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Southeast Asia
2018
Investment Landscape
Supported by Published by
Contents
1 What makes SEA attractive? 01
2 Attractive sectors 03
2.1 Fintech 03
2.2 E-commerce 03
2.3 Transport 04
2.4 Other sectors 04
3 PE/VC investments in Southeast Asia - 2017 06
3.1 Singapore, Indonesia take lion’s share of PE/VC investments in SE Asia 08
3.2 Private Equity in Focus 09
3.3 Venture Capital in Focus 09
4 Key Takeaways 13
4.1 First mega IPOs have shown the way 13
4.2 Mega Rounds are the New Normal 14
4.3 Venture funds are getting bigger and newer entrants are joining the fray 15
4.4 As unicorns expand into newer services, consolidation is on the anvil 16
5 Top VC-backed Startups based in Southeast Asia 17
6 Growth Projections 18
7 Comments from PE/VC/startup stakeholders on the SEA ecosystem 20
7.1 Jeffrey Perlman, Managing Director, Head of Southeast Asia, Warburg Pincus 20
7.2 Jenny Lee, Managing Partner, GGV Capital 22
7.3 Thomas G. Tsao, Founding Partner, Gobi Partners 23
7.4 John Riady, Director, Lippo Group and Managing Partner, Venturra Capital 25
7.5 Finian Tan, Chairman, Vickers Venture Partners 26
7.6 Amit Anand, Co-Founder & Managing Partner, Jungle Ventures 27
7.7 Roderick Purwana, Managing Partner, Sinar Mas Digital Ventures 29
7.8 Michelle Suteja, Director, Central Capital Ventura 30
7.9 Albert Shyy, Principal, Burda Principal Investments 31
7.10 Nicko Widjaja, CEO, MDI Ventures 32
7.11 Paul Santos, Managing Partner, Wavemaker Partners 34
7.12 Nikhil Kapur, Principal, GREE Ventures 35
7.13 Paul Ark, Managing Director - Corporate Venture Capital, Digital Ventures 39
7.14 Eddie Thai, Partner, 500 Startups 40
7.15 Nicholas Bloy, Co-Managing Partner, Navis Capital 41
7.16 Alan Hellawell, Group Chief Strategy Officer, Sea Ltd 44
7.17 Ming Maa, President, Grab 47
7.18 Heang Chhor, Founder and Managing Partner, Qualgro 50
7.19 Trax co-founders, CEO Joel Bar-El & Chief Commercial Officer Dror Feldheim 51
8 Malaysia’s Investment Landscape 52
8.1 Victor Chua, Chairman, Malaysia Venture 52
Capital Association and Founder, Vynn Capital
8.2 Razif Abdul Aziz, Acting CEO and Chief Operating Officer, Cradle Fund 53
8.3 Raja Hamzah Abidin, Managing Partner, RHL Ventures 55
8.4 Seng Teong Chua, Principal, Sun SEA Capital 58
8.5 Funding Secured by Malaysia-based Startups in 2017 & H1 2018 601
01
What makes
Southeast Asia
attractive?
Southeast Asia’s journey to the spotlight as an Venture capital firms are raising larger funds
attractive investment destination has been a -- a vote of confidence in the region’s potential
long and steady one. The region has witnessed -- and are beginning to have to compete to
strong economic growth, even during the get into deals. The region is now home to nine
global financial crisis, with average growth unicorns, with several others in the making
expected to exceed 5 per cent over the next (PropertyGuru, ONE Championship), and these
few years (OECD, 2017). startups are increasingly raising bigger funding
rounds to sustain their growth.
Every year since 2012, startups in Southeast
Asia have pulled in more money than the With an internet economy that was expected
previous year1. Home to over 600 million to have hit US$50 billion in 2017 and pegged to
consumers and the world’s fastest growing exceed US$200 billion by 20252, it is no surprise
internet market, the region’s moment seems to that Chinese tech giants and Silicon Valley
be now. majors are vying with each other and regional
competitors for a slice of this market.
This change is reflected in the startups and
investors in the region. With the ecosystem
maturing, we are seeing serious capital that
is significant in size and patient in joining
the fray. There are more opportunities being
created upstream, downstream and in sectors
previously untouched due to a lack of capital
and infrastructure.
