Capital JDI’s Tommy Khương on the New Reality of Building and Funding Startups in Southeast Asia

From Vietnam’s underpriced engineering talent to why most failed fundraises aren’t about the market, an on-the-ground view of a region that has moved past growth at all costs

Southeast Asia’s startup ecosystem has entered a new phase—one defined less by speed and scale, and more by discipline and proof. That is the view of Khương Nguyễn (Tommy) Công Thành, an investment associate at Capital JDI, who works closely with early-stage founders across the Vietnam–Singapore corridor.

Rather than describing the current environment as slightly weak, Tommy calls it “maturely cautious.” In his view, the post-2021 correction has forced founders and investors alike to recalibrate—leaving fewer startups in the market, but stronger ones. In an interview with AsiaTechDaily, he shared how this shift is reshaping fundraising, founder behaviour, and what investors now expect before writing cheques.

A post–growth-at-all-costs reset

“I would describe the current health of the Southeast Asian ecosystem as maturely cautious,” Tommy said. “We’ve moved past the ‘growth-at-all-costs’ era that defined the early 2020s.”

Seed-stage funding volumes have tightened, but he argues the change has been constructive. “While the total volume of seed-stage funding has tightened, the quality of the startups remaining is much higher,” he said. Founders, he added, are now building with a “default-to-survival mindset,” which could make the ecosystem more resilient over time.

Market data across Southeast Asia broadly supports this assessment. Over the past two years, venture capital deployment has slowed, with investors prioritising follow-on funding for stronger performers rather than backing large numbers of new bets. This has raised the bar for first-time founders, particularly at the seed stage, while increasing scrutiny around unit economics, customer retention, and path to profitability. As a result, startups that continue to attract capital tend to be more disciplined in hiring, clearer on market focus, and better prepared for longer fundraising cycles—traits that investors now view as essential rather than optional.

Why Southeast Asia still has underappreciated advantages

Despite the tougher climate, Tommy believes global investors continue to underestimate Southeast Asia’s structural strengths—particularly on the supply side. “The most underappreciated advantage is the technical talent arbitrage, specifically in Vietnam,” he said.

Investors often frame the region as a consumer growth story, he noted, but miss the depth of its engineering base. “We are seeing high-level R&D and complex software architecture being built at a fraction of the cost of Silicon Valley or even Bangalore.”

When paired with the region’s “China + 1” manufacturing shift, that talent advantage creates what he calls a “unique structural moat” for hardware and B2B SaaS startups—especially those building globally relevant products from Southeast Asia.

Three markets, three founder profiles

Tommy is quick to push back against the idea of Southeast Asia as a single, uniform market. Founder quality, he said, varies sharply by geography.

• Vietnam is producing some of the most technically capable and resilient founders. “They are used to capital constraints, which makes them incredibly lean,” he said.
• Indonesia remains unmatched in operational scale. Founders there, he noted, understand how to manage massive, fragmented logistics better than almost anywhere else.
• Singapore stands out for its “global-first” mindset. Founders are generally more fluent in institutional expectations and complex regulatory frameworks.

Treating the region as one market, he warned, often leads to strategic mistakes—particularly during expansion.

The Execution Gap Between Traction and Capital:

When bootstrap discipline turns into underinvestment

In the current funding climate, capital efficiency is widely praised—but investors say many founders struggle to recognise when discipline should give way to deliberate spending. According to Tommy, the danger zone typically appears at the point of market inflection, when demand is proven and growth becomes a question of execution rather than validation.

“‘Bootstrap discipline’ becomes a growth-killer at the moment of market inflection,” he said. At this stage, refusing to deploy capital into channels that are already working can slow momentum and weaken a startup’s competitive position. “If you are doing US$1 million in ARR and you know that spending US$100,000 on a proven sales channel will return US$300,000, but you refuse to spend it to ‘stay lean,’ you aren’t being disciplined—you’re being timid,” he added.

From an investor’s perspective, this hesitation often signals a deeper issue around leadership scaling. Underinvestment, Tommy noted, frequently shows up as a talent bottleneck, particularly in go-to-market roles. “When a founder refuses to hire a VP of Sales because they want to keep the burn low, they often accidentally cap their own ceiling,” he said. Rather than protecting runway, such decisions can limit a company’s ability to capitalize on demand—raising questions for investors about whether the team is prepared for the next phase of growth.

Why most fundraisers fail quietly

When fundraising stalls, founders frequently point to external conditions. Tommy disagrees. “Beyond ‘market conditions,’ the most common reason we see is a lack of coachability and narrative misalignment,” he said.

