E-104: Tech Titans Bet Big On Southeast Asia

Even though venture capital and private equity firms remain super cautious in Southeast Asia, global tech giants can’t keep their eyes off the region.?

For context, regional startups raised US$7.8 billion in equity financing in 2023. But, for the first eight months of this year, this figure stood at just about US$3.2 billion, per data collated by DealStreetAsia.?

Things are completely different when it comes to bigwigs like Google and Microsoft.

In 2024, big tech firms have announced pouring nearly US$17 billion into Southeast Asia, albeit over the next few years.?

Just last week, Google announced it would invest US$1 billion in Thailand to build a data center and cloud region. It also held the ground-breaking ceremony for its US$2 billion Malaysian data center and cloud region that it unveiled earlier in June.?

That’s US$3 billion in investments—to capture the growing cloud demand and boost artificial intelligence adoption in Southeast Asia.

Microsoft is another tech titan betting big on Southeast Asia.?

A few months ago, the company said it would invest US$1.7 billion in Indonesia and US$2.2 billion in Malaysia over the next four years to build new cloud and AI infrastructure.?

Well, Microsoft also proposed to set up its first regional data center in Thailand, though it hasn’t disclosed the investment in the country.

Google and Microsoft aren’t the only ones tapping Southeast Asia to build data centers.?

American computer technology company Oracle will invest more than US$6.5 billion in opening a public cloud region in Malaysia, to meet the rapidly growing demand for its AI and cloud services in the country.?

That’s more than what Google and Microsoft are investing, put together.?

Zooming beyond data centers, Samsung just made headlines for its proposed plan to invest US$1.8 billion in Vietnam to build a factory to produce OLED displays for automobiles and tech equipment.

Meanwhile, Elon Musk’s SpaceX has proposed investing US$1.5 billion in Vietnam for its Starlink satellite service in the country. Starlink, a subsidiary of SpaceX, uses thousands of satellites to provide internet access. For this plan to go through, Vietnam will have domestic firms coordinate with SpaceX to complete investment procedures.

In a nutshell, Malaysia, Indonesia, Vietnam, and even Thailand are now on the radar of tech behemoths.?

These companies either have an intense desire to capture regional companies for their AI and cloud services or they see the region’s untapped manufacturing capacity.

This attention surely sends a positive signal across the Southeast Asian tech ecosystem.

Buzzing Deals

? Indonesian automotive platform Broom landed US$25 million in a Series A extension round led by Openspace. Founded in 2021, Broom is a used vehicle digital platform for auto dealers and end users. Other backers included AC Ventures, Quona Capital, MUFG Innovation Partners, and PKSHA Capital. On top of this funding, Broom has secured credit facilities from institutions like Komunal, Funding Societies Capital, PT Modalku Finansial Indonesia, Alami, Koinworks, Helicap, and DBS Indonesia. The startup plans to use the fresh money to expand further in Indonesia, form strategic partnerships, and invest in building its team.

? Indonesian insurtech startup Rey raised US$3.5 million in additional seed funding from CyberAgent Capital, Arthazen Capital, and PT Gametraco Tunggal. Existing investors including Trans Pacific Technology Fund, Genesia Ventures, and Reycom Document Solusi also chipped in. Started in 2021, Rey is a health and life insurance provider, which also offers an integrated digital healthcare ecosystem. Aside from covering the inpatient and outpatient treatments, it lets users book consultations on its app and helps them build healthy habits. Before this, they had raised a US$4.2 million seed in 2022. With the new money, the company will further build its end-to-end fully digital health service.

? Singaporean AI startup TeamSolve completed a US$2.5 million seed round anchored by SGInnovate and Burnt Island Ventures. Founded in 2022, TeamSolve has a generative AI-powered platform for industrial operators, which provides access to crucial workforce knowledge and expertise digitally to frontline workers for safer and more efficient problem-solving. It does so by ingesting historical asset and incident data, along with expert notes, troubleshooting guides, and operating procedures for industries like power, energy, water, and buildings.?

