterTradeOff (Singapore, financial advisory), CrediLinq.Ai (Singapore, financial services), Qritive (Singapore, healthcare).

As we can see, there is increasing popularity of insurtech. Also, some of these companies are going to expand their presence not only in Southeast Asia but also in other parts of the world, including Europe and the Middle East. Obviously, both product and geographic diversification are becoming increasingly important.

Speaking about product solutions, there is also interest in investing in artificial intelligence. This is confirmed by projects which received significant funding, including MONIX (Thailand, digital lending, US$20 million), Qritive (Singapore, healthcare, US$7.5 million), Trust IQ (Singapore, software development, US$105 million), Advance Intelligence Group (Singapore, financial services, US$80 million), Soft Space (Malaysia, software, US$31.5 million) and others.

In particular, Advance Intelligence Group will direct the attracted investments to improve the work of AI, which is used in transactions, lending and other products. Trust IQ, together with its investors from the Masan Group, will develop a loyalty program that uses AI and ML, as well as a scoring system which does not require proving income when issuing credit cards.

Also Read: It is important that founders see investors as their partners: Christina Teo of she1K

Another trend is non-standard projects, which also emphasize the change in the structure of investment in the region. For example, Little Wallet from Singapore claims to become the first in Southeast Asia to implement the concept of a “family bank”.

According to the company, no one in the region has tried to do this before. Little Wallet uses gamified youth branding to appeal to users aged 6 to 18. The company raised US$1.6 million in its pre-seed funding round. Pilon is another project from Singapore worth mentioning.

The company acts as a financial intermediary between banks, small and medium-sized businesses (suppliers) and large enterprises (purchasers) to ensure a seamless experience for all parties. Pilon raised US$5.2 million in seed funding.

A large group of investors took part in more than one deal — for example, Big Sky Capital, Gobi Partners, Northstar Group, EDBI, Openspace Ventures, East Ventures, MassMutual Ventures, Sequoia Capital, Khazanah.

There are investors who prefer investing in one direction (Big Sky Capital — lending; Khazanah — insurance; PayPal Ventures — payments and transactions), and those who are engaged in a variety of fintech products (Gobi Partners — insurance, neo banking; MassMutual Ventures — financial services, health; Northstar Group — lending, e-commerce). The comprehensive approach of large institutional investors confirms their interest in Southeast Asian fintech.

In conclusion, the current situation around the funding of fintech in Southeast Asia can indicate a change in the drivers of industry development.

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The legal industry is undergoing a remarkable transformation with the advent of artificial intelligence. As a lawyer who has embraced AI solutions and innovation, I have witnessed firsthand the profound impact it has on legal practices.

In this article, I will explore how AI is revolutionising legal research, contract analysis, and case management, enabling me and my fellow legal professionals to streamline workflows, deliver efficient legal solutions, and shape the future of our law practice.

 

The rise of AI in the legal industry

As a lawyer who has integrated AI into my work processes, I have experienced the game-changing potential of artificial intelligence in the legal industry. AI excels in legal research, eliminating the hours previously spent sifting through extensive information. Now, AI-powered tools can analyse databases, extract relevant information, and provide quick insights, significantly reducing research time and effort.

Contract analysis is another area where AI algorithms shine. Reviewing contracts for clauses, risks, and compliance used to be time-consuming. However, AI-powered contract analysis tools leverage natural language processing and machine learning to swiftly analyse contracts, identify critical provisions, and flag potential risks. This empowers me to make informed decisions more efficiently.

Transforming case management

Through the integration of AI, case management in litigation has undergone a transformative shift. Machine learning algorithms analyse past cases, predict outcomes, and provide valuable insights that support my legal strategy. This data-driven approach enhances decision-making and enables me to assess the strengths and weaknesses of my cases more effectively.

Additionally, AI-powered tools automate routine administrative tasks, such as document review and case documentation. By utilising optical character recognition (OCR) and data extraction techniques, these tools efficiently sort through vast volumes of documents, identify relevant information, and organise it in a structured manner. This not only saves time but also reduces the risk of human error.

Also Read: Beyond the token and the law of diminishing marginal (NFT) utility

Improving access to justice

As a lawyer committed to promoting access to justice, I recognise the significant advantages that AI brings to the legal field. Many individuals and businesses face barriers when seeking legal assistance due to high costs and limited resources. AI-powered solutions provide an opportunity to bridge this gap by offering affordable and accessible legal services.

For instance, chatbots and virtual assistants powered by AI can interact with clients, answering their legal queries and guiding them through basic legal processes. This empowers individuals to seek preliminary legal advice without the immediate need for a consultation with a human attorney. By leveraging AI, I can extend my legal expertise to a broader range of individuals who may not have otherwise had access to legal guidance.

Addressing ethical considerations

As a lawyer who embraces AI solutions, I understand the importance of addressing ethical considerations associated with its use. Transparency and accountability in algorithmic decision-making processes are crucial to ensure fairness and prevent bias. Furthermore, maintaining client confidentiality and data security is always a top priority when utilising AI tools.

I am also aware of the ethical challenges related to potential job displacement for certain tasks traditionally performed by legal professionals. However, it is important to note that AI technology is designed to augment human capabilities, not replace them.

By automating repetitive tasks, AI allows me to focus on higher-value activities such as legal analysis, client counselling, and strategic thinking, ultimately providing a more comprehensive and tailored service to my clients.

