2023 is in the books and we would like to thank you for being a part of this journey with us through the Insignia Insights newsletter.

It has been a difficult year for the region’s startup and VC ecosystems, and 2024 shows no signs of easing up on the challenges (We wrote an article with more views on this). Nevertheless, we have been fortunate to uncover new opportunities (in poultry for example) and continue supporting our portfolio companies as they reached record profitability (like Carro), pioneered innovative products (like WIZ.AI), and exceeded expectations on growth (like Konvy). We summed up the year in our 2023 Annual Summit video.

For a VC, this continued support is primarily through follow-on rounds across companies like Rainforest, Intellect, Aspire, Bakool, Nudge, among many others.

But in today’s market, this support has to also come in other forms. In 2023, we have also invested more into our role in this growing ecosystem of startup and VC in Southeast Asia, recognizing the importance of collaboration and cross-pollination in navigating market challenges. Our ecosystem development marked several new milestones this year:

1. We were privileged to be accorded the GIP Select Fund status along with a handful of peers in the industry. This comes at a time when there is increasing interest in Singapore (and through Singapore, Southeast Asia) as a destination for wealth allocating to venture creation.

2. In May this year, we launched over first ever playbook on Product-Market Fit to great interest from our LinkedIn community. In the next few months, we launched a cross-border hiring playbook with Deel, Michael Page, and Intellect, then a startup CFO playbook with Aspire. Stay tuned for the next playbook this coming January 11 (will be accessible on our website)!

3. Towards the end of 2022, we launched the Insignia Founders Club in Indonesia as an opportunity for founders in the ecosystem to learn from each other. We held three editions of this gathering of founders in Indonesia over this year, with themes on startup leadership and startup finance management.

4. Our education arm Insignia Ventures Academy (IVA) launched VC Launchpad, a self-learning course on venture capital, welcomed two cohorts to our flagship VC Accelerator (the Mar 2024 cohort is open for applications), rolled out a fundraising library (featuring guides on pitch decks, data rooms, and managing fundraising pipelines), and launched the first cohort of StartCFO, an executive program for finance professionals to immerse in startup finance leadership (the Jan 2024 cohort is open for applications).

5. Our investment in Indonesian agritech Elevarm has received recognition through the AVCJ 2023 Responsible Investment Award and the HKVCA 2023 ESG Excellence Award. Both awards were rooted in our work with Elevarm on their sustainability report and initiatives this year, as well as our publicly available ESG survey.

Entrepreneurship is a lonely journey, and it is important to have support systems along the way, being connected with the right people and resources at the right moments.

It is this value of support that we hope to create through our ecosystems, going back to the companies we partner with as talent, capital, or learnings, that shape their journeys and the lives of millions they impact.

In all these initiatives we have had the support of many people, including subscribers to this newsletter. Thank you!

And if you would like to be a part of our ecosystem, find out how by asking our IVP chatbot!

Wishing you and your loved ones happy holidays and new year,
Team Insignia

IN the orange corner 🥊

IPO prospects, Regulatory innovation milestones, Industry recognition: The latest from our portfolio

1. Carro on the path to the public markets. The CFO of the tech company behind Southeast Asia’s largest auto retail platform Ernest Chew talks IPO prospects with its “profitable tech company” narrative and raising a round ahead of a potential listing. Read more and recap the journey of Carro on our podcast.

2. MAS grants IPA to three entities issuing regulated stablecoins
First announced by Ravi Menon at this year’s SFF, the IPA includes StraitsX’s SGD (housing the already public XSGD) and USD issuance. This marks a significant milestone for compliant digital asset use cases globally. Read more.

3. WIZ.AI wins the Asia telco industry award for startup innovation. The AI company wins this award for its work in automating customer service in ASEAN enterprises through voice AI technology. Read more.

4. Intellect wins the 2023 Best Digital Wellness Platform Award. The company was the only mental health platform to receive this recognition by the industry in the HR Vendors of the Year 2023. Read more.

5. Super CEO and co-founder Steven Wonsoredjo is awarded the EY Young Entrepreneur of the Year. He follows the footsteps of another Insignia founder, Ajaib’s Anderson Sumarli. Super also recently gets featured on Google Playstore’s #weareplay global campaign.

6. Aspire, Meta, and Bank Aladin have joined forces to empower SMEs in Indonesia. Through the partnerships, SMEs are able to access productive loans in the form of credits through the Aspire corporate card, and enables them to tap into digital advertising on platforms like Facebook and Instagram. Read more.

RESOURCEs in the bank 🏦

AI whitepapers, AI podcasts, and insights on going global: The latest resources for entrepreneurs, startup executives, and investors

New Downloads

1. 2024 Indonesia E-commerce Landscape: Win The Market Through Live Commerce (ebook by Shipper’s Aloshop). Access here.

