SEA of Startups

Decoding the Pulse of Founders, Capital & Conviction in Southeast Asia.
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Real, raw, relatable takes on Southeast Asian startups. One investor, the week's news, no script. seaofstartups.substack.com

  1. 6d ago

    Count who gets paid: the least glamorous AI money in Southeast Asia

    Somebody is going to stand on a stage in Singapore this month and tell you two things. Southeast Asia now has more than 60 profitable tech startups. And the region is in the middle of a $4 billion AI boom. Both numbers are true. Both are also lies. Not made up. Lies the way your uncle lies at dinner, where every word checks out and the whole thing is still nonsense. So I am going to tell you up front where this lands. The most profitable AI business in Southeast Asia is not building the model. It is not even the thing people are calling the AI boom. It is teaching people how to actually use it. That is a services business. It gets paid on day one, or net 30. And it is the one lane where being a follower is not a weakness. It is the strategy. I am writing this from KL with the haze back, the Twin Towers invisible from three streets away and a throat that sounds like I gargled a satay grill. We cannot see through the sky this week. We can still see through the press releases. One. The 40 people who never logged back in This did not start with a report. It started with watching the same movie play out across my portfolio and my network. A company I am close to spent good money last year buying every AI tool you can name. Seats for the whole team. I did the same thing myself. I had so many subscriptions I lost count, and I justified every one as my R&D budget. Fast forward to today and ask how it is going. Past the slides, the honest answer is this. A handful of people went fully red-pilled and got the lift. The rest logged in once, maybe twice, felt a bit confused or a bit silly, and quietly went back to doing the job the way they already knew how. Nothing was wrong with the tools. The tools are incredible. What was missing was the boring part. Nobody sat down with 40 people and taught them, in plain language, for their actual job, how to make the thing useful before nine o’clock on a Monday. Once you see it, you see it everywhere. Startups, SMEs, corporates. The gap is not the model. The gap is the person in the chair who was never taught, and was too embarrassed to say so. Multiply that person across 680 million people and you do not have a technology problem. You have the biggest teaching job this region has ever faced. And where there is a job that big that nobody has done yet, there is money. Two. Take a wrench to the headline numbers First, the 60-plus profitable startups. It comes from a single list, quoted everywhere, and nobody says who is on it or how profitable is defined. I sanity-checked it against my own portfolio and I would apparently be a meaningful chunk of the region’s total. I am a good solo GP. I am not that good. Here is what I will concede. Directionally, it is right. I sit across from early-stage founders every week, and genuinely profitable venture-backed companies are less rare than they used to be. The capital drought forced it. Treat the number as a direction, not a fact. The second one is worse. Native AI startups in the region raised about $4.1 billion so far this year, roughly double all of last year. Pop the champagne. Now pull the thread. Kling AI, the video generation unit of Beijing’s Kuaishou, raised a $2.8 billion Series D. That one round is about 68 percent of the entire “boom.” Strip it out and you are looking at a fraction of the headline. The number of rounds actually fell, from 41 last year to 23 this year. That is not a boom. That is one cheque and a thinner deal count. Of what is left, almost all of it lands in Singapore. With the usual caveat I will keep repeating until it stops being true: half the region is incorporated in a Singapore holdco, so the geography in these tables is partly an accounting artefact. So put both numbers down. Neither tells a founder in Manila or Bangkok where to make money in AI this year. Here is the rule I want you to carry for the rest of this piece: Do not count logos on a slide. Do not count dollars in one giant round. Count who sells a thing and collects cash. Three. AI projects do not fail. They stall on people. We have all seen the MIT-style reports on enterprise AI projects that never deliver a return. I do not think most of them fail, exactly. They stall. And not because the model is not smart enough, or the tool is badly designed. They stall because nobody knows how to use it, nobody trusts it, and the pilot dies quietly in a slide deck. If you have ever rolled out a CRM at a growing company, you know this movie. The software was never the hard part. Changing the daily habit was. Research on the roughly $400 billion corporate learning market lands on the same point: workforce readiness, not technology, is what blocks most enterprise AI. One survey has three in four companies saying they cannot keep up with their own demand for new skills. They have the tools. They have the budget. They do not have the drivers. That flips the story. If the model is not the moat and the model is not the blocker, the bottleneck in the entire AI economy is human. It is a teaching problem. A change management problem. A get-accounts-payable-to-trust-the-tool problem. That is not a San Francisco problem. That is an on-the-ground, local, human problem. And being close to the ground is one of the few things we are genuinely good at. Four. Sell shovels, not a prayer The AI training and enablement slice of corporate learning is somewhere in the six to seven billion dollar range today, heading toward something like 18 by the end of the decade. Estimates vary and I am not going to pretend to precision. Every serious forecast points the same way: up and to the right, fast. Here is why I care. Teaching people is a services business, and services get paid differently. No eight-year burn. No praying you hit an inflection before the money runs out. A company signs a purchase order, you deliver, you invoice, you get paid. Assuming a good payer. We have all met the other kind. This is the picks and shovels trade of the AI era. You can run at the hills and maybe strike gold. Or you can sell shovels to everybody running, and get paid whether they find gold or not. You do not need a frontier lab or a $200 million round. You need expertise, a curriculum, a customer and a purchase order. That is a business. Not a bet. Five. Three kinds of buyer, all moving at once Demand for this is not spread evenly around the world. It is concentrated here. Surveys have roughly 96 percent of Southeast Asian employers prioritising upskilling, against around 85 percent globally. Young workforce, fast adoption, hundreds of millions of people who came online mobile-first and now have AI in their pocket from day one. The instinct that let this region skip the desktop and skip the credit card is now pointed at AI. And this is not a prediction. Two of these moves landed this month while most people were not looking. Individuals. On 16 September, Singapore rolled out more than 200 AI courses under SkillsFuture, and citizens who take one get six months of a premium AI tool for free, so they can actually practise. A government putting shovels directly in people’s hands. Educators. ASEAN education officials endorsed AI Ready ASEAN, backed by Google.org and the ADB, moving from awareness into applied learning with a target of more than 1.7 million students and teachers by the end of 2028. That is not a webinar. That is a regional workforce being built on purpose. Governments. Here at home, Malaysia’s national AI skilling push with Microsoft, Microsoft Elevate, has already reached 80,000 learners from its pilot. The part I like is who it includes: educators, small business owners, civil servants, even retired servicemen and women. That is a whole-of-country bet that the bottleneck is people and the fix is teaching. A word to my friends in the Philippines, because this one is yours to win. The youngest population, the strongest English, and a workforce that already trains and supports the rest of the world for a living. You have done the BPO. You have done the data annotation. If any country here is built to become the place that teaches the region to use AI, it is you. Do not let anyone tell you that is a small ambition. Demand is not the question. Demand is the one thing we are not short of. The only question is who supplies it, and whether that supplier is one of us. Six. What it looks like as a company Take Gnowbe out of Singapore. AI-powered microlearning for enterprise. The client list is not hopeful startups. It is General Mills, Shangri-La, MetLife. Blue chips paying real money. The clever bit: they are SkillsFuture-accredited, so corporate clients can get up to 90 percent of the training cost co-funded by the government. Malaysia has its own version in HRD Corp. Employers pay into the levy whether they like it or not, and a lot of them genuinely struggle to spend it. There is cash sitting there. Smart operators build straight on top of it. What I respect is that this is a capital-light business. Nobody raised nine figures and set it on fire. It is a book of blue-chip customers, government co-funding pulling demand through the door, quietly compounding. That is what a healthy company looks like when the hype leaves the room. And it is not one company. A business in our portfolio has started running AI training in India and has landed some very large contracts. Someone in my network doing the same in the Middle East tells me they have more demand than they can possibly supply. Corporate bootcamps are running week-long intensives for executive teams. None of it shows up in that $4 billion number, because nobody is counting it. Which is exactly why there is still room. Seven. The plumber is now worth more than the engine builder There is a job title that barely existed three years ago and is now the hottest role in AI: the forward-deployed engineer. The idea is simple. Instead of selling a company a model and wishing them luck, you send an engineer to sit inside the customer an

    Count who gets paid: the least glamorous AI money in Southeast Asia

  2. Sep 16

    Exposing the AI panic: who actually profits?

