In a previous post, SME Magazine was able to secure an interview with Craig Dixon, Co-Founder of Accelerating Asia, regarding the increasing viability of the Southeast Asian region as a venture capital hub. While the SEA region is definitely picking up steam as a hotbed for startups and investment, that does not mean that founding a company in the region is any easier.

Today, we bring to you the insight shared by several SMEs under Accelerating Asia’s cohort of startups regarding the challenges they face in founding a company and how they overcame them.

What is your view on the SEA region as a start-up location? Is it easy or hard to start a business in these areas? 

Hazel Wei, Co-Founder Joni.AI:
It is easy to start a business in Singapore because we have a strong startup support system. The Singapore market is also relatively open to trying out new products made by Startups.

I think that it is an exciting time to explore potential digital disruption for SEA Education. For one, there is a lot of commercial opportunity in designing mobile-first solutions for our Gen Z youths who are increasingly choosing to consume digital content on phones rather than on desktops. However, what excites our team the most is the prospect of deploying technology in developing regions to bridge the gap between education resource constraints and the need to adequately prepare the next generation of youths for an increasingly competitive and knowledge-intensive global economy.

Fahad Ifaz, Co-Founder and CEO, iFarmer:
South-East Asia and South Asia is an excellent location for startups. South Asia consists of multiple countries with different development stages and cultures. Each country comes with its own set of consumer behaviours and local customer needs, in which there still exists various problems to be solved.

Given the sheer collective population size of SEA and SA, dominated by countries like India, Bangladesh, China and Indonesia and its increasing affluence, there has been a significant paradigm shift. The US and Europe are no longer the epicentres of internet usage, with almost half of all global usage, currently out of Asia. This number has only gotten more prominent over the years and will continue to grow.

Some of the fastest-growing economies of the world are in South Asia and South-East Asia. Countries like Bangladesh, Myanmar and Indonesia have been experiencing rapid growth in their economy, which means there will be demand from the people for new, and better services and products. More importantly, people are willing to pay for these services.

Okka Phyo Maung, Co-Founder and CMO, RecyGlo:
It is the best time to start a startup due to the funding opportunities and current gaps in the market. We are based in Singapore, which is the financial capital of Southeast Asia and one of the most accessible places to raise funds in the region. I witnessed many startups raise funds in a brief period of time. It is also the headquarters of many multinational companies, making it an ideal place to meet potential clients and reach out to them to discuss different opportunities in Southeast Asian markets. We also have the market presence in Myanmar and Malaysia and are looking at expanding across the region to Indonesia and Cambodia.

What are some of the major challenges you have faced when starting a business?

Hazel Wei, Co-Founder Joni.AI:
In education, it is challenging to find the intricate balance between all stakeholders, and we believe that a truly successful education venture is one that manages all stakeholders well. We have students as consumers, parents as customers and teachers as legislators. The product must be hip and beautiful with just enough elements of gamification to keep students hooked and happy without diluting its educational value. It must be conservative enough to earn the trust of traditionally educated parents and pedagogically consistent with attaining the approval of teachers which can directly drive demand from parents.

Fahad Ifaz, Co-Founder and CEO, iFarmer:
There’s still a range of challenges; for example, regulatory issues are always a challenge in this region, especially in the areas of fintech, health tech, and so on. The regulators are trying to learn and keep up with the innovative business models, but at the same time, they have to deal with these issues, with limited resources and knowledge. The second challenge is access to funding. Other than a few countries like Singapore, China, India and now increasingly in Indonesia, there has not been much funding injected into the other Asian countries, especially for early-stage and growth-stage startups.

Okka Phyo Maung, Co-Founder and CMO, RecyGlo:
Fundraising in Myanmar can be challenging; the ecosystem is not as mature as Singapore, Indonesia or Vietnam. So the option is for us to raise capital abroad through different networks and from participation in accelerators. This was not our original intention joining the accelerator, but it is one of the best ways to raise the fund, to get support, to connect with clients and to penetrate the market. We are changing our position from a Myanmar startup to a regional startup that has significant revenue generation in markets such as in Indonesia, Malaysia, Singapore, etc.

How did your company manage to overcome said challenges? Or what is being done to tackle these hurdles?

Hazel Wei, Co-Founder Joni.AI:
We studied other EdTech players to distillate their successes and failures and found that it is imperative to have a strong foothold across pedagogy, engineering and business. As an early-stage company, Joni focuses on Human Resources to build a well-balanced, motivated team of people from backgrounds of Public Education, Software engineering, Data Science, Business, Finance and Game Design.

At Joni.AI, our team worked together to cover each others’ blind spots and built a mobile assessment platform driven by sound pedagogy and power analytics. It is built on the backbone of scalable and reliable tech infrastructure with a learning experience that delights our students, parents, teachers.

Fahad Ifaz, Co-Founder and CEO, iFarmer:
Being a fintech company, iFarmer operates in a highly regulated vertical and economy such as Bangladesh, we’ve been closely working with the Government agencies and Central Bank to support them in understanding the business model and the product. It is really important to create such awareness amongst the regulators and be open about the business.

For fundraising, we are in touch with Singapore and Indonesia based VCs. Recently we received S$100,000 investment from Accelerating Asia. Accelerator programs such as Accelerating Asia can also help us a lot to create a positive image for investors looking into a country like Bangladesh with potential market size of 170 million!

Okka Phyo Maung, Co-Founder and CMO, RecyGlo:
It was very challenging, especially in Myanmar, I think if the idea had been in the USA or Europe, people would have understood it much better and it would have been easier to raise capital. However, we started in the frontier market because it was the best place where we can test our idea and product/market fit.

In terms of the challenges we faced, they included HR and capital raising. The human capital in Myanmar is not job-ready. We needed to go through a training program to teach, and train and high employee turnover are standard in the market. Job hopping is natural in Myanmar. We needed to curate unique strategies to attract and maintain good people.

Grit and persistence are the keys to overcome challenges. We were able to recruit outstanding talent within our circles and those who share the same passion as we do for the environment. The team makes the impossible possible.

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