Final thoughts

As a lawyer who has fully embraced AI solutions and innovation, I can attest to the transformative power it has brought to the legal industry. By leveraging AI-powered tools and algorithms, I have enhanced my efficiency, accuracy, and overall effectiveness as a legal professional.

AI enables faster and more comprehensive legal research, streamlined contract analysis, improved case management, and greater access to justice. By embracing AI technology while upholding ethical considerations, I can harness the full potential of AI and actively shape the future of our law practice.

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Amidst the challenges of a tough funding climate, e27 is launching an exciting new article series called Angel’s Advocate to provide fresh perspectives on angel funding. In this exclusive series, we sit with prominent angels to hear their stories and strategies and gain unique insights about early-stage financing.

Adriel Yong is currently the Head of Community at Ascend Angels, one of the largest angel networks in Singapore with over 400 members. Yong’s journey as an angel began when he started angel investing in SEA startups such as Doyobi, AcadArena, JiPay, StackUp, Lumina and Acme.

He also works with Jeremy Au on the BRAVE Podcast and co-authored their publication featuring the top 10 stories on the show since its inception. Outside of startups, Yong is passionate about social mobility and continues to support Access Singapore, an education non-profit that he helped to found back in 2019.

In this edition, Yong shares his take on angel funding.

Edited excerpts:

How do you typically approach investing during a funding winter?

During a funding winter, we focus on companies with strong fundamentals and a high potential for growth, especially those with proprietary technology and experienced teams. We invest smaller initial amounts and look for startups that can scale with less capital.

What are your typical investment criteria, such as industry, stage, and geographic location?

As one of the largest angel networks in Southeast Asia, we are excited to back the next generation of founders in the region across various sectors and stages. Our sector and regional focus is a reflection of the concentration of membership in this part of the world, which allows us to best source, evaluate and support our portfolio companies.

We particularly like to back second-time founders and founders with a deep understanding of the problems they are going after because of a hard-earned insight or significant operating experience.

Can you describe your investment process from initial contact to closing a deal?

Our team and extended angel network can often be found in startup events and industry mixers. After the initial contact, the investment team will speak with a company to better understand their proposition and evaluate if there is a mutual fit to proceed further.

Also Read: Angels should play a more hands-off role: Sanjay Shivkumar of Carousell

Thereafter, we will start to speak with relevant members of the angel network to do initial due diligence and gather interest to support the company in its current round of fundraising. Once we have gathered initial conviction and interest in the company, we will share it with the wider angel network and arrange calls for the founder to speak with interested parties before collecting commitments.

How do you evaluate a startup’s potential for growth and success?

We think about companies from first principles and try to understand what is the problem they are actually going after, how large that problem is and how much people would pay to solve that problem. We ask ourselves if this is the best team to tackle this problem and whether we are able to effectively partner with them to accelerate their growth with our network over the medium to long term.

How important is the founder’s experience and background when making investment decisions?

We have observed that the founder’s experience and background can influence product, commercial and hiring outcomes significantly, especially at an early stage. Second-time founders often have an advantage in understanding pitfalls in company building, such as how to hire, fundraise and structure teams effectively.

Founders with deep operating experience in particular industries will have a massive advantage in attracting the best talent to work with them, have higher clarity on their customer persona and tend to see much quicker commercial traction. All these translate to stronger growth in the business and better fundraising outcomes.

Can you share your successful investment and what made that investment successful?

One investment we are particularly excited about is Ringkas, a digital mortgage platform in Indonesia. The founding team previously built large companies in Southeast Asia and had a good combination of startup, property and financial expertise.

What makes Ringkas impressive is its ability to structure and secure complex partnerships with top banks in Indonesia and the largest property developers to secure over $2 billion in property supply over a short span of time.

Furthermore, the gap in Indonesia’s mortgage industry is massive with Indonesia’s mortgage penetration rate, currently at a modest 3.25 per cent of the total GDP, which significantly lags behind countries like India and the United States, which have penetration rates of 11 per cent and over 50 per cent of GDP, respectively.

What are some common mistakes that startups make when pitching to angel investors? What are some myths about angel investment?

Startups need to inspire confidence in prospective investors when they pitch. Some common mistakes would be being vague about product differentiation, the business model and unit economics and the details of going to market.

Even though a pitch might have gone well for angels, some might not participate in the end when they feel that the deal terms are not sufficiently fair for the company’s stage.

How important is the alignment of values between the investor and the startup founder?

Venture investing is often thought of as a one-way street in terms of whether an investor finds a startup attractive. I argue that a mutual alignment of values between investors and startups is important for long terms success.

Also Read: It is important that founders see investors as their partners: Christina Teo of she1K

For instance, if the investor prioritises high topline growth and not strong fundamental unit economics, while the founder does, then it might not be the best investor-investee relationship over the medium to long term. This is especially challenging if such an investor is a major shareholder or board member with additional levers to compel the founder to their vision for the company.

Our advice to portfolio founders is to speak to other portfolio companies of potential investors to understand how the fund manages their portfolio companies, what they prioritise, how they have managed crises in their investees and the individual working style of Partners that will be board members.

How do you manage risk when investing in startups? Are there any specific metrics or indicators you look for?

To manage risk effectively when investing in startups, we first have to be able to identify the risks. As an angel network with over 400+ accredited angels across Southeast Asia, we tap into our extensive network to do industry and founder due diligence.

This helps us accelerate our internal education on new markets that we might be unfamiliar with and helps us get better clarity of the backgrounds of the founders we work with. Beyond the network, we also tap into our portfolio companies (over 60+) and funds that we are limited partners.

