Going cardless: Can eSIMs connect startups to a billion-dollar opportunity?

This week’s On the Rise explores the next big opportunity in eSIMs, maps big tech’s money in Southeast Asia, and asks if genAI can make money. [Read from your browser]( On the Rise 🚀 Welcome to On the Rise! Delivered every Tuesday via email and through the Tech in Asia website, this free newsletter breaks down the biggest stories and trends in emerging tech. If you’re not a subscriber, get access by [registering here](. --------------------------------------------------------------- IN FOCUS In today's newsletter, we look at: - [eSIM startups changing the telco game]( - [Big tech’s billion-dollar bets in Southeast Asia]( - Can genAI generate the big bucks? Hello {NAME} , When I was traveling around Southeast Asia last year, I was reminded of how much I hate buying local SIM cards. It usually involves fighting crowds gathered around a small booth, handing your passport to a stranger (which I dislike doing), and most annoyingly, being forced to buy an expensive data plan. Somehow, cheaper ones just aren’t available. I knew if I stepped out of the airport and went to a local shop, I would find a lower-priced SIM, but that would be tedious. Still, these prices don’t compare to the exorbitant fees charged by Indian telecoms for a roaming package. To solve this, eSIM companies have cropped up offering attractive plans from local telcos. In this week’s Big Story, my colleague Glenn highlights the nascent but growing market for eSIM companies in Southeast Asia. Not only are these startups attracting VC attention, but telecom operators are also looking at them as a viable option to reach new customers, as eSIMs don’t infringe on their existing sales. With more smartphone companies integrating eSIM technology into their phones, some say that the traditional small plastic cards will go the way of the [compact disc](. These types of transformative advances in technology bring us to our second Big Story by my colleague Peter, which maps out investments by big tech firms in Southeast Asia over the last 18 months. Companies such as Google, Nvidia, and Amazon, among others, have committed to investing nearly US$70 billion into Southeast Asia, with most of it going into AI infrastructure. Speaking of the money being poured into AI, in this week’s AI Odyssey, I explore a key question: Can genAI generate enough money? But first, the Big Stories. -- Collin  --------------------------------------------------------------- THE BIG STORIES 1️⃣ [Why eSIMs could be the next startup goldmine]( Southeast Asian eSIM startups need to convince telcos they can help them reach customers outside of their home countries. 2️⃣ [Charting big tech’s billion-dollar spending spree in Southeast Asia]( Tech majors such as Amazon, Nvidia, and Google have committed billions of dollars to the region in the last 18 months, but which sectors will benefit the most?  --------------------------------------------------------------- AI ODYSSEY Promising AI projects we’re noticing. The billion-dollar question: Can genAI generate money? On a recent visit to Bengaluru, I attended the [IGIC 2024 conference](. There, I listened to a talk from a VC who enumerated some figures that drove home one argument: that startups in India aren’t getting enough funding to survive. The numbers don’t lie, as the tech winter has seen several startups call it quits. There is one exception, though. GenAI startups are flush with funds. This week, I came across some numbers that made me question the amount of investments going into this space. I can see a bubble forming. In the last 18 months, big tech firms have announced investments of over US$55 billion, all aimed at building the Southeast Asian AI ecosystem, with a focus on [GPU]( chip manufacturing and data centers. However, the market size of AI in the region is expected to grow only to US$30 billion by 2030, as per [a Statista report](. The [unit economics]( - a term commonly thrown around by investors - didn’t make any sense. One could argue, however, that the investments include much longer term bets than the five-year horizons typical of other funds. I would agree, but moving the goalposts still doesn’t answer the big question of how genAI is going to actually create revenue. Cost-cutting measures don’t count. A recent [Bain & Company survey]( of over 200 firms in the US found that they were spending US$5 million in the segment on average, but the same report also said that those companies still haven’t found a clear business case for genAI. Only 11% had a clear idea of how they would use genAI to generate revenue. While the likes of Microsoft, Google, Amazon, and Meta are investing heavily in the future of AI, customers first need to find value in the new services being created. Even software-as-a-service (SaaS) companies are [struggling to make money]( out of genAI, despite their heavy investment in creating tools. This includes giants such as Salesforce and Adobe. Many don’t know how to price these tools too. Take a look at the monetization model of SaaS companies. They charge companies per user, but their clients are slashing their workforces on the expectations that AI will now do the work. This leads to less subscription revenue. What further convinced me that many companies are just “AI-washing” this problem was a [report by the BBC]( on copywriters who were laid off due to genAI. The remaining editors were told to work on the AI-generated content to make them “sound more human.” This is akin to Amazon’s failed [“AI-powered” cashier-free shops]( in the UK. These same stores required the firm to employ humans in India to monitor the items customers were buying. It’s no wonder why some of the VCs are still hesitant to get into the AI game. It seems to me that VCs are caught between a rock and a hard place, with [FOMO]( on one end and getting involved with companies that don’t know how to generate revenue on the other. -- Collin  --------------------------------------------------------------- NEWS YOU SHOULD KNOW Also check out Tech in Asia’s coverage of the emerging tech scene [here](. 