Fintech founder reveals why its harder to start up in Singapore
If you want a successful fintech in 2023, chances are you're founding one in a main global funding hub like London, San Francisco or New York. But what about Singapore, the largest fintech hub in Asia? Speaking at the Singapore Fintech Festival last week, McKinsey analyst turned fintech founder Kelvin Teo says building a startup in Southeast Asia isn't easy and can be a "really long game."
Teo, who founded digital lending startup Funding Societies, says, in Europe and America, "it usually takes around seven years to become a unicorn." In Asia, however, "the gestation period is a lot longer because of how fragmented the market is."
It doesn't help that most startups haven't figured out what they actually are. "A lot of earlier startups are clones" Teo says, "the Netflix of Asia, the PayPal of Asia." In order to achieve more sustainable success, companies must "expand the graph of their business, which makes starting up in Asia that much harder."
Case in point: Grab. The $13bn Singaporean fintech has a thriving financial services division, but began its life as a ride-share service, 'the Uber of Asia.' This need to expand the product suite also explains the fascination with 'super-apps' which is starting to seep its way into western markets with Elon Musk's X.
There are some advantages to building a startup in Southeast Asia, however. Teo says the average founding year of a company in the region is 1987; the number of innovative companies likely pales to an area like the US, meaning there's a significant gap in the market for forward-thinking companies. "If you cross the chasm of becoming a meaningful business," Teo says, "you’re here to stay."
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