While Singapore is an already established startup ecosystem of Southeast Asia, I think the other countries that people most talk about when they start conversations about startups in the region, are Indonesia and Vietnam.
What do Indonesia and Vietnam have in common?
Large population, increasing usage of the Internet and mobile phones, some strong manufacturing sectors, and startups are rising driven by higher mobility.
What differ Indonesia from Vietnam?
Huge, huge and huge rounds of funding.
The recorded number of deals in Indonesia in 2015 was 62. The count for Vietnam in the same year was 67. But that slightly higher figure did not even deliver a silver lining for Vietnam, as the total investments into Vietnamese startups last year could not bear to a single funding round for MatahariMall, which was worth $500 million.
This year, GoJek made a record with a $550 million private equity investment. While the record for Vietnam is $28 million (also a private equity deal) for MoMo.
Even as the funding landscape in the two countries share the same characteristic that most of the deals are seed to series A, it shows how crazy valuation can be.
And although Vietnam had the first unicorn of Southeast Asia, and shows off better rates of Internet and mobile phone/smartphone penetration, the country is still lagging behind Indonesia in terms of the recognition of investors.
However, the deal-making frenzy in Indonesia looks like a bubble to me. And from there, I see a silver lining for Vietnam.
While investors are still pouring their war chest of money in the consumer sector, especially e-commerce, in Indonesia, I think Vietnam and Indonesia have the same level for B2B and deep tech.
Vietnam does not need to have strong B2C startups in order to develop more B2B and deep tech firms.
While the opportunities in those areas are untapped, Vietnam boasts a very important advantage over its neighbor, that is the tech talent pool that every VC I have met all have praise for.
I am not Indonesian local, so obviously I do not have the insights into the market. What I’ve got to know is through the media, from my colleague’s articles on DEALSTREETASIA, or from such story like this one, telling the scarcity of tech talents in Indonesia.
Going out of the new tech zone, for the advocators of the app era, which helped GoJek be recognized then receive huge funding as an app rather than just a web-based company, and for those who still think Vietnamese are sitting in front of the computer clicking on websites, App Annie has shown us that people in Vietnam are using apps way more than accessing websites.
Data and some photos taken from Tradingeconomics.com, eMarketer, Indonesia Internet Service Providers Association and Freepik.com
If you have more updated an accurate data for both Indonesia and Vietnam, please comment below with your thoughts.