1 The State Of Southeast Asia Tech, September 2017, CB 2 e-Conomy SEA Spotlight 2017, Google-Temasek
Insights
SOUTHEAST ASIA INVESTMENT LANDSCAPE 2018 12
“ “Southeast Asia hasn’t fully
realized its potential. Given
the family-owned business
transformations across
Southeast Asia in markets such
as Indonesia and Malaysia, we
see a great opportunity to invest
even more in the region.”
Ashish Shastry
Head of Southeast Asia, KKR
SOUTHEAST ASIA INVESTMENT LANDSCAPE 20182
02
Attractive sectors
2.1 Fintech 2.2 E-commerce
• More than half the adult population of • E-commerce sales of first-hand goods was
ASEAN is unbanked1 and the lack of access estimated to have reached US$10.9 billion
to financial services is acute in rural areas. in gross merchandise value (GMV) in 2017,
up from US$5.5 billion in 2015, growing at a
• In ASEAN, peer-to-peer (P2P) lending is 41% CAGR5.
forecast by Allied Market Research to grow
at a compound annual growth rate of 51.5 • The overall regional e-commerce market is
per cent to 20222. projected to hit US$88 billion by 2025.
• The unmet electronic payment needs • Southeast Asia’s mobile internet users
across four ASEAN markets -- In Indonesia, spend on average 140 minutes per month
the Philippines, Cambodia, and Myanmar on e-commerce platforms versus 80
-- total more than US$180 billion3. minutes per month in the US.
• In these four markets, the credit market
currently serviced by the informal sector is
worth approximately US$80 billion4.
1 State of Fintech in ASEAN, UOB 5 e-Conomy SEA Spotlight 2017, Google-Temasek
2 Ibid.
3 Accelerating Financial Inclusion in South-East Asia with Digital Finance,
2017, Asian Development Bank
4 Ibid.
SEA e-commerce market size ($B)
100.0B
88.1B CAGR 2015-17
41%
75.0B
CAGR 2015-25
32%
50.0B
25.0B
10.9B
5.5B
.0B
2015 2017 2025
E Commerce
SOUTHEAST ASIA INVESTMENT LANDSCAPE 2018 32
2.3 Transport
• Transport demand in Asia has increased, on • The overall ride-hailing market is projected
average, four times per country since 19806. to touch US$20.1 billion in GMV by 2025.
• Ride-hailing services in Southeast Asia were • Two of the biggest unicorns in Southeast
expected to have reached US$5.1 billion in Asia are ride-hailing majors – Grab and Go-
2017, double the US$2.5-billion market in Jek.
20157.
6 Unlocking Cities: The impact of ridesharing in Southeast Asia and
beyond, November 2017, BCG
7 e-Conomy SEA Spotlight 2017, Google-Temasek
Indexed estimated growth in travel demand (1980=100)
800
Singapore
600 Korea
Malaysia
Vietnam
400 Thailand
Indonesia
Hong Kong
Philippines
200 Australia
Japan
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2.4 Other sectors
• The online travel market in Southeast Asia • Horizontal personal services are emerging
reached US$26.6 billion in 2017, led by as a new lucrative area as ride-hailing
growth in airline and hotel bookings8. players expand to food delivery, courier
• Online media services touched US$6.9 services, and digital payments.
billion in 2017, driven by online ads and
gaming.
8 e-Conomy SEA Spotlight 2017, Google-Temasek
4 SOUTHEAST ASIA INVESTMENT LANDSCAPE 2018“
“The market is so big. The
market for payments, the
market for food delivery, all
things food, the market for
transport, we’re barely scraping
the surface of how big these
markets can become in the
region, and as we become
bigger and bigger, I think that
that mindset is also important
to have and competition is
super necessary.”
Nadiem Makarim
Founder and CEO, Go-Jek
SOUTHEAST ASIA INVESTMENT LANDSCAPE 2018 53
03
PE/VC investments in
Southeast Asia - 2017
25
20
15
USD Billion
10
5
0
2014 2015 2016 2017
PE Corporate VC VC
Source: Preqin,: SVCA Graph: SVCA
According to Preqin data, private equity (PE) investors were part of seven of the top 10 deals
and venture capital (VC) investments into by size in Southeast Asia in 2017.
