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Essential Tips for Financing your Startup in Southeast Asia

Southeast Asia is a prime location to set up your startup. To acquire capital for turning your idea into a viable business check out these top tips

  • The tech-savvy and young population, ease of establishing and running a business, and low tax rates are factors that attract entrepreneurs and investors from all over the world
  • To acquire capital for turning your idea into a viable business – Check out government programmes; Contact local angel investors; Pitch your idea to venture capital firms; Use incubators
  • Business infrastructure projects can receive funding from the ASEAN Infrastructure Fund (AIF), which to date has committed US$520million to 9 projects
  • Some notable incubators include BlueChilli or Techstars (Singapore), Tunelabs (Malaysia), GnB (Indonesia), ImpactTech (Singapore, Thailand, Japan), Bangkok Bank InnoHub (Thailand), and for ASEAN countries there is Plug and Play, SOW Asia, or The Yield Lab

Southeast Asia is a prime location to set up your startup. The tech-savvy and young population, ease of establishing and running a business, and low tax rates are factors that attract entrepreneurs and investors from all over the world. If you plan to make the most of this trend and startup in Southeast Asia, you must finance your venture. Use the tips below, to acquire capital for turning your idea into a viable business:

Check out government programmes

The Majority of governments in Southeast Asia understand the importance of backing up startups so provide different types of programmes that provide businesses capital. There are business loans, equity financing, and cash grants available. Ensure, your business meets the requirements in these schemes to get funding. 

Businesses working on government-approved projects in the 10 countries within the Association of Southeast Asian Nations (ASEAN) are also eligible for funding from the Asian Development Bank (ADB). For example, business infrastructure projects can receive funding from the ASEAN Infrastructure Fund (AIF), which to date has committed US$520million to 9 projects.  

Contact local angel investors

Several cities in Southeast Asia are home to several high net-worth individuals. According to Forbes the Asian-pacific region had 778 billionaires as of 2020, and many more millionaires. Many of these people are interested in providing financial support to startups, especially companies that can repay high dividends or create social entrepreneurship and development. In some countries, the government give startups a list of angel investors. The advantage of getting this type of investment is that you get access to significant amounts of capital. However, it is quite challenging to convince these individuals to invest in your startup. You need to have a solid business plan and financial forecasts to show them what they gain by providing you with their capital.

Pitch your idea to venture capital firms

Venture capital companies in Southeast Asia tend to focus on the financial aspects of a startup. In other words, they want to see the rate at which you can scale the business to become profitable. Entrepreneurs need to have a revenue model to convince these organisations that their startup can create a positive cash flow within a short period of operating. On top of that, there is no standard process for approaching and securing funds from venture capital firms. The time it takes depends on the investor handling your business case, so make sure the startup has enough finance to operate during this waiting time. 

Use incubators

Run by public and private entities, incubators are programs designed to help startups succeed in Southeast Asia. They provide excellent financial management services along with easy access to loans. Incubators make it easier for startups to raise capital, thanks to their programmes and partnerships with other organisations. Some notable incubators include BlueChilli or Techstars (Singapore), Tunelabs (Malaysia), GnB (Indonesia), ImpactTech (Singapore, Thailand, Japan), Bangkok Bank InnoHub (Thailand), and for ASEAN countries there is Plug and Play, SOW Asia, or The Yield Lab. 

Southeast Asia is a hot market for startup financing, which you can use to your advantage with the tips highlighted above. As an entrepreneur, setting up your business in this region can be the best decision you can make!

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