On July 2nd, X-HUB TOKYO, a platform which supports overseas expansion of Tokyo-based startups, held the FY2024 X-HUB TOKYO #1 Overseas Expansion Seminar titled “Gateway to Southeast Asian Market ～Seizing Success with Expansion into Singapore and Indonesia～.” The seminar included an overview of X-HUB TOKYO and highlighted the characteristics and attractions of the Southeast Asian market, focusing on Singapore, which leads the startup ecosystem in the region, and Indonesia, which is experiencing remarkable growth.

During the first half of the seminar, Mr. Takeshi Ebihara, Founding General Partner of Rebright Partners Pte Ltd. presented an overview of the startup ecosystem in Southeast Asia. He shared quantitative data and practical examples to illustrate the realities of the Southeast Asian market.

In the latter half of the seminar, two panelists: Mr. Ryo Sueyoshi, Director/Head of Global Business Development of KINS CO., Ltd. and Director of KINSLABO SINGAPORE PTE.LTD., and Mr. Shintaro Nakayama, Chief Operating Officer (COO) of OUI Inc. and Researcher at the Department of Ophthalmology, Keio University School of Medicine, joined. Under the facilitation of Mr. Ebihara, they discussed “Expansion Strategies and Secrets to Success in Singapore and Indonesia” based on their real-life experiences.

Overview of the Startup Ecosystem in Southeast Asia

Mr. Takeshi Ebihara, Founding General Partner of Rebright Partners Pte Ltd.

First of all, Mr. Takeshi Ebihara, Founding General Partner of Rebright Partners Pte Ltd., a venture capital firm specializing in the Asian region with headquarters in Singapore and offices in Bangalore, India, and Tokyo will provide an overview of the Southeast Asia startup ecosystem.

When looking at the rankings of startups fundraising amounts in each country for 2023, Southeast Asia follows the United States, China, Eurozone including the UK and India. In term of scale, it has recorded figures nearly twice that of Japan. If we consider fundraising amounts as the size of ecosystem, you can see the momentum of Southeast Asia.

In recent years, industries such as e-commerce, lending, and Agritech have seen significant growth. Southeast Asia has many young populations, leading to rapid penetration of digital transformation(DX). Additionally, internet access in rural areas has increased 2-3 times over the past seven years, resulting in a DX revolution in these regions. Many countries in Southeast Asia have a high potential for digital native innovation to occur faster pace than in developed countries.

However, it is important to note that Southeast Asia is not a homogeneous entity; each region has vastly different cultures. When expanding a business in Southeast Asia, there are three key points to keep in mind. Firstly, the environment varies greatly between countries and regions, making it “Fragmented.” Secondly, the majority of businesses are small or micro-enterprises, which are often “Unorganized” and lack modern management investments. Lastly, due to the absence of established businesses, there is a phenomenon of “Leap Frog” development, where digital native innovation can occur faster than in developed countries.

Can you tell us about the characteristics of the startup ecosystems and markets in Singapore and Indonesia within Southeast Asia?

Regarding Singapore, I often describe it as the “Red Dot of Asia,” signifying its small size but central role in the region. Singapore provides a stable business environment in terms of legal and tax aspects, which is why many startups choose to establish their companies there in Southeast Asia.

Additionally, Singapore has a well-established ecosystem for fundraising, making it highly recommended not only as a destination for business expansion but also as a place for securing funds. Based on our experiences, it seems to be particularly suitable for startups at Series B and beyond.

On the other hand, Indonesia boasts the largest market in Southeast Asia. Approximately one-third of the total GDP of Southeast Asia is concentrated in Indonesia. For startups aiming to eventually expand their business across the entire Southeast Asian region, we recommend starting from Indonesia.

Finally, could you share some strategies and key points for Japanese startups aiming to expand into Southeast Asia?

Firstly, determine whether your business is aimed at a global or local market. If you possess specific technology or intellectual property (IP), global expansion may be more feasible. However, expanding overseas can be quite challenging for local businesses. Then, ensure that you envision a sufficiently large Total Addressable Market (TAM). Lastly, build a team capable of pursuing overseas expansion. This may involve hiring a business manager locally or including foreign nationals on your board of directors at your headquarters in Japan. While there is no one-size-fits-all solution, these aspects need to be considered in advance.

