Southeast Asia provides great opportunities to Australian tech startups seeking to expand, according to SingTel, startups and investors at the Echelon Ignite conference in Sydney.
“There is a huge wealth of talent here in Australia, but unfortunately most of them look towards the US as the next logical step,” said SingTel Innov8 CEO Edgar Hardless. The Innov8 program provides seed funding to startups around the Asia Pacific.
“I firmly believe that the Southeast Asia opportunity is one that more and more Australian startups should look at because ... there is more money coming into the region and therefore more money available for entrepreneurs in general.”
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Singapore promotes investment in startups through government tax incentives, added Optus Innov8 lead principal, Peter Huynh. That has created wealth of available funding, compared to a relative “dearth” of capital in Australia, he said.
“There’s a lot of money available in Singapore,” said Vinod Nair, founder of Singapore startup Catapult Ventures. The government strongly supports startups through grants and by sponsoring events, he added.
However, Nair said a challenge for startups in Singapore is hiring help. Hiring is almost as expensive as it is in Australia, and the talent pool in Singapore is as small as the country, he said. In addition, the government has recently made it harder to secure work visas for foreign workers, he said.
HotelQuickly moved its headquarters to Thailand in part because hiring is inexpensive and the cost of living is low, said the hotel booking startup’s founder, Benjamin Forgan. The location is still very central in the region, he said.
Hardless stressed that it’s easy to set up a business in Southeast Asia, saying it often only takes three to four days in Singapore. Bangkok, Manila and Jakarta are similarly welcoming to startups, he said.
Some investors in Southeast Asia prefer startups founded by expatriates, said angel investor John Tan. That’s because expatriates have few connections and are less reliant on funding from friends and family. As a result, to an investor, they show great confidence in their business idea, he said.
Hardless agreed it’s not important to actually come from Southeast Asia to set up there. “Lots of Singapore startups have no Singaporeans in them,” he said.
Mobility in particular is a major opportunity in Southeast Asia, said Hardless. There is nearly 100 per cent penetration of mobile devices in Southeast Asia, he said. That means there are more than 600 million potential mobile Internet users, he said. “Pretty much everyone that matters has a mobile device.”
In Singapore, 80 to 90 per cent of mobile phones are smartphones, mostly running the Google Android mobile operating system, Hardless said. In other countries in the region smartphone penetration is only about 20 to 30 per cent, but that number is growing fast, he said.
Social media usage is also growing, with Facebook leading, Hardless said. Indonesia has one of the highest penetrations of Facebook outside the US, he said.
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