"If any of you have played Civilization or another computer game, there's something called the technology tree. You need to unlock fire, chemistry, and steel in order to make a gun. Technology requires certain things to unlock, and progression is important because when Japan was forced to open up as the British and Americans sailed in with guns and steam power, Japan was at a different point in the technology tree with samurai. That technology stack is important." - Jeremy Au, Host of BRAVE Southeast Asia Tech Podcast


"Would an American person who grew up in the Midwest be able to succeed in China as a VC? The people who have succeeded in China venture capital were a mixture with Chinese and Western education, but they also understood the local ecosystem, politics, and dynamics. Could you expect a pure Chinese VC with no American experience to succeed in the American ecosystem? There are already Chinese VCs moving to America to try. The subversion of that is whether a Singaporean VC can invest in Malaysian or Thai companies, or whether only a Filipino VC can invest in Filipino startups. There is debate, and there is no one winning strategy or one size fits all. The edge of these VC funds competing with each other is important to understand." - Jeremy Au, Host of BRAVE Southeast Asia Tech Podcast

Jeremy Au explored why venture capitalists hunt unicorns and how Southeast Asia fits into this global race. He discussed the Asia Partners golden age thesis, the importance of technology stack progression, and how localization shapes billion dollar outcomes. The conversation compared the US, China, India, and Southeast Asia, broke down country strategies, and examined how ideas migrate across ecosystems.

03:10 Golden Age Thesis: Asia Partners argues Southeast Asia is entering a golden age as GDP growth enables tech ecosystems to flourish.

06:00 Technology Stack and Localization: China sped through decades of development, while Southeast Asia companies like Grab had to adapt ride hailing to local gaps such as drivers without smartphones.

09:20 Copy and Localize Models: Founders replicate proven ideas such as Uber or e commerce while tailoring them to Southeast Asia’s conditions.

12:15 Fragmented Markets: Southeast Asia is not a single region but a patchwork of cities and countries, making scaling strategies complex.

14:10 Three Paths to Unicorns: Indonesia only giants such as GoJek, regional players like Ninja Van and Shopee, and Vietnam conglomerates like VNG.

Jeremy Au (00:00)

next chapter we're talking about is really talking about obviously start-ups, some of the definitions about unicorns, but now taking a little bit more of a Southeast Asian lens and apply that for unicorns because the kind of question that we had earlier was very much about why are VCs hunting for unicorns? And in general, the reason why we're teaching about unicorns is that VCs must hunt unicorns in order to become vegetable capital successful funds.

And so let's take that lens on the Southeast Asia lens. So I think this is a decent count. There's actually a more up to date, but I think this is useful because what it shows is that this is the number of unicorns by country, right? And what we see here is that United States is number one in the world of unicorns. You see that China, obviously, is 120 plus. And then the UK and India, about 20 plus. And then obviously Europe. But what's interesting is that if you look at Indonesia and Singapore, I Southeast Asia,

I think you see about 10 unicorns. And actually, think we look at the latest count as even more because we actually see a lot of Chinese companies actually relocating the headquarters of Singapore and getting counted as Singapore unicorns. So a little bit of debate, whether you want to them as that, the crux of it is that there's a little bit of a power law itself for the amount of unicorn value in terms of number of counts. And that roughly corresponds as well to the value

of these unicorns, right? Because these unicorns all have a certain amount of market cap. And so the United States and China actually are the top two countries in terms of numbers of unicorns, followed by India. So I think it's interesting because when we think about Southeast Asia and these ecosystems, you have to think about the fact that Singapore is not just a count for the countries, but also we tend to be the domicile unicorn destination for Southeast Asia and also for Chinese companies.

So this is an interesting report by Asia Partners, and Asia Partners basically has made a thesis. And I think there's something for us to think about, but their thesis is that Southeast Asia is entering a golden age. So what this chart is showing is on the y-axis, it shows again the GDP per capita, in dollars. On the x-axis, it shows obviously the time horizon of history. And what they've done is that they've shown and plotted that GDP per capita for

USA, Australia, Japan, South Korea, China, Southeast Asia, and India. And their thesis is that as these economies grow in terms of the wealth, then technology companies tend to emerge out of those markets. And so I think basically saying that India started out with the basic stuff in terms of kind of like flip card, make my trip so it's like travel and logistics. And then

Southeast Asia is ahead. Southeast Asia grab, go to Bukalapak, travel local, Khasum, SEI, which is in Thailand. And obviously China has Tencent, Alibaba, Meituan, ByteDance. And then of course, in the US, the highest GDP capital, it shows Apple, Microsoft, and your classic high tech of the high tech companies is out there. So I think the thesis is that there's a golden age for Southeast Asia. And I think there's something for you to think about whether it's true or not true, whether you believe it don't believe it.

