In Southeast Asia, a booming crypto scene


Image Credits: Saigon/hochiminh City from above. Getty Images

Southeast Asia, a diverse region with an expanding population and rising income, is emerging as a popular destination for crypto entrepreneurs and investors hunting down high-growth startups in the space.

More than 600 crypto or blockchain companies are now headquartered in Southeast Asia, according to a new report by venture investment firm White Star Capital. Much of the recent growth in venture capital funding across the region has stemmed from crypto, blockchain and web3 startups, which drew in almost $1 billion in funding just in 2022 to date and are on track to surpass the $1.45 billion total in 2021, says the report.

Investors from all over the world are drawn to the region’s vibrant web3 scene, with those from the U.S., China and Singapore being some of the most active ones, the report shows.

While much of the deep, fundamental research and infrastructure development in the blockchain space still takes place in the U.S., Southeast Asia is ideal for web3 startups offering consumer-facing services, Amy Zhao, lead at Ocular, a crypto fund under Openspace Ventures, told TechCrunch.

“The demographics of Southeast Asia are very favorable for web3,” said the investor. “[It has] young populations who inherently understand the technology and are more willing to try new things. It’s [mostly] developing economies, so the financial aspect of crypto provides a lot of incentives for people to participate.”

Southeast Asia, with nearly 700 million residents, has one of the world’s fastest-growing populations; 480 million of them are active internet users and more are coming online. By 2040, Asia is estimated to make up half of global GDP and 40% of global consumption, with much of it coming from the 10-member Association of Southeast Asian Nations (ASEAN), a report by Pinebridge Investments found.

Much like other developing countries, large swathes of the population in Southeast Asia still have limited access to banking services despite the region’s great strides in financial inclusivity over the decade. More than 70% of the adult population remained “underbanked” or “unbanked”, according to a 2019 report from Bain & Company.

The lack of access to formal banking, in turn, gives room for alternative crypto-related finance to grow. Decentralized finance, or DeFi, has flourished in the region as it uses distributed ledger technologies to process transactions and promises to let users earn yield and gain access to capital without the cumbersome traditional financial intermediaries. Blockchain games that let users earn money by playing (GameFi) are also popular, such as Vietnam-based Sky Mavis’s Axie Infinity, which has large followings in the Philippines and Indonesia.

Crypto adoption rates in Southeast Asia averaged 3.56% in 2021, but Singapore stood out with nearly 10% of its population owning crypto, ahead of the U.S. at 8.3%, according to White Star Capital. In terms of DeFi adoption, Vietnam and Thailand were only after the U.S. in 2021, Chainalysis found.

Each country in the region has its slight edge in crypto innovation, observed Zhao. Vietnam is a source of “hardcore engineers,” whereas the Philippines loves entertainment. Thailand, on the other hand, has a vibrant financial market. Singapore is likely to produce more SaaS products given its pool of international talent.

Indonesia is “catching up” on web3 probably because the huge talent pool still rests in their web2 industry,” the investor said. But the country is also home to one of the most well-funded blockchain firms in the region — crypto trading platform Pintu, which brought in over $110 million from its Series B round recently.

It’s not just homegrown entrepreneurs courting Southeast Asia’s web3 adopters. Having spotted the region’s appetite for blockchain services, New York-based crypto exchange Gemini announced a roadmap to enter the region last year. San Francisco’s Coinbase had plans to hire in Southeast Asia as part of its global expansion before freezing recruiting amid the current market downturn.

Aside from consumer demand, Southeast Asian countries like Singapore also attract entrepreneurs with their relatively open-minded attitude toward crypto, which is largely banned in China and has come under growing regulatory scrutiny in the U.S.

“Singapore has always been very pragmatic. The regulations might not seem to be as lenient as say Dubai, which has attracted a lot of large exchanges to move there from Singapore. But Singapore’s approach has been to build up more trust in the long run to protect consumers here,” Zhao reckoned.

In January, the Monetary Authority of Singapore (MAS), the city’s state’s financial regulator, said that the trading of digital payment tokens or cryptocurrencies is highly risky and thus should not be promoted to the public.

“And in terms of innovation, it’s very supportive, such as setting out regulatory sandboxes,” the investor added.

For instance, MAS has worked with the industry to build a blockchain-based payments network. Temasek, the sovereign wealth fund of Singapore, has been an active investor in crypto startups, backing companies like crypto asset management unicorn Amber.

“We expect regulators in [Southeast Asia] to continue developing their regulatory frameworks that govern digital assets in the coming years. ‘Sudden-stop’ regulations look less likely as digital asset adoption rises, as it would put brakes on a vibrant sector with future prospects,” White Star Capital writes in its report.

Southeast Asian startups to watch in 2022

More TechCrunch

A Singapore High Court has effectively approved Pine Labs’ request to shift its operations to India.

Pine Labs gets Singapore court approval to shift base to India

Ahead of the AI safety summit kicking off in Seoul, South Korea later this week, its co-host the United Kingdom is expanding its own efforts in the field. The AI…

UK opens office in San Francisco to tackle AI risk

Companies are always looking for an edge, and searching for ways to encourage their employees to innovate. One way to do that is by running an internal hackathon around a…

Why companies are turning to internal hackathons

Featured Article

I’m rooting for Melinda French Gates to fix tech’s broken ‘brilliant jerk’ culture

Women in tech still face a shocking level of mistreatment at work. Melinda French Gates is one of the few working to change that.