    This week a guy who, as far as anyone can tell, had never posted anything in his life put up a thread about artificial intelligence and got 170 million eyeballs on it in five days. A former Anthropic employee, or so the byline says. Within 48 hours you had Senator Bernie Sanders talking about banning superintelligence, market people calling for a bloodbath on Monday morning, and half my group chats forwarding the same screenshot to each other. Then, almost on cue, the chief executive of one of the biggest AI labs on earth published an essay saying, and I am paraphrasing, we need to slow this thing down before it gets away from us. And then China told him to get lost. So here is the question I want to sit with. Not “is AI going to kill us all.” That is the wrong question, and frankly it is the question everybody wants you asking, because it sells. The question is this. When the most powerful people in the most powerful technology of our lifetime suddenly all agree you should be afraid, or suddenly all agree you should not be, who actually benefits from that? And the second one, the question that matters if you are reading this from KL, Manila, Bangkok, Jakarta or Singapore. While the big boys fight about the brakes, are we building this future, or are we just being told what the rules are? One. Where I stand, so you know Let me put my cards on the table before I say another word, because I am about to be skeptical of a lot of people in this piece, and you deserve to know where I am coming from. I am an optimist on AI. Full stop. I invest in it. I use it every single day, in my fund, in my other businesses, in how I read the market. I think it is one of the best things to ever happen to a small team trying to compete against a large incumbent. If you are a founder in this region with four people and a good idea, this is the closest thing you have ever had to a fair fight. So I am not here to scare you. But optimism is not the same thing as being naive, and this is the part people get wrong. Every powerful technology in human history arrived with bad actors attached to it. Every single one. Fire, gunpowder, nuclear fission, the internet. Even the ATM got used for fraud. Cheques got used for fraud. The tool does not decide. People do. There will always be rogue states. There will always be criminals. There will always be somebody who wants to take the sharp end of a good thing and hurt someone with it. That is not an AI problem. That is a human problem, and it is as old as we are. So hold both of these at once, because I am going to keep coming back to it. I am bullish. I am also clear-eyed. Those are not opposites. Anybody telling you that you have to pick one is selling you something. Two. Panic has sponsors now Back to our mystery man and his 170 million impressions. Here is what should bother you about that thread, and it has nothing to do with what he actually said. Multiple outlets that dug into it came away thinking the virality itself was manufactured. An account with basically no history, suddenly spiking on numbers that do not behave the way organic posts behave. In plain language: somebody may have paid to make you panic. I do not know that for certain, and neither does anyone else, and that is exactly the point. We now live in a world where the fear itself is a product. Somebody can build it, ship it and sell it. Whether the goal is attention, influence, or moving a stock on a Monday morning, panic has sponsors. So when a piece of content seems engineered to make your stomach drop, the correct response is not to feel the fear and forward it to the family group chat. The correct response is to ask a boring question. Who wanted me to feel this way, and what do they get if I do? That is not cynicism. That is media literacy in 2026. And it applies just as hard to the calm, reassuring voices as it does to the scary ones. Keep it in your pocket, we need it in about two minutes. Three. Sincere and self-serving are not opposites On 12 September, Dario Amodei, chief executive of Anthropic, published an essay called “We Must Pace the Frontier.” Just under 4,000 words, which by the standards of this genre counts as restraint. The core argument is reasonable on its face. He is not saying stop, and he is careful about that. He is saying slow the rate at which these models get more capable, so that the safety work and the outside checking can keep up. His worry is recursive self-improvement, which is a fancy way of saying an AI that gets good enough at building the next AI that the whole thing starts accelerating on its own, faster than any human can supervise it. His ask is that each generation gets aligned and checked by independent evaluators before anyone sprints to the next one. Honestly, as reasoning, that is not crazy. If you were building a bridge and you had a machine that could design the next, taller bridge by itself, you would want to inspect a few of them before you drove your family across. But here is where you put the glasses back on. When the leader of one of the two or three companies out in front says we should all slow down, bring in third-party evaluators and regulate this properly, what world is he also describing? He is describing a world where the companies already ahead get to lock in their lead. Where the rules get written around the way the current leaders already do things. Where it becomes a lot harder and a lot more expensive for a challenger to catch up. Regulation is a wall, and walls protect whoever is already inside the castle. I am not accusing him of dishonesty. This is the nuance I actually want you to take away. He can be completely sincere about the safety risk, and it can also happen to be extremely good for his business. Both of those can be true at the same time. Sincere and self-serving are not mutually exclusive. Grown-ups can hold that. So I do not clap and I do not boo. I note it. A safety argument from a company that benefits from a safety regime is still worth listening to. It is just not scripture. And by the way, some of the reporting says other lab bosses nodded along with him. Be careful there. “Signalled agreement” is doing a lot of work in those headlines, and I have not seen anything I would put my name to on exactly who endorsed what. So I am going to leave it alone rather than build a story on a soft source. You should demand the same from anyone reporting this to you, including me. Four. The paragraph the Western coverage walked past Here is the part of that essay most of the Western coverage glided over, and it is the part that matters most for us out here. The same essay that says let us all slow down together for safety also says, and I am being fair to the text, that a Chinese lead in AI would be a grave danger, and that the United States should keep restricting the sale of the most advanced chips and chipmaking equipment to China. Read those two things back to back. Slow down, everybody, in the name of global cooperation and safety. And also, we should keep choking off one specific competitor’s access to the hardware. China noticed. Of course China noticed. Their foreign ministry called it fearmongering and said, more or less, that confrontation and vicious competition will wreck any chance of real global cooperation on AI. Global Times called the essay a Cold War playbook dressed up as safety. The commerce ministry said the real game is the US trying to hold a monopoly on the industry. Now, same rules apply. I am not going to sit here and tell you Beijing is the innocent party and the noble truth-teller. A government framing a safety debate as an anti-China containment plot is also incredibly convenient for that government. It rallies their own industry. It plays well across a developing world that already carries some anti-American sentiment. And it lets them skip straight past the actual substance of whether frontier AI is dangerous. A rebuttal can be fair and strategic at the same time. Again, hold both. And while we are handing out skepticism evenly, let us not forget Washington. The Trump administration has doubled down the other way, leaning hard into acceleration and winning the race. That is also a position, and it also has a book behind it. Chipmakers, defence contractors, and the simple political value of looking strong. Nobody in this fight is a neutral referee. Everybody has a jersey on. Five. The dancing robot and the soldier robot are the same robot All of this slow down, speed up, contain China material can feel abstract. Percentages, essays, ministry statements. We have been living inside a geopolitical bubble long enough that it all starts to sound the same, and it becomes very easy to tune out. And then last month the abstract got legs. Literally. In Beijing, from 22 to 26 August, they held what people are calling the robot Olympics. The official name is the World Humanoid Robot Games. More than 2,000 humanoid robots. They ran, they boxed, they danced, they played football. Three years ago these machines could barely get down a corridor without a spotter. My first reaction was not fear. It was wonder. I am a bit of a tech nerd, and this is a genuine feat of engineering. A huge chunk of it is coming out of Chinese companies who, by some counts, now ship around 95 percent of the world’s humanoid robots. That is real capability. That is not a PowerPoint and it is not an essay. But here is where it gets heavy, and here is why it fed straight into the panic cycle. Within days of the games ending, the PLA Daily, the official newspaper of the Chinese military, said the quiet part out loud. It called for accelerating the move of this technology from the laboratory to the military training ground. There is a growing pile of reporting on Chinese defence research into humanoids for urban combat, for reconnaissance, for the jobs you do not want to send a human into. There is a state-backed platform, the Fuxi, described as capab

    Exposing the AI panic: who actually profits?

