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[ASEAN ISSUE #19] The rise of Unicorns in ASEAN

The rise of Unicorns in ASEAN




ASEAN startups are drawing the world’s attention. Investments to Southeast Asian startups in 2019 recorded $ 7.7 billion, which is a slight decrease from $12 billion of the previous year. However, considering that the size of investment back in 2013 had been only $1 billion, startups in ASEAN are indeed growing at an exponential rate.


With a population of 650 million and a median age of 31.2 years, ASEAN has a young, digital-friendly population and a favorable environment for startups. These conditions have both directly and in-directly promoted growth of startups in the region. The remarkable growth in the startup sector is further testified by the growing number of unicorns (private startup companies with a valuation over $1 billion) in ASEAN.


This week’s ASEAN Issue will take a look into startups in ASEAN especially those that have risen to the status of unicorns. Further, the article will review some of the policies in ASEAN countries that have been particularly favorable to startups and then see where ASEAN and Korea can cooperate in startup area.



■ Government support for startups in ASEAN, home to nine unicorns

According to CB Insights, a U.S. startup information company, the total value of nine unicorn companies in ASEAN amounts to about $44.5 billion. This may be a small figure compared to the total 476 unicorns worldwide, but it is significant because i) there were no unicorn companies six years ago in ASEAN, and ii) some unicorn companies have gone beyond this status and are now listed on stock exchange.


[ASEAN Unicorns]

CompanyValuation($B)CountryYear Listed in UnicornCategory
Go-Jek10.0Indonesia2016Ride- hailing
Revolution Precrafted10.0Philippines2017Others(prefabricated housing)
Grab14.3Singapore2014Ride- hailing
HyalRoute3.52020Mobile communication

Source: CB Insights


Of course, there are differences within ASEAN countries and therefore not all 10 ASEAN countries have produced unicorns. Indonesia has five unicorns listed, Philippines one and Singapore three. Birth of these unicorns are inseparable to the startup policies and directions of the three countries.


"Gojek", which started off as a ride-hailng business, changed the way of life throughout ASEAN, and was created in Indonesia. Indonesia is also the home to the most number of unicorns in ASEAN. The country has produced unicorns every year since 2016, including Indonesia's leading e-commerce company "Tokopedia," "OVO" which offers smart payment services, "Bukalapak”, also a e-commerce company commonly known as the ‘Amazon of Southeast Asia,’ and " Traveloka," which has expanded to providing comprehensive travel package services as well as flight and lodging reservations.


Indonesia is actively promoting digital economy through 「Making Indonesia 4.0 Roadmap」. From 2016 to 2020, 「1,000 Digital Startup Movement」 was implemented in 10 major cities including Jakarta, Bandung, Yogyakarta, and Bali. Although it did not succeed in creating 1,000 startups as planned, the program was supplemented by the 「1,001 Digital Startup Movement」 in 2019. The new program added five more cities and will focuse on incubation with the aim of nurturing 5,000 startups over the next five years. In terms of unicorns, under government’s plan to increase the number of companies from the current five to eight within four years, workshops, hackathons, and incubating are conducted through the ‘Next Indonesia Unicorn’ program.


Philippines' "Revolution Pre-Crafted" offers homes designed by famous architects at more affordable prices by prefabricating the houses. It became a unicorn in 2017, just two years after its establishment in 2015. While this success is based on a groundbreaking business model, the Philippine government's startup policy also played a part.


Through 「2015-2020 Digital Startup Roadmap」, the government announced its commitment to support startups with plans to reach 500 startups, total investment of $200 million, and accumulated corporate value of $2 billion by 2020 (As of 2015, the number of startups in Philippines was around 100 and investment value was estimated to be about $40 million). Moreover, the government has put into effect a bill that gives tax benefits to startups, and continued efforts to establish innovation hubs as well as holding startup contests and boot camps. 「Innovative Startup Act」 which was passed in February 2019, developed a more beneficial environment for startups including securing additional fund, tax benefits for companies, and easing visa procedures for foreign entrepreneurs.


Singapore, a ‘start-up hub’ has been actively putting its efforts to foster a startup-friendly environment. “Grab”, the first unicorn in ASEAN, was originally based in Malaysia but moved to Singapore. “Tracks”, an inventory management company using AI, started its opeartion in Israel but also settled in Singapore. This was attributed to the government’s full support for such companies, which encourages them to transfer their headquarters to Singapore even though they started off in other countries. According to ‘Startup Genome’, a global startup research firm, Singapore is the only Southeast Asian city to rank 14th in the top 20 of the startup ecosystem rankings in 2019.