You just have to understand that there's a thesis that has been underwritten by many VC funds and actually by many limited partners in America and globally writing checks into the Southeast Asia VC funds. And there's something for you to think about. But the crux of it is that the Asia partners perspective is that Chinese IPOs show a certain growth of the country that explains the development of technology ecosystem. So if what they have done is they put again on the

X axis from 1995 to 2022. And then on the Y axis, they have put, from their perspective, technologies from the bottom, the most basic or fundamental. And then at the top end, technologies that are dependent on the bottom technologies. If any of you have ever played a game, Civilization, or some computer game, there's something called the technology tree. It's like you need to unlock fire and chemistry and steel in order to make a gun.

And you need to wheels, unlock wheels and horse, therefore to make a chariot, for example. So I think there's this concept that technology requires certain things to unlock. And that progression of technology is important because when Japan was forced to open up because the British sailed a ship with, and Americans sailed in the ship with all those guns, Japan was at a certain technology tree where they had samurai.

The Westerners had guns and steam power and all this other stuff, right? So that technology stack is important. And what this chart is showing is that China did a speed run of building out those technologies. And it's a good map because in America, a lot of these technologies were actually built over a longer time frame, over 50 years. But I think from their perspective is that over the past 30 years, if you look at it, is that these companies have IPO. They have all become billion dollar companies.

And they started out from the bottom, from wireline telcos to film television, telecom equipment, to semiconductors, to wireless telcos, to software, to data centers, to online travel games, to online education, to online real estate, lending, to wealth management, to online health, to ride hailing, right? And I think it's important for us to think about, because what they're basically making a thesis is that technologies stack on one another and enable new technologies to be built. And so it's important for countries, not the leapfrog.

but to be thoughtful about where they are in that technology stack. So a good example would be, you can't have right hailing if people don't have cell phones, and you don't have data equipment, and you don't have wireless internet. And there's actually a really good example where Franco Verona, he was on a podcast of Brave. He shares about his experience as one of the earliest general managers for the Philippines market for Grab. So Grab started out in Malaysia and Singapore. Again, we know that it was a much higher GDP per capita compared to the Philippines.

And what happened was that Grab was able to de-risk and figure out ride hailing in Malaysia and Singapore because there was obviously look at the Uber experience in America, lots of internet, high speed, lots of phones, but they were able to replicate that to Malaysia and Singapore. But when Franco Vorona started deploying in the Philippines, one of his biggest challenges was that taxi drivers did not have smartphones, neither did they use mobile internet. And so one of the things that he had to do and get authorization for

was that here to buy thousands of phones and install wireless internet on them and teach those drivers how to drive. Right? Doesn't make sense? We have that app and also along that way, also the map feature of how to drive and navigation. basically, Philippines was kind of like further away, didn't have some of that technology stack. So again, I think what they're saying here is that, again, you can do online lending.

when there's online commerce beforehand, Because FinTech requires that. So I think we just had to be thoughtful about what this piece is. It's basically saying that these companies are all built over time. And obviously, there's a category creator. think Linda was asking a question about competitors, second, third runners, so they can compete with each other. Still, IPOs can be built in the same sector, in the same line. But then, obviously, this grows and stacks upon each other over time.

And their thesis is that China is ahead of Southeast Asia by 10 years. And our way of saying it is that if you are a smart entrepreneurial person, you can take lessons from the Chinese and American ecosystems and copy those IPOs back into Southeast Asia. And I think this is actually a pretty good thesis because you can also see, and I have met Chinese founders in Singapore or Southeast Asia, in Latin America, where they're basically saying, OK, we saw the future.

