A closer look at how technology has enabled startup success in Malaysia, Indonesia, and Singapore
Since 2012, the startup ecosystems in Malaysia, Indonesia, and Singapore have raised well over US$80 billion in venture funding. From relative infancy in 2011 to global startup powerhouses in 12 short years is nothing short of remarkable.
Malaysia is the 3rd in Southeast Asia, according to rankings by the Global Startup Ecosystem Report 2024. With 1,000+ tech companies and only 2 unicorns, it has yet to truly realize its potential. In 2023, for example, only US$277 million in venture deals were closed with an average of about US$4.5 million per deal.
Indonesia is one step above at 2nd in Southeast Asia and 36th globally, with 2,400+ tech companies and 14 unicorns. Startups routinely fetch over a billion dollars in venture funding (as high as US$6 billion in 2021), with an average of about US$10 million per deal.
Singapore comes in as the top startup ecosystem in all of Asia and 7th globally. Already home to 36,000+ startups and 32 unicorns, the city-state also boasts 200+ incubators and 500+ investors.
In trying to understand this explosive growth, we can point to technology’s role in creating opportunities for startups to solve people’s problems. Case in point is the smartphone and what it has done for financial, transportation, and communication solutions.
What I find most interesting is how startup success has altered the talent pool in the three countries. Software engineering graduates and jobs, in particular, have boomed as a result of startups such as Grab, GoJek, and Carsome. Online business management, social media marketing, and business development have also seen increases.
The question moving forward is how we can prepare for the next phase of startup growth in these three countries. Communication is something we’re looking at closely: reaching users where they are with the right message at the right time. There is so much to learn from how startups interact with their users.
Technology’s role in startup ecosystem growth
Aside from the internet itself, the smartphone has undoubtedly been the biggest driver of startup growth. With penetration reaching nearly 100 percent in Singapore, 70 percent in Indonesia, and 89 percent in Malaysia, it has emerged as the single greatest tool for startups to leverage. Everything from banking and investing to food delivery and last-mile travel has been made accessible and convenient.
Grab and GoJek are two prime examples of just how much smartphones can enable. Users can do almost anything on the apps without needing to leave home, while driver location can be tracked in real-time. With the integration of financial services, these apps are also bringing a critical segment into the fold: the millions of un- and under-banked. This includes the drivers who are deriving their income from the apps.
The other key point worth noting is that technology has supported scale. Indonesia is a large country with 17,000+ islands. Without the internet, smartphones, and electricity, it would be very difficult to scale a consumer tech solution in, say, Jakarta to West Papua. With scale comes revenue potential and venture capital interest, which further drives startup ecosystem growth.
The impact on the talent pool
It’s not an exaggeration to say that startup success has altered talent distribution in the three countries. The promise of higher salaries, and even equity, has led to an increase in the number of people choosing software engineering as a career path. In the last year alone, the number of software engineering roles in ASEAN increased some 25 percent. Nowhere is this more apparent than in Indonesia and Malaysia.
And with each successive unicorn, a new generation of aspiring founders is born, armed with the knowledge of those that came before them. It’s a veritable network effect of startup wisdom that thrives in co-working spaces, startup hubs, and incubators. In notoriously “risk-reluctant” Singapore, this phenomenon has provided founders with the confidence to choose the startup path.
Another encouraging factor is the dispersion of talent. It’s no longer the case that Kuala Lumpur and Jakarta, in the cases of Malaysia and Indonesia, dominate the startup landscape. Penang, Bandung, and Surabaya have emerged as centers of both talent and capital. This creates hubs within larger ecosystems that are solving hyperlocal problems.
Future growth through communication
For us, communication is central to any startup in 2025. Whether increasing security through one-time passwords (OTPs), delivering real-time updates, or enabling efficient customer service, timely and effective communication has become the hallmark of a successful startup.
What we find most interesting about startups in Indonesia, Malaysia, and Singapore is the number of communication use cases. Telemedicine has become critical in both heavily congested and rural areas, government services are increasingly going digital for updates, and know-your-customer (KYC) services can be outsourced to third parties via digital channels. With the advent of AI chatbots and agents, we’re seeing even more potential use cases. Things like personalized shopping recommendations, tailored financial advisors, and easier flight booking.
What we’ve also seen over the last 10 years is an increase in communication channels. What used to be email and SMS is now WhatsApp, Instagram, TikTok, Telegram, and Facebook. In the marketing context, messaging has to be tailored to each platform. It’s no longer enough to send a generic message if startups want to reach new target markets, let alone expand geographically.
At Infobip Startup Tribe, we’re excited about building the communication tools that will power the next generation of startups in Malaysia, Indonesia, and Singapore. Startups such as Indonesian fintechs Skorlife and Danabijak, used our tools to streamline user communication, enhance security, and ensure compliance with local regulations. They also took advantage of our own communication expertise and network to support their growth.
But we have much to learn from the way new startups in these countries interact with their customers. Rural users, such as farmers, are a new frontier for things like financial inclusion. Our goal is to evolve together with the startups to help each other deliver the kind of experiences that give farmers access to capital and allow small merchants to build a credit score.
Nikola Pavesic is Director of DevEx & Startups at Infobip.
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