Southeast Asia’s digital financial system is turning into a hotbed for international buyers. Whereas e-commerce and fintech stay the primary drivers of funding within the area, international enterprise capital companies are additionally more and more eyeing native initiatives 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 principally concentrating on Southeast Asia as the subsequent area for its investments.
The agency believes that Taiwan, with its mature R&D hubs, and Southeast Asia, with its burgeoning web financial system, can create synergies to profit one another, based on Jessica Liu, a associate at AppWorks.
Furthermore, Liu mentioned that AppWorks has been working carefully to help the New Southbound Policy, a mission launched by the Taiwanese administration in 2016 to advertise collaborations between Taiwan and Southeast Asia in science and know-how. “We associate with the authorities in varied actions, from investments to visa functions. Our funds come from varied buyers,” Liu informed KrASIA.
The agency controls three enterprise capital funds, managing funds totaling USD 212 million. AppWorks makes about 20 offers annually, from seed to Sequence C rounds. Liu mentioned the standard 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 in search of alternatives within the area’s rising blockchain ecosystem, Liu mentioned. “I received my first Bitcoin in 2014, and that’s how I realized about blockchain. AppWorks began to have a look at blockchain initiatives within the area in 2017, and to date, we’ve got invested in about 20 startups,” she added.
KrASIA not too long ago 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): Apart from 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 offers. We’ve an accelerator and a robust neighborhood of founders, buyers, and mentors. We join them with one another. Founders can all the time search help once they wish to develop into a brand new market or when they should focus on new alternatives with fellow entrepreneurs.
Kr: What’s your view on blockchain potential in Southeast Asia?
JL: Previously, there have been only a few startups engaged on blockchain initiatives, they usually largely got here from Singapore. However not too long ago, there was a lot of curiosity in blockchain, pushed by a bull market in cryptocurrency, GameFi, and NFTs all over the world.
The benefit of blockchain is that it has been a world enterprise since day one. Corporations wish to attain completely different customers all over the world 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 completely different from another 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 most likely pivot the enterprise inside two to a few months if the present mannequin doesn’t work.
Investing in blockchain corporations is basically fairly just like different sectors. The principle distinction is the funding automobile. Whereas we often put money into an organization’s fairness, with blockchain initiatives, we additionally put money into tokens. From a founder’s perspective, it’s simpler to boost cash [through tokens] these days. Nevertheless, this offers founders restricted room to vary their enterprise mannequin as a result of buyers often wish to put money into a particular blockchain mission.
Kr: What kind of blockchain initiatives are extra in demand within the area? What’s one mission that you just take into account will do effectively?
JL: Each market has completely different alternatives and calls for. Every nation is experiencing a distinct evolution within the blockchain and crypto world. For instance, in Indonesia, there are a number of exchanges as a result of curiosity in crypto funding and buying and selling has been rising up to now few years. In Vietnam, there’s a number of 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, attempting to copy 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 completely 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 widespread as different social media websites within the area. Additionally, it could take extra time for a market to undertake completely different sorts of blockchain functions. For instance, whereas NFT video games are widespread in Vietnam, we don’t see many initiatives in decentralized finance there in the intervening time. I feel we’ll see progress in Southeast Asia over the subsequent 12 to 18 months.
The crypto world has ups and downs, however each cycle attracts a brand new person base. I consider this hype, or what some folks would name a “bubble” round crypto and blockchain, will proceed and increase the adoption of this tech in the long term.