  3. Sep 9

    The tourists went home: who is actually left to fund Southeast Asia

    Last week one of the firms that taught this region what seed capital even looks like quietly admitted that it will not raise another Southeast Asia fund. 500 Global showed up in KL, in Jakarta, in Bangkok more than a decade ago, when honestly almost nobody in the Valley could find these cities on a map, let alone wire money to them. They ran the accelerators. They wrote the small early checks that nobody else was writing at the time. For a lot of founders here, a 500 check was the first time a real Silicon Valley name said yes. DealStreetAsia reported on 31 August that they are not raising another dedicated Southeast Asia fund. Future bets here come out of the global pool. A smaller local team, mostly managing and winding down what they already own. To be fair, and I am going to try to be fair the whole way through this, Khailee Ng pushed back a few days later. Still committed to the region, still managing the existing funds, still looking at new mandates. I believe him. He is tied to this place far more than I am, because I was not born here. And both things can be true at once. You can be genuinely committed to a region and still decide you will not raise a dedicated fund for it. Hold that thought, because the gap between what people say and what they will actually write a check for is the entire point of this piece. And this is not a 500 story. That is just the way in. One. Two canaries, one coal mine Rewind and look at Y Combinator, the most famous accelerator on the planet. In 2021 and 2022 their batches swelled to something like 400 companies. Founders from everywhere, checks everywhere, the whole world invited. Then under Garry Tan they cut the batch back to roughly 100. They stepped back from late stage. And they pulled back from the rest of the world. The Winter 2023 batch was about 21% international. The batch right before it was 42%. Cut in half. Today something like 80% of the batch is an AI company, which surprises nobody. Now look at what those two decisions have in common. The biggest early stage machine in the United States, and one of the most important funds this region ever had, a decade apart, looked at the whole wide world and reached the same conclusion. Smaller. Closer to home. Pointed straight at AI. That is the tide going out. Two canaries in the same coal mine, singing the same note. This piece is about what the tide leaves behind here. Two. The boom is four companies wearing a trench coat Start with the number everybody is celebrating, because that number is part of the tell. Global venture capital just had a record six months. Around $510 billion in the first half of 2026. That is more than all of last year in half the time. If you only read that one headline, you would think we are living through the single greatest funding boom in the history of the industry. Put your skeptical hat on with me, because here is the number that actually matters. Artificial intelligence took roughly 77% of all global venture dollars in that half year. Two companies you already know, OpenAI and Anthropic, raised somewhere around $217 billion between them. Say that a different way so it lands. Two companies, essentially in California, took about 43% of all startup funding on planet Earth. The US on its own was about $412 billion, and 86% of that went to AI. Now the caveat, because I promised I would and because the whole brand of this show is that I do not read you a number without telling you what is wrong with it. These figures move depending on who is counting and what they choose to count. Different reports land on slightly different numbers, so treat them as directionally correct rather than precise. And the definition of an AI company right now is extremely generous. Anyone with an API wrapper and a login screen qualifies. Out here we are throwing data centres and chip companies into the same bucket, and it is a fair question whether hardware belongs in an AI funding total at all. Every version of the number tells the same story anyway. The money is concentrating into the US. Inside the US it is concentrating into AI. Inside AI it is concentrating into about four companies, mostly the two I just named. So when a fund manager gets on a stage and tells you venture is back, ask the simple question. Back where? Strip out those few mega rounds in San Francisco and the rest of the planet is not in a boom. Some markets are recovering. That is not the same thing. The oxygen got pulled into one room, and we are not in that room. Three. This time they have something better to do at home Here is the part that should sting, because it is a change from the old story. This is not the usual complaint where American money ignores us because it does not understand us. This time the US money has something better to do at home. So ask yourself honestly: why would capital that has that choice get on a 14-hour flight to underwrite a logistics startup in Kuala Lumpur, when it can walk three blocks from the office and put a check into a frontier lab that might be worth a trillion dollars? It would not. It is not. That is not a slight against Southeast Asia. That is gravity. The returns moved, so the money moved. Capital is not loyal and it never was. Even the money that does show up in our numbers is not always what it looks like. You will hear that Singapore now captures something like 78% of all Southeast Asian startup funding. Seventy-eight percent, one city. Be careful with that figure too, because a chunk of it is not activity, it is address. Companies born elsewhere domicile a holding company in Singapore for the tax and the safety, and the raise gets counted as Singapore. Strip out the holding company effect and the infrastructure deals, and the amount of genuine early stage, founder-led money landing across the rest of this region is thin. Thinner than the conference panels will tell you. Four. Nobody is funding the funds Which brings me to the question the rest of this is really about. If the tourists have gone home to chase AI, and the money that stayed is huddled in one city, who is actually left to fund the next founder in Manila, in Ho Chi Minh, in Kuala Lumpur, in Bangkok? So I went looking at who is raising money to invest in this region. Not investing. Raising. That is the leading indicator, and almost nobody talks about it, because a lot of it is non-public by regulation and quite a lot of it is non-public by design. A fund that cannot raise cannot write checks next year, no matter how confident it sounds or how good the website looks. Here is what you find, and it should stop you. In the first half of 2026, I could not find a single dedicated Southeast Asia fund that reached a final close. Not one. Only one Southeast Asia focused venture fund closed at all in that window. And as of August, no Southeast Asia headquartered venture manager had reported a final close for the year. My data set may well be incomplete. Some of the paid sources I do not subscribe to will show something I cannot see. But the word on the street matches the numbers I can get to. It is tight. Let me translate that out of finance language. The machine that raises the money, that then funds the founders, has basically stopped for the year. Think about how a fund actually works. A general partner goes to family offices, pension funds, high net worth individuals, sometimes corporates, and at the larger end the sovereigns. That is the raise, and it takes a year, two, sometimes three. Then they spend the following years deploying it into startups. So if nobody is closing a fund in 2026, that is not a bad year. That is a hole in the checks founders will feel for the next several years. Regional deal value is already down, and the tank that is supposed to refill it is running close to empty. Keep that one in your pocket for the next time somebody at an event talks glowingly about this region’s bright future. Bright futures are funded in advance, and right now almost nobody is funding the funds. And before you tell me this is just the small tourist players washing out and good riddance, look at the biggest name of all. Peak XV, formerly part of Sequoia, generally well regarded, announced $1.3 billion in February. Genuinely good news. But it is an India fund and an Asia Pacific fund. Not a Southeast Asia fund. The biggest name that ever carried this brand in this part of the world raised money and pointed almost none of it specifically here. India gets its own dedicated vehicles. Asia Pacific, the big blurry bucket, gets one too. Southeast Asia as its own thing, with its own fund and its own partners? Apparently not. That is what I mean by the herd thinning. It is not always a dramatic exit and a farewell blog post. Sometimes it is just a fund quietly taking the words Southeast Asia off the label and hoping nobody notices. I noticed. And I am guilty of a version of it myself. We added Japan, and to make that work we swapped Southeast Asia for APAC. Five. The three letters that decide who keeps their job So why did the money that was so in love with this region a few years ago go quiet? I am not going to let us off the hook here, because a big part of this we did to ourselves. The answer is DPI. Distributions to paid-in capital. In plain English: of the money the investors gave the fund, how much did the fund actually give back? Not on paper. Not in a markup. In the bank account, in real dollars, returned to their own investors. The honest answer in Southeast Asia is not much, and not lately. Exit value fell about 32% last year, to something like $4 billion for the entire region. Almost every good exit this region ever produced is still clustered back in 2021 and 2022. Since then it has not been slow. It has been quiet. Put yourself in the shoes of a limited partner. You are a pension fund, a family office, a sovereign wealth fund. You put money into Southeast Asia venture in 2019. In 2021 you were told with a straight face and a beaut

    The tourists went home: who is actually left to fund Southeast Asia

  4. Sep 2

    Southeast Asia's Superapps Finally Made Money. Do Not Copy How.

