Southeast Asia’s tech sector has been breaking records and making headlines in the first half of this year, no small feat amid a global pandemic.
With significant deals for on-demand mobility and e-commerce companies such as Singapore-based Grab and Indonesian giant Gojek, the upturn in activity has already been termed a ‘boom’ and a ‘hot streak’ by UK media outlets including Financial Times and The Economist.
Southeast Asia’s digital economy is expected to surpass US$300 billion by 2025, according to a 2020 report. The region’s tech success story is evolving and international opportunities for partnerships, investment and company expansion are plentiful.
Specifically looking at the UK – where I am the Chair of Tech Nation, the growth platform for UK tech leaders – the opportunity for Southeast Asian startups is bright.
We recently announced that the UK now has 12 tech decacorns, and that out of the seven new decacorns this year, six of the founders were not from the UK. A compelling argument for Southeast Asian tech entrepreneurs looking to start, scale or grow in the UK.
The UK tech ecosystem is valued at US$585 billion, more than double the next most valuable European ecosystem, Germany, at US$291 billion and has huge potential in these three key areas for Southeast Asian scale-ups who are ready for their next big step.
A well-connected fintech sector
The UK’s world-leading fintech hub presents an attractive opportunity for Southeast Asian scaleups, not just due to the maturity of the sector, but also because the major global financial centres– London and Singapore– are well-aligned with similar approaches to regulating innovation and encouraging collaboration between fintech and traditional financial services firms.
The UK’s Financial Conduct Authority (FCA) and Singapore’s Monetary Authority (MAS) have both taken a proactive approach to foster digital transformation in the financial sector.
The FCA’s innovation unit runs regulatory sandbox programmes for fintech to ensure market stability without holding up innovation, and MAS offers a similar scheme alongside an ‘express’ sandbox to rubber-stamp low-risk innovation.
Singapore and the UK recently launched a new financial partnership that will help boost collaboration on important areas including fintech with Singapore and the Asia Pacific region.
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Driven by innovation and technology, our financial services sector continues to deepen its connections with financial centres across the world.
With 10 per cent of the world’s total fintech investment coming into the UK, our fintech sector remains at the cutting-edge of digital finance, with unicorns (and Tech Nation Alumni) such as Revolut, Wise, Starling and Checkout.com who have all scaled into Asia Pacific, born in the UK.
The size of the market opportunity in the UK, presence of world-class talent and levels of investment into its fintech sector, provide real growth potential for fintechs in Southeast Asia.
Accelerated cybersecurity growth
The combination of world-leading universities, a high density of cybersecurity accelerators, and the prioritisation of security on the national agenda has created a cluster of cybersecurity activity in the UK. This includes globally successful companies such as Darktrace which was founded in the UK.
The pandemic has accelerated growth in the sector, with the UK’s Department for Digital, Culture, Media & Sport (DCMS) Annual Cyber Sector Report showing a 21 per cent increase in the number of cyber firms, and almost 4,000 new jobs created in 2020.
Companies and national infrastructure in Southeast Asian nations, including Indonesia, Singapore and the Philippines, are particularly vulnerable to cyber attacks and breaches.
A recent ‘urgent report’ explained that the region’s growing strategic relevance and low cyber resilience makes it a prime target for cyberattacks.
Southeast Asian scaleups which can leverage the UK’s expertise and experience in cybersecurity have the opportunity to become pioneers in this fast-growing sector.
The UK’s healthtech boom
For more than five years, Southeast Asia has experienced a ‘digital healthcare leap’ with the emergence of accessible health services designed specifically for a ‘mobile-first demographic.
According to data from Tech Nation, healthtech in the UK is also booming, showing record-breaking investment in 2020 at US$2.33 billion.
The UK is home to more than 3,000 healthtech scaleups, of which around 400 have shown at least 20 per cent growth over the last two years.
A key factor for success for healthtech scaleups is forming crucial partnerships with healthcare providers, insurers and corporate partners.
For example, UK-headquartered Babylon Health partnered with Prudential insurance to provide its digital services to Asian customers, while Asian ‘superapp’ Grab partnered with Chinese healthcare platform Ping An Good Doctor for a joint venture that delivers online healthcare in Southeast Asia.
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The synergies between the healthtech sectors in Southeast Asia and the UK, alongside the importance of international partnerships, have the potential to generate world-leading healthcare innovation without limits.
The UK and Southeast Asia are perfect partners for the future of tech. Launched in 2021, our Tech Nation International Growth Programme is one of the many ways the UK continues to collaborate in the digital economy globally.
We are working closely with the UK government, specifically the Department for International Trade, as part of the Digital Trade Network, to help not only UK tech firms enter new markets in Southeast Asia but also help build foundational links for businesses, offering the Global Talent visa to tech professionals from the region so they can immerse themselves in the UK’s tech vibrant ecosystem.
I look forward to seeing more international partnerships between our ecosystems, creating the next generation of tech unicorns and decacorns.
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