Southeast Asian tech startups are increasingly turning their attention to the US market, driven by the growing importance of artificial intelligence and the need for a physical presence to scale their businesses. Traditionally, startups from the region focused on local or regional markets, but the AI revolution is changing this dynamic.
Yoeven Khemlani, founder of Singapore-based JigsawStack, launched his company in July 2024 to create small AI models that automate tasks such as code maintenance, web scraping, and translation for different markets. “We saw a huge uptake of users and realized a lot of our early-stage customers were from the US,” Khemlani said. JigsawStack raised $1.5 million in pre-seed rounds from Antler’s Southeast Asia fund.
The Shift to the US Market
The US market offers several advantages for Southeast Asian startups. It is more concentrated, mature, and less price-sensitive than their home markets. The region’s GDP has grown over 62% since 2015 to $4.12 trillion, with venture capital deals more than tripling to 1,800 between 2015 and 2021, according to PitchBook data.
“We’re in an AI-first world where the US is currently at the epicenter of driving groundbreaking advancements,” said Shailendra Singh, managing director with Peak XV. This makes the US an attractive market for startups looking to leverage AI.
Challenges and Opportunities
However, the US market also presents challenges. Sweeping tariffs on China may increase the cost of hardware imports, such as servers, potentially affecting Southeast Asian startups. Despite this, many are finding success in the US. Realfast, a Singaporean startup backed by Peak XV, builds AI agents for IT systems and has found the US to be its deepest market.
“Everything from deal velocity to deal size operates at a completely different level in the US,” said Sidu Ponnappa, cofounder of Realfast. Patsnap, a software maker backed by Vertex Ventures, also has more than half of its 5,000 customers in the US.
Balancing Local Advantages with US Expansion
While expanding to the US, startups are also leveraging their local advantages. Southeast Asian founders often have an “underdog mindset,” working harder and learning faster to compete with Silicon Valley startups, according to Singh.
Some startups are splitting their operations, with one cofounder based in the US while the other remains in Southeast Asia. JigsawStack’s Khemlani moved to the US to scale his business, stating, “You can’t sell to the US when you’re not there.”
Sagar Khatri, CEO and cofounder of Multiplier, an HR platform backed by Tiger Global and Peak XV, emphasized the benefits of being based in Singapore, including favorable tax policies and government grants for tech companies.
The trend of Southeast Asian startups targeting the US market is expected to continue, driven by the region’s growing tech ecosystem and the allure of the large, mature US market.
