Southeast Asia’s travel tech sector is at a pivotal moment for tech-driven value creation. Speaking at WiT Singapore, Oliver Rippel, co-founder and partner at Asia Partners, said, “We believe that Southeast Asia’s time has come, that we have hit a golden age of tech entrepreneurship here in this region.”
His firm, which focuses on growth-stage companies with check sizes between $20 million and $50 million, sees travel tech as a key sector ripe for innovation and scale in Southeast Asia.
With the region in the middle of an explosive growth phase, fueled by a rapidly expanding middle class, skyrocketing digital adoption and pent-up demand for travel post-COVID, Rippel said that for Asia Partners, Southeast Asia presents a more attractive investment landscape than other parts of Asia, particularly India.
Rippel highlights that while India has received a flood of venture capital funding over the past decade, the region’s economic development has not fully caught up to justify the valuations and capital inflows. “India is way higher than Southeast Asia [in terms of funding], although it’s a decade behind from an affluence perspective,” he said. “It’s kind of normalized in the last one to two years, but it’s still very much elevated.”
In contrast, Southeast Asia has reached an economic “sweet spot,” where increased affluence and GDP growth are fueling domestic consumer demand. This makes the region especially ripe for travel tech, as rising spending power is driving greater demand for travel-related goods and services.
“When you hit a certain minimum threshold of GDP per capita, your spending power goes up tremendously,” Rippel said. “That allows a domestic backdrop of demand to emerge for the companies offering these goods and services.”
A thriving early-stage ecosystem
Southeast Asia’s early-stage investment ecosystem is also helping to create a robust pipeline of potential growth-stage companies, a factor that makes the region particularly attractive for firms like Asia Partners.
According to Rippel, over 600 companies in the region received early-stage funding of $1 million to $20 million over the past three years. “That early-stage venture capital ecosystem is thriving, which is great for us because that gives us a strong top of the funnel and allows us to look at really interesting deals,” he said.
This early-stage activity provides Asia Partners with a steady stream of potential investments, especially in sectors like travel, where consumer demand and tech adoption are both high.
"The travel ecosystem as part of the overall tech ecosystem is hugely important and often one of the subsectors of the tech space that scales first,” Rippel said. This positions travel tech as a foundational sector for Southeast Asia’s broader tech evolution, as companies in this space are often among the first to achieve meaningful scale, he observed.
The rise of vertical solutions in travel tech
As Southeast Asia’s tech ecosystem matures, the region is seeing a shift from general-purpose horizontal platforms to more specialized, vertical solutions. This trend is particularly evident in travel tech, where companies are focusing on niche offerings to serve specific consumer needs or operational challenges.
"We had the big horizontal platforms at first,” Rippel said. “But over time, as the ecosystem becomes more sophisticated, you get more verticalized, specialized solutions. This could mean specific software for the travel industry or payment solutions tailored to travel businesses.”
One of his portfolio companies is RedDoorz, a company that aggregates and standardizes budget and long-tail accommodation options across Southeast Asia. "Think about one- and two-star hotels,” Rippel said. “That becomes a little harder for OTAs to source directly, which is why players like RedDoorz, with their deep local entrenchment in markets like Indonesia and the Philippines, are so valuable.”
Talent flow and the impact of first-generation tech companies
One of the unique advantages Southeast Asia has is the growing pool of experienced tech talent emerging from the region’s first-generation tech giants like Sea Group, Grab and Gojek. Many of the region’s new startups are being founded by “C-suite plus one” talent – the layer just below top executives – who are striking out to launch their own ventures after gaining years of operational experience.
"The success of these first-generation companies has created a talent pipeline,” Rippel said. “That C-suite plus one layer is now founding the next generation of startups.” This dynamic helps the entire ecosystem mature faster, as these founders bring deep operational knowledge and a clearer understanding of how to scale businesses in Southeast Asia’s challenging market conditions.
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Asia Partners tracks these talent movements closely, seeing them as early indicators of emerging trends and new opportunities. For example, the firm observed a significant flow of talent from Sea Group to ByteDance (TikTok) in recent years, signaling a growing interest in e-commerce among major tech players.
Filling the growth equity gap
One of Asia Partners’ core investment theses is addressing a gap in Southeast Asia’s funding landscape. While the region has a healthy ecosystem for seed, angel, and early-stage venture capital, there’s a lack of growth-stage capital available to help companies scale. Asia Partners aims to fill that gap by providing growth equity investments, typically in companies that are three to four years away from going public.
"We are what is called a growth equity investor,” Rippel said. “We don’t do early stage, small checks, and we don’t do very late stage either. Think about us investing maybe a $20 million check or $50 million check into a company that’s three to four years from a public listing.”
This focus on growth equity allows Asia Partners to support promising companies as they scale, helping them prepare for IPOs or other forms of exit. For Rippel, growth-stage investment is a crucial step in ensuring that Southeast Asia’s tech ecosystem reaches its full potential.
Challenges of scaling in emerging markets
While the opportunity in Southeast Asia is immense, scaling startups in the region is not without its challenges. Navigating complex regulatory environments, dealing with fragmented markets, and building local relationships are all crucial – and often difficult – parts of the journey.
“To be able to appreciate how hard it is to build businesses here, you need operational experience,” Rippel said. “Ultimately, we think that empathy helps us have better conversations with founders and makes us better investors.”
In industries like travel, which require deep local knowledge and connections, local companies often have an edge over global players. “If there’s a deep entrenchment locally because you have to deal with local merchants, local customers, local payments, local content — you name it — often the local guys actually beat the global guys,” Rippel said.
The 10-year window for SE Asia’s tech boom
Looking ahead, Asia Partners believes Southeast Asia is at the beginning of a decade-long period of high-value tech creation, similar to what China, South Korea and Japan experienced at earlier stages of their development.
“If you roll back the clock and look at other markets in Asia, most of the tech value creation happened when they were at the same spot in terms of affluence as Southeast Asia is today,” Rippel said. “We think that this region has a critical 10-year window.”
During this time, Asia Partners anticipates that most of the region’s major tech IPOs and acquisitions will occur, as companies capitalize on the growing demand for digital services. For travel tech, this could mean a new wave of Southeast Asian companies emerging as significant players, not only locally but on the global stage.
“We think Southeast Asia’s time has come,” Rippel said. “This region is hitting the right spot of affluence, and the travel tech sector is one of the areas that will benefit the most from that shift.”
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story originally appeared in WebinTravel.