As a network that invests across the early stage and growth stages, we also have the flexibility of revisiting investments in the future that we do not feel the most comfortable with at the current stage because of certain product or market risks that we are unable to underwrite.

Finally, when we do make an investment, we leverage our angel network to derisk things related to commercialisation, hiring and further fundraising.

For individual angel investors, a key part of risk management is sizing your bets and dealing with fair terms. I previously discussed how to think about angel investing ticket sizes and deal terms with Jeremy Au on the BRAVE podcast, do check out the episode here if it’s something you might be thinking about.

Can you share any advice for startups looking to raise funds from angel investors?

The truth is, your fundraising journey started way before you decided to find a company. Angel investors will do extensive reference checks with people whom you have worked for previously and those that have worked with and for you.

Are you someone that the best talent will want to work with and for? Founders should actively think about cultivating strong relationships with their previous teammates and bosses and leveraging them when they want to start out on their fundraising journey with angel investors.

There is also a cliché: “When you ask for money, you get advice. When you ask for advice, you get money.” I have seen advisors of startups/founders become the first angel investor in companies and actively advocated for them to other investors based on their working experience with the team.

In this regard, actively seek advice at each point of your journey, and that can reap both direct benefits (better product and traction) and indirect benefits (greater trust and advocacy from advisors).

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Fundraising or preparing your startup for fundraising? Build your investor network, search from 400+ SEA investors on e27, and get connected or get insights regarding fundraising. Try e27 Pro for free today.

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HK tycoon John Lau sues EmergeVest, demands US$45M back
He sued EmergeVest over the PE firm’s portfolio company EV Cargo’s alleged plan to operate in Greater China, where it would be rivalling Lau’s own Cargo Services Group.

Bitdefender to acquire Horangi Cyber Security
Horangi Warden offers a cloud-native solution that secures critical cloud infra for hundreds of organisations across all major public cloud platforms, including AWS, Azure, and Google Cloud.

Singaporean ex-Googler’s AI startup Reka raises US$58M
The lead investors are DST Global and Radical Ventures; Reka’s first commercial product Yasa is a multimodal AI ‘assistant’ trained to understand images, videos and tabular data in addition to words and phrases.

Singapore’s digital payment platform Sunrate raises funding
The investors include Prosperity7 Ventures and SoftBank Ventures Asia; Sunrate provides cross-border payment and treasury management solutions for businesses in emerging markets.

HK’s OneDegree raises US$27M to expand insurance reach in Asia
The investors include Gobi Partners, BitRock Capital, and Sun Hung Kai; OneDegree will use the funds to further expand in Asia and invest in its AI capabilities.

Carl Pei’s Nothing closes US$96M in funding ahead of Phone (2) launch
The startup’s first product – wireless earbuds Ear (1) – generated orders for 400,000 units when it launched in August 2021; This was followed by Nothing’s Phone (1) debut in July 2022 and Ear (2)’s rollout in March this year.

Korea’s Alwayz aims to make e-shopping fun with US$46M in funding
The investors include DST Global, KB Investment, and Korea Investment; Alwayz deviates from typical e-commerce platforms by incorporating social features like short videos and gamification into shopping to draw customers.

Preowned motorcycles marketplace iMotorbike scores US$2.6M
The investors include Gobi Partners, Ondine Capital, Penjana Kapital, and The Hive Southeast Asia; The funds will be used to strengthen its operations in Malaysia and Vietnam, besides investing in technology and talent.

Meet the 4 SEA startups of PepsiCo’s climate tech programme
They were the results of an open call PepsiCo did in March, when it sought solutions for sustainable packaging and climate reduction.

Indonesia’s Baskit raises US$3.3M in seed funding
The investors include Betatron Venture Group, Forge Ventures, Investible, and 1982 Ventures; Baskit focuses on digitalising and growing distribution businesses in supply chains.

Crypto.com to set up Singapore innovation lab
The lab will leverage Singapore’s strength as both a tech-driven city and a leading global financial hub to further accelerate the development of the nascent digital asset industry innovatively and responsibly.

Is there a sudden slowdown in the pace of digital transformation globally?
Matija Kapic of Infobip says if businesses refrain from adopting digitalisation, they will lose approximately US$145 billion of GDP growth.

Lessons from Echelon: Make cybersecurity a priority from day one of the business planning
Given the ever-evolving threat landscape, cybersecurity holds paramount importance for startups, demanding proactive measures from day one.

How layer-2 rollups boost Ethereum’s scalability for broader Web3 adoption
Two types of Rollups are currently very common: Optimistic and Zero-Knowledge (ZK); But while both methods contribute significantly to Ethereum’s scalability, they have considerable limitations.

Unleashing the power of specialised AI startups in the era of generative AI
To maximise the value of generative AI, startups should consider the optimal insertion point for their product within existing workflows.

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Artificial Intelligence is fast becoming the most wanted tech tool in the new era. The likes of ChatGPT have become the most widely used software solutions.

Below is a list of the investors that have invested in Southeast Asia’s AI startups in 2023 so far.

Darwin Ventures

Darwin Ventures is a fund of funds that provides individual and institutional investors (primarily educational endowments and foundations) access to investment opportunities generally unavailable to most investors. The firm was founded to provide selective investments in top-tier VC funds. These investments include a diverse group of VC partnerships focusing on US-based early-stage VC funds diversified across industry sectors, including technology, information technology, and healthcare.

