The first-ever ASEAN GenAI Startup Report 2024

The first-ever ASEAN GenAI Startup Report 2024 by Founder Institute Vietnam 's partner, GenAI Fund , offers a comprehensive analysis of the generative AI (#GenAI) startup ecosystem in Southeast Asia. Here are the key points and insights from the report:

?? Overview of the ASEAN GenAI Ecosystem:

• Singapore leads with 44% of GenAI startups, followed by Vietnam ???? (27%) and Indonesia (13%). Other countries include Thailand (7%), Malaysia (6%), and the Philippines (3%).
• GenAI startups in ASEAN are predominantly B2B-focused (92%). Key industry sectors include Productivity & Business Solutions (26%), Healthcare & Wellness (13%), and Financial Services (13%).

?? Challenges for GenAI Startups:

• Startups face challenges such as slow enterprise onboarding, difficulties in achieving product-market fit (PMF), cash flow management, competition with Big Tech, and a lack of sales resources.
• Poorly executed Proof of Concepts (POCs) and slow tech onboarding processes also hinder startup growth.
• Cash flow is a significant concern, with 49% of startups bootstrapped or angel-funded and only 16% reporting profitability.

?? Opportunities for GenAI Startups:

• There are opportunities for GenAI startups to develop specialized solutions for niche markets and leverage local expertise to create tailored AI applications.
• Collaborations with Big Tech can be beneficial. Major cloud providers like AWS (67%), Google Cloud Platform (47%), and Microsoft Azure (41%) provide essential infrastructure support.

?? Big Tech’s Role:

• The relationship with Big Tech is complex, as they provide crucial tools for GenAI startups but also pose competitive threats. Foundation model providers like OpenAI (76%) and Anthropic (31%) are widely used by startups, though startups risk being overshadowed as these providers develop more advanced features.

?? ASEAN GenAI Ecosystem Growth:

• The report forecasts strong growth in Vietnam ????, where the GenAI startup count is expected to rise from 27% to 35%, making it an epicenter for GenAI development in the region. Singapore's share of startups is predicted to fall slightly, reflecting faster growth in other countries.
• Indonesia is expected to see a boom in B2C GenAI startups over the next 18 months, leveraging its large population.
• Thailand and Malaysia are projected to grow, with Thailand leading in startup-enterprise go-to-market execution and Malaysia becoming a key AI infrastructure hub.

?? Funding Landscape:

• Despite challenging global funding conditions, there is a rising interest in mergers and acquisitions (M&A) within the region, as well as increased attention from corporate investors.
• 32% of GenAI startups are bootstrapped, and many are becoming more selective about the choice of investors, seeking those who understand AI or can assist with go-to-market strategies.

?? Strategic Recommendations:

• Partnerships and alliances are the most effective channels for acquiring customers, with 74% of startups leveraging them.
• Startups should actively pursue global and regional go-to-market strategies to address larger Total Addressable Markets (TAM), particularly given the limited size of individual ASEAN economies.

In summary, the ASEAN GenAI ecosystem is growing rapidly, particularly in Singapore and Vietnam. While startups face significant challenges, such as competing with Big Tech and navigating enterprise sales, there are substantial opportunities for those that can leverage partnerships and build niche solutions tailored to the region's unique needs.

Download the full report: [ link ]

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