1️⃣ [OpenAI co-founder launches ‘safe’ AI firm]( Ilya Sutskever has co-founded Safe Superintelligence with Daniel Gross, previously Apple’s AI head, and Daniel Levy, a former OpenAI researcher. 2️⃣ [HSBC gives social loan to Vietnamese biotech firm]( The biotech firm Gene Solutions says it is the first venture-backed startup in Vietnam to receive financing from HSBC Singapore’s US$200 million New Economy Fund. 3️⃣ [Japanese firm scoops up Singapore data startup]( Japanese digital marketing company Ayudante has acquired Singapore-based data analytics firm Sparkline. With the move, Ayudante’s goal is to grow its business in both East Asia and Southeast Asia. 4️⃣ [TikTok launches genAI tools]( TikTok has introduced generative AI tools to help brands and creators expand their reach globally by allowing users to make digital avatars and dub their videos in different languages. These new features are part of TikTok Symphony, the short-video app’s suite of ad solutions. 5️⃣ [Indian healthtech bags $5.5m]( Alyve Health raised US$5.5 million in a series A funding round led by Axilor Ventures. The startup offers various health plans, which include services such as medical consultations, medication access, gym memberships, and wellness programs.  --------------------------------------------------------------- FYI 1️⃣ [A bot for your money? Wealthtech firms divided on tapping genAI for investment advice]( A genAI-powered investment platform can tell you why you should buy a particular stock, but some think taking its advice is a bad idea. 2️⃣ [Oddle’s revenue drops, loss widens in FY 2022 as food delivery slows]( However, the Singapore-based company says it anticipated the drop in volume, which let it expand to new offerings like restaurant reservations. 3️⃣ [VC funds tracker: Peak XV, IvyCap Ventures, others add $1.4b in new funds]( Fundraising is difficult. To make things easier, we have compiled a regularly updated list of the most recent VC funds for our subscribers. ---------------------------------------------------------------  EVENTS HAPPENING You can also check out a curated list of trending tech events [over here]( and Tech in Asia’s signature events [here](. [Tech in Asia Conference Kuala Lumpur 2024 : Malaysia on The Rise on 24 - 25 July]( Be part of the trailblazers to pitch your game-changing ideas to a panel of top-tier judges and a live audience. Winner gets to walk away with prizes including: - Stripe fee-free processing credits - Sunway Innovation Sdn Bhd. office hours - A Startup Factory exhibition booth for two days … and many more! Application deadline is extended to June 26 due to popular demand, [apply today!]( [Product Development Conference (Jakarta, 25-26 June 2024)]( The countdown is on! PDC kicks off in just a few days and tickets are flying off the shelves. Don’t just talk about innovation, experience it firsthand on June 25-26. P.S. We’ve got less than 50 tickets left on Pro Pass; General Pass is selling out real soon. Hurry and get yours before they’re gone! [Tech in Asia’s Founders Meetup in Malaysia on July 25]( Double the excitement awaits as Founders Meetup returns to Malaysia, this time in conjunction with the closing party of TIA Conference KL! It's the perfect opportunity to unwind, network, and connect with fellow founders, startup leaders, and investors. Hurry, [get your early bird ticket]( before the promo ends on June 28! [Tech in Asia Conference Jakarta on Oct 23-24]( Where is the next Silicon Valley? It might just be Jakarta! Indonesia's young tech talent is booming, and Tech in Asia Conference Jakarta puts you right in the center of the action. Join us at #TIAConferenceJKT to connect with 4000+ region's brightest minds, 150+ hottest startups, and hear straight from 80+ experts. Early-bird tickets are now available! [Snatch the 75% discount while it lasts!]( ---------------------------------------------------------------  That’s it for this edition - we hope you liked it! Do also check out previous issues of the newsletter [here](. Not your cup of tea? You can unsubscribe from this newsletter by going to your “edit profile” page and choosing that option in our preference center. See you soon! [ADVERTISE]( | [SUBSCRIBE]( | [HIRE]( | [FIND JOBS]( P.S. Don't miss out on the biggest tech news and analysis. Add newsletter@techinasia.com to your address book, contacts, or safe sender list. Or simply move us into your inbox. Too many emails? Switch to a different frequency or get new content through our [preference center]( or [unsubscribe](. You can also break our hearts and remove yourself from all Tech in Asia emails over [here](  Copyright © 2024 Tech in Asia, All rights reserved. 63 Robinson Road, Singapore 068894