Asia’s startup ecosystem hasn’t been performing well recently, with geopolitics and higher interest rates affecting investors’ willingness to invest. Many venture firms have left China, once the continent’s largest venture market, and while the number of fundraising rounds hasn’t drastically decreased, the rounds have become much smaller — investors are not investing as much as they used to.
However, some investors remain optimistic about the continent’s potential, creating global strategies as they search for fund-returning investments.
Venture firm Antler is one such investor. They introduced a $285 million emerging growth fund called Antler Elevate Fund in June 2023, investing between $1 million and $10 million in Series A rounds and beyond globally. Founded in 2018 in Singapore, Antler has since expanded its investments and networks worldwide, reaching the U.S., Europe, Africa, and throughout Asia, including Vietnam, Japan, and Malaysia.
Truth Voices met with Antler’s founder and CEO, Magnus Grimeland, at an event in Seoul to discuss startup trends in Asia, the opportunities the firm sees in the region, and their investment approach as AI becomes increasingly significant.
Asian markets are growing quickly
Grimeland strongly believes in Asia’s potential for innovation despite the funding decrease. “Each ecosystem in Asia has been growing rapidly. We’ve witnessed the fastest growth in tech innovation the world has ever seen in Asia,” Grimeland said. “No other region is experiencing growth like this. Southeast Asia, in particular, has seen the rise of numerous unicorns.”
Antler anticipates significant growth in the Asian startup ecosystem over the next few years. “It’s likely the biggest opportunity in the world right now in terms of growth,” Grimeland said. “Considering the current base and looking ahead ten years, the potential is 10 to 20 times greater. Southeast Asia alone saw almost 60x growth in activity level and value creation over the last decade.”
Antler focuses on ecosystems where it believes it can make a substantial impact and where startups are rapidly growing, Grimeland said. He noted that Indonesia provides a large market for building successful global companies, while Vietnam boasts highly skilled professionals and established international companies, particularly in gaming. Grimeland also highlighted Malaysia as an excellent hub with vigorous early-stage activity and ample late-stage funding.
Japan once had a smaller tech ecosystem relative to its potential, Grimeland said, but the country now aims to establish one of the largest technology ecosystems in the world, supported by the Japanese government. Korea’s strong presence in industries such as shipping, automotive, fashion, and beauty further showcases its reputation for quality and influence, he added.
India is another country that has done an impressive job building out its digital infrastructure and commerce platforms. “India possesses excellent research and deep tech capabilities. We’re investing across the value chain in India, and the opportunity there has expanded significantly over the past few years. It’s now possible to address the entire population of 1.4 billion people,” Grimeland said.
“For the first time, beyond the service industry, we’re seeing remarkable tech companies emerging from India. This is very exciting because not only can you target a vast and fast-growing population with this digital infrastructure, but you can also build fantastic companies for the global market.”
Antler is also looking to support companies in China, Grimeland mentioned.
Asia is home to some of the world’s top companies in battery technology and chip manufacturing, and Grimeland expects many Asian companies to expand into the global market. “You can already see this trend in consumer electronics and advanced technologies like deep tech, and it will also appear in B2B, SaaS, and B2C. The next global tech giants like Google, Facebook, or Apple might be created here in Asia,” he said.
Grimeland noted that Asia’s tech startup environment is slowly recovering from the funding slowdown. “Deal activity is picking up rapidly in the U.S., and we’re starting to see the same trend globally. In Asia, it’s definitely picking up,” he said.
While things may not return to how they were in 2021, Grimeland described that year as an anomaly. “If you back great founders who are building sensible companies, they can secure the capital they need,” he said.
Investing during the AI frenzy
Grimeland believes AI represents one of the most significant opportunities for startups currently.
“[The emergence of AI] is the biggest opportunity of our generation. New technology shifts create incredible opportunities, and each is better than the last. This is possibly the greatest opportunity startups have ever seen. So it’s essential to be thoughtful in how you invest and deploy capital,” he said.
He identifies three primary areas of potential for AI: infrastructure, applications, and enablers. “For example, OpenAI represents general infrastructure: data centers and API layers that build the foundation for others. The next trillion-dollar company will probably emerge from this infrastructure category, as well as the application layer where developers leverage the existing infrastructure,” Grimeland explained.