Hive Ventures

Hive Ventures is a global VC firm that aims to accelerate technological advancements from Taiwan to build a smarter, hyperconnected world. Led by a team of entrepreneurs with deep expertise in AI and big data, the firm invests in early-stage companies developing the building blocks of AI, SaaS, blockchain and other future technologies.

Harbinger Ventures

Harbinger Ventures is an early-stage growth equity firm focused on identifying and scaling high-growth companies in the consumer sector. It works exclusively with early-stage consumer brands led by exceptional female founders or mixed-gender founder founding teams and incentivises collaboration amongst its portfolio companies by giving each entrepreneur an equity stake in the portfolio.

Darwin, Hive, and Harbinger invested in Profet AI, a Taiwanese artificial intelligence startup in January this year.

RTP Global

RTP is an early-stage VC firm. It has made over 110 investments worldwide, with one in ten becoming multi-billion dollar companies, including Datadog, DeliveryHero and Cred. Its capital comes almost entirely from its founders, who reinvest proceeds from their past startups.

It has a presence in New York, Bangalore, Dubai, London, and Paris.

Lunar Ventures

Lunar Ventures is a deep-tech, seed-stage venture fund with a team of three deep-tech expert partners in Berlin. It invests pre-revenue to help turn your science fiction into reality.

It writes a cheque of €300,000 to €1 million (US$325,000 to US$1.8M) to technical teams with strong R&D backgrounds who build European products that will sell globally.

In February, RTP and Lunar joined the US$3.6 million seed funding round of Instill AI.

Biospring Partners

Biospring Partners was founded in 2020 by Michelle Dipp and Jennifer Lum to invest in companies with the potential to fundamentally shift how technology is utilised across the life sciences sector. Biospring invests in growth-stage B2B companies driving innovation across the life sciences industry and beyond.

Senator Investment Group

Based in New York, Senator Investment is a hedge fund providing services to pooled investment vehicles. It specialises in the fields of financial services and investment management. It was formed in 2008.

B Capital Group

B Capital Group is a global firm specialising in equity investments in venture and growth-stage companies that have achieved traction with customers. Through its extensive global network and exclusive partnership with The Boston Consulting Group, B Capital helps high-growth startups navigate business challenges, raise capital, and attract talented leadership at key points of their journeys to scale.

It has offices in San Francisco, New York, Los Angeles, and Singapore. The focus verticals are AI, biotech, consumer, cybersecurity, e-commerce, finance, healthtech, insurtech, SaaS, transportation, and travel.

The focus stages are seed, pre-Series A, Series A, Series B, Series C, and above. The ticket size is US$10 million to US$60 million.

Glasswing Ventures

Glasswing Ventures is an early-stage VC firm investing in the next generation of AI and frontier technology startups enabling the rise of the intelligent enterprise. It is laser-focused on funding exceptional entrepreneurs leading the AI revolution, capitalising on the intellectual might and talent from the premier academic institutions on the East Coast, and fostering growth for our ecosystem.

In March, Biospring, Senator Investment, B Capital, and Glasswing invested in Labviva, a Singapore- and US-based AI-driven life sciences digital marketplace.

FinSight Ventures

A global fintech and SaaS investor. Most of its investments are from the US, India and Europe. It invests in pre-seed and seed stages and writes US$50000 to US$100,000.

For Series A and Series B firms, it usually invests anywhere between US$500,000 to US$5 million. In Series С+, it can invest between US$10 million and US$20 million.

Rebel Fund

Rebel aims to invest in the best 0.1 per cent of the 40,000-plus tech startups that apply each year to Y Combinator. The fund’s due diligence and investing decisions are made by a team of accomplished Y Combinator alumni who have founded companies valued at over US$85 billion, invested in 200+ startups, and generated top-decile portfolio returns.

Rebel utilises a proprietary machine-learning algorithm called Rebel Theorem to help validate and screen potential investments.

Nurture Ventures

Nurture Venture provides venture assistance and strategic advice to entrepreneurs. The firm focuses on various areas, including healthtech, cyber security, applied artificial intelligence, and customer experience.

Leonis Investissement

Leonis Investissement is a private club that allows individuals and business angels to invest from €1,500 in hyper-growth startups in Silicon Valley.

FinSight, Rebel, Nurture, and Leonis were part of the US$8.5 million Series A funding round of Betterhalf, an AI-powered matchmaking platform targetting urban Indians.

Wavemaker Partners

Wavemaker takes a portfolio-building approach to early-stage (seed to Series A) investing. It usually starts with a US$100,000 to US$200,000 cheque and follows on until US$1 million. It has 15 member funds across four continents.

Wavemaker Group is a multi-faceted cross-border venture capital firm founded in 2003. The firm is dual headquartered in Los Angeles and Singapore and has raised over US$580M across multiple funds. In Southeast Asia, Wavemaker focuses on enterprise and deep technology companies.

Its Singapore-based investments include Luxola (acquired by LVMH), ArtofClick (acquired by Xurpas), and Pie (acquired by Google).

SEEDS Capital

As the investment arm of Enterprise Singapore, SEEDS Capital catalyses smart monies into Singapore-based early-stage technology startups. It co-invests with institutional investors in innovative startups with strong intellectual content and global market potential. It focuses on nascent and strategic industries such as advanced manufacturing and engineering, health & biomedical sciences, and urban solutions & sustainability.

