Southeast Asia's SME Software Gap Is Massive

TL;DR: 70 million SMEs across Southeast Asia run on spreadsheets and WhatsApp - not because they're small, but because nobody's built software that fits how they work. AI-native development now makes it possible to build vertical SaaS for industries that were previously too niche to justify the investment.

At Carro, we grew to 4,000+ employees across six countries, processing over 10,000 cars a month. A serious operation by any measure. And even at that scale, certain teams still clung to spreadsheets and WhatsApp. Getting people off those tools and onto proper systems was one of the hardest things we did - and we never fully won that fight.

So when I talk to businesses across Southeast Asia now - logistics companies, clinics, dealerships - and see the same thing, I'm not surprised. Almost every industry I've spoken to is still running critical operations manually. This isn't unusual. Across the region, this is just how most mid-size businesses operate. And the more I talk to companies like this, the more I'm convinced it's one of the biggest opportunities in the region.

The Two-Tier Reality

Enterprise software in this part of the world follows a depressingly familiar pattern.

There's tier one: banks, telcos, conglomerates. They run SAP, Salesforce, Oracle. They have IT departments with 200 people, implementation partners on retainer, and seven-figure software budgets. They're fine.

Then there's everyone else.

Food distributors managing thousands of retail relationships through a combination of spreadsheets and memory. Property management companies tracking buildings across multiple cities on what's basically Google Sheets with extra steps. Construction subcontractors doing compliance tracking in a folder of PDFs.

These are not small-time operations. They're serious businesses with serious operational complexity. But nobody has built software that actually fits how they work. 70 million SMEs across Southeast Asia, most of them running on duct tape.

Why "Just Use Shopify/Monday/HubSpot" Doesn't Work

The obvious question is why not use existing SaaS. And the answer is that fit matters more than features.

We learned this firsthand at Carro. We tried Salesforce, HubSpot, Zendesk, Freshdesk, Intercom, MessageBird - the list goes on. Every time, the same problem. The tool doesn't understand your industry's workflow, so you spend months configuring it with widgets, plugins, and workarounds. You're constantly fighting the tool to bend it into something that fits. And the CRM providers all make their platform the centre of action, even when sometimes CRM is just one part of a larger flow.

Eventually we built our own. Not because we wanted to - because nothing fit.

Horizontal tools require so much customisation to handle industry-specific realities that you end up with a brittle, over-configured system that one person understands and everyone hates. What these businesses actually need is vertical software - built for their industry, built for their market context, built by people who understand that operations in Indonesia is fundamentally different from operations in San Francisco.

The Numbers

The ASEAN digital transformation market is projected to reach $295 billion by 2030, growing at 23% annually. Southeast Asia's digital economy already exceeds $300 billion in GMV.

But here's the detail that matters: a disproportionate share of that growth is coming from SME digitisation. Every government in the region is pushing it. Malaysia's MDEC. Singapore's IMDA. Thailand's DEPA. Indonesia's various digital economy initiatives. The demand is there. The policy support is there. The funding is there.

What's missing is the actual software.

Products, Not Projects

You could look at this gap and see a consulting opportunity - help each business build custom software one at a time. That's the agency model, and it doesn't scale. You build one system for one client, finish, and start from zero for the next one.

The opportunity is products. Vertical SaaS platforms that serve entire industry segments. One fleet management platform for hundreds of logistics companies. One procurement system designed for food distributors across the region.

And for the first time, the tools exist to make this work. AI-native development means a small, focused team can build production-grade vertical SaaS in months - not because it's cheap, but because AI lets experienced builders move at a speed that was previously impossible. Then compounding kicks in. Every customer in the same industry generates data and feedback that makes the product better for all customers. The platform gets smarter. Onboarding gets faster. The moat deepens.

This is the playbook that built Veeva (~$32B market cap from pharma-specific CRM), Procore (~$9B from construction management), and Toast (~$16B from restaurant tech). Except now you can execute it with a small team that actually understands the industry.

What We're Doing About It

At First To Fly, we see this gap as one of the largest opportunities in the region. Not as an abstract thesis - we've operated businesses here. We've lived the pain of running operations on tools that weren't built for us.

Our approach: partner with domain experts in target industries, co-build vertical SaaS using AI-native development, and go to market together. Not one platform that does everything. A portfolio of products, each deeply tailored to its market.

The SMEs across Southeast Asia don't need another horizontal tool with a Southeast Asian pricing page. They need software that actually understands their work. The infrastructure to build it now exists. The market is ready.

We'd like to hear from people building in underserved industries.