For years, becoming a
Venture capitalists and technology chieftains converged in Singapore in recent weeks to hobnob over a number of high-profile annual conferences, marking the city-state's grand
"It's cockroach time -- do whatever it takes to survive," Tessa Wijaya, co-founder of Xendit, a digital payments firm
In the past several years, Southeast Asia attracted abundant capital from investors eager to bet on one of the fastest-growing internet economies. Perpetually growing teams was the norm at richly funded companies and for many young leaders and staff, this was the only environment they've ever known.
Now the startup ecosystem is facing
"Cash is not only king, it's king, queen and everything else," Raj Ganguly, who started B Capital Group with Facebook co-founder Eduardo Saverin, said at
That sentiment was echoed by Jenny Lee, a managing partner of GGV Capital and one of the most sought-after figures who spoke at five conferences, including
"In my 22 years as an investor, this is probably the most complex environment globally," Lee said at the
Her venture capital firm is advising its portfolio companies to have enough cash to stay afloat for 36 months without having to raise additional funds. About 80% of them are now in that bucket, said Lee, who launched GGV's first office in China in 2005 and now leads the firm's US fundraising activities.
After reaching sky-high valuations, tech companies the world over have seen the worst year of their lives amid surging inflation and interest rate hikes. Many are cutting jobs and shutting parts of their operations to shore up balance sheets ahead of a
In Southeast Asia,
Grab's first investor day coincided with Singapore's Formula One race week at the turn of the month, with former Google Chief Executive Officer Eric Schmidt and General Atlantic Vice Chairman Ajay Banga among some of the 90,000 delegates in town. Grab's top executives sought to reassure shareholders that it's adjusting to a downturn and speeding up efforts to reverse years of losses.
Shailendra Singh, managing director at Sequoia Capital India, said founders shouldn't dread raising funds at a lower valuation.
"Down rounds are like your 10th grade math exam: It might increase your anxiety at that point in time, but in the long term it doesn't matter," Singh said. "If and when you list, you will face market fluctuations all the time."
Founders who've been through previous cycles remained upbeat about the prospects for companies with proven business models.
Julian Tan, the founder of a startup whose app FastGig matches employers with part-time job seekers, said he hasn't had problems to raise funds this year and got calls from investors looking for sustainable businesses while trying to tackle social issues. He said Southeast Asia has so far had few services for manual and semi-skilled employees, which make up the vast majority of the working population.
"Not-so-good startups have been filtered out. Now is the time for real startups to shine, go out and raise from value investors," said
As in previous downturns, efficiency is emerging as a key focus.
"This was a word that wasn't used for years," B Capital's Ganguly said. "It was always about growth, growth, growth. Now we talk a lot about efficiency."
Patrick Cao, president of Indonesia's biggest internet company GoTo, said his firm will focus on reducing subsidies and streamlining operational expenses while offering services that merchant partners can monetize further. "We've accelerated our break-even targets," he said, "but there's still a lot of work to be done."
GoTo's archrival Grab downplayed its long-held slogan of being "Southeast Asia's leading superapp," the powerful tagline that helped the company raise billions of dollars from investors including SoftBank Group Corp.
Its newly defined goal, posted in its investor day presentation slides, underscores its intention to become more focused after burning through cash since its inception: "Southeast Asia's largest and most efficient on-demand platform that enables local commerce and mobility."
--With assistance from Olivia Poh.