? Malaysian agritech startup Qarbotech bagged US$1.5 million in an extended seed funding round from 500 Global, Better Bite Ventures, ID Capital, EQT Foundation, and Epic Angels Limited. Qarbotech develops a biocompatible solution called QarboGrow that increases the photosynthesis rate of leafy plants. This product boosts crop yields, reduces fertilizer use, and promotes sustainable agriculture. The company will use fresh funds to expand its operations in Indonesia, Thailand, and Vietnam, and to set up a new manufacturing facility in Malaysia.

? South Korean startup Wemeet Mobility recently secured KRW 20 billion (or US$15.05 million) in a Series B funding round led by Hankook Precision Works, with the participation of Kiwoom Investment and Bass Investment. Wemeet Mobility operates an AI-based route optimization engine and real-time dispatch control solution called Roouty. Wemeet Mobility serves over 100 corporate clients currently. It plans to use the fresh funds to enhance its product development and strengthen its market position.?

? Nio China, a subsidiary of Shanghai-based EV manufacturer Nio received about US$471 million in funding from a consortium of investors supported by the Hefei government in China’s Anhui province. Its backers include Hefei Jianheng New Energy Automobile Investment Fund Partnership, Anhui Provincial Emerging Industry Investment, and CS Capital. This comes nine months after Nio raised US$2.2 billion from CYVN Holdings, a firm owned by Abu Dhabi’s government. The company will use the fresh money to develop its products and technologies further.?

? Singapore-based business management services platform Sleek raised US$5 million in debt financing led by Fintech Nation Fund. Founded in 2017, Sleek helps small and medium businesses with company registration,? accounting, payroll, and tax compliance, and provides them financial services. It will use the funds for its operations in Singapore, Hong Kong, Australia, and the UK.

What Stood Out This Week

? Singapore’s Azalea Investment Management has successfully closed two new Altrium funds, exceeding their initial targets of US$200 million. The Altrium Co-Invest Fund I (ACF I) raked in US$268 million, while the Altrium Growth Fund I (AGF I) secured US$212 million from investors across Asia and the Middle East. While ACF I focuses on co-investing with PEs in resilient companies, AGF I provides access to top-tier early-stage growth funds. This latest success adds to Azalea's growing Altrium platform, which now manages over US$2 billion in assets.

? Singapore's Temasek has set aside S$100 million (US$77.67 million) under Concessional Capital for Climate Action for flexible and accessible financing for climate-focused initiatives. This concessional capital aims to overcome market barriers and attract further investment in projects that might otherwise struggle to secure funding. Funded by Temasek's community gift program, which utilizes a portion of its returns for philanthropic purposes, this initiative is aimed at driving sustainable outcomes and achieving climate goals.

? Malaysia plans to draft a new national cloud policy and regulations for ethical AI use, as the country aims to position itself as a hub for generative AI. This comes at a time when global tech giants are investing in building cloud and AI infrastructure in the country. The national cloud policy will prioritize public service innovation, economic growth, data security, and digital inclusivity. Meanwhile, a new national AI office will oversee the development of the AI action plan and ethical guidelines within the next year.?

? Deliveroo is closing its two remaining cloud kitchen locations in Singapore due to rising operating costs and a slowdown in demand from restaurant partners. The food delivery company, which operated Deliveroo Editions sites to provide kitchen space for delivery-only meals, has seen a decline in business since the end of the pandemic restrictions. With a renewed emphasis on cost reduction and consolidation, Deliveroo will now focus on its core food delivery business in Singapore, supporting its restaurant partners through delivery and pickup services.

And that’s the wrap for this edition of #ICYMI, our weekly curated highlights from the Asian tech ecosystem. Subscribe to receive it every Thursday and stay updated on the noteworthy tech developments you might have missed during the week. Like this newsletter? Share it with your friends and colleagues here.