Hard to steer investment in Mekong startups, say global investors

A panel at the Mekong Entrepreneurship Ecosystem Summit

While tremendous investments are often focused in the US, global investors are also trying to navigate the Asian startup market.

However, funding differentiates within this continent, mostly and increasingly funneling to countries like Japan, China, Singapore and India. The lower part of the Mekong region falls behind despite its potential, said several market matchers during the recent Mekong Entrepreneurship Ecosystem Summit.

Quan Nguyen, venture partner at Inspire Ventures, a $25 million venture capital firm with investment teams in Thailand and Vietnam, sees great potentials in the Mekong market, which has a young population, growth of internet usage and an improving environment towards freer market model.

There are opportunities in the Lao market, said Aditta Kittikhoun, deputy managing director of Vientiane-based Sengdara Communications. “In terms of tech, there are many to explore.”

While the panelists attending the summit agreed about the diverse potential of Mekong region, they also pointed out that the area was hard to navigate. Lao and Cambodian startup markets are too young and small. Even in a more mature ecosystem like Vietnam, it is difficult to make investments, because not many investable companies are available, they added.

Nguyen does not see enough deal flows in the Mekong area, even with his fund looking to disburse up to $3 million for each series A round.

The common obstacle for both local and global investors is the market size. Not only does the scale matter, the purchasing power also counts. A Lao panelist took Burger King as an example. It entered East Timor, a territory smaller than Vientiane, the capital city of Laos, where Burger King is not available.

“It is really challenging to push the ecosystem,” he said.

Meanwhile, Nguyen added: “There is a good number of middle-stage funds and angel money, but startups do not know how to get to them. Those who have the money, don’t know how to deal with it.”

Capital is available, but the startups are not compelling enough.

They are still thinking too much about the tech, according to Channarong Buristrakul, vice chairman of the Khon Kaen Chamber of Commerce, Thailand. Meanwhile, investors look for not only great ideas and unique products but also a business model that will work and the ability to scale up.

“A lot of startups don’t know how to build the value for stakeholders. So mentoring could be helpful,” Nguyen said.

In countries like Laos and Cambodia, funding is provided from non-for-profit organisations such as the International Finance Corporation, who is proactive in supporting small and medium-sized enterprises. However, there is a need to raise the awareness of the method to access to investments.

Related stories:

3 Mekong startups win $20,000 at regional entrepreneurship summit

Vietnam startup scene poised to take off as ecosystem comes together

Seed funding hard to come by in Vietnam: George Vozikis

VCs in Vietnam: Scope for domestic development

Exclusive: Vietnam to launch a national venture capital fund by year-end

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.