Indonesia rises through the ranks
Indonesia is rising.?
It’s a fact rather than an opinion. Southeast Asia’s biggest economy with US$1.4 trillion in GDP grew 5.3% last year, hitting a 9-year high.
The country is gearing toward 4.8% growth this year, which is far better than the US and Europe, which are hoping for only one thing—a soft landing, where the inflation comes down without pushing these countries into a recession.?
Speaking of inflation, Indonesia’s central bank kept the interest rates unchanged this week at 5.75% for the third consecutive month. Because inflation seems to be cooling in the country and the central bank expects it to further fall to the 2-4% target range by September. All this while the growth remains intact.?
Then there is something more interesting brewing. Gen Z is fast becoming the prime driver of the economy.?
Gen Z—those between the ages of 11 and 26—make up 28% of the total population in Indonesia. This makes them the largest generation, followed by millennials, which constitute 26% of the Indonesian population. A portion of Gen Z has already begun to become a part of the country’s workforce, and by 2030, everyone in this generation will be of working age.?
During the pandemic years, millennials and Gen Z were the two generations that shopped the most on ecommerce platforms in Indonesia, a Tech in Asia report notes. That’s a prelude to what’s to come—Gen Z will be the prime spenders over the next decade.?
What makes this digitally native generation different is their love for authenticity and uniqueness. And their openness to experiment and explore. By extension, this generation will drive Indonesia’s startup ecosystem—currently ranked 2nd in Southeast Asia and 38th worldwide—to new heights.?
On that note let’s dive into this week’s recap.
Doing Right by Climate
Singapore is doing its bit to save the earth. This week, the city-state launched a new initiative to support Asia’s transition to a low-carbon economy with financing.
The Monetary Authority of Singapore (MAS), Singapore’s central bank, has unveiled the Finance for Net Zero (FiNZ) Action Plan, which entails transition finance to fund projects that reduce carbon emissions in sectors like power generation, buildings, and transportation.?
In 2019,?MAS launched a similar endeavor—Green Finance Action Plan —focused on financing low-carbon and climate-resilient development. FiNZ is a step up in the same direction. With this new development, MAS believes Singapore will play a key role in accelerating Asia’s net-zero transition and decarbonization activities. Well, that’s the hope.?
On the private side, enterprises as well as investors continue to pump money into the EV space.
Chinese automaker Changan Auto is investing US$285 million in a Thai EV facility to produce 100,000 electric vehicles annually, with the aim to sell them in Southeast Asia, Australia, and South Africa. Meanwhile, Vietnamese electric vehicle maker VinFast has received a fresh round of funding pledges worth US$2.5 billion for its future development.
Singaporean battery-as-a-service startup Oyika has bagged a US$10.8 million series B round from Banpu Next, a subsidiary of Thai energy solutions firm Banpu Infinergy,?and Yinson Venture Capital. The startup, which develops battery charging and swapping infrastructure for EVs, now plans to widen its network of swap stations and onboard more clients.?
Elsewhere, Japanese investment firm Global Brain has written a check for Biome, a local biodiversity monitoring and conservation app. The investment amount was not disclosed. A startup from Kyoto University, Biome is building a platform for environmental conservation leveraging big data on the distribution of organisms worldwide. The company runs an AI platform to identify plant and animal species from images.?
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AI Calling
ChatGPT has unleashed a new phase for AI startups, there is no denying that. More and more startups are coming up with AI bots with superior abilities powered by large language models.?
For instance, Singapore-based Greywing has developed SeaGPT, an AI chatbot designed to assist shipping companies with port communication. And it does what is understood to be the biggest challenge for crew managers—being inundated with emails which makes it ever so daunting to retrieve specific information. Now fleet managers can access necessary port, immigration, and travel information for crew changes by sending a query to SeaGPT via email or Greywing’s platform.
Notably, SeaGPT’s text-based design and the ability to communicate through SMS and WhatsApp allow the chatbot to run even with poor connectivity.?
Another Singapore-based startup, Betterdata, is also riding the AI wave. It is solving a critical problem in the age of AI, using AI.?
By leveraging generative AI, Betterdata creates synthetic datasets that maintain information, accuracy, and impartiality without revealing or destroying the original source. Basically, synthetic data is similar to real-world data minus personal and sensitive information. It enables startups to train their AI models on synthetic data, without having to worry about any risks and compliances. Founded in 2021, the startup has just raised a $1.65 million seed round led by Investible.
Singapore and Australia-based AI startup Cortical Labs this week raised a US$10 million round led by Horizons Ventures. The biological computing startup is doing something unique. It is trying to put live neurons into chips to revolutionize computing. That’s a fancy way to say it is making chips smarter.?
True Global Ventures is going all out to bet on generative AI, so much so that it has changed the entire investment thesis of its current fund. Last June, the VC firm raised US$146 million for its TGV4 Plus Follow On Fund. Initially, it was a blockchain-focused fund, with plans to invest money in the follow-on rounds of TGV4 Plus Fund’s portfolios as well as into late-stage Web3 firms. The VC has recently rebranded its Follow On Fund to Opportunity Fund while shifting its focus to generative AI firms in growth and late stages.
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Money, Money, and More Money
Funding winter is lingering on. Startups are still finding it difficult to raise money. Yet, there is money flowing into the startup ecosystem, thanks to limited partners—who fund VC funds—loosening their purse strings.?
US-based Capria Ventures has hit the first close of its Global South Fund II, which aims to raise US$100 million in total. The fund that will invest in emerging markets has Bill Gates’ Gates Ventures as an anchor investor. The other LPs include Crystal Springs Foundation, OIP Investment Trust, Sall Family Foundation, and Brakeman Family Trust. From this fund, Capria wants to invest in 20-25 early-to-growth stage startups using generative AI across sectors such as agritech, fintech, edtech, health tech, HR tech, logistics, and climate tech. And it’s focus is going to be Southeast Asia, the Middle East, Latin America, and Africa.
Private equity major Carlyle Group has closed its latest Asia-focused buyout fund at US$950 million , as per DealStreet Asia. The fund aims to back fast-growing businesses primarily operating in the technology, business services, health care, consumer, media, and retail industries.
Singapore-headquartered Better Bite Ventures has made four investments under its First Bite program , which invests in alternative protein startups in the Asia Pacific region. Of the four startups, two are Singaporean, and the remaining two are from India and New Zealand.
Meanwhile, Zebox , a global accelerator focused on decarbonizing and optimizing the supply chain has opened its Asia-Pacific hub in Singapore. This would be Zebox’s fifth innovation hub following the ones in Europe, North America, the Caribbean, and West Africa. Its priority sectors include supply chain, logistics, transport, and energy. To date, four-year-old Zebox has aided over 130 early-stage businesses in raising over US$235 million in funding.