It also looks at other emerging technologies such as agri-tech, AI, blockchain, Quantum Computing, and space technologies. Post-investment, it leverages Enterprise Singapore’s networks across industries and global overseas centres to support the growth of our portfolio companies.

Today, it has over 100 startups in its portfolio and works with more than 40 co-investment partners.

Wavemaker and SEEDS Capital participated in the US$1.8 million seed funding round of Groundup.ai, a Singaporean startup helping industrial companies prevent unplanned downtime of industrial assets and improve workplace safety.

Horizons Ventures

Horizons Ventures was co-founded by Solina Chau and Debbie Chang in 2005. It is known for backing era-defining companies making a lasting and positive impact worldwide. Its notable early-stage investments are Zoom, Impossible Foods, Perfect Day, Spotify, Siri, and DeepMind.

LifeX Ventures

LifeX is a capital growth company that de-risks early-stage life sciences companies in terms of time, resources, and investment. It focuses on the strategic pillars of commercialisation, capital, infrastructure, and resources to create alignment and achieve the highest probability of success for every company in our portfolio.

Blackbird Ventures

Blackbird is based in Australia and New Zealand. It invests in every type of technology, from software to space. It backs the best startup companies from idea to beyond IPO. Its portfolio is worth over US$7 billion and includes some of the most successful Aussie and Kiwi startups, including Canva, Zoox, SafetyCulture, Culture Amp, and Halter.

Radar Ventures

Radar Ventures is a private fund based in Australia and New Zealand, investing globally in companies developing technology solutions to problems affecting humans on a global scale. Investment sizes vary, with a preference to invest early and follow the company’s growth.

In April, Horizons, LifeX, Blackbird, and Radar joined the US$10 million financing round of Singapore- and Australia-based Cortical Labs.

Qatar Investment Authority (QIA)

QIA was established in 2005 to protect and grow Qatar’s financial assets and to help diversify the economy. QIA is a global investment organisation with investments spanning all major global markets, asset classes, sectors and geographies.

ICONIQ Capital

ICONIQ Capital is a privately-held investment firm. ICONIQ provides financial advisory and family office services and manages direct investments focusing on technology growth equity, venture capital, middle market buyout, and real estate.

Jungle Ventures

Jungle Ventures is a Singapore-based VC firm that invests in and helps build tech category leaders from Asia. It invests in early and growth-stage companies.

The focus verticals are consumer, enterprise solution, finance, and SaaS.
It invests across Singapore, Indonesia, India, Malaysia, Thailand, and Vietnam across pre-Series A/bridge, Series A, Series B, Series C, and above.

The investment range is US$1M to US$15M.

Its portfolio includes Livspace, Kredivo, Reddoorz, Sociolla, and Waresix.

Insight Partners

Founded in 1995, Insight Venture Partners specialises in growth-stage software and internet investing globally. Insight’s team of growth experts comprises technology investors and operating executives with significant experience scaling technology companies. Since its inception, Insight has raised over US$7.6 billion to invest in market-leading companies through minority and majority deals.

QIA, ICONIQ, Jungle, and Insight were part of the US$250 million Series D funding round of Builder.ai, an AI-powered composable software platform.

Warburg Pincus

Warburg Pincus is a global growth investor. The firm has more than $80 billion in assets under management. Its active portfolio of more than 250 companies is highly diversified by stage, sector, and geography.

Founded in 1966, Warburg Pincus has raised 21 private equity and two real estate funds, which have invested over US$109 billion in over 1,000 companies in more than 40 countries. The firm is headquartered in New York with offices in Amsterdam, Beijing, Berlin, Hong Kong, Houston, London, Luxembourg, Mumbai, Mauritius, San Francisco, São Paulo, Shanghai, and Singapore.

Northstar Group

Northstar Group is a Singapore-headquartered private equity and venture capital firm managing over US$2.6 billion in committed equity capital. It invests in fast-growing in Southeast Asia with a particular focus on Indonesia.

Since its founding in 2003, the group has invested in more than 50 companies across the financial services, consumer/retail, manufacturing, technology, telecom, and agribusiness sectors. In aggregate, it has invested over US$4 billion with its co-investors in Southeast Asia.

In May, Singapore-based AI company Advance Intelligence Group raised US$80 million from an investor consortium led by existing investors Warburg Pincus and Northstar Group.

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Copyright: peshkova

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Bitdefender, a global cybersecurity company headquartered in Romania, has agreed to acquire Singapore-based Horangi Cyber Security.

The transaction is expected to close subject to the satisfaction of customary closing conditions. Terms of the transaction were not disclosed.

With this acquisition, Bitdefender will incorporate Horangi’s Cloud Infrastructure Entitlement Management (CIEM) and Cloud Security Posture Management (CSPM) capabilities into the Bitdefender GravityZone unified risk and security analytics platform. These will add critical compliance and governance capabilities to Bitdefender’s threat prevention, protection, detection and response capabilities.

Additionally, Horangi’s security services, including proactive risk assessment, red teaming, and penetration testing, will integrate with and complement Bitdefender Managed Detection & Response (MDR) services.

Also Read: Lessons from Echelon: Make cybersecurity a priority from day one of the business planning

Horangi Cyber Security was founded in 2016. Its flagship platform, Horangi Warden, is a cloud-native solution that secures critical cloud infrastructures for hundreds of enterprise organisations across all major public cloud platforms, including AWS, Azure, and Google Cloud.