Two issues recur:

• The narrative trap: founders pitching solutions in search of a problem, rather than demonstrating deep understanding of a specific pain point.
• The messy middle: internal “hygiene” problems such as unclear cap tables, weak governance, or limited transparency around past pivots.

“Investors aren’t just buying your product,” he said. “They are buying into your ability to manage an institution.”

The metric founders avoid and investors demand

Another frequent disconnect lies in metrics. “It’s almost always cohort retention,” Tommy said. Founders tend to highlight numbers that look impressive—total registered users or gross merchandise value—while avoiding the data that shows whether customers actually stay.

Investors, he said, focus on net revenue retention and monthly active user cohorts. “They want to know: of the users you acquired six months ago, how many are actually still paying you today?” If that bucket is leaking, more capital will not solve the problem. “It will just make the leak bigger.”

Capital JDI’s advisory lens on early-stage readiness

Capital JDI’s advisory role shapes how it evaluates startups, placing it slightly outside the typical venture capital decision-making cycle. Rather than screening companies solely for immediate investment readiness, the firm works closely with founders to address gaps that often prevent startups from attracting institutional capital.

“Because we are advisors, we don’t look for ‘perfection’—we look for ‘moldability,’” Tommy said.

This approach reflects Capital JDI’s position as a venture advisory and capital access platform, rather than a traditional lead investor deploying a fixed fund mandate. Through its work with early-stage startups across Southeast Asia, the firm often engages with companies that have early traction but lack the operational, governance, or narrative clarity expected by institutional investors.

In practice, that means issues such as an incomplete data room, an underdeveloped go-to-market strategy, or inconsistent metrics may not be immediate disqualifiers. Instead, Capital JDI focuses on whether those weaknesses can be corrected within a defined timeframe. “Can we help this founder bridge the gap to institutional readiness in three to six months?” Tommy said.

From an ecosystem perspective, this advisory-first model addresses a common bottleneck in Southeast Asia’s startup pipeline, where founders frequently struggle not because their products lack promise, but because they are unprepared for the standards of global capital. By prioritising execution velocity and a founder’s willingness to address blind spots, Capital JDI positions itself at the intersection between early traction and institutional funding.

“Execution velocity and willingness to fix blind spots matter more than surface-level polish,” Tommy added—an assessment that aligns with the firm’s hands-on work helping founders professionalise operations before entering longer fundraising cycles.

What will be hardest to fund next

Looking ahead, Tommy expects certain models to struggle. High-CAC B2C startups without a clear path to organic growth are likely to face resistance. So will what he calls “AI-wrapper” companies—products that simply place a user interface on top of third-party large language models.

“Investors are looking for defensible moats,” he said. “A subscription to ChatGPT is not a moat.”

One piece of advice for first-time fundraisers

Tommy’s advice to founders preparing for their first institutional round is straightforward. “Treat fundraising as a sales process, not a request for help,” he said.

He recommends building a pipeline of 30 to 50 targeted investors, researching mandates carefully, and running a tight eight-to-12-week process. Just as important is starting early. “Begin building relationships six months before you need the money,” he said. “Investors like to watch the dots connect over time.”

Conclusion

The fundraising environment in Southeast Asia has not closed, but it has become far more selective. Founders raising capital today are being evaluated less on ambition and more on execution readiness—how well they deploy capital, how clearly they explain their market, and how honestly they present their data.

Based on Tommy’s observations, startups that continue to raise successfully tend to share a few common traits: they invest decisively once traction is proven, prioritise retention and unit economics over headline growth, and address governance and internal structure before investors force the issue. Founders who delay key hires, avoid uncomfortable metrics, or expand regionally without first achieving local dominance are finding it harder to secure backing.

For Capital JDI, the focus is not on polished pitch decks but on whether teams can improve quickly and close gaps to institutional standards. In a “maturely cautious” market, capital remains available—but primarily to founders who treat fundraising as a disciplined process and are prepared to operate like institutions earlier than in previous cycles.

Quick Takeaways

• Southeast Asia’s startup ecosystem has shifted from rapid expansion to execution-first growth, with investors applying stricter standards at the seed and early stages.
• Vietnam’s engineering talent, Indonesia’s operational scale, and Singapore’s institutional readiness offer distinct advantages—but treating the region as a single market often backfires.
• Capital efficiency remains important, but refusing to invest at proven growth inflection points can limit scale and signal risk to investors.
• Fundraising failures are more often linked to narrative gaps, weak governance, and lack of coachability than to external market conditions.
• Investors are prioritising cohort retention and revenue durability over vanity metrics such as total users or GMV.
• Startups that can quickly close gaps in execution, leadership, and data quality are better positioned to attract institutional capital in the current market.