    Three of the biggest companies this region has ever produced just did something they had never done before. They made money. Sea, the Singapore company behind Shopee and Garena, posted a net profit of 487 million US dollars in a single quarter, on 7.8 billion dollars of revenue. GoTo, the Indonesian giant behind Gojek and Tokopedia, booked its second profitable quarter in a row. And Grab, maybe my most hated company in Southeast Asia but the ride hailing app none of us can avoid, is now profitable for a full year and buying back its own stock. If you are a founder, the obvious temptation is to take one lesson from that. Burn. Burn hard, burn big, buy the market, and the profit comes later. That is what the superapps did, and look at them now. I want to talk you out of it. The real story of Southeast Asian tech in 2026 is not that burning worked. It is that Southeast Asia grew up. And the strategy that got these three to profit is the single most dangerous thing a normal founder can copy. THE SHORT VERSION · The burn is not what made them profitable. Discipline in the last two or three years did. The burn is just what they survived. · Two ingredients made it work, and you have neither. A once in a generation land rush, and a backer deep enough to outspend everyone until they died. · Read past the adjusted number. Sea still carries a 6.6 billion dollar hole. GoTo’s real quarterly profit is about 15 million dollars. Grab trades at under a third of its listing price. · Payments is becoming a loss leader for lending. Which means the profit engine of regional fintech is a bet on the credit cycle. · The funding window is not shut. It got selective. That is good news, if you are building something that actually works. 1. The scoreboard nobody reads past the headline Start with the good news, because it is genuinely good. For a decade the knock on Southeast Asian tech was simple. These companies do not make money. They set investor cash on fire to buy growth, and one day the music stops and there is nothing underneath. I said versions of that myself. A lot of us did. Well, the music got quieter, and they adapted. Sea is the cleanest win. Full year 2025, just under 23 billion dollars of revenue and about 1.6 billion dollars of net income. Not adjusted, not massaged. Actual net income. The stock ran from around 102 dollars in late July to about 130 on the back of the quarter. If you held Sea through the pain, you got paid. Now read the fine print, because the fine print is the whole point. Sea The headline: 487m US dollar net profit in the quarter. 1.6bn net income for FY2025 on about 23bn of revenue. The fine print: Accumulated deficit still around 6.6bn dollars. Two great years have refilled a bit more than 2bn of the hole they dug. GoTo The headline: Second straight profitable quarter. First time crossing 1 trillion rupiah of adjusted profit. The fine print: Actual bottom line net income for the quarter was about 252bn rupiah, roughly 15m US dollars, on a company that size. Grab The headline: Just under 1bn dollars of quarterly revenue, up 22 percent. Adjusted profit up more than half. 750m dollar buyback. The fine print: Trades around 3 dollars and change against a listing price near 11. Day one shareholders are still deep underwater. The number the headlines love is adjusted, and adjusted quietly removes things like share based compensation and financing costs before it shows you the shiny figure. The burn was vindicated at Sea. It was survived at Grab. It is still being paid off at GoTo. Three outcomes from one strategy, and only one of them is the fairy tale. 2. Why the burn worked, and why you have neither ingredient Even for Sea, burning only worked because two things were true at the same time. You need both. You almost certainly have neither. One, this was a genuine land rush. A region of more than 600 million people came online, on mobile, all at once, in categories that really are winner take most. Ride hailing. E commerce. Food delivery. When the prize is a whole region and the market collapses to one or two winners, spending to be that winner can make sense. Most businesses are not like that. Most markets have room for several healthy players, and there, buying share with subsidies just trains your customers to leave the moment you stop paying them. Two, and this is the one people forget. The burn was funded by a capital pipeline almost no founder on earth can access. Sea had Tencent. Grab had SoftBank. GoTo had SoftBank, Alibaba and the biggest names in Indonesia. These companies did not out innovate their rivals. They out funded them. They raised so much, from backers so deep, that they could afford to lose money for longer than the competition could stay alive. The capital was the moat, not the app. So when a founder tells me they are going to run the Grab playbook in their category, I ask one question. Who is your SoftBank? If you do not have a backer willing to fund losses all the way to the horizon, and a market that pays exactly one winner and kills the rest, you are not running the Grab strategy. You are running the part of the Grab strategy that bankrupts everyone who is not Grab. Here is the quiet irony in the numbers. What actually turned these three profitable was not the eight years of losses. It was the last two or three years of doing the opposite. Cutting the burn. Killing the vanity lines. Focusing. For 99.9 percent of founders here, growth at all costs is not a strategy. It is a faster way to die. 3. The same pitch is back, with AI on the label I am banging on about a decade old strategy this week for a reason. It is being sold again, right now, with AI on the front. Same pitch. There is a land grab, get big fast, spend whatever it takes, profit is a later problem. Globally the frontier labs are raising tens of billions for the model race. In this region the AI funding year is basically one giant cheque. For a lab with a bottomless backer, fine. Maybe that is a real land rush, and there is going to be a lot of lost capital when the winner take most reality arrives. But if you are a founder in KL, Manila or Bangkok, building a product on top of somebody else’s models and burning your seed round on compute to grow before you charge, hear me clearly. You are copying the one part of the playbook that only ever worked for a tiny handful of companies with sovereign sized money behind them. That is land grab cosplay without the balance sheet to survive it. The lesson from Sea, Grab and GoTo is not burn to win. It is get disciplined and survive long enough to matter. Bank that one. Throw the other one away. 4. Payments finally makes money. Just not from payments. The most useful signal in the whole quarter, read properly, is where GoTo’s profit came from. Not ride hailing, which is now under pressure from pricing regulation anyway. It came from fintech. GoTo’s fintech arm overtook the on demand business to become the single biggest profit contributor in the company, with adjusted profit in that unit up more than 400 percent year on year. Law of small numbers, sure, but the direction is clear. It is not just the giants. In the Philippines, PayMongo hit breakeven early this year with gross profit up 240 percent, a company that was bleeding cash a couple of years ago and turned itself into a real business under new leadership. Easy headline: fintech is booming, payments won. Here is the trap inside it. The actual fee on a payment in this region is collapsing, by design. In Indonesia the QR standard, QRIS, charges a merchant about 0.3 percent, and the central bank waived the merchant fee entirely on transactions under 500,000 rupiah at the end of 2024. Compare that to a Visa or Mastercard swipe at one and a half to three percent. Governments across the region, and globally, are building payment rails that are near free on purpose, because they want financial inclusion, not fee income. Add stablecoins. Add cross border interoperability, my Maybank QR working in Thailand, the Philippines, Singapore. The squeeze only gets worse. So how is anyone profitable? Because the payment is not the business anymore. It is the hook. The money sits on top of it. · Lending. GoTo’s profit engine is credit. · The float. Interest earned on balances sitting in the system, especially with central bank rates where they are. · Cross selling. Credit to the merchant and to the consumer. PayMongo’s growth product is literally called Capital, and it lends merchants money against future sales. The payment gets you the customer and the data. The loan makes you the margin. And the caveat I cannot skip, because this is not all sunshine. A profit engine built on lending in emerging markets is a bet on the credit cycle. It looks fantastic while rates are high and everyone is paying their loans back. It looks very different in a downturn, when the same loan book that made you profitable turns around and bites. We have watched that movie in peer to peer lending, in fractional purchases, in every iteration of consumer credit that got ahead of itself. So when someone tells you fintech is the new profit machine of Southeast Asia, the right response is: great, now show me the loan book, and show me what happens to it when things get hard. If you are building a pure payments startup charging a fee per transaction, be worried. That is a race to zero, and the state is the one pushing it there. 5. The money did not leave. It got smart. Last one, for the founders who have been told all year that the funding window is shut. It is not shut. It got selective. And selective is good news if you are building something real. Late in August, a Vietnamese company called M Village, now rebranded Modern Village Lifestyle, raised 26 million dollars led by Japan’s Mizuho with Trip.com adding on, at a valuation north of 120 million dollars. More than double its last round. An up round, in this market. Underneath it: a proven o

  5. Aug 26

    Next, Owned by Whom?

