Southeast Asia’s digital financial system is changing into a hotbed for international traders. Whereas e-commerce and fintech stay the primary drivers of funding within the area, international enterprise capital corporations are additionally more and more eyeing native tasks 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 especially 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 learn one another, based on Jessica Liu, a accomplice at AppWorks.
Furthermore, Liu mentioned that AppWorks has been working carefully to assist the New Southbound Policy, a mission launched by the Taiwanese administration in 2016 to advertise collaborations between Taiwan and Southeast Asia in science and expertise. “We accomplice with the authorities in numerous actions, from investments to visa purposes. Our funds come from numerous traders,” Liu informed KrASIA.
The agency controls three enterprise capital funds, managing funds totaling USD 212 million. AppWorks makes about 20 offers every year, from seed to Collection C rounds. Liu mentioned the same old ticket measurement for investments ranges from USD 200,000 to USD 15 million per deal. A few of AppWorks’ backed corporations in Southeast Asia embrace Carousell, Lalamove, and ShopBack.
The agency is presently searching for alternatives within the area’s rising blockchain ecosystem, Liu mentioned. “I bought my first Bitcoin in 2014, and that’s how I realized about blockchain. AppWorks began to have a look at blockchain tasks within the area in 2017, and to date, now we have invested in about 20 startups,” she added.
KrASIA lately 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): Moreover capital funding, what different assist 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 assist its rising tech trade. This is a bonus that AppWorks gives. We now have an accelerator and a powerful group of founders, traders, and mentors. We join them with one another. Founders can all the time search assist once they need to develop into a brand new market or when they should talk about new alternatives with fellow entrepreneurs.
Kr: What’s your view on blockchain potential in Southeast Asia?
JL: Up to now, there have been only a few startups engaged on blockchain tasks, they usually largely got here from Singapore. However lately, there was plenty 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 worldwide enterprise since day one. Corporations need to attain totally different customers all over the world through the use of international platforms. So whether or not you’re in Taipei, Jakarta, or Washington, everybody has the identical place to begin within the blockchain house.
Kr: What’s your funding thesis? Is investing in blockchain totally different from some other 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 in all probability pivot the enterprise inside two to 3 months if the present mannequin doesn’t work.
Investing in blockchain corporations is basically fairly much like different sectors. The principle distinction is the funding car. Whereas we often spend money on an organization’s fairness, with blockchain tasks, we additionally spend money on tokens. From a founder’s perspective, it’s simpler to lift cash [through tokens] these days. Nevertheless, this provides founders restricted room to vary their enterprise mannequin as a result of traders often need to spend money on a particular blockchain mission.
Kr: What kind of blockchain tasks are extra in demand within the area? What’s one mission that you simply think about will do effectively?
JL: Each market has totally different alternatives and calls for. Every nation is experiencing a distinct evolution within the blockchain and crypto world. For instance, in Indonesia, there are quite a lot of exchanges as a result of curiosity in crypto funding and buying and selling has been growing previously few years. In Vietnam, there’s quite a lot 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, making an attempt 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 totally 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 common as different social media websites within the area. Additionally, it could take extra time for a market to undertake totally different sorts of blockchain purposes. For instance, whereas NFT video games are common in Vietnam, we don’t see many tasks in decentralized finance there for the time being. 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 consumer base. I imagine this hype, or what some folks would name a “bubble” round crypto and blockchain, will proceed and enhance the adoption of this tech in the long term.