“This acquisition represents a strategic partnership built on shared values, a commitment to innovation, and a vision for the future,” stated Paul Hadjy, Co-Founder and CEO of Horangi Cyber Security. “By leveraging Bitdefender’s broad cybersecurity portfolio, our customers can expect an even greater level of service, accelerated innovation pace, and exceptional cybersecurity outcomes in the cloud and beyond.”

Founded in 2001, Bitdefender is a cybersecurity company delivering threat prevention, detection, and response solutions. The firm has customers in 170-plus countries with offices worldwide.

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SG-based firms stepped up tech acquisitions in rest of SEA in 2022
According to DealStreetAsia, such tech acquisitions witnessed a 166% surge from 12 in 2021 to 32 in 2022; About 62.5% of the targets were Indonesian firms, mainly from fintech and financial services sectors.

Prenetics announces US$200M JV for early cancer detection
The joint venture Insighta with Dennis Lo, an expert in non-invasive prenatal testing and liquid biopsy, aims to develop and commercialise a breakthrough early detection screening test for several types of cancer.

Singapore-based Apeiron bags US$37M in debt funding
Apeiron collects various types of food and agricultural waste – including used cooking oil, tallow, and palm oil mill effluent – and converts them into biodiesel.

UTU raises US$33M to help travellers get more from tax-free shopping
It has also acquired CardsPal, a Singapore-based fintech that offers deals and promotions nearby to users; Utu’s goal is to create innovation in the tax-free shopping sector, which allows tourists to reclaim VAT on their purchases.

Byju’s assures investors of FY 2022 earnings audit by September
The Indian edutech unicorn previously filed its financial statements for FY 2021 in September 2022; Last week, Byju’s auditor Deloitte resigned due to long delays in completing its FY 2022 financials.

Amazon plans to invest another US$15B in India by 2030
The e-commerce group has invested about US$11B in India to date; The vast majority of the new capital is likely earmarked for AWS expansion in India.

Ant Group expands Alipay+ to all 7-Eleven stores in Malaysia
The integration, which was facilitated by Razer Merchant Services, allows the 2,400 7-Eleven stores in Malaysia to accept AlipayHK, GCash, Kakao Pay, and TrueMoney as payment options.

GoTo-backed Electrum to manufacture 250K e-bikes annually
It is constructing a factory in the West Java province to manufacture two-wheel EVs in Indonesia; These collaborations involve efforts in battery packaging and production, EV adoption, and battery swapping.

Alt-protein firm Green Rebel readies to serve the Philippines, Vietnam
The meat consumption in those markets has been relatively higher than in the rest of the region; People are willing to shift to plant-based meats if the quality is on par and affordable.

‘Starting with a clear culture in mind is a vital for companies’
Finhay CEO Huy Nghiem says short-term financial stability is as important as long-term goals; If we cannot meet the former, we can’t meet the long-term goal either.

How Salmon promotes financial inclusion with AI banking in PH
In its first year since launching, Salmon has achieved significant milestones, including launching its first point-of-sale lending product.

Solarad.ai can forecast accurate energy generation for solar plants
Solarad.ai’s software continuously updates the forecasts to account for real-time weather conditions and fine-tune the accuracy of the predictions.

The future of gamification: Connecting brands with consumers through games
Gamification solutions will bear greater resemblance to mobile games in which consumers can earn rewards through a curated process.

UK implements stricter rules: Crypto airdrops and dree NFTs banned
The UK concluded a consultation on new rules for the crypto sector and proposed an authorisation regime overseen by the FCA.

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Baskit, a startup that focuses on digitalising and growing distribution businesses in Indonesia’s supply chains, today announced that it had raised US$3.3 million in seed funding.

The funding round comes from Betatron Venture Group, Forge Ventures, Investible, 1982 Ventures, DS/X Orvel, Michael Sampoerna, and other prominent global and regional angels.

It followed a US$1.5 million pre-seed funding round that Baskit announced in March.

With the fresh funding, the company plans to accelerate expansion for proven revenue streams while doubling down on its technology stack and leveraging resources to strike numerous important contracts with brand principals and manufacturers.

“We aspire to build a platform that orchestrates all of the relevant players in the supply chain, generating economic gain and ultimately benefiting consumers. To do this, we have a razor-sharp focus on building superior tech that wins in functionality and usability for the SMEs we support,” Baskit CEO Yann Schuermans said in a press statement.

Also Read: Echelon: Breaking barriers in Southeast Asia’s supply chain

“With the raised funds, we will accelerate both our tech roadmap and city-by-city expansion, continuously embedding flexibility into our platform to cater to Indonesia’s vast and diverse landscape.”

How Baskit drives growth to a new height

Launched in November 2022, Baskit said that it had seen rapid growth since its inception, sustaining growth rates of more than 70 per cent month-on-month during the period.

In an email interview with e27, Schuermans explained the keys behind this achievement.

“Growth comes from a carefully executed go-to-market in regions that needed our solutions the most. We used local relationships and referrals to drive quick adoption and an efficient acquisition process, and have been able to effectively monetise our software, revenue-share initiatives (we take a cut if our customers grow), and signed lucrative contracts with lenders and manufacturers who want to access our wholesalers.”

He also shared the user acquisition strategy that Baskit is implementing: “Acquisition strategy is a very localised one; we play city by city and ensure that we build critical mass in each one of the areas we operate in. We’ve been very focused on West Java, particularly Greater Bandung Area, for now, and will be expanding to Greater Jakarta Area and Central Java in H2 2023.”