    As you read this, thousands of people are in a convention hall in Bangkok. Techsauce Global Summit, 26 to 28 August, at the Queen Sirikit National Convention Center. Three hundred sessions, hundreds of exhibitors, and one word on every lanyard and every panel title. The word is next. The race to the next model, the next unicorn, the next Thailand. So I want to be a little contrarian this week and not talk about next. I want to talk about what Thailand has already won, because it has won real things and nobody on that main stage is going to say them plainly. And then I want to ask the only question that actually matters when the music is this loud and the capital is this cheap. Not what is next. Next, owned by whom? Because here is the number I cannot get out of my head. This year Thailand pulled in more than two billion US dollars of AI data centre money. Microsoft, Google, ByteDance, the whole parade. Thai AI startups, the actual companies with founders and cap tables, raised about four million. Same country. Same year. Two billion and four million. Say those back to back and you barely need the rest of this piece. But stick around, because the gap between them explains almost everything about Thai tech right now. The country is the host, not the guest of honour Start with the money, because a lot of it is real. Microsoft has committed over a billion dollars to Thai cloud, AI and data centres running from 2026 through 2028. Google opened a Bangkok cloud region in January and put a number on it, forty billion dollars of economic value over five years. ByteDance is building too. National IT spend this year is heading toward 1.1 trillion baht. If you are the Thai government, this looks like winning. The photos are great. Prime minister, hard hats, ribbon, a rendering of a big grey building with a lot of cooling on the roof. I want to be fair, because this is not nothing. Data centres mean construction, power upgrades, some high-skilled jobs, a reason for engineers to stay in the country. Real assets get built. That matters. But I have been doing this long enough to have one reflex when a big number lands on the table. I ask who owns the thing the number is attached to. So let us do that. Who owns the compute in those buildings? Microsoft, Google, ByteDance. Who owns the models running on it? The same names. Who owns the margin, the recurring, high-fat software margin that compounds for twenty years? The same names again. And what does Thailand own? The land. The power lines. The water. The local joint venture partner who helped with the permits. The electricity bill. There is a phrase for this and it is not AI hub. It is compute arbitrage. Thailand is renting out cheap power, cheap land and a plugged-in population of seventy million to companies headquartered eight thousand miles away. The country is the host. It is not the guest of honour. Now hold that against the four million dollars that actual Thai AI founders raised this year, per DealStreetAsia data. A country can host the entire weight of global AI on its soil and fund almost none of its own. Capex or equity: the question to ask all week Here is the part I want founders to hear, because it is where this gets useful and not just cynical. When you are at Techsauce this week, or reading about it afterwards, and somebody says Thailand’s AI investment hit record levels, stop and ask them one thing. Capex or equity? Data centre capex is offshore-owned infrastructure. Startup equity is Thai-owned companies. They are two completely different things, and this week they will be blended into one flattering headline every single time. Capex builds someone else’s asset on your land. Equity builds your asset. Full stop. The win for Thailand is not the ribbon cutting. It is the day a Thai company owns a real layer of this, something above the substation and the security fence. Until then, be honest about what you are celebrating. You are celebrating being a very good landlord. There is nothing wrong with being a landlord. Ask Singapore. But a landlord does not get wealthy the way the tenant does, and the tenants here are trillion-dollar American software companies. Just know which side of the lease you are on. The champion, and the question underwriters will circle If the hyperscalers own the infrastructure, where is the Thai champion? Where is the homegrown AI company we can actually point to? There is one. It is called Amity. And it is genuinely impressive, which is what makes this interesting. I am not here to knock it. I am here to hold it up to the light. Amity raised a hundred million dollar Series D in March, one of the largest generative AI rounds in all of Southeast Asia. Revenue over a hundred million a year, up more than tenfold since 2022, targeting two hundred million by the end of this year, and lining up an IPO in 2027. Enterprise AI, chatbots and agents for big organisations: banks, government, retail. By any measure this is a real company. Not a deck and a dream. Revenue. Now here is the detail that tells you a lot about how Thai tech actually works. Amity was founded by Korawad Chearavanont, grandson of the founder of CP Group and son of CP Group’s current chief executive. CP is the largest private company in Thailand. It owns 7-Eleven across the country. It is the majority owner of True, one of the two big telcos. It is in food, agriculture, retail and property, and basically everything you touch in a Thai day. So picture the founding conditions of this startup. You are building an enterprise AI company, and your first potential customers include the biggest convenience store operator in the country, one of the two largest telcos, and a web of banks and companies that all sit inside or next to your family’s group. CP All, the 7-Eleven operator, True and PTT all show up as Amity clients. I need to be precise here, because the lazy version of this take is wrong and I do not want to do the lazy version. The lazy version is that it is just selling to daddy’s companies. That is not accurate. Reporting is clear that only about 35 to 40 percent of Amity’s revenue is generated in Thailand at all, and the company says the majority of its revenue and customers are now outside Thailand entirely. So it is not a captive shell. It has gone and won business in other markets. Credit where it is due, and the accurate version is more interesting than the lazy one anyway. Amity may have been born captive and then grown out of it. A family conglomerate handed a young founder the one thing no other founder in Bangkok can get at any price: a guaranteed home market. Banks, state enterprises, 7-Eleven and True as your first reference points, all while you are still figuring out the product. In enterprise software, a trusted first customer who will not churn while you learn is extremely valuable. He got a whole portfolio of them at the birth of the company. And look, if I am the investor writing that Series D cheque, I do not hate this. A de-risked launch market is a feature. It is plausibly why the thing scaled from ten million to a hundred million of revenue in two years, after taking almost a decade to reach the first ten. The family base was the launch pad. But here is the question I would put on the table if I were sitting across from them, and it is the question underwriters are going to circle before that 2027 IPO. How much of that hundred million plus is arm’s length, won on the merits from customers who could have picked anyone? And how much is related party, business that flows because of the name on the building? That is not an attack. That is diligence. It is the single most important number in the whole story and it is the one that never makes the press release. If most of it is arm’s length, Amity is a genuine Southeast Asian software champion, and I would love to say that loudly. If a big chunk of it is the family buying from the family, then the valuation is telling you a story the revenue quality does not back up. I do not know the answer. Neither do you, and neither does most of that convention hall. But now you know the question. When a Thai founder tells you their startup is crushing it with enterprise logos, the first thing to gently ask is: whose enterprise? And for the ninety-nine percent of Thai founders who do not have a billionaire relative, the lesson is brutal and important. Your hardest first year is finding a customer who will trust you before you have proof. Amity basically skipped that year. You will not. Plan for it. First to adopt is not the same as first to win Here is where Thailand genuinely leads, and where the lead is thinner than it looks. Thailand has the highest AI adoption in ASEAN. Not second, first. An AWS report this year puts it plainly: 43 percent of Thai businesses now use AI consistently, up from 32 percent a year ago. Ninety percent of Thai students use generative AI. The country took to this faster than anyone else in the region. If you only read the headline, Thailand looks like it is running away with it. Then you read the next line, and the next line is the whole story in one statistic. Seventy-four percent of those adopters are stuck at what the report calls the basic stage. Off-the-shelf chatbots, ready-made tools, someone in the office with ChatGPT open in a tab. A few people paste things into it. The actual work, the workflows, the decisions, the output, has not really changed. Longtime listeners will remember Tiwa York on this show calling this exact thing the level 1.5 trap. A company where AI is bookmarked, mentioned in the strategy deck, played with by a few keen people, and yet nothing downstream is different. He called it adoption theatre. Thailand has just gone and proven you can run adoption theatre at the scale of an entire nation. I want to be careful, because first to adopt is not worthless. It means the workforce is not scared of these tools. It means a founder in Bangkok is selling in

    Next, Owned by Whom?

