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Region offers opportunities for Internet start-ups

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South-east Asia is largely seen as a tough nut to crack for Internet start-ups because its fragmented markets and language barriers tend to make expansion difficult, but there are bright spots.

Venture capital firm Jungle Ventures says the region's biggest cities, including Singapore, Jakarta and Manila, are a fast-growing, homogeneous market that present significant opportunities for firms with products targeted at urban consumers.

The firm's new report highlights how urban consumers in cities across the region use common platforms like AliCloud for cloud computing and PayPal for payment networks.

The growth in the number of Internet users in South-east Asia - surging 39 per cent in the past year - exceeds the global growth rate of 10 per cent.

Internet users made up at least half of the population in six key Asean markets - Singapore, Malaysia, Indonesia, the Philippines, Thailand and Vietnam.

Not only does the growing Internet user base provide an expanding e-commerce market that start-ups can tap into, the use of common platforms also provides readily available infrastructure solutions, according to the report.

"Investors and founders are looking for familiarity in what appears to be an extremely complex market from the outside," said Mr Amit Anand, founder and managing partner of Jungle Ventures.

In 2014 Asean's top six markets' capital cities had an average combined GDP per capita of US$11,924 (S$16,632), over five times that of India's six largest cities at US$2,148.

This large spending power would benefit start-ups focused on urban consumers, the report said.