Industry expert lauds booming venture capital landscape in Southeast Asia
Amid the pandemic-induced darkness, Soo Boon Koh, founder and managing partner of iGlobe Partners, sees light at the end of the tunnel for venture capital investments in Southeast Asia.
“W h i l e C O V I D -1 9 h a s h e av i l y impacted various industries, there are a few that have experienced positive effects, especially in digital services and biotech (thanks to the new normal of social distancing and remote working),” said Koh who set up iGlobe in 1999 in the early days of venture capital’s globalization.
With the absence of any vaccine, there is no clear definition of what a post-pandemic era will look like, Koh said. But “what we can anticipate and dive into is a new normal, where at the heart of the market is digital connectivity enhanced by recent development in 5G and artificial intelligence.” Accordingly, iGlobe is targeting investment in industries such as edtech, health tech, fintech, biotech, esports, and agritech, all of which offer huge growth potential.
There are also major investment opportunities in fintech startups, from payment systems to digital banking for small and medium-sized enterprises and consumers. “Now is the time where the countries (in Southeast Asia) which were previously ‘underdeveloped’ will find that they can leapfrog into the digital era, affordably and speedily.”
IGlobe is a successful example of venture capital investment. Its investment has focused on three high growth sectors — smart cities, fintech, and synthetic biology, with a geographical portfolio allocation split evenly between Silicon Valley/ Europe and Southeast Asia/Japan.
Keeping abreast of the latest technology, iGlobe has upped its game by investing in domains with room for growth and life-changing potential. In 2013, for example, iGlobe invested in Matterport, a budding enterprise specializing in 3D capture and a virtual tour platform for real estate; architecture, engineering, and construction; insurance and restoration; industrial and facilities; and travel and hospitality sectors. Matterport had been operating for just two years when iGloble made its move. By leveraging the auto-stitching software, the startup gives potential property buyers the freedom to tinker with their indoor spaces, from the floor mat, to an additional wardrobe or changing the wall colors, before making any decisions.
This year’s global pandemic crisis has confirmed iGlobe’s sharp acumen and investment vision. “COVID-19 has speeded up the demand for the virtual experience that Matterport can provide,” Koh said. iGlobe also has stakes in other technology segments such as video games, esports, drones, and a dynamic routing optimization engine for mobility, fintech and synthetic.
Southeast Asia is a significant regional venture capital market with a population of 650 million, and its cheaper pool of younger workers appeal to foreign multinational corporations keen to set up manufacturing plants in the region, Koh said.
The input of technology professionals, who are either returnees from the US or graduates of local universities with valuable overseas work experience, has paved the way for the success of many companies based in the region, she said.
While the venture capital industry in Southeast Asia is in its infancy compared to the US, Europe, and China, we have seen a significant influx of overseas money from Japan, South Korea, Europe, the US and Chinese family offices, venture capital funds from the US, and Japanese and South Korean corporate venture capital, Koh said, acknowledging the region’s booming venture capital landscape.