  6. Aug 19

    Industrial Policy in a Startup Jersey

    There is a company in Singapore that has raised close to half a billion US dollars and has never sold a single thing. Not a small amount of revenue. None. It has a chip. It has a box. It has a founder story, a serious set of engineers, and one of the bigger names in Singaporean venture writing the cheque. What it does not have is a customer you can name or a price you can look up. And here is the part that should make you sit up. That is not a scandal. In 2026, that is a business model. So this one is about a Singapore chip company called Acrab. But Acrab is really just the door. Behind it sits the question every founder and every investor in this region needs an answer to. When a company raises hundreds of millions before it has a product in the market, is that smart money seeing the future early, or is it the dumbest money in history dressed in a lab coat? And underneath that, something more practical. This whole idea of running powerful AI on a small box on your desk instead of in the cloud. Is it real, or is it a slide in a deck? The box On 6 August, Acrab closed a $130 million Series B led by Vertex Ventures SEA and India, together with Vertex Growth. Hold that name, Vertex, in your head. We are coming back to it, and it turns out to be the most interesting thing in the whole story. That round took Acrab past $480 million in total funding. The company was founded in 2024 and only came out of stealth this year. By its own description it has visible paths to industrial deployments and expects revenue within 2026. Read that last part again. Expects revenue within 2026 is a very polite, very well lawyered way of saying we have not made any money yet. So what did they build? This is where it gets genuinely interesting, and I do not want to be cynical about the engineering, because the engineering looks real. The chip is called GELIX 1. It is a system on a chip built on a 5 nanometre process, which is a serious modern manufacturing node, pairing a 20 core Arm CPU with a dedicated neural processing unit and 273 gigabytes per second of unified memory bandwidth. If none of those words mean anything to you, here is the translation. This is a real piece of high end silicon, not a science project. Around it they built a product called Agent Box. Think of it as a small computer that sits on your desk and runs AI models locally, on the device, without sending your data off to a data centre somewhere. Acrab says it is designed to support models in the 100 billion parameter class, with persistent memory, multimodal input, and agents that actually do things, all running on the box in front of you. That is the pitch. Now let me do the part I actually get paid to do, which is not believe the pitch. The headline number is a benchmark. Acrab claims its chip processed a prompt at 1,416.8 tokens per second, against 188.9 on a Mac Mini with an M4 Pro. Roughly seven and a half times faster than a high end Apple machine. Sounds incredible. It might be. But let me tell you what that number actually is, because this is where you earn the right to have an opinion. That measurement is something called prefill. Prefill is the speed at which the machine reads and digests your question before it starts answering. It is the reading phase, not the writing phase. It is genuinely useful, and it is exactly one half of the job. The other half, where the machine generates the answer token by token, is called decode. Acrab has not published its decode rate. It has not published time to first token. It has not published power consumption. It has not published thermal data. And crucially, nobody independent has verified any of it. Every one of these numbers comes from Acrab. Even the tech press covering the launch flagged this openly. The claim is prefill only. It is not proof the chip is seven and a half times faster at everything. It is proof it is fast at one specific thing, in one specific test, that the company designed. And the 100 billion parameter claim, the one doing the work in every headline, notice the wording. Designed to support. Not runs. Not we measured it running a 100 billion parameter model at this speed while drawing this many watts. Designed to support is a target, not a result. I am not saying anyone is lying, and I want to be clear about that. I am saying that as of today, GELIX 1 is in validation. It is chasing its first industrial adoption. The first market is the smart cockpit inside cars. No named customer, no public price, revenue as a forecast. So here is your honest scorecard on the product. Real chip, real team, one genuinely fast benchmark on the reading half of the task, and the entire set of numbers that would tell you whether this actually works quietly missing. Half a billion for nothing is now normal Before you laugh at half a billion dollars for a company with no revenue, look at what is happening everywhere else. Acrab is not the strange one. Acrab is the small one. San Francisco. Safe Superintelligence, founded by Ilya Sutskever, formerly chief scientist at OpenAI, raised $2 billion at a $32 billion valuation. Around 50 employees. No product. No published research. And it has said out loud, on purpose, that it does not intend to ship anything until its mission is complete. Nvidia is one of its backers. Two billion dollars, fifty people, nothing to sell, by design. Thinking Machines, founded by Mira Murati, formerly chief technology officer at OpenAI, raised roughly $2 billion at a $12 billion valuation, then another $5 billion at $50 billion. To its credit it did finally ship a model in July. But it raised the first two billion on a founder name and a thesis, not on a product. And this is not fringe. In 2025, OpenAI and Anthropic between them absorbed around 14 percent of every venture dollar invested anywhere on earth. Anthropic was valued at $965 billion by May this year. The money is not spread out. It is piling into a handful of bets on faith. That is America. Here is where I actually wanted to take this, because Asia is running the same playbook with local accents, and almost nobody here describes it that way. Tokyo. Sakana AI raised $135 million at a $2.65 billion valuation, making it the most valuable startup in Japan. And here is the elegant part. Sakana’s entire philosophy is small. Cheap, efficient models trained on small datasets, tuned to the Japanese language and Japanese business. One of its founders, Llion Jones, co-wrote the original research paper that created the modern AI boom. Rich valuation, thin revenue, sold on pedigree and a thesis that says bigger is not always better. Sit with that, because it is the same bet Acrab is making. The anti-giant bet. Do more with less. Beijing. Moonshot AI raised $2 billion at a $20 billion valuation and is reportedly chasing $30 billion. But here is the twist, and this is the one that should sting. Moonshot is not pre-revenue. Its annualised recurring revenue passed $200 million in April. Its rivals Zhipu and MiniMax already listed in Hong Kong in January. The Chinese champions are not raising on faith. They are raising, making money, and ringing the opening bell. Bangalore. India has decided AI is a sovereignty question. Sarvam raised $234 million at a $1.5 billion valuation, led by the Indian IT giant HCLTech. And Ola’s founder Bhavish Aggarwal is building Krutrim, which is not just making models but building its own chips and its own computing infrastructure. That is a direct echo of what Acrab is doing, wrapped in the flag of national self-reliance. Put the map together. Silicon Valley is doing pre-product on pure faith. Japan is pricing efficiency on pedigree. China is already making money and ringing the bell. India is treating this as national security. And Southeast Asia’s entry into the contest is a box from Singapore that runs AI models on your desk. Pre-revenue is not pre-product One distinction, and it is the difference between a lazy take on this and a correct one. Pre-revenue is not the same as pre-product. Safe Superintelligence has literally nothing to ship, deliberately. Acrab has a chip and it has a box. And a chip company is not a model company. Silicon costs a fortune before you make a single dollar, because you have to design it and manufacture it long before anyone can buy it. That is the nature of hardware, not a warning sign. So if you are going to judge Acrab, do not judge it against a software lab in California. Judge it against Sakana in Tokyo and Krutrim in Bangalore. Judge it against the other people trying to build hardware and sovereignty in Asia. That is the fairer fight. Where the engine was built So who runs it? The chief executive is Dr Ken Phua, the former co-chief executive of Arm China. He spent two decades at Arm and stepped in to co-run its China business in 2020, during a very messy boardroom fight. Let that land. The technical spine of this Singaporean deep tech contender was built at the top of Arm China. I want to be careful and fair here, because this is exactly the kind of thing this show exists to say out loud without turning it into a smear. That is a real, world class credential. It is not a red flag on its own. But it is the same thread we pulled on with Manus and with DayOne. When something is wearing a Singapore jersey, it is always worth asking where the engine was actually built. Here, the engine has an Arm China lineage. There is also a small mystery I could not fully close. A couple of outlets name someone called Tian Qi as the 2024 founder, and that name appears almost nowhere else, while Phua is the public face. I am flagging it, not asserting it. If you know who else is in there, tell me. So is edge AI real, or is it a slide? Now the question the whole thing hangs on, in the plainest language I can manage. Edge AI just means running the model on the device in front of you, instead of sending your request over the internet to a giant data centre and waiting for the answer to bounce back