In China, we are going to take what we learned in China and take it to Brazil or take it to Southeast Asia to build because we know what it is. Because China is ahead of Southeast Asia by 10 years, something was built in this horizontal category that is now viable. We also see other versions of that. We must not forget that Grab and Go-Jak were founded by Anthony Tan and Nadim. And both of them were Harvard MBA students.

around the same time. So all of them were in America, all of them were using Uber. And then one went back to Malaysia and Singapore, the other one went back to Indonesia. And instead of saying, wow, Indonesia or Singapore, Malaysia is such a backward country compared to whatever, why can't America have, why can't Singapore and these countries have ride hailing like America, America's so good. They flipped it and they said, oh, this is a time travel machine. Singapore and Southeast Asia is ripe for

right-hailing as well. So they use a time travel machine to, and know, then this value in this point of view is, did they copy and localize, right, into Southeast Asia? I think arguably yes, right, because they took that category in. But also you think about it, DD, which is also beat Uber, but also clone and localize Uber into China, right?

And we must not forget that those other companies, for example, like Rocket Internet Group, which is the Germans, which is called the Samwer brothers, they actually had something called the Blitz scaling and the Blitzkrieg and memo the road. But their perspective was, OK, we know that innovations in America, how do we replicate that strategy of American technology across Europe in every geography and Southeast Asia? Right. And so they saw that e-commerce was doing well. So they created Zalora.

in Southeast Asia, they also set up a ride-hailing business and many other businesses that were arguably clones or localizations. They also bought, they also localized Groupon as well, and they rolled, know, and then they sold it back and so forth. So there's all kinds of debate about that, but all I'm just trying to say here is that the migration of ideas can happen in all kinds of ways, from people who see the future in America and travel to Singapore and Malaysia.

from people in China who see the future as it is and they want to bring it to Southeast Asia. We have people and we have other people who see it and say, okay, let's deliberately make it our intentional funding strategy. I think there's also, I think the opposite of that, which is that we often see that people may travel too far from the future. So for example, somebody from America may travel to Indonesia and say,

America open banking APIs is the future. Every bank will talk to each other. And then they travel to Indonesia and they get crushed by the Indonesia banking ecosystem because they don't have an incentive to open up the APIs at the same rate as America does because of legislation or regulation, whatever it is. But it's actually much more difficult in Indonesia. And so some people may argue that they time travel too far. The gap was too far. They skipped a step. They should have done something, maybe something

more basic or more foundational, which is maybe just do lending instead of banking APIs. But then from their failures and from the ashes of their failures of all the Indonesia fintechs that were banking on that, we now see a new wave of fintech companies that are a little bit more savvy about that. So some of them are saying, we're focusing on Singaporean companies that go in regional, but we're not trying to go after Indonesian SMEs that need access. So different product market fit.

iterations on that component where people learn from each other as well. I think Asia partners point of view is that Southeast Asia can learn from China as a direct comparable that's viable. Your name is Lai Ping.

Yeah. So the question is, does Southeast Asia exist as a market? And I'll tell you now that that's actually a very good question because I think today, from most VCs' perspective, it's now very cool to say Southeast Asia is not one region. It's multiple countries. I was very uncool several years ago saying that Southeast Asia is not even a bunch of countries. It's actually a of cities. I think Singapore, Bangkok, Kuala Lumpur, Jakarta.

you know, Manila, I think are more similar to each other than Singapore. I mean, even saying Jakarta is similar to, you know, Bandung is such a wide gap that everybody would be like, it's like bonkers because it's a big gap from a tier one. I mean, I think and also there's a big argument. think I remember the early China tech wave, they used to call it tier one cities, which was Beijing and Shanghai, tier two, which would be like Tianjin.

Shenzhen, I mean at the time and then they would say Tier 3 was one level lower. But I think at least within a China ecosystem, it was like they're much more similar. I think you make the argument. But yes, I think today...

Today, there is a new consensus that Southeast Asia is not a homogeneous collection. And we'll talk about some of that later. But that was not a common insight, and it was not a popular insight to advocate because for regional VC funds, if you say Southeast Asia is very fragmented, then everybody's going to ask you why you're a regional VC fund, right? Because it's so fragmented. So if you believe it's fragmented, then instead of underwriting regional VC funds,

then you could make an argument that you should be underwriting country-specific funds rather than regional funds.

Correct.

