How We Propel Nordic & Baltic Founders to Asian MarketsSeptember 1, 2021
Tera’s expanding network in Asia is creating new inroads to some of the world’s biggest, most exciting markets—starting with Japan.
Just 5 years ago, Asian markets were largely a new frontier for us and for startups in our region. Asia is still not very commonly an early priority for startups, but this represents a massive missed opportunity for businesses with global ambition.
Aside from already being some of the best markets for global expansion, Asian countries are also predicted to bounce back from the COVID-19 pandemic faster than Western countries. Just some of this vast and immensely diverse region’s attractions for globally minded startups:
- Singapore, consistently recognized as one of the world’s best places to do business (currently 2nd in the world, according to the World Bank).
- Hong Kong, one of the top global financial hubs, which continues to be a key destination for financial and fintech businesses.
- Taiwan, where incentives for technology and R&D have created an attractive business environment for innovative companies.
- Japan, with its enormous purchasing power, a stable economy, and a predicted economic growth of a healthy 4% in 2021.
Luckily, we’ve found it relatively easy to narrow down the list of countries to focus on, especially since Japan is a great match for Tera in many ways:
- It’s the most developed country in the world and its corporations have left a considerable footprint across Asia. So collaboration with Japanese companies allows entry to Asian markets at large.
- Japanese companies are excited to collaborate. The Japanese approach to innovation relies substantially on locating the most advanced ecosystem or company and learning from them. Because our “New Nordics” region is a well-known global innovation powerhouse and Estonia in particular is on the forefront of digitization, it’s a perfect match.
- Lastly, there are similarities in our business cultures, attitudes, and communication styles, which makes collaboration relatively smooth.
But there are, of course, plenty of challenges:
- Products need to be customized for local needs, which often essentially means finding product/market fit all over again from scratch.
- Figuring out the difference in time frames between large corporations and early- stage startups can be tricky.
- It can be somewhat complex to interpret messages between different cultural and business contexts.
- Setting mutual expectations correctly takes experience.
One clear key factor for success in Asia—the fix for all of the above—is the right local partner. Which is precisely where Tera’s connections come in. As one of the longest-running seed-stage funds in the Nordics and Baltics, we’ve developed a knack for establishing portfolio companies in Asian markets.
For instance, Japanese e-commerce giant Rakuten has been a partner for Tera’s portfolio company Lingvist for a good few years now. Lingvist also partnered with Taiwanese e-commerce provider PChome in 2017 to bring a new type of language learning technology to Mandarin-speakers. Another portfolio company, Realeyes, has been collaborating with Global Brain and NTT Docomo in Japan for a few years and Nordic Ninja has also been actively collaborating with our companies recently.
And now, having announced a partnership with ITOCHU, one of Japan’s largest general trading companies, we’re even better positioned to empower impactful European startups to enter these lucrative, once-intimidating Asian markets.
With the way our network in Asia is set up to fit our born-global investment theme, we can confidently say that our portfolio companies can essentially penetrate any market.