Asian startup ecosystem he hasn’t been doing well in the last few years, as all the pieces from geopolitics to higher rates of interest influences investors’ willingness to write down checks. Many enterprise capital firms have left China, which was once the largest enterprise capital market on the continent. While the variety of fundraising rounds hasn’t dropped significantly, those rounds have decreased — investors aren’t spending as much as they used to.
Still, some investors are optimistic about the continent’s potential, developing global strategies in search of investments that generate returns on funds.
Venture firm Antler appears to be one such investor. It began $285 million emerging growth fundcalled Antler Elevate Fund in June 2023 and is investing from $1 million to $10 million in Series A rounds and later globally. Founded in 2018 in Singapore, Antler has grown its investments and networks around the world, expanding its reach into the United States, Europe and Africa, and throughout Asia, including Vietnam, Japan and Malaysia.
TechCrunch sat down with Antler founder and CEO Magnus Grimeland at an event in Seoul to speak about startup trends in Asia, the opportunities the company sees in the region and the way it approaches investment as artificial intelligence becomes more essential.
Asian markets are growing rapidly
Funding may have been cut, but Grimeland strongly believes in Asia’s innovation potential. “One thing that all of Asia has in common is that all ecosystems are developing very rapidly. In Asia, we have seen the fastest growth in technological innovation the world has ever seen,” Grimeland said. “I do not think anyone has seen this type of growth. This is Southeast Asia and a lot of unicorns are made there.
Antler expects the Asian startup ecosystem to grow significantly over the next few years. “This is probably the biggest opportunity in the world right now in terms of growth,” Grimeland said. “If you look at the base now and where it’ll be in 10 years, you know the potential is 10 to twenty times greater. In terms of activity levels and value creation in Southeast Asia, we have seen an almost 60-fold increase over the last decade.
Antler is attempting to focus on ecosystems that it believes it may well have a huge impact on and where startups are growing in a short time, Grimeland said. He noted that Indonesia offers a large market for building successful global firms, while Vietnam has highly expert professionals and established international firms, especially in the gaming industry. Grimeland also noted that Malaysia is an excellent hub, with significant activity in the early stages and sufficient funding in the later stages.
Grimeland said Japan used to have a smaller technology ecosystem in comparison with its potential, but the country appears to be committed to establishing one of the largest technology ecosystems in the world, and the Japanese government is actively supporting it. And Korea’s significant presence in industries similar to shipping, automotive, fashion and beauty shows its fame for quality and influence, he said.
He also highlighted India as one other country that has done an impressive job in building its digital infrastructure and digital commerce platforms. “India has really great research and advanced technology. We are investing across the value chain in India, but I think this has really changed the opportunities there over the last few years. It has become so much bigger that now you can actually reach the entire population of 1.4 billion people,” Grimeland said.
“Also, for the first time outside the services industry, you can see great technology companies being created in India, which is very exciting. With this digital infrastructure, not only can you reach a vast and rapidly growing population, but you can also build great companies for the rest of the world.”
He added that Antler also desires to support firms in China.
Grimeland noted that Asia is home to some of the world’s leading firms in fields similar to battery technology and chip manufacturing, and he expects many Asian firms to enter the global market. “I consider you have already seen this trend in consumer electronics and advanced technologies similar to deep tech, and it’ll even be visible in B2B, SaaS and B2C. The next Google, Facebook or Apple could also be created here, in Asia,” he said.
Grimeland says Asia’s tech startup environment is slowly recovering from the financial winter. “Transaction related activity [in the U.S.] things are picking up very quickly and we are starting to see the same in the rest of the world. Things are definitely picking up pace in Asia now.”
He added that the situation may not return to the state of 2021, but he described this 12 months as unusual. “As long as you support great founders who are building companies that make sense, they will be able to raise the capital they need,” Grimeland said.
Investing in the age of AI madness
Grimeland believes that artificial intelligence represents one of the biggest opportunities for startups today.
“[The advent of AI] is the greatest opportunity of our generation. […] New technological changes create crazy opportunities, and the opportunities created by each technological change are higher than the last. This is probably the biggest opportunity the world has ever seen for startups. So this is a huge opportunity; Therefore, it is essential to think rigorously about how we invest and allocate capital.”
He sees three primary areas of AI potential: infrastructure, applications and enablers. “OpenAI, for example, is a general infrastructure: data centers and API layers create infrastructure that other people can build on. Now you’re probably going to see another trillion-dollar company in this infrastructure segment and the application layer, which is what developers build on top of the infrastructure,” Grimeland said.