15 hours ago
I’m rooting for Melinda French Gates to fix tech’s  broken ‘brilliant jerk’ culture

Blue Origin has successfully completed its NS-25 mission, resuming crewed flights for the first time in nearly two years. The mission brought six tourist crew members to the edge of…

Blue Origin successfully launches its first crewed mission since 2022

Creative Artists Agency (CAA), one of the top entertainment and sports talent agencies, is hoping to be at the forefront of AI protection services for celebrities in Hollywood. With many…

Hollywood agency CAA aims to help stars manage their own AI likenesses

Expedia says Rathi Murthy and Sreenivas Rachamadugu, respectively its CTO and senior vice president of core services product & engineering, are no longer employed at the travel booking company. In…

Expedia says two execs dismissed after ‘violation of company policy’

Welcome back to TechCrunch’s Week in Review. This week had two major events from OpenAI and Google. OpenAI’s spring update event saw the reveal of its new model, GPT-4o, which…

OpenAI and Google lay out their competing AI visions

When Jeffrey Wang posted to X asking if anyone wanted to go in on an order of fancy-but-affordable office nap pods, he didn’t expect the post to go viral.

With AI startups booming, nap pods and Silicon Valley hustle culture are back

OpenAI’s Superalignment team, responsible for developing ways to govern and steer “superintelligent” AI systems, was promised 20% of the company’s compute resources, according to a person from that team. But…

OpenAI created a team to control ‘superintelligent’ AI — then let it wither, source says

A new crop of early-stage startups — along with some recent VC investments — illustrates a niche emerging in the autonomous vehicle technology sector. Unlike the companies bringing robotaxis to…

VCs and the military are fueling self-driving startups that don’t need roads

When the founders of Sagetap, Sahil Khanna and Kevin Hughes, started working at early-stage enterprise software startups, they were surprised to find that the companies they worked at were trying…

Deal Dive: Sagetap looks to bring enterprise software sales into the 21st century

Keeping up with an industry as fast-moving as AI is a tall order. So until an AI can do it for you, here’s a handy roundup of recent stories in the world…

This Week in AI: OpenAI moves away from safety

After Apple loosened its App Store guidelines to permit game emulators, the retro game emulator Delta — an app 10 years in the making — hit the top of the…

Adobe comes after indie game emulator Delta for copying its logo

Meta is once again taking on its competitors by developing a feature that borrows concepts from others — in this case, BeReal and Snapchat. The company is developing a feature…

Meta’s latest experiment borrows from BeReal’s and Snapchat’s core ideas

Welcome to Startups Weekly! We’ve been drowning in AI news this week, with Google’s I/O setting the pace. And Elon Musk rages against the machine.

Startups Weekly: It’s the dawning of the age of AI — plus,  Musk is raging against the machine

IndieBio’s Bay Area incubator is about to debut its 15th cohort of biotech startups. We took special note of a few, which were making some major, bordering on ludicrous, claims…

IndieBio’s SF incubator lineup is making some wild biotech promises

YouTube TV has announced that its multiview feature for watching four streams at once is now available on Android phones and tablets. The Android launch comes two months after YouTube…

YouTube TV’s ‘multiview’ feature is now available on Android phones and tablets

Featured Article

Two Santa Cruz students uncover security bug that could let millions do their laundry for free

CSC ServiceWorks provides laundry machines to thousands of residential homes and universities, but the company ignored requests to fix a security bug.

3 days ago
Two Santa Cruz students uncover security bug that could let millions do their laundry for free

TechCrunch Disrupt 2024 is just around the corner, and the buzz is palpable. But what if we told you there’s a chance for you to not just attend, but also…

Harness the TechCrunch Effect: Host a Side Event at Disrupt 2024

Decks are all about telling a compelling story and Goodcarbon does a good job on that front. But there’s important information missing too.

Pitch Deck Teardown: Goodcarbon’s $5.5M seed deck

Slack is making it difficult for its customers if they want the company to stop using its data for model training.

Slack under attack over sneaky AI training policy

A Texas-based company that provides health insurance and benefit plans disclosed a data breach affecting almost 2.5 million people, some of whom had their Social Security number stolen. WebTPA said…

Healthcare company WebTPA discloses breach affecting 2.5 million people

Featured Article

Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Microsoft won’t be facing antitrust scrutiny in the U.K. over its recent investment into French AI startup Mistral AI.

3 days ago
Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Ember has partnered with HSBC in the U.K. so that the bank’s business customers can access Ember’s services from their online accounts.

Embedded finance is still trendy as accounting automation startup Ember partners with HSBC UK

Kudos uses AI to figure out consumer spending habits so it can then provide more personalized financial advice, like maximizing rewards and utilizing credit effectively.

Kudos lands $10M for an AI smart wallet that picks the best credit card for purchases

The EU’s warning comes after Microsoft failed to respond to a legally binding request for information that focused on its generative AI tools.

EU warns Microsoft it could be fined billions over missing GenAI risk info

The prospects for troubled banking-as-a-service startup Synapse have gone from bad to worse this week after a United States Trustee filed an emergency motion on Wednesday.  The trustee is asking…

A US Trustee wants troubled fintech Synapse to be liquidated via Chapter 7 bankruptcy, cites ‘gross mismanagement’

U.K.-based Seraphim Space is spinning up its 13th accelerator program, with nine participating companies working on a range of tech from propulsion to in-space manufacturing and space situational awareness. The…

Seraphim’s latest space accelerator welcomes nine companies

OpenAI has reached a deal with Reddit to use the social news site’s data for training AI models. In a blog post on OpenAI’s press relations site, the company said…

OpenAI inks deal to train AI on Reddit data