Asia PE-VC Summit 2018: Deep tech needs government push, top talent to flourish

L-R: Kroll's Head of Southeast Asia, Reshmi Khurana; Jeffrey Chi, Vickers Venture Partners; Vinod Murali, Alteria Capital; Gavin Lock, Senjo Group; Heang Chhor, Qualgro; and Ozi Amanat, K2 Global.

Southeast Asia, with a population of 660 million and fast-growing internet penetration, is often seen as a homogenous market when it comes to funding in consumer technology. However, that may have little bearing on the development and trends in deep technology, according to experts speaking at DEALSTREETASIA’s ASIA PE-VC SUMMIT 2018 in Singapore on September 12.

For the past five years, the sharing economy has taken southeast Asia by storm. But the next big thing will be AI, robotics, self-driving and the other areas in frontier technology.

Gavin Lock, COO of payment operator and fintech investment firm Senjo Group, said, “while we see a lot of tailwinds, there is also an awful lot of fragmentation. That makes it difficult to build businesses at scale in more than one geography.”

Vickers Venture Partners’ vice chairman Jeffrey Chi added: “We believe that technology is a global phenomena. From that regard, it is difficult to look at a very specific local market.”

While the differences in culture and customer requirements are already substantial, the biggest challenge is the government’s approach to regulating each markets.

“Because it is so new, so cutting-edge, regulators often don’t know what to do with it. We need to engage the regulators, even before the things that they fear most happen. Regulators are really struggling on how to get their arms around this,” said Chi.

Even as these investors believe VCs should be able to bring new technologies to disrupt the markets, the protectionism measures by governments may disallow the entry for foreigners.

Singapore fund manager Qualgro’s founder and managing partner Heang Chhor also called for support from the government to really develop advanced technologies, which will take decades to make substantial breakthroughs.

Currently in Asia, Singapore and Hong Kong are considered the two most favourite markets for frontier tech, especially fintech, given their sophistication and the enablement of the startup ecosystem, according to Senjo’s Gavin Lock.

Couple with the presence of some interesting markets like Indonesia, as well as the high level of fragmentation, SE Asia is believed to become one of the most attractive regions for deep tech development. The biggest challenge the region faces is paucity of talent in the deep sciences space.

“We are lacking hundred thousands of data scientists to really help companies make breakthrough. But I’m very optimistic. We invest for the long-term, 10 to 20 years. We do believe that there’s no reason why SEA cannot grow this type of talent,” commented Chhor.

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