Former Fave executives Joel Neoh and Audra Pakalnyte have launched First Move, a founder-led early-stage fund early July, in a bid to empower consumer-focused startups across Southeast Asia.

The fund provides vital pre-seed funding of up to $100,000, and has a current portfolio of seven companies spanning Singapore, Malaysia, and Indonesia, according to its statement then. Amongst its first collaborators and backers are VC firm 500 Global, underscoring First Move’s collaboration-first approach to support the growth and success of startups in the region.

Neoh, who joined healthtech company Prenetics as Managing Director of CircleDNA last month, said, “In my recent travels, I met many healthcare professionals and the conversations broadened my understanding of the healthcare landscape. To me, it became clear that there is significant work needed to advance healthcare for the betterment of humanity. This was one of the big reasons why I joined Prenetics and CircleDNA.”

“Through my role there, I will be able to learn deeply about the healthcare industry, and with Healthtech being one of our target verticals with First Move, I hope to be able to apply the practical learnings in my mentorship to the founders we invest in,” he told TechNode Global, when asked about how his role at Prenetics and CircleDNA can complement his role in First Move.

TechNode Global also spoke to Pakalnyte, Partner at First Move to learn more about its plans, the opportunities First Move sees in Southeast Asia, where are the “underserved” segments within the consumer tech sector, among others.

Founded in 2015, Fave is a Malaysia-headquartered fintech loyalty platform in Southeast Asia. Fave was acquired by Pine Labs in April 2021. Neoh, another Partner at First Move, was the founder and Chief Executive Officer of Fave while Pakalnyte was the Head of FavePay Later when she left Fave earlier this year.

First Move Partners Joel Neoh (left) and Audra Pakalnyte

Below are the edited excerpts of the interview with Pakalnyte:

What are the opportunities and potential you both see in Southeast Asia? Within Southeast Asia, is there any country/market(s) you are focusing on/prioritizing?

Southeast Asia has a vibrant startup ecosystem with new disruptors emerging everyday. The digital economy across the region has been growing at an unprecedented speed owing to the rise of smartphones and mobile technology. By 2025, the region’s Internet economy is expected to reach $100 billion, according to the SEA e-Conomy Report.

Over the last 10 years, Southeast Asia has made significant progress in terms of digital infrastructure development and adoption, particularly in areas like digital payments, logistics, last-mile delivery solutions, and marketplaces. These advancements lay a solid foundation for the emergence of new consumer solutions and further contribute to the region’s overall potential for innovation.

There is also an increasing pool of talent, comprising current employees and individuals who have previously worked in the tech industry, all driven by their entrepreneurial ambition and fresh graduates with a visionary mindset. Universities throughout the region are providing a plethora of entrepreneurship and innovation courses, actively
nurturing the development of the next generation of founders.

We are also seeing a rise in government policies across the region that support the growth of the startup ecosystem. More and more leaders are recognising the region’s potential and providing incentives like tax benefits and funding/support programs to startups.

The markets that we are keeping a close eye on upcoming disruptors are in Singapore, Malaysia, Indonesia, Vietnam, Thailand and the Philippines.

Why consumer tech? Are there any particular segments within the consumer tech sector you are focusing on and why?

We are seeking consumer-focused companies that aim to address challenges and make a meaningful impact in various sectors such as healthtech, commerce, sustainability-focused solutions, inclusive fintech, and more. We both have extensive expertise in establishing and managing consumer tech startups right from their inception, enabling us
to guide founders through the initial stages of their journey.

However, our support extends beyond just the two of us, as we have established a consumer tech angel syndicate to provide mentoring, advice, and additional resources to entrepreneurs.

Is there any segment you think startups should disrupt or come up with better solutions? What are the “underserved” segments within the consumer tech sector?

As a region, Southeast Asia offers numerous opportunities for startups to disrupt and provide better solutions, for example in the HealthTech sector.

The digital transformation of healthcare has been progressing in the region, but there remains a need for improved access to preventive healthcare and personalized health solutions. Startups can contribute to bridging these gaps by offering solutions that focus on preventive healthcare measures, early disease detection, remote health monitoring,
and wellness management platforms.

By leveraging technology, startups can empower individuals to take proactive control of their health, providing them with tools for tracking and managing their wellness goals, accessing personalized health recommendations, and facilitating remote consultations with healthcare professionals.

The integration of data analytics, artificial intelligence, and wearable devices can further enhance preventive healthcare efforts by enabling the early identification of health risks and the implementation of targeted interventions.

How is the overall consumer-startup ecosystem?

The overall consumer-startup ecosystem in the region is rapidly evolving and adapting to technological advancements. The foundation of strong marketplaces, widespread adoption of digital payments, and the digitalization of small and medium enterprises (SMEs) have provided a solid framework for the emergence of consumer-focused solutions.