2. Increasing Bank Competitiveness with Generative AI (whitepaper by WIZ.AI). Access here.

3. Navigating AI in Finance (whitepaper by Aspire). Access here.

New On Call with Insignia Podcast Episodes

1. Call 145: Building The Future Where Every Company Is An AI Company | On Call with AI Enabler CEOs | Spotify | Apple Podcasts | YouTube | Transcript

2. Call 146: The Reality of Leveraging AI in Southeast Asia’s Leading Consumer Platforms | Spotify | Apple Podcasts | YouTube | Transcript

3. Call 147: Hard Truths About Scaling Brands and Supply Chain Networks | Spotify | Apple Podcasts | YouTube | Transcript

Top 3 Most Watched Episodes in 2023

1. Call 134: Why is Southeast Asia so attractive for global companies and semiconductor supply chains? Watch here.

2. Call 122: Why You Shouldn’t Take Blue Oceans For Granted and How to Assess These Opportunities in Fintech. Watch here. 

3. Call 112: Private Label in Rural Indonesia is a Whole New Ballgame. Watch here.

New Insignia Business Review Essays

1. What It Takes for a Startup to Go Global from Southeast Asia. Read more.

2. What does the global startup look like? Notes from the FII Institute Priority Conference 2023 in Hong Kong. Read more.

3. 6 Things to Know About a VC’s Mindset in Indonesia on Startup Fundraising. Read more.

4. Five Reasons to Look Forward to the Next Generation of Public Market Outcomes from Venture-Backed Companies in Southeast Asia. Read more.

5. How the next five years of ASEAN Fintech will be different: 8 Fintech Trends to Watch. Read more.

Top 3 Most Read Essays in 2023

1. Building Resilient Companies In ASEAN: The Venture Capital Perspective. Read more.

2. Semiconductor Supply Chains In Flux: Where Is The Southeast Asia Opportunity? Read more.

3. Insignia AI Notes #8: Autonomous AI Agents Part 1. Read more.

CAREER and education OPPORTUNITIES 🎓

More open roles in our team and portfolio companies on career.insignia.vc

1. Insignia Ventures Academy StartCFO Cohort 2 | Apply
2. Insignia Ventures Academy VC Accelerator Cohort 7 | Apply
3. Investment Team – Vietnam | Apply
4. Executive Assistant and Office Manager | Apply

INSIGHTS FOR the unstoppable 🏎

What does 2024 hold for Southeast Asia’s startup and VC landscape?

In response to the 2022 public market shocks, 2023 has been the year the rules were rewritten for what makes a great startup investment or fundraising story (count the number of “Don’t be a unicorn, be a [insert more mundane animal here]” on LinkedIn).

The private funding markets for startups in 2023 saw longer cycles, greater uncertainty beyond term sheet offers, and higher investor expectations on financial and corporate maturity. 

What then does 2024 hold for startups and their investors in Southeast Asia?

2024 will be the year of the squeeze.

This squeeze is a result of the world converging on Southeast Asian markets and the macroeconomic externalities impacting the ability of startups to earn and raise money. We see this squeeze coming in a few forms (explained in as much brevity as we could muster): 

1. The Monetization Squeeze: Budgets and wallets are expected to only get tighter in the coming year, putting pressure especially on two-sided platforms operating with thin margins. This will force both startups and investors to revisit TAM assumptions — and perhaps even strongly held beliefs (like Indonesia is big enough) may be broken for certain business models.

It will also incentivize startups, especially in Southeast Asia, to think more globally, perhaps finding synergies in emerging market regions like LatAm or MENA? On a related note, we share our thoughts on the increase in Gulf investments in SEA in this Financial Times article.

2. The Competition Squeeze: In a SWITCH press briefing for VCs in Singapore, Yinglan spoke about the next wave of Chinese tech entrepreneurship coming to Southeast Asia, posing greater operational (and thus cost) competition sharpened by the Chinese work ethic, especially in ecommerce (Shein and TikTok are progenitors) and D2C brands. 

3. The Dry Powder Squeeze: Even with capital yet to be deployed by regional funds, these are likely to converge into a few early-stage outliers, growth-stage category leaders in so-called “king-making” rounds, and repeat founders as investors flock to intuitively “safer” destinations. This means higher barriers to entry in funding markets than ever before.

Read more about #s 4 to 7 on Insignia Business Review.

A decade ago, Cowboy Ventures’ Aileen Lee coined the term “unicorn” as part of a larger effort to learn what it will take to drive outlier returns (the top 0.07% of software and internet companies in the prior decade). The market has since gamified this “anomaly” on top of increasing demand, but fundamentally, unicorn creation is rare — much less unicorns that endure into generational companies.

Such is the nature of venture capital. So as the year of the squeeze is upon us, perhaps contrary to popular opinion, now more than ever before the truly rare, enduring unicorns will emerge in Southeast Asia from these onslaught of external pressures.