Antler’s founder on its vertical AI guess in Southeast Asia

A rising roster of vertical AI startups is rising in Southeast Asia to serve sectors starting from seafood to finance. Singapore-based enterprise capital agency Antler not too long ago made a guess on 37 of them, investing $5.1 million in complete for pre-seed offers. This included a strategic partnership with Khazanah, Malaysia’s sovereign wealth fund, which invested into seven startups.

“If you look at the rest of the world, there’s lots of horizontal AI and it’s becoming insanely competitive,” Antler co-founder and managing associate Jussi Salovaara tells TechCrunch. “What founders are increasingly looking to solve in this part of the world are practical problems in different industries.”

He provides that although Southeast Asia doesn’t have the expertise pool to construct one thing like OpenAI but, they’ll take a customer-first strategy to AI apps, fixing ache factors distinctive to completely different sectors and markets.

Inside verticalized AI, completely different tendencies are rising in every nation. For instance, Vietnam has a big pool of technical expertise. Founders there who’re engaged on a client startup normally focus extra on the home market at first, however B2B startups are extra globally-oriented from the start, Salovaara says. Then again, Indonesian startups have a tendency to not goal worldwide growth as a result of their home market is so giant, however Antler hopes to see extra of them increase internationally.

One in every of Antler’s investments is BorderDollar, which is constructing an bill financing platform for cross border logistics. Since funding constructions are completely different in Southeast Asia than the remainder of the world, BorderDollar used their very own coaching knowledge to construct a credit score scoring system.

“You can’t really take something from the West and then just plug it in here and use that,” says Salovaara.

One other member of Antler’s portfolio is CapGo, which Antler backed largely due to the founders’ backgrounds: CTO Chen Yu labored on machine studying at Seize and CEO Yichen Guo earned a Harvard MBA and labored at Citi, Almanac and VIPKid as a product supervisor. CapGo automates knowledge acquisition for market analysis, a ache level Salovaara is conversant in as a result of he used to work at an funding financial institution.

“It’s super unclear why you would throw endless amounts of human hours into researching a market when AI can do so much more effectively and efficiently,” he says, including that CapGo’s aggressive moat is its capability to construct knowledge sources which can be tailor-made first for Southeast Asia. It plans to increase into the remainder of the Asia Pacific area.

Each Zolo and Seafoody have been created to resolve issues in Southeast Asia’s meals provide chain infrastructure. Primarily based in Malaysai, Seafoody was based by Eleen Kee, Samantha Ooi and Zach Leong. Kee, its CEO, comes from a household that has labored within the seafood business for a number of generations. Seafoody is concentrated on utilizing AI to remove middlemen within the seafood provide chain and promote on to companies. Zolo, in the meantime, can be simplifying the meals provide chain through the use of AI to shorten the order administration course of, which normally entails quite a lot of back-and-forth between suppliers and eating places on WhatsApp.

One other startup Salovaara highlights is Malaysia-based Coex. It makes use of AI to digitize venture claims and payments of amount, so approvals, communication and making ready supplies can all be carried out extra rapidly. “Construction is obviously one of the most analog and old school industries, so this is largely a play to optimize capital efficiency and operational efficiency,” says Salovaara.

Constructing a vertical AI startup comes with its personal challenges. For instance, the appropriate group needs to be put collectively and embody not solely a technical founder with the appropriate experience, but in addition somebody who understands the business they’re concentrating on very properly. In addition they want the appropriate knowledge for coaching. However as soon as a vertical AI startup comes collectively, Salovaara says they’ll construct a really deep aggressive moat.

“If you want to raise funding for a quote unquote ‘hardcore’ horizontal AI out of Southeast Asia, it would be challenging, especially to enter into a race with a company based in Silicon Valley,” he provides. “Trying to compete with a place that has more talent or a better funding infrastructure in this space, especially at the later stage, is still quite difficult. So these vertical plays are the way to go.”