(Helen Wong is a managing partner at AC Ventures and a seasoned venture capitalist with over two decades of experience spanning Silicon Valley, China, and Southeast Asia.)
As I gaze at the glimmering sea and majestic mountains of Banyuwangi, Indonesia, I find myself reflecting on what has been a transformative 2024.
This year marked my third since returning to Singapore and joining AC Ventures. It has been a year of milestones for us: we closed Fund V, celebrated our portfolio company Koltiva’s win of a prestigious ESG award, was honoured by my inclusion in the Forbes 50 Over 50 list, and grew our portfolio with new investments and follow-on financings.
But let’s start with the bigger picture — politics.
This was a year defined by elections. Indonesia’s Valentine’s Day surprise saw a resounding win for the Prabowo-Gibran ticket, signalling continuity and a focus on human capital development, downstreaming of the mineral industry, and foreign direct investment.
Then in November, we saw a nail-biting election in the US. What would a potential Trump 2.0 mean for Southeast Asia? Would increased tariffs on China redirect opportunities here, or would protectionist policies disrupt regional trade routes? The potential bans on TikTok and Temu, already banned in Vietnam, raise further questions about market flows and inflation risks.
Speaking about the supply chain, one of the major surprises of this year was the deluge of goods from China flooding the ports in Indonesia. This triggered protectionist fears, resulting in delays in customs clearance and a shortage of quotas for imports. A major shortage of supplies ensued for everyone ranging from restaurant owners to online merchants. This led to significant missed sales opportunities, which we hope will improve in 2025.
E-commerce was another battleground. Platforms like Shopee and TikTok dramatically raised their commission fees, making Southeast Asia the world’s most expensive market for merchants. While Sea Limited’s stock recovery signalled optimism, it also highlighted mounting pressures on sellers.
Live-streaming e-commerce in China grew by only 50% year-over-year, hinting at a maturing market, and Southeast Asia seems poised to follow. As digital brands pivot toward offline retail, the demand for skills in distribution, site selection, and store management grows—a daunting shift for many. Only the strongest brands that can adapt an omnichannel strategy will survive, and we hope to see more born in SE Asia brands succeed.
The strongest brands that can adapt an omnichannel strategy will survive
The Indonesian Stock Exchange (IDX) provided an optimistic counterpoint. My visit with distinguished guests from China showcased promising IPO pipelines for 2025, boosted by a post-election recovery.
Meanwhile, Southeast Asia’s consumer strength shone through, as exemplified by Malaysia’s successful Mr DIY and 99 Speed Mart IPOs. The long lines at select stores in malls show that there is always opportunity if you can find the right product-market fit. I was quite impressed by Labubu, the crazy smiling collectible that is sold out worldwide.
Popmart’s meteoric rise, from under $20 to around $93 per share, underscores the power of having a blockbuster product. Closer to home, the burgeoning queues outside On Cloud’s Jakarta store reaffirm Indonesia’s retail potential.
This year, we were proud to invest in 707, the distributor behind On Cloud, Fred Perry, Melissa, and others, with around 80 stores in Indonesia and a growing footprint across the archipelago.
On the climate front, we were thrilled to see Xurya, which was seeded by our Fund II, close an oversubscribed $55 million funding round, marking a significant milestone in clean energy innovation.
On the electric vehicle front, things have been moving slower than expected in Indonesia, with only 60,000 subsidies for two-wheeler electric vehicles, so we await to see how the new government in Indonesia will dictate policies in the new year.
If China can offer us a look into the future of electric vehicles in Southeast Asia, then we are glad to see that 2024 marks the first time that electric vehicles outsold traditional cars for new cars. If we wind back the clock a few years ago, electric vehicles in China only made up 6% of all new car sales in 2020 – in a few years, this number has become 50%. This makes me hopeful for electric vehicles in Southeast Asia.
Of course, any article about 2024 would be amiss not to mention Generative AI — still a hot topic and driving large fundraising rounds in the US and China. I had the opportunity to attend the launch of OpenAI’s Singapore office, where I witnessed fascinating demos like self-programmed drones.
I was surprised to see my daughter use ChatGPT to ask Santa what presents she should wish for this Christmas, which led her to discover Shein (a potential risk of AI-enabled consumerism!).
On the investment front, most AI applications we have seen are for enterprise use, not dissimilar to the SaaS business model. Few consumer-facing applications, such as “Speak” in the U.S., have reached a unicorn valuation for language learning, so we await more traction on consumer applications in 2025.
The key phrase that comes to my mind for 2024 is the year the “penny finally dropped” for the startup ecosystem in this region. If you recall the euphoria of 2022, and the gradual awakening to a new reality in 2023, the acceptance of the new norm took place in 2024 for many founders.
We also saw around 7 follow-on financing rounds for our portfolio companies as investors loosened up their purse strings and founders came to terms with down-to-earth valuations. Notable examples include Supermom’s $14 million funding round connecting brands with over 10 million parents across Southeast Asia and the Indonesian automotive startup Broom securing $25 million in Series funding.
With the fundraising records we saw in 2021 now a distant memory, and the painful cost efficiencies mostly done, I hope we can look to 2025 with renewed optimism, reigniting the engine of growth and seeing how companies perform compared to the pre-COVID era.