    Industrial Policy in a Startup Jersey

  7. Aug 13

    A salary is not ownership

    In 2022, at the Vietnam Venture Summit, forty one funds stood up and pledged one and a half billion dollars for Vietnamese startups. The pledge covered the three years from 2023 to 2025. Through May of this year, Vietnamese founders raised twenty eight point eight million dollars. Ten rounds. And next month, on the twenty first of September, FTSE Russell reclassifies Vietnam from a frontier market to a secondary emerging market. FTSE’s own estimate is that about six billion dollars of passive index money follows it in. Six billion dollars, arriving on a scheduled date, into the stock exchange. Twenty eight point eight million, across five months, into companies. So I do not want to hear that Vietnam has a funding problem. Vietnam is about to be soaked in money. It is just the wrong money. I will defend this next line anywhere. Vietnam has the best engineering talent base in Southeast Asia. It also spent recent years being told it was the next China, then the next India, then the next Indonesia, then whatever the next thing was that year. Every one of those labels pulled in capital. Not one of them pulled in the kind of capital that funds a company and then hangs around for eight or ten years to find out whether it worked. This is not about how much money there is. It is about what kind. The amount was never the problem. * * * One. Four taps, and the one that is off There are four ways money flows into Vietnam right now. Three of them are running hard. One has been turned off. Almost every story you read about the country confuses them. Tap one is venture capital, and that is the one that is off. Through May, Vietnamese startups raised twenty eight point eight million dollars across ten equity rounds. In the same period last year it was two hundred and twenty seven million across fifteen rounds. Deal count barely moved. Deal value fell about eighty seven percent. Those are Tracxn numbers and they run through May, not through the full year, and I am going to keep saying that, because a five month figure is not a year. Let me be fair about the baseline, because this is where people overcook the story. Vietnam was never a billion dollar a year venture market. Full year 2024 was four hundred and ninety four million dollars across sixty eight deals. So this is not a collapse from a great height. It is something more boring and more serious. Sixty eight deals a year became ten deals in five months. That is roughly one venture round every two weeks, in a country of a hundred million people, with the deepest engineering talent pool in the region. And Vietnam is not alone in it. Across Southeast Asia the first half was thin. The regional dollar totals held up because people keep stuffing them with data centre deals that should never have been in a startup funding report in the first place. Strip those out and it is down across the board. Vietnam is the sharpest version of a regional problem, not a Vietnamese peculiarity. Tap two is index money, and it is running hard. In April, FTSE Russell confirmed the upgrade, effective the twenty first of September and phased into the global index series through next year. FTSE estimates about six billion dollars of inflows from passive trackers. The World Bank puts near term flows at about five billion and says the long term potential could reach twenty five billion by 2030. Those are their numbers, not mine, and both institutions have an interest in the story being good, so hold them loosely. Even at half those figures it is the largest single capital event in Vietnam’s modern financial history. Here is the part nobody says out loud. Ask what passive money actually does. It buys the index by a pre-designed weighting. It does not read a deck. It does not take a meeting. It does not care who the founder is or what the product does. It buys the listed companies in proportion to their weight, which in Vietnam means banks, property and retail. And when it leaves, it leaves the same way, by weight, on a rebalance date, regardless of how good your quarter was. Not one dollar of that six billion is available to a founder with a working product and eighteen months of runway. Not one. It is not that kind of money. Tap three is borrowed retail money, and it is running very hard. Margin lending at Vietnamese brokerages hit about four hundred and forty five trillion dong at the end of the second quarter, roughly sixteen point nine billion dollars. At the start of 2023 it was one hundred and twenty five trillion. Three and a half times more borrowed money in three years. This is the bit that should make you sit up. That borrowed money is now the main thing absorbing foreign selling. When overseas funds sell Vietnamese stocks, it is domestic retail investors, on credit, taking the other side. The counterargument is a real one. The prevailing view among Vietnamese analysts is that this is not yet a problem: brokerages have strengthened their buffers, July’s margin calls were localised, forced selling did not spread. That is the majority position, held by people who know that market far better than I do. My read is simpler. When the buyer holding your market up is borrowing to do it, your market is not deep. It is propped. Contained and safe are different words, and the gap between them is where people lose money. Borrowed positions unwind faster than anyone models them. Tap four is public listings, and it is reopening hard. Four Vietnamese IPOs raised more than eight hundred and thirty million dollars in the first half of this year, at a combined market value just under seven billion. I am going to hold that one, because tap four tells you the most and it deserves its own section. Put the four side by side. Vietnam has built a functioning machine for turning domestic savings into listed equity. It has built almost nothing for turning savings into new companies. Both get called a capital market. Only one of them compounds into industries that did not exist before. Think about what that does to a talented twenty seven year old in Hanoi who wants to build something. The shortest path to capital is not a seed round, because there are ten of those a year. It is a salaried job at a multinational, a role inside a listed group, or a family business with a balance sheet. Every one of those choices is rational. Individually they are all the right call. Collectively they are how you end up with a country that has world class engineers and no company anyone outside the country can name. * * * Two. The world found Vietnam’s engineers and decided to rent them Vietnam has more than eighteen thousand four hundred specialised AI engineers, the largest pool in Southeast Asia. Demand for them is running at about two and a half times where it was in 2023. On technical and system design assessments, the top tier score within about eight percent of their American peers, at sixty to eighty percent lower cost. Disclosure on those figures, because it matters. Most of them come from recruitment firms and offshore advisory shops, which are businesses that exist to sell you a Vietnamese engineering team. Take the direction as real and the decimal places as marketing. Even discounted heavily the picture holds. This is a deep, cheap, genuinely excellent engineering base, and the world knows it. Vietnam is an exporter of talent. Look at what the world is doing with it. Nvidia has been expanding its hiring in Vietnam across manufacturing and operations roles tied to high end GPUs, with Foxconn reported as a possible partner, and it keeps AI model development roles in Hanoi and Ho Chi Minh City. Be careful here, because this is exactly the kind of story that gets inflated in a group chat by Friday. Nvidia has not announced a factory in Vietnam. What is reported is hiring, in roles consistent with more advanced work. That is a signal, not an announcement. But take the signal seriously, because it tells you the whole story in one move. The world found Vietnam’s engineers, and it decided to rent them. Nobody in this story is the villain. Nvidia hiring hundreds of engineers in Hanoi is good for Hanoi and good for those engineers. Hard currency, frontier work, none of the risk. A twenty nine year old with a mortgage and a kid who takes that job over a startup salary is making the correct choice, given the options in front of them. The failure is that nobody local ever put a competing offer on the table. And I want to be even handed about whose fault that is, because it is not only the money’s fault. Investors in this region got risk averse and clustered around whatever was already working, which is how you get ten rounds in five months. Founders own a piece of it too. Plenty of Vietnamese founders spent the last few years priced for a market that stopped existing in 2022, holding out for a valuation that was available once and is not available now. A round that closes is worth more than a valuation you are still defending. That is not investor propaganda. That is arithmetic about runway. The reporting around Vietnam’s funding reset names constraints that are unglamorous and real: reluctance to hire foreign expertise, language barriers, and legal and foreign exchange rules that make a Vietnamese entity harder to fund than a Singapore one. Some of that is business culture and takes a generation. Some of it is paperwork and could be fixed inside a year. In fairness, the government has made real moves on the rules, and the direction of travel is good. But underneath all of it sits one sentence, and it is the sentence I would put on the wall of every ministry in the region, and every university. A salary is not ownership. When an engineer in Hanoi builds something excellent on an offshore contract, the value of what they built shows up on somebody else’s cap table, in somebody else’s currency, in a company listed on somebody else’s exchange. They get a good wage, which is not nothing, especially if you remember wha