On the other hand, I often use the expression “Company Belongs to Community,” emphasizing that globalization and maintaining your own identity are not mutually exclusive. Leveraging your strengths while preserving the positive aspects of Japanese culture can become an advantage in the markets you are entering. By keeping these points in mind, I encourage everyone to actively pursue opportunities in Southeast Asia.

Panel Discussion：Strategies and Secrets to success for expanding into Singapore and Indonesia

（Top left）Mr. Ryo Sueyoshi, Director of Overseas Business, KINS Co., Ltd.
（Top right）Mr. Takeshi Ebihara, Founding General Partner, Rebright Partners Pte Ltd.
（Bottom）Mr. Shintaro Nakayama, Chief Operating Officer (COO), OUI Inc.

In the latter half of the seminar, we will have a panel discussion. Our panelists are Mr. Ryo Sueyoshi, Director/Head of Global Business Development of KINS Co., Ltd., and Mr. Shintaro Nakayama, Chief Operating Officer (COO) of OUI Inc. The panel will be moderated by Mr. Takeshi Ebihara, Founding General Partner of Rebright Partners Pte Ltd. To start, could you please introduce yourselves and talk about the businesses you are working with in Southeast Asia?

Mr. Sueyoshi: At KINS, we are a biotech startup founded in 2018, focusing on the relationship between the balance of microbes within the human and animal body and health and beauty. Our mission is “to make ‘caring for microbes’ a common practice in society.” We are engaged in product development, clinical services, and research and development. Currently, we have about 80,000 people using our services.
We began its overseas expansion in 2022, and we have since entered Taiwan, China, and Singapore. For our expansion into Singapore, we have received support from JETRO Singapore and JSIP (Japan SEA Innovation Platform), and I am currently based in Singapore to drive our business forward. In addition to being a hub of Asia, Singapore offers a stable business environment with well-established legal systems, which I believe greatly enhances the scalability of our business operations. Additionally, as Mr. Ebihara mentioned, I recognize the importance of “globalization our fundraising efforts.”

Mr. Nakayama: We are a university-originated venture founded by ophthalmologists from Keio University in 2016. Although we are a small company with around 15 people, we have a grand vision of “reducing global blindness by 50% and protecting people’s health through their eyes.” We have developed a device that enables ophthalmic examinations using a smartphone and are offering a new model for eye diagnosis. Currently, we are operating in over 60 countries worldwide, and we find the Indonesian market particularly attractive due to its size. Additionally, the geographic factor of the archipelago has posed challenges in accessing ophthalmic care, which we are addressing by collaborating with local medical institutions, doctors, and university professors.

As you progressed with your overseas expansion, when did you feel that your product or service achieved product-market fit (PMF) and was accepted by the market?

Mr. Sueyoshi: We felt a sense of achievement in attaining product market fit when we received feedback from customers who bought our products or patients who visited our clinics saying, “This is exactly what I was looking for” or “I’ve been waiting for a clinic like this.” However, we have not fully captured the market yet, so we intend to continue our efforts in expanding it.

Mr. Nakayama: In our case, when we conducted product demonstrations and received reactions such as astonishment from local ophthalmologists, or when crowds gathered around our products, we definitely felt that there was a need for our solutions.

Finally, could you share any challenges you have faced during your overseas expansion, and based on those experiences, provide a message for startups aiming to expand into Southeast Asia?

Mr. Sueyoshi: We have faced various challenges so far, especially when establishing a dermatology clinic in Singapore. Hiring was particularly difficult. While we were aware through prior research that there were few dermatologists in the country, finding someone who resonated with our company’s philosophy and eventually accepting our offer was a long journey. I recommend that everyone live locally to gain first-hand insights and connect with various people and companies until you reach this level of understanding.

Mr. Nakayama: When we expanded into Indonesia, it took longer than expected to become profitable, and we faced difficulties in sustaining our funding. Therefore, we aim to build our business with a long-term perspective, thinking, “We might receive significant returns in 10 years.” On the other hand, insights gained in Indonesia have led to new business ideas in Japan, so having a diverse portfolio is also important. Despite all these points, based on my experience, the most crucial aspect of overseas expansion is to maintain a sense of enjoyment. If you hold onto this mindset, you will naturally attract like-minded individuals, and the path forward will open up.

At this seminar, we introduced the characteristics of the Southeast Asian market and the attractions of the startup ecosystem, focusing on Singapore and Indonesia. Moving forward, X-HUB TOKYO will continue to provide the latest information on the characteristics and attractions of overseas startup ecosystems, as well as strategic approaches for expanding abroad.