Startups are leveraging existing infrastructures, such as logistics networks, to launch and scale their consumer-centric offerings more efficiently. This allows them to serve customers with greater ease and convenience.

The ecosystem has demonstrated resilience and agility, continually shifting to embrace new technologies and trends. Startups are actively capitalizing on the opportunities presented by the digital landscape to address consumer needs and preferences.

Rather than solely focusing on growth, there is also a growing emphasis on profitability within the consumer-startup ecosystem. This shift comes in light of the current macro economical landscape which will produce more startups that strive to build sustainable and viable business models.

What is the reason behind setting up a pre-seed fund? Do you see a gap here?

The current macroeconomic conditions have drastically affected funding for startups. According to SE Asia Deal Review: Q1 2023, Southeast Asian startup funding has dropped to a two-year low in the first quarter (Q1) of this year.

Across the region, homegrown firms raised 52 percent less funds as compared to Q1 2022. There is a definite gap here which we want to address. We strongly believe that disruptive ideas should not be left as a dream. Thus, we want to provide founders with the right support to make these ideals a reality and prosper in trying times like the current global economic climate.

What is the fund size? What are the ticket sizes? How long do you plan to fully deploy all the funds?

We are looking to invest in 15 to 20 companies this year with a ticket size of up to $100,000 in the consumer space across industries with reserving some of the funds for the next year investments and follow-ons.

We move rather fast with the investments and deploying of funds to founders, as we want to ensure founders focus on operating business, rather than spending months fundraising. Signing off of terms and capital deployment is done within days.

First Move has invested in seven startups, in e-commerce and D2C space across Singapore, Indonesia and Malaysia. Would you be able to disclose which are the startups?

Giggly Coco, Scentses & Co, Collektr, Evolut Commerce, TjuFu, and Decube as well as Malaysia’s home-grown coffee company focused on making premium beverages more accessible.

What are the most important criteria you look for in a startup when you are making investment?

Since we are very founder-focused, the primary consideration is the founder. We carefully assess their experience, character and passion for solving the specific problem their business addresses.

We also evaluate the size of the opportunity presented by their venture and analyze the approach they have taken to address the market demand and unit economics behind the business model.

Based on your observations, what are the challenges startups in Southeast Asia face? How can you both help? What’s the goal of First Move?

Startups in Southeast Asia face various challenges depending on the industry and stage
they are in, from finding right founders and talent, to limited access to capital, a relatively
smaller number of successful IPOs and exits in the region which in mature ecosystems
fuels ambition, experienced talent pool and early stage investments.

Also highly fragmented Southeast Asia market when it comes to regulatory complexities, digital payments and local infrastructures for it as well as rapidly shifting consumer behavior trends and market competition.

Our goal is to support founders in overcoming the obstacles they may face in the very initial stages of their business.That means going beyond the monetary investment and providing invaluable mentorship. We are founders ourselves and understand pain points. We know the crucial growth stages of a business and can guide founders through them to success.

How do you see the next generation of Southeast Asian entrepreneurs, and what bodes for the future of the innovation ecosystem?

The beauty of working in a high-growth region like ours is that one successful founder can inspire another founder to make their first move. Collectively we need to work to build more success stories in Southeast Asia that would serve the region and the world. We want to encourage all aspiring founders to make their first move and help them

What’s your views on the future of venture investment in Southeast Asia, and the role of repeat founders, new funds and family offices in giving back to help new founders make their first move?

The role of investors is shifting from funding to also supporting and mentoring. They are more considerate of business models and capital efficiency. While growth was king as recently as a few years ago, profitability has taken the throne now. Investors are actively encouraging their portfolio companies to pursue profitability and self-sufficiency.
Slowly, we will continue to see investors go beyond cash injection. They – along with seasoned founders like us – have identified the need for mentorship among new founders.

Any suggestions for startups, investors, governments to build a better tech ecosystem in Southeast Asia?

We have already seen a shift in startup mindset towards prioritizing profitability and sustainable business models. Startups should focus on strong unit economics and a clear path to profitability, making them more resilient in challenging times. Investors also are looking beyond growth metrics and consider the long-term sustainability and profitability of startups, investing in ventures with potential for enduring success.

Besides, governments can play a crucial role by implementing supportive policies and initiatives. This includes providing tax incentives, funding programs, and regulatory frameworks for new emerging technologies that enable new ventures to launch easier
and attract investments.

Collaboration and knowledge-sharing should be fostered among startups, investors, and industry players, creating platforms for networking and partnerships. Lastly, embracing flexibility and adaptability in the face of rapidly changing macroeconomic conditions is essential, with startups encouraged to experiment, adopt agile methodologies, and iterate their strategies to seize new opportunities.

Former Fave Execs launches pre-seed fund to support consumer-focused startups in Southeast Asia