As Malaysia’s startup scene flourishes, local companies are realizing that the domestic market, while promising, may not be enough to fuel long-term success. For many, the answer lies in expanding regionally to tap into Southeast Asia's vast potential. However, the path is not without its challenges. Both Venture Capital (VC) and Corporate Venture Capital (CVC) are facing growing obstacles in smaller Southeast Asian markets like Vietnam, Thailand, Malaysia, and the Philippines, where traditional paths to IPOs and M&A exits are proving elusive.
As these emerging economies continue to develop, it’s clear that the time to act is now. Companies that prioritize regional scalability early are more likely to attract investor interest and secure sustainable growth paths. Without a regional expansion plan, Malaysian startups and companies risk hitting a growth ceiling that may limit future funding and exit opportunities.
Kailash Raghuwanshi is a seasoned business strategist with over fifteen years of experience across Southeast Asia, the US, and China. Known to many as “Kai,” he has built a reputation for guiding companies through complex growth challenges in rapidly evolving markets. A New York graduate, Kailash’s expertise spans diverse sectors, including fintech in Indonesia, high-impact joint ventures in Vietnam, and launching an American digital marketing company JV in Vietnam. As a thought leader and speaker, Kailash has contributed to Vietnam’s Ministry-affiliated SIHUB and has advised through the Mranti (Malaysia)-Kumpul (Indonesia) partnership program, fostering cross-border collaboration in the region. He also served as a Director at a Shanghai-based public health venture backed by the Gates Foundation, where he gained valuable experience in impact-driven innovation.
A decade ago, Kailash was instrumental in consulting for vOffice’s teams in Malaysia-Indonesia and contributed to Rocket Internet’s pioneering team in Malaysia, helping at PMO level with Zalora, Lazada, and Foodpanda. His extensive work with VCs and CVCs positions him as a leader in exploring innovative growth models for Southeast Asia’s unique challenges. For more insights, visit kairaghu.com.
We sat down with Kailash to explore why regional expansion is essential for Malaysian startups and companies seeking sustainable growth and viable exit opportunities.
Q: Kailash, why is regional expansion so crucial for Malaysian businesses, especially now?
Kailash: Malaysia is an excellent market to start in, but it’s ultimately limited by its population of 32 million. For companies aiming to grow sustainably, thinking regionally is essential. A great example is Carsome, Malaysia’s first tech unicorn, which began as a used car platform and expanded across Southeast Asia. Carsome now operates in multiple countries, including Indonesia and Thailand, and offers end-to-end solutions for car buying and selling. Their regional expansion has allowed them to tap into larger markets, secure significant funding, and become a recognizable brand across the region. Without a regional focus, Carsome might not have achieved this scale or investor appeal.
Similarly, Grab, another company that started in Malaysia, recognized the potential of Southeast Asia’s interconnected markets early on. Grab’s expansion across eight countries transformed it from a local ride-hailing service to a multi-country super-app serving over 600 million people. Both Carsome and Grab show that regional growth isn’t just beneficial—it’s essential for Malaysian companies that want to achieve long-term, scalable success.
For Malaysian startups and companies, going regional is not just about scaling—it’s also crucial for securing viable exit opportunities. Local-only businesses often face limited exit options, as Malaysia’s market size restricts large IPOs and major acquisitions, making it harder for investors to see substantial returns. Companies that scale regionally are far more attractive to investors who want to see a clear path to exit, whether through acquisitions or IPOs in larger markets.
Q: Why is Malaysia in a particularly tricky situation right now, compared to other Southeast Asian markets?
Kailash: Malaysia’s market size is both a strength and a limitation. With a population of 32 million, it’s larger than Singapore but significantly smaller than Indonesia or the Philippines. This middle-ground size means that while there is enough demand to support startups initially, growth reaches a ceiling quickly. Unlike larger markets where companies can sustain themselves by dominating locally, Malaysia’s market size often isn’t enough to fuel sustained, high-scale growth.
Moreover, the VC and CVC landscape is evolving. Investors are cautious about local-only businesses that lack regional or global scalability, as they see more limited exit opportunities. Traditional paths to exits, like IPOs or large-scale mergers and acquisitions, are not as robust here as they are in larger economies. This has created a ticking clock for Malaysian companies: if they want to secure funding and attract regional or international investors, they need to expand beyond Malaysia sooner rather than later.
Q: How do Carsome and Grab’s regional strategies compare to Gojek’s approach in Indonesia?