Southeast Asia almost tripled to US$23.5 billion
in 20179, hitting a four-year high. The year’s notable deals included the US$11.6-
billion privatisation of GLP (formerly known
The growth was driven by a surge in corporate as Global Logistic Properties) by a Chinese PE
investments as leading companies across Asia consortium and Grab’s US$2-billion funding
co-invested in or led sizable funding rounds for round led by SoftBank and Didi Chuxing.
startups in the region. In fact, corporate
9 Southeast Asia PE & VC: May 2018 Investment Activity, Singapore
Venture Capital & Private Equity Association (SVCA)
6 SOUTHEAST ASIA INVESTMENT LANDSCAPE 2018“
“We’re starting to see a much
greater desire from a select
group of our LPs that want
more exposure to SEA and they
have expressed their desire
and willingness to co-invest in
opportunities here. I would say
this has happened in the last 18
months or so when the interest
level in this region picked up
considerably.”
Jeffrey Perlman
Managing Director and Head
of Southeast Asia, Warburg Pincus
SOUTHEAST ASIA INVESTMENT LANDSCAPE 2018 73
3.1 Singapore, Indonesia take lion’s share of PE/VC
investments in SE Asia
Singapore10 and Indonesia remain the top As the fourth-largest economy in the
destinations for PE and VC investments in the world, Indonesia remains a key market, and
region, accounting for more than 90% of all significantly untapped at that, for businesses
deal value in 2017. and investors alike. It is also home to four of
the region’s unicorns – Go-Jek, Tokopedia,
The city-state’s pro-business policies, tax Traveloka and Bukalapak.
treaties and a transparent regulatory regime
make it an attractive regional hub for fund Vietnam continues to show promise, with
managers and businesses seeking growth in investments growing almost three times over
Southeast Asia. the last two years to exceed US$510 million in
201711.
11 Southeast Asia PE & VC: May 2018 Investment Activity, Singapore
10 Includes investment through Singapore holding vehicles. Venture Capital & Private Equity Association (SVCA)
25
20
15
USD Billion
10
5
0
2014 2015 2016 2017
Singapore Indonesia Vietnam Thailand Malaysia Cambodia Laos Myanmar Philippines
Source: Preqin,: SVCA Graph: SVCA
8 SOUTHEAST ASIA INVESTMENT LANDSCAPE 20183
3.2 Private Equity in Focus
Private equity deal value in Southeast Asia transactions; such deals grew at 113% annually
increased from US$9.2 billion in 2014 to US$15.5 from 2014 to 2017.
billion in 201712.
Deal activity in the region was driven by the In 2017 alone, privatisation deals involving PE
growing PE interest in public to private firms grew 5.8x year-on-year, led by the mega
GLP deal.
12 Southeast Asia PE & VC: May 2018 Investment Activity, Singapore
Venture Capital & Private Equity Association (SVCA)
18
16
14
12
10
USD Billion
8
6
4
2
0
2014 2015 2016 2017
Public to Private PIPE Buyout Growth Capital Add-on Merger Restructuring
Source: Preqin,: SVCA Graph: SVCA
3.3 Venture Capital in Focus US 0.40%
Venture capital inflow in Southeast Asia has
been steadily rising. These investments stood
at 0.18% of the region’s GDP in 2016, up from a China 0.03%
mere 0.04% in 2014.
The uptick in VC investments brought the India 0.18%
region at par with India in terms of proportion
of GDP as it continues to trail China (0.30% of
GDP). SEA 0.18%
Venture capital investments (% of GDP)
SOUTHEAST ASIA INVESTMENT LANDSCAPE 2018 910
“ “The SEA private equity
market still lacks depth. This is
improving as more institutional
funds deploy capital and make
profitable exits for LPs.”
Yar-Ping Soo
Partner (Singapore),
Adams Street Partners
SOUTHEAST ASIA INVESTMENT LANDSCAPE 20183
According to Preqin data, venture capital In an indication of the growing maturity of the
investments in Southeast Asia grew 4.8x from regional startup ecosystem, the largest gain
US$1.7 billion in 2014 to US$8 billion in 201713. was seen Series C onwards; such investments
rose from US$738 million in 2014 to US$6.3
Seed and Series A investments in the region billion in 2017. In fact, Series C and subsequent
increased from US$39.5 million in 2014 to financing rounds accounted for 79% of the
US$83.1 million in 2017. year’s total VC investments.
