Venture capital and private equity investment in Southeast Asia is at an all-time high. As per recent research by Bain Consulting, Southeast Asia’s investment ecosystem is entering a new phase of growth with at least 10 new companies with a market value of more than $1 Bn each coming up by 2024.
Looking at the current numbers, 261 companies in Southeast Asia received the first round of seed financing in 2017 and venture capital investments jumped to $3.16 Bn over the first eight months of 2018, up by 16 percent from $2.72 Bn for all of 2017. Most of these investments came from local VCs and investors, who are also proliferating and contributing to the improved landscape of funding and investment in the region.
One such player in the market is GREE Ventures. Based in Japan, Southeast Asia, and India, GREE Ventures focuses on investing in early-stage (seed to Series A) startups. In Southeast Asia, they have invested in startups like Crowde, Ayopop, YOYO HOLDINGS PTE. LTD. and PT Bukalapak.com.
Nikhil Kapur, Principal & Investment Head (South Asia), GREE Ventures based in Singapore is one of the leaders to cover investments across Southeast Asia and India. Kapur is also one of the mentors in the People Matters TechHR Startup Program Singapore 2019.
With People Matters TechHR Singapore conference around the corner, Kapur spoke to People Matters about the growing funding scene in Southeast Asia and shares what solutions in the HR tech space does he look forward to as an investor.
How would you describe the entire funding and investment landscape in the Southeast Asian region?
The funding landscape in the region is very vibrant in almost all stages. But the biggest increase has been witnessed in growth rounds of Series A onwards. There are many VCs who have raised much larger funds than before to target the markets.
Singapore and Indonesia continue to lead the pack in terms of fundraising activity but geographies like Vietnam and the Philippines are also picking up now.
In my opinion, there is a need for more Seed investments mostly to help foster an experimental market where entrepreneurs are encouraged to take risk and iterate. There are two ways of doing that, one by involving more and more angel investors in the ecosystem and two by launching targeted micro-funds.
Where does HR tech stand in this scenario?
In parallel to the growth in the entire startup space, investment in HR tech has also been expanding significantly. SaaS adoption is growing in the region, and many startups have emerged in the recruitment industry especially, adopting innovative tech tools and taking the leap to the future of work.
Most of the startups in the HR tech space are focusing on addressing the talent matching problem. Indonesia itself has more than 10 companies solving this problem. As a shortage of tech talent remains a key challenge across the region, solutions in this space are receiving that sort of demand as well.
As an investor, what solutions in the HR tech space do you look forward to?
If we divide HR tech into 3 broad categories: talent acquisition, talent management, and talent administration. All of them are still quite nascent in the market with no clear winners, but I believe the biggest open space is in talent management. How do you upskill the workforce, onboard them faster, make them more productive, measure their performance, and strengthen them to deliver more for your company is where I feel the next set of investments will happen in the industry.
These talent management solutions can be built for both types of professionals, the current employees as well as the emerging potential talent. We would look forward to seeing startups targeting both these spaces enthusiastically.
What HR solutions are you looking forward to in People Matters TechHR Startup Program Singapore 2019 and what are your expectations from the participants?
I am personally looking for solutions that can be taken to solve the problems of the masses in the region. How should SMEs in Malaysia recruit, train, and manage their employees? How do we enable Vietnamese developers to converse in English and take on global projects? How do we generate enough talent internally in Indonesia so that we don't have to depend on workforce educated abroad? And so on.
What advice would you give to emerging startups looking to raise fund? Can you share some tips with them?
Build your business well, with the right fundamentals and the best possible team to target a meaningful and large problem in the industry. The rest will follow on its own.
Meet Nikhil Kapur, Principal & Investment Head (South Asia), GREE Ventures and many other investors, venture capitalists and business and HR leaders at People Matters TechHR Singapore on 28th February 2019 at Marina Bay Sands, Singapore.