According to the company, the rapid expansion is reflective of a real need in the market for strengthening the operations of distributors and wholesalers.

These two players are now facing increasing competitive and fiscal pressures in the aftermath of COVID-19.

Also Read: Logistics platform for e-commerce merchants Jumppoint raises US$6.5M

This “new normal” involves high awareness but low access to tech, thinning margins and additional operational complexity from rampant inflation, and declining sales from softness in certain sectors. Baskit believes that the timing is conducive for them to support across these areas.

Schuermans said, “Collectively, trade and industry account for more than half of Indonesia’s GDP and are supported by more than 200,000 traditional distribution businesses that ensure that people can access a wide array of products, from biscuits to cement for construction.”

“While it is fashionable to disintermediate these businesses, it is not sustainable as they hold valuable infrastructure and relationships. We are deeply committed to supporting these intermediaries in their pursuits of powering their local communities and believe that doing so will yield tremendous economic benefits in the long run.”

This year, there are three things that Baskit wants to focus on: Expansion into the aforementioned areas; product improvements, particularly around its SaaS product and data product capabilities; and expansion of the number of lucrative contracts to build a solid foundation for profitability into 2024.

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Image Credit: Baskit

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The rapid growth and investment in generative AI have sparked a race among startups to leverage this technology and build AI-native applications. In Q1 of 2023 alone, US$1.7 billion was invested in 46 generative AI companies. However, in the midst of this excitement, it is crucial for these startups to consider the long-term viability and competitiveness of their products.

As we reflect on the transition from the introduction of horizontal cloud software in the early-2000s to the emergence of industry-specific cloud software in the late-2000s, it becomes clear that specialised startups hold immense value.

Building defensibility

We see a few key considerations to think deeply about as startups think about how to build defensibility vis-a-vis the models and potential incumbents coming in. To avoid getting commoditised, there are two critical questions: does the startup provide enough value on top of the model layer? And on what basis does a startup develop its moat?

One of the fundamental considerations for startups is to assess whether they offer enough value on top of the model layer to avoid being commoditised by it. While generative AI models provide a strong foundation, startups must focus on incorporating AI value through prompt engineering and fine-tuning specific to their use cases.

However, it is equally important to evaluate whether the value provided by the startup will remain significant as models continue to improve. Startups should strive to go beyond the capabilities of the underlying models and offer unique features, insights, or services that differentiate them from competitors.

Incorporating private data and customer context into the generative AI model is a powerful way for startups to improve the quality and relevance of their outputs. By leveraging proprietary data sources and understanding customer needs deeply, startups can enhance the accuracy, personalisation, and value of their AI solutions.

Also Read: Solarad.ai can forecast accurate energy generation for solar plants, battery storage

AI’s value will be most powerful when tightly focused, so startups should aim to accumulate proprietary data. This strategy enables startups to create a competitive advantage that is difficult for incumbents or generic AI models to replicate.

The age of generative AI

In the current landscape, generative AI applications are following a trajectory akin to early cloud companies, albeit with a crucial distinction. Unlike the cloud era, where startups like Salesforce, Workday, and ServiceNow emerged as ground-up pioneers, the underlying technology of generative AI now closely aligns with industry giants such as Microsoft, Google, and Meta.

Moreover, with the advent of APIs and open-source models, the adoption of generative AI technology has become markedly more accessible, fostering an environment conducive to both incumbents and startups. Consequently, as these major players dominate the broad horizontal applications, startups must recalibrate their focus toward specific domains with narrow contexts.

To maximise the value of generative AI, startups should consider the optimal insertion point for their product within existing workflows. This requires understanding the pain points, inefficiencies, or opportunities where AI can make the most significant impact. By going deep into specific workflows, startups can minimise disruptions while unlocking the full potential of AI.

In the age of generative AI, the stronger your context window, the wiser your model and product. Founders need to have a deliberate emphasis on the emerging technical capabilities of generative AI, accompanied by a relentless pursuit of identifying functions or vertical problems that stand to benefit from their unique insights.

We’re at an inflexion point. Startups must learn from past platform shifts and understand the importance of narrowing their focus and leveraging proprietary data to create defensible businesses.

By providing value beyond the model layer, incorporating private data, going beyond incumbents, and finding the right insertion point, startups can build specialised AI applications that deliver superior outcomes for customers. In the era of generative AI, specialised software holds the key to success.

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In October 2020, Vitalik Buterin shared his thoughts about a ‘rollup-centric roadmap’ for Ethereum. Looking at projects emerging at the time — Optimism, Arbitrum, zkSync, etc.— he wrote: “The Ethereum ecosystem is likely to be all-in on rollups (plus some plasma and channels) as a scaling strategy for the near and mid-term future.”

Buterin’s prodigious vision has become a reality due to the synergistic relationship between Layer-2 Rollups and Eth2’s enhanced data availability. Rollups are the Holy Grail of Ethereum scalability, potentially solving the scalability trilemma — i.e., blockchains must compromise security or decentralization to achieve scalability. 

Two types of Rollups are currently very common: Optimistic and Zero-Knowledge (ZK). But while both methods contribute significantly to Ethereum’s scalability, they have considerable limitations. Therefore, emerging ‘Smart L2’ platforms like Metis innovate ‘Hybrid Rollups’ that combine security and scalability while fostering decentralization. 

