The explosive growth of the digital economy, with more than 300 million internet users across the region, has fostered the growth of six unicorns, companies that have reached a valuation above USD 1 billion. The unicorn startups in Southeast Asia are becoming regional and global leaders in respective fields, including ride-hailing, e-commerce, digital entertainment, and online travel.
The digital economy in Southeast Asia is expected to worth nearly USD 200 billion by 2025 with almost 3.8 billion new users online every month. With an increasingly tech-savvy younger population, the internet population in Southeast Asia is expected to grow from 260 million to 480 million between 2015 and 2020.
Southeast Asia is a home to several emerging market countries, which make the region as one of the most dynamic and an important driver of the world’s economic growth. The region is currently experiencing a boom in the technology sector.
Southeast Asia ride hailing market size reached USD 7.7 billion and is predicted to reach USD 28 billion by 2025. Ride hailing fields hit 35 million active users and around 8 million daily rides in Southeast Asia throughout 2018. The players have been focussing on acquiring users and expanding geographically, with the dominance of two regions’ unicorns, Go-Jek and Grab.
Headquartered in Jakarta, Go-Jek was founded in 2010 and has become the leader of ride-hailing startups in Indonesia. Not only Go-Jek provides ride services, it is considered a super app which also provides digital payment, food order, shopping, local delivery, and even massage services. The company is now developing strategy to grow into neighboring countries, including Vietnam, Thailand, Singapore, and the Philippines with around USD 500 million investment. Go-Jek has raised approximately USD 1.5 billion in total and currently valued at USD 5 billion.
Another unicorns in ride-hailing fields is Grab, that was founded in 2012 and has become the leader of ride-hailing transport services in Southeast Asia alongside with Go-Jek. Started out in Kuala Lumpur, Grab hit USD 6 billion valuation in 2018 and has branched out into services for private cars, motorcycle taxis, carpooling and goods delivery. Currently Grab offers services in 168 cities in eight Southeast Asian countries.
The digital economy of Southeast Asia is one of the fastest growing in the world with a market size of 630 million people and 53% internet penetration rate. The region has developed a highly competitive online shopping market, making e-commerce the perfect choice for the millennial consumer base in the region. Convenience of use, wider product selection, and increased transaction security are among the primacy of e-commerce that is expected to grow by 261% between 2016-2021.
Lazada has been a major player of online shopping and selling in Southeast Asia since its beginning in 2012. The company is based in Singapore, founded by Rocket Internet, and has launched in six Southeast Asian countries with million of users. Within two years of the launch of Lazada’s website, the company managed to gain some major investments, such as USD 40 million from Swedish retailer Kinnevik and USD 26 million from Germain private equity firm. With the valuation of USD 7 billion, Tokopedia becomes another Indonesia’s most valuable unicorns for e-commerce platform. In August 2018, the company had reached 93% of sub-districts in Indonesia and now has around 4 million merchants that keep growing. Tokopedia has also launched Mitra Tokopedia that allows small business owners to sell digital products on the app.
PC and mobile games become a hot source of entertainment, accelerated by increased connectivity and improved data speeds. Digital entertainment sector is predicted to see 145% growth between 2016-2021. On average, Southeast Asian gamers spend more hours on mobile platforms than PC, and more willing to spend money during gameplay.
Sea, a gaming platform from Singapore launched in 2009, embodies vision to connect online game players through Garena, connecting buyers and sellers through Shopee and enabling payment access through AirPay. Through Garena platform, users if Sea can access popular mobile and PC online games that are curated and localized for seven Southeast Asian markets, such as League of Legends, Arena of Valor, FIFA Online 3, Blade & Soul, and Point Blank.
The Southeast Asia region is renowned for its tourism industry, with rising middle class is booking increasingly more hotel reservations and holiday flights online. The total online travel market of Southeast Asia is estimated to see a 90% increase until 2021.
Traveloka was founded in 2012 and the fourth Indonesian startup to become unicorn. It offers airline ticketing and hotel booking services and currently operates in Indonesia, Malaysia, the Philippines, Thailand, Singapore and Vietnam. Traveloka received funding injections, including Expedia, East Ventures, Hillhouse Capital Group, JD.com, and Sequoia Capital, with the total USD 500 million. The company also launched the its latest service, PayLater, that allows flexible payment instalments and low interest rates for its users.