Ever since the government declared its 「Smart Nation」 scheme in 2014 which plans to focus its efforts on innovative technology, policies for startups were also actively carried out. Except for the condition that Singaporeans should hold more than 33 percent of the company's shares, there are only a few restrictions on starting a startup in Singapore, making the city an attractive city to establish businesses for not only domestic but also foreign entrepreneurs. Entrepreneurs can set up a firm in just two days in Singapore, with government funding of around $20,000 (30,000 Singapore dollars), and additional tax benefits will be provided if the startup headquarters or technology patents are moved to Singapore. Furthermore, 「Startup SG」, a program run by the Singapore government, is systematically operated to provide consulting and funding to startups, and business models and corporate information of nearly 3,000 startups to investors.


In addition to Indonesia and Singapore, where startups are the most active in ASEAN, other ASEAN countries such as Vietnam and Thailand are also aware of the potential of startups and are working to create startup ecosystems in the country.



■ ASEAN- Korean Cooperation for discovering ‘Next Unicorn’

On the occasion of the ASEAN-ROK Commemorative Summit held in Busan in November 2019, ASEAN and Korea together declared solidarity in the startup ecosystem. The two sides held the ‘ASEAN- Korea Startup Summit’ and the ‘ASEAN-Korea Startup Expo’ as official side events of the Summit. The ‘ASEAN-Korea Startup Summit’ brought together 400 startup stakeholders from ASEAN and Korea. These included not only the leaders of the 11 countries, but also global investors, accelerators, and startup-related government and agency officials in addition to ASEAN's most well-known unicorns such as Gojek and Bukalapak. ASEAN- Korea Startup Expo provided a platform for unicorn companies and stakeholders to share experiences and best practices, with 21 ASEAN companies pitching their business ideas over the course of two days.


Since 2018, the ASEAN-Korea Center also has been hosting the ASEAN-Korea Startup Week with the aim of establishing an environment for boosting investment, laying the foundation for joint growth between the two sides, and organizing a platform for promoting exchanges. In the aforementioned ‘ASEAN- Korea Startup Expo’, ASEAN companies invited by the AKC showcased their business through pitching session, and other companies did the same in Pangyo and Seoul. The program provided an opportunitiy to introduce ASEAN startups, and raise awareness on the ASEAN startup ecosystem. This year the AKC also plans to invite promising ASEAN startups, if necessary via on-line, to showcase their potential to Korean investors and stakeholders.


In addition, AKC has been organizing the ‘ASEAN- Korea Scale-Up Session’ jointly with the Maeil Media Group since 2019. The session, organized as a session during the ‘World Knowledge Forum’, aims to unveil the 'next unicorns' in ASEAN and Korea. Last year, eight startups from ASEAN and Korea held pitching sessions, follwing the keynote speech on why global venture capitals are paying attention to the ASEAN market. Islamic fashion brand ‘Hijab.com’(Indonesia), education company using augmented reality technology ‘360ed’(Myanmar), and fintech company ‘C88’ (Indonesia) were invited for the pitching session.


Since the establishment of ASEAN-ROK dialogue relations in 1989, ASEAN and Korea have tirelessly sought ways to prosper together through mutual cooperation. The advent of the Fourth Industrial Revolution and the emergence of new challenges such as the current COVID-19 requires the two to explore new areas of cooperation for continued partnership into the future. Korea’s information technology and ASEAN’s young skilled talents will undoubtedly generate synergy when working together. In this regard, the startup sector has great potential as the next major focus area for ASEAN-Korea cooperation. And in these efforts, the AKC too will also take part by hosting this year’s 'ASEAN- Korea Scale-Up Session’ and the ‘ASEAN- Korea Startup Week’.




ASEAN unicorns are on the rise (The ASEAN Post, 2020.01.19.)

Indonesian “1000 Startups” initiative being renewed by the government (E27, 2019.05.23.)

Philippine Roadmap for Digital Startups, 2015 and beyond (Department of Information and Communications Technology of the Philippines)

Off to a great start, the Philippine startup ecosystem (PWC, 2017)

Southeast Asia Tech Investment in 2019 (Cento Ventures, 2020)

Southeast Asia is the promised land for tech startups. Here’s what we need to make that a reality (E27, 2020.01.22.)

Startup Grants & Funding Sources in Singapore (Startup SG)

The future is Asian but can Singaporeans lead it? (CNA, 2020.02.26.)

The Global Unicorn Club (CB Insights, 2020.07)

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