  8. Aug 5

    Malaysia does not have a money problem

    On the twenty seventh of July, in a bank tower in Petaling Jaya, the Malaysian government announced more than five billion ringgit of financing for Malaysian startups. It has been a week. I still cannot tell you who is giving it. Not because it is a secret. Because nobody published the list. The minister said fifteen organisations. The fullest account any newspaper ran named twelve, and it introduced them with the word “among”. So somewhere out there are three institutions holding a share of five billion ringgit for Malaysian founders, and not one outlet in the country can tell you their names. Now, I am not going to spend this piece telling you Malaysia has no money. That is the lazy version and it is not true. Malaysia has enormous amounts of money. Thirty billion ringgit sits in committed venture and private equity funds, according to the Securities Commission. A hundred and sixty billion ringgit of data centres is going up in Johor. And two weeks before that press conference, Malaysian retail investors queued up with one point four billion ringgit in cash to buy shares in one small AI company on the ACE Market. One point four billion. For a company raising about twenty million. So the money is here. The appetite for risk is here. Malaysians will absolutely gamble. What almost nobody in this country will do is write a two million ringgit cheque into a company with no revenue and then wait eight years to find out if they were wrong. That is not a funding gap. That is a temperament gap. And you cannot fix a temperament gap with a press release. One. Fifteen organisations, twelve names Start with what was actually announced, because the detail is better than the headline. The event was called TechnoMART Malaysia: High Tech Financing 2026. It was run by MOSTI, the Ministry of Science, Technology and Innovation, and launched by the minister, Datuk Chang Lih Kang, on the twenty seventh of July at Menara MBSB Bank in Petaling Jaya. His words, and I want to be fair and quote him properly: “We have connected fifteen organisations, including funding agencies and financial institutions. Together, they provide funding worth about five billion ringgit to support our startups and innovators.” Four things about that sentence. First, the verb. He said connected. Not allocated. Not committed. Not budgeted. Connected. And he was straight about it when a reporter pushed him, because a reporter did ask whether the five billion was for this year alone. His answer was that it is an aggregated funding pool from the participating organisations, covering about a year and a half. Aggregated is doing a lot of work there. It means nobody created a fund. Fifteen institutions added up the financing capacity they already had on their books, over eighteen months, and someone put the total on a banner. Not one ringgit changed hands on the twenty seventh of July. Second, and to his credit, the minister said the quiet part himself. He said the financing is not distributed automatically, and that it is subject to each institution’s own eligibility requirements. That is an honest caveat and he did not have to offer it. Credit where it is due. But sit with what it means. There is no single door. There are fifteen doors, and behind each one is a different credit committee with a different form, a different collateral test, and a different definition of the word startup. Third, TechnoMART is not new. It has been running since 2018 and has delivered more than thirty programmes. It is a matchmaking platform. It puts technology companies in a room with financiers. That is a genuinely useful thing to do, and I want to say so plainly, because the commercialisation gap in Malaysia is real. The minister called it the valley of death, and he is right that it exists. It is just not a new pot of money. It got reported like one. Fourth, the list. This is where it stops being funny. New Straits Times named three participants: MRANTI, MBSB Bank and EXIM Bank. Business Today added MIDF. Malaysia Tribune ran the longest list and named twelve: Cradle, SME Bank, Malaysia Debt Ventures, Permodalan Negeri Selangor, MRANTI, Bioeconomy Corporation, ADFIM, EXIM Bank, MTDC, Venture Tech, Kumpulan Modal Perdana and PMB Tijari. Put every outlet together and you get fourteen distinct names, and not one of those reports claims to be the complete list. Look at what is on it. SME Bank. EXIM Bank. Malaysia Debt Ventures. MBSB. MIDF. Those are lenders. Development banks. Institutions whose entire discipline is getting the principal back. There is real equity in there too, and I am not going to pretend otherwise. Cradle, MTDC, Venture Tech and Kumpulan Modal Perdana are equity vehicles. The minister himself listed the instruments: grants, equity, debt, guarantees, blended finance and working capital. Equity is in the mix. What nobody has published is how much of the five billion is equity. There is no split. Not by instrument, not by institution, not by stage. You are told the total and asked to be impressed. And one of the fifteen is ADFIM, the Association of Development Finance Institutions of Malaysia. It is a trade body. It represents lenders. It does not lend. So we are already at fourteen funders and a members’ club. Two. The bank in the lobby Here is the part that actually changed how I read this story. Five days later, the same New Straits Times reporter filed a second piece on a different subject. MBSB Bank, the bank that hosted the event in its own tower, announced it is committing four billion ringgit to what it calls high growth, high value industries. One billion each for rail, aerospace, automotive and renewable energy. And the chairman gave that quote, in the paper’s own words, “on the sidelines of the TechnoMART Malaysia: High Tech Financing 2026 event”. Same room. Same day. I want to be careful here, because this matters and I am not going to overstate it. Neither article says MBSB’s four billion is part of MOSTI’s five billion. No source links them. I chased this and could not close it, because MOSTI never published a breakdown. So there are two possibilities, and you can pick either one. Possibility one. The four billion is inside the five billion. In which case eighty percent of Malaysia’s headline startup financing pool is one bank’s sector lending strategy, and the startups in question are rail suppliers and solar farms. Possibility two. It is separate. In which case MOSTI’s five billion is spread even thinner across the other fourteen institutions than it already looked. There is no third possibility where this number means what the headline said it meant. And one more detail, because it is the most telling sentence in the whole story. MBSB described this push as diversifying beyond its traditional strength in property financing. A property lender is moving into industrial lending. That is a perfectly sensible corporate strategy and I have no quarrel with it. It is just not startup capital, and it got filed under startup capital. Three. Thirty billion committed, 2.8 billion out the door So much for the announcement. Now ask what happened last year, with the money that already exists. The Securities Commission published its capital market masterplan in March. In it is a number that should be the headline of every Malaysian startup story for the next twelve months, and I have seen almost nobody use it. At the end of 2025, Malaysian venture capital and private equity together held thirty point one billion ringgit in committed funds. In that same year, venture and private equity together deployed two point eight billion ringgit, across a hundred and seventeen deals. Thirty billion committed. Two point eight billion out the door. That is under ten percent. And be careful with that two point eight, because I am going to be careful with it. That is venture and private equity combined. The venture slice on its own is smaller. Of the thirty billion committed, only about six billion is venture at all. The other twenty four is private equity, which buys profitable companies. Different animal, different risk, different sport. So when a minister stands up and says Malaysia needs more financing for startups, the honest response is: does it? There is thirty billion ringgit sitting in committed funds in this country and it moved two point eight billion in a year. Adding a fifteen door lending pool to that does not solve the problem. It is the wrong end of the pipe. If you want the sharpest version of this, look at Jelawang Capital. Jelawang is Khazanah’s national fund of funds. It was set up specifically to fix this. One billion ringgit, mandated to back Malaysian venture managers so they can back Malaysian founders. Exactly the right instrument. Genuinely the right idea. I have no criticism of the design. In February, Khazanah reported the results for the year to the end of December. Its first five fund managers had backed more than ten startups, and crowded in about thirty million ringgit. Thirty million. Ten companies. From a one billion ringgit national fund of funds. Fund of funds are slow by design. First five managers, early days, capital calls take years. That is all true and I will defend it. But hold that thirty million next to a five billion ringgit banner and tell me which number describes Malaysia today. Four. Fifty billion of debt, under a billion of equity You can see the same shape in the budget. Budget 2026 raised the combined equity allocation across KWAP’s Dana Perintis and Khazanah’s Jelawang to seven hundred and fifty million ringgit. Cradle got fifty five million for equity programmes. The co-investment fund got two hundred million. In that same budget: over fifty billion ringgit in loans and guarantees for entrepreneurs. Fifty billion of debt. Under a billion of equity. That is the Malaysian capital stack in two numbers. And I understand why. Debt is politically easy. A guarantee costs nothing until it is calle

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Real, raw, relatable takes on Southeast Asian startups. One investor, the week's news, no script. seaofstartups.substack.com

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    Decoding the Pulse of Founders, Capital & Conviction in Southeast Asia.
  • Years Active
    2022 - 2026
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    91
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    Clean
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