Experts at Metis, such as Co-Founder and CTO Yuan Su, have found that combining the fast finality of ZK Rollups and the transcendental scalability of Optimistic Rollups enables developer-friendly and secure Ethereum Layer-2 solutions. This is much needed for Web3’s sustainable and long-term adoption. 

The case for L2 Rollups

While Bitcoin lays the foundation for an alternative, censorship-resistant, peer-to-peer money, Ethereum’s primary purpose is facilitating decentralized computation. The latter has an immense scope, especially as it provides a user-centric and community-oriented infrastructure for Web3. 

However, Ethereum—or any other decentralized computing platform, for that matter — must be scalable to fulfil its role efficiently. It has to process thousands of transactions per second securely. Otherwise, DeFi applications, for instance, can’t compete with their Web2 counterparts like VISA.

On the contrary, Ethereum, like most other Layer-1 blockchains, currently has severe scalability limitations. The network clogs up due to traffic surges, as happened with Cryptokitties in 2017, DeFi in 2020, and NFTs in 2021. Congestion spikes gas fees, making Ethereum practically unusable for most users. This is a tremendous hurdle to mass adoption both for Ethereum and Web3. 

Ethereum’s recent transition to a Proof-of-Stake (PoS) consensus model — i.e., The Merge — is said to “set the stage for further scalability upgrades not possible under proof-of-work”. But these ‘upgrades’ cannot happen on Layer-1, for most parts, due to consequent security concerns. 

Also Read: The Merge is coming, but will it help Ethereum dominate the world?

Moreover, PoS doesn’t ensure scalability by itself. It requires implementing specific solutions like Sidechains, Plasma Chains, Channels, Validiums, and L2 Rollups. Among these alternatives, Rollups can leverage the underlying L1’s security effectively while increasing transaction speed and throughput at a much lower cost.

How do Optimistic and ZK Rollups work?

Generally, Rollups are smart contracts that relay transaction data and other information between L1s and L2s. The computation happens off-chain—i.e., on the L2—while the L1 only records and stores the hash or cryptographic address for completed transactions. 

L2 Rollups work by ‘rolling up’ or batching multiple transactions into a single block before sending them to the L1 for finalization. This reduces the burden on L1s, helping blockchains like Ethereum scale from roughly 15 TPS to 1000-4000 TPS. It also optimizes gas fees and lowers the overall costs for end-users, even during peak traffic. 

Optimistic and ZK Rollups adopt the core principle of relaying only critical, rolled-up smart contract data to the L1. However, they have key differences in their approach to validity and finality and the types of ‘proofs’ they use. 

As their name suggests, Optimistic Rollups assume all L2 transactions are valid unless someone challenges them. The process requires L1 nodes to submit ‘Fraud Proofs’ for potentially invalid transactions within a fixed timeframe. Unchallenged transactions are finalized when this window expires.

Most Optimistic Rollups, including Optimism and Arbitrum, are EVM-compatible, general-purpose smart contracts. According to Chris Dixon and Arianna Simpson of Andreessen Horowitz (a16z), “…this close adherence to Ethereum development paradigms results in a very easy transition for developers, wallets, and users: no new programming languages, minimal code changes to existing contracts required, and out-of-the-box support for the majority of existing Ethereum tooling.” 

ZK Rollups, on the other hand, adopt a more adversarial approach. Instead of assuming L2 transactions as valid, they use Zero-Knowledge Succinct Non-Interactive Argument of Knowledge or zkSNARK-based ‘Validity Proofs’ while publishing them on the L1. This method doesn’t require any challenge window and can achieve near-instant finality. It thus reduces the withdrawal time from days to hours, besides ensuring superior data privacy and integrity.

Also Read: The growing adoption of Ethereum in emerging markets

L2 challenges and the need for hybrid Rollups

Optimistic and ZK Rollups go a long way in scaling Ethereum, but they have limitations. For instance, there’s no guarantee that vigilant L1 nodes will successfully produce fraud proofs to refute invalid transactions published by Optimistic Rollups.

As for ZK Rollups, the development process is still highly complicated for most Web3 developers, which increases the scope for error and hampers contract-level security. Moreover, most existing ZK Rollups have difficulty achieving EVM compatibility, which restricts their accessibility. 

However, while Optimistic and ZK Rollups are still restricted in their individual capabilities, innovators like Yuan Su argue that the two approaches ‘can coexist and be unified’ to unlock their full potential. Further research has revealed the possibility of utilizing Optimism’s Cannon framework to integrate MIPS with ZK Proofs for effective EVM equivalence.

Innovating zkMIPS resolves the interoperability crisis facing ZK Rollups. It also eases the development process, enhancing accessibility for Web3 developers and project owners. But even besides that, the framework for Hybrid Rollups adapts a unique Optimistic Data Availability approach. 

During his talk at Devconnect AMS, Yuan explained Optimistic Data Availability as a method where it’s optimistically assumed that sequencers will make the data available for verification when required. This enables on-demand rollups which don’t have to roll up to the entire L1 data set all the time, drastically reducing availability costs and latency.

Given the capabilities discussed, Hybrid Rollups can arguably take Ethereum scalability to the next paradigm. Furthermore, open-source innovation and the consequent network effects can inspire other L1s to adopt Hybrid Rollups or similar solutions, ultimately making Web3 more scalable and cost-efficient.

Finally, as Web3 becomes faster, cheaper, and safer, it’ll be more relevant for diverse business cases and applications. This is the key to boosting adoption in the long run and in a sustainable manner. That’s the horizon for L2 Rollups, which can extend further with progressive innovation.

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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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