Southeast Asia’s digital economic system is turning into a hotbed for international buyers. Whereas e-commerce and fintech stay the principle drivers of funding within the area, international enterprise capital corporations are additionally more and more eyeing native tasks associated to blockchain and crypto applied sciences.
Taipei-based startup accelerator and enterprise capital agency AppWorks, based in 2019, has blockchain tech as an funding focus, along with AI and the web of issues. The VC is especially focusing on Southeast Asia as the following area for its investments.
The agency believes that Taiwan, with its mature R&D hubs, and Southeast Asia, with its burgeoning web economic system, can create synergies to learn one another, in line with Jessica Liu, a companion at AppWorks.
Furthermore, Liu mentioned that AppWorks has been working intently to help the New Southbound Policy, a challenge launched by the Taiwanese administration in 2016 to advertise collaborations between Taiwan and Southeast Asia in science and expertise. “We companion with the authorities in numerous actions, from investments to visa functions. Our funds come from numerous buyers,” Liu instructed KrASIA.
The agency controls three enterprise capital funds, managing funds totaling USD 212 million. AppWorks makes about 20 offers annually, from seed to Collection C rounds. Liu mentioned the same old ticket dimension for investments ranges from USD 200,000 to USD 15 million per deal. A few of AppWorks’ backed corporations in Southeast Asia embody Carousell, Lalamove, and ShopBack.
The agency is at present searching for alternatives within the area’s rising blockchain ecosystem, Liu mentioned. “I obtained my first Bitcoin in 2014, and that’s how I discovered about blockchain. AppWorks began to take a look at blockchain tasks within the area in 2017, and thus far, we’ve got invested in about 20 startups,” she added.
KrASIA just lately spoke to Liu about AppWorks’ technique and blockchain potential in Southeast Asia.
The interview has been edited and consolidated for readability and brevity.
KrASIA (Kr): Moreover capital funding, what different help does AppWorks present to Southeast Asian startups?
Jessica Liu (JL): The strengths of Taiwan’s tech ecosystem lies in R&D and tech expertise. These are complementary to Southeast Asia because the area wants extra expertise to help its rising tech trade. This is a bonus that AppWorks supplies. We’ve an accelerator and a powerful neighborhood of founders, buyers, and mentors. We join them with one another. Founders can at all times search help once they need to develop into a brand new market or when they should talk about new alternatives with fellow entrepreneurs.
Kr: What’s your view on blockchain potential in Southeast Asia?
JL: Up to now, there have been only a few startups engaged on blockchain tasks, and so they largely got here from Singapore. However just lately, there was a number of curiosity in blockchain, pushed by a bull market in cryptocurrency, GameFi, and NFTs world wide.
The advantage of blockchain is that it has been a world enterprise since day one. Firms need to attain totally different customers world wide through the use of international platforms. So whether or not you might be in Taipei, Jakarta, or Washington, everybody has the identical start line within the blockchain house.
Kr: What’s your funding thesis? Is investing in blockchain totally different from some other sector?
JL: We’re very founder-centric. We worth the founders’ journey, mission, and integrity, whereas the enterprise mannequin comes second. More often than not, a enterprise mannequin is a short-term factor. Startups will in all probability pivot the enterprise inside two to 3 months if the present mannequin doesn’t work.
Investing in blockchain corporations is actually fairly much like different sectors. The principle distinction is the funding automobile. Whereas we normally put money into an organization’s fairness, with blockchain tasks, we additionally put money into tokens. From a founder’s perspective, it’s simpler to boost cash [through tokens] these days. Nonetheless, this provides founders restricted room to alter their enterprise mannequin as a result of buyers normally need to put money into a selected blockchain challenge.
Kr: What kind of blockchain tasks are extra in demand within the area? What’s one challenge that you just take into account will do effectively?
JL: Each market has totally different alternatives and calls for. Every nation is experiencing a distinct evolution within the blockchain and crypto world. For instance, in Indonesia, there are numerous exchanges as a result of curiosity in crypto funding and buying and selling has been growing up to now few years. In Vietnam, there’s numerous enthusiasm for GameFi and NFT video games, pushed by the success of Axie Infinity.
There are about 40 gaming studios and builders there doing NFT video games, making an attempt to duplicate the success of Axie Infinity. In the meantime, we’re seeing artists and creators beginning to embrace NFTs in Thailand. Startups are testing the water and exploring totally different options these days like crypto enablers, NFT collectibles, and so forth.
Kr: What are some challenges within the area’s blockchain and crypto house?
JL: There’s nonetheless not sufficient dialogue about blockchain. Most discussions amongst crypto communities are on Twitter and Discord, which aren’t as well-liked as different social media websites within the area. Additionally, it might take extra time for a market to undertake totally different sorts of blockchain functions. For instance, whereas NFT video games are well-liked in Vietnam, we don’t see many tasks in decentralized finance there in the mean time. I believe we’ll see progress in Southeast Asia over the following 12 to 18 months.
The crypto world has ups and downs, however each cycle attracts a brand new consumer base. I imagine this hype, or what some individuals would name a “bubble” round crypto and blockchain, will proceed and enhance the adoption of this tech in the long term.