Kailash: Carsome and Grab took a regional-first approach, expanding across Southeast Asia to capture a larger market. Carsome, for instance, started with a Malaysia-based used car platform and grew into multiple Southeast Asian countries, building a strong regional brand and attracting significant investments. Grab similarly leveraged its Malaysian origins to establish a broad presence across the region, positioning itself as a super-app.
Gojek, by contrast, focused on dominating its home market of Indonesia, Southeast Asia’s largest with 275 million people. Gojek embedded itself deeply into the Indonesian ecosystem, becoming a staple in daily life but hasn’t achieved the same international reach as Carsome or Grab. For Malaysian companies, which operate in a smaller home market, a regional approach like Carsome’s or Grab’s is more scalable and sustainable.
Q: What makes Southeast Asia such an attractive region for Malaysian companies to target?
Kailash: Southeast Asia is a region with 650 million people and a combined GDP of nearly $3 trillion. Expanding into markets like Vietnam (97 million people), Thailand (70 million), and the Philippines (113 million) can significantly increase a company’s reach and revenue potential. The region’s high level of digital connectivity, with 440 million internet users, creates unique opportunities for digital and mobile-first companies.
Additionally, smaller markets like Cambodia (17 million) and Laos (7 million) offer fertile ground for early movers. For Malaysian companies, these markets represent a chance to establish a presence and capture market share before larger players step in.
Q: What advice would you give to Malaysian startups and companies looking to expand regionally?
Kailash: Start with a regional mindset from day one. Design your business and brand to appeal to customers across Southeast Asia’s diverse markets. Both Carsome and Grab structured their offerings to be adaptable across different countries, which allowed for smoother expansion.
Second, forge strategic partnerships. Partnering with local companies can ease entry into new markets by helping to navigate regulatory challenges and establish local credibility quickly.
Lastly, prioritize a mobile-first approach. Southeast Asia is highly mobile-centric, with most of the digital audience connecting through smartphones. Adapting to this digital landscape is essential for capturing a broad audience.
Q: How can VC and CVC support play a role in helping Malaysian companies go regional?
Kailash: VC and CVC partnerships are crucial, especially for companies looking to enter unfamiliar territories. For Malaysian startups, finding investors who understand the regional landscape can provide not only funding but also strategic connections and market insights. However, it’s essential for startups to retain strategic independence and ensure that these partnerships support, rather than restrict, their regional growth.
Q: What’s your final takeaway for Malaysian startups, VCs, and corporates interested in regional expansion?
Kailash: Southeast Asia is rich with opportunities, but capturing them requires urgency and a regional-first mindset. Malaysian startups should embrace this approach early—don’t wait until you’ve maxed out the local market to consider expansion. By positioning for regional growth, companies can become more resilient and appealing to investors who are looking for scalable, multi-market ventures.
In short: aim big, act regionally, and leverage strategic partnerships. Southeast Asia’s diversity and dynamism provide a clear path to success for those ready to cross borders. Carsome and Grab’s journeys are testaments to what’s possible, and Malaysian companies can carve their own path to regional impact by following a similar model.
About SEA innovation Hub (Fractional Hub)
About SEA innovation Hub (Fractional Hub)
SEA Innovation Hub is a freelance collective of thinkers, writers, and innovators focused on exploring and analyzing Southeast Asia's rapid growth. Established in 2023, the hub produces insightful interviews, articles, and discussions centered on key sectors such as AI, health, and sustainability. With a finger on the pulse of the region’s dynamic changes, SEA Innovation Hub seeks to foster meaningful dialogue on the future of Southeast Asia’s business and technological landscape.
About Kailash Raghuwanshi:
Kailash Raghuwanshi brings a decade-long experience across Southeast Asia, the US, and China. As a New York graduate, his expertise spans over fifteen years advising companies across the Southeast Asia region, including fintech ventures in Indonesia, high-impact joint ventures in Vietnam, and launching an American digital marketing company in Vietnam. A thought leader and speaker, Kailash has contributed to Vietnam's Ministry-affiliated SIHUB and advised through the Mranti (Malaysia)-Kumpul (Indonesia) partnership program. He also served as a Director at a Shanghai-based public health venture backed by the Gates Foundation.
A decade ago, Kailash was instrumental in consulting for vOffice’s teams in Malaysia-Indonesia and contributed to Rocket Internet’s pioneering team in Malaysia, helping at PMO level with Zalora, Lazada, and Foodpanda. His extensive work with VCs and CVCs positions him as a leader in exploring innovative growth models for Southeast Asia’s unique challenges. For more insights, visit kairaghu.com.
Ross is known as the Pambansang Blogger ng Pilipinas - An Information and Communication Technology (ICT) Professional by profession and a Social Media Evangelist by heart.