Yeah, so the thought experiment that you're asking about is what is venture capital and what are competencies needed? Would an American person who's grew up in the Midwest be able to succeed in China as a VC? I think most of us would now know that the people who have succeeded in China venture capital were, you would say, a mixture. I think they had Chinese and Western education, but they were able to understand the local ecosystem very well. They're embedded, they understood.

the politics, they understood the dynamics, they understood who the talent system was. And so I would ask the same thing, could you expect a pure Chinese, no American experience VC be able to succeed in the American ecosystem? The answer is there's a bunch of Chinese VCs who are now moved to America to try to do that. So now you're asking another question, is, so the subversion of that is, can a Singaporean VC invest in Malaysian companies?

Can a Singaporean VC invest in Thai companies? Can a Singaporean VC invest in Filipino companies? Or do you have to be a Filipino VC investing in Filipino startups? So I think there's a little bit of that debate. I'm not saying that there is a winning strategy. Neither I'm saying there's a one size fits all. But your thesis about what is the edge of these VC funds that are competing each other is super important for you to be aware about.

So I think this ties in very nicely to the next slide from Asia Partners, which is that I think they have made an argument of three types. And I think this is easier. In my podcast, I should talk about more ways you can build unicorns in Southeast Asia. But I think this is actually a good example of the country-level way of thinking about it. So approach number one is looking at Indonesia only, which is that Indonesia has about 300 million people. And they're

build a company that only does Indonesia. So this is your Go-Jek, your Bukalapak, your Traveloka. But these are pure play specialized companies that are building only in Indonesia. So that's number one. The second category is your Singapore in general start, Malaysia start, depending how you look at it. But they grow regionally. And I think the type of company that tends to grow regionally

tend to be a little bit more lightweight or a little bit more in what I call the white spaces. So lightweight, for example, is FinTech. So obviously Singapore FinTech, as it expands regionally, doesn't have that much heaviness on the ground. It's not like agri-tech, where you do agriculture in every country, acre by acre. But FinTech is a little bit more of a transnational piece. But also you can see that in Singapore or in Malaysia, for example, you'll see a little bit more of your marketplaces, your e-commerce.

And also what I call the trade, so shipping, logistics. So something that's between borders, if that makes sense. So for example, if you look at FedEx within America, you look at it as an American company. But if you look at it in Southeast Asia, FedEx has to travel not between Boston and New York, which is three hours away, but it has to travel between Singapore and Kuala Lumpur. And so managing the logistics complexity is actually an order of magnitude harder and therefore an order of magnitude more valuable for e-commerce in Southeast Asia.

So you can see, example, and another example would be Ninja Van, right? It's a Singapore unicorn that's competing across the region, doing e-commerce parcels. But you look at JNT, it was founded by Chinese founders who moved to Indonesia. So they time traveled back 10 years and said, we are going to build a logistics company. And JNT is now fighting tooth and nail with Ninja Van.

So they are Indonesia- So but they have Chinese national founders and they are competing across the region with each other. And what they're fighting They're fighting the share of the flow of goods between China and Southeast Asia. So Chinese factories have to go to Southeast Asia. Ninja Van used to focus very much on the end consumers on the Southeast Asia side. GNT is a little bit more focused on the Chinese factory side. So they but supply chain as it vertically integrates is...

getting more more tricky for NinjaVan. But it's not easy for JNT ideal. So if you look at Shopee, which is C Group, they do e-commerce, but they're also starting to vertically integrate the logistics chain as well. So all of these companies are all unicorns, and they're all fighting tooth and nail regionally across all countries simultaneously. And of course, the third category that we see is the Vietnam Group, which is 100 million people. These tend to be a little bit more

conglomerate looking because the market size may not be big enough. So if you look at VNG, it's a good example. They have a local version of WhatsApp or WeChat. They also have local e-commerce. They have also local gaming. They also have local payments. They have local fintech. So each of those businesses, you may argue, the end vision is a conglomerate of 10 business lines of $10 million of revenue each, for example. So that's how you get to your $100 million revenue.

All I'm just trying to say is that some people look at Indonesia and say, OK, you get the $100 billion of revenue in Indonesia alone. Some people say it's better to get $100 million of revenue connecting Southeast Asia together or weaving Southeast Asia together. And some people say, OK, maybe you can build a billion dollar company in Thailand or Philippines or Malaysia or Vietnam, but you may have to make it as 10 separate businesses that interlink with each other that sum up to $100 million of revenue. So I think there's a way to understand that.