13 Southeast Asia PE & VC: May 2018 Investment Activity, Singapore
Venture Capital & Private Equity Association (SVCA)
9
8
7
6
5
USD Billion
4
3
2
1
0
2014 2015 2016 2017
Seed/Angel Series-A Series-B Series-C + Others
Source: Preqin,: SVCA Graph: SVCA
It is worth noting that the traditional US$100-billion Vision Fund. This is also reflected
boundaries between private equity and in Southeast Asia where investors ranging
venture capital are getting blurred globally, from private equity firms to hedge funds are
due in no small part to the launch of SoftBank’s participating in smaller venture deals.
SOUTHEAST ASIA INVESTMENT LANDSCAPE 2018 1112
“ “Southeast Asia represents a
market with huge potential.
IFC’s increased focus on
supporting innovation and
digital transformation in
emerging Southeast Asia
has led to partnerships with
regional early-stage venture
funds that help build local
start-up ecosystems.”
Pravan Malhotra
Venture capital lead for South
and Southeast Asia and Asia
internet investments, IFC
SOUTHEAST ASIA INVESTMENT LANDSCAPE 20184
04
Key Takeaways
4.1 First mega IPOs have shown the way
Having a clear and viable exit path is critical It was followed by gaming hardware maker
to investors. Southeast Asia’s track record on Razer that raised around $504 million (after
this front, however, has been iffy at best. With deductions) on the Hong Kong Stock Exchange
most startups in the region unprofitable, and in November. Its market cap stands at about
still burning cash in pursuit of growth, a public HK$16.42 billion or US$2 billion.
market listing has not been a favoured option.
While the seesaw performance of both these
However, the recent IPOs of some of the bigger stocks have not alleviated concerns, an IPO
startups from this region have sparked hope. doesn’t remain the distant option it used to be
Singapore’s internet company Sea (formerly for startups in the region. Case in point: Go-Jek
known as Garena) raised US$884 million in founder Nadiem Makarim has mentioned that
a New York IPO in October 2017, and today he would prefer to list the startup in Indonesia.
boasts a market cap of around US$5.13 billion. A path to profitability, of course, remains the
key criterion to decide on the timing of its IPO.
SEA-based companies have seen a number of successful listings in the region, as well as
in the USA
(Listed on JKSE in Oct 2017) (Listed on NTSE in Oct 2017) (Listed on ASX in Sep 2012)
(Listed on PSA in Dec 2014) (Listed on HKSE in Nov 2017)
Graphic: Jungle Ventures
SOUTHEAST ASIA INVESTMENT LANDSCAPE 2018 134
4.2 Mega Rounds are the New Normal
The funding rounds for Southeast Asia’s Early this year, Indonesia’s Go-Jek closed a
startups are progressively getting larger, led by US$1.5-billion funding round backed by Google,
the unicorns raising multi-billion-dollar rounds. Tencent, BlackRock, JD.com, Meituan-Dianping
and local conglomerates Astra International
Prominent among these is Singapore- and Djarum Group. It is reportedly raising
headquartered Grab that raised a US$2.5-billion another US$1-1.5 billion round of financing.
funding round co-led by Didi Chuxing and
SoftBank in 2017. More recently, the ride-hailing Other notable mentions include Indonesian
firm announced raising another US$2 billion unicorn Tokopedia that raised US$1.1-billion in
in an ongoing round, with plans to raise US$1 an Alibaba-led round in August 2017.
billion more in the offing.
Chinese tech giant Alibaba injected US$2
billion in e-commerce major Lazada in 2017,
doubling its investment in the startup to US$4
billion.
Breakout of rounds > $50m (Mega Rounds)
Q1’18 0.32 0.61
Over the last nine quaters,
Q4’17 0.15 0.39 mega rounds have comprised
84% of total capital invested
Q3’17 1.40 1.66
Mega Rounds Finance Per Quater
Mega Rounds
Non-Mega Round
Q2’17 0.14
Q1’17 0.09 0.26
Q4’16 1.21 1.36
Q3’16 4.84 5.10
Q2’16 1.05 1.36
Q1’16 1.92 2.14
0 1 2 3 4 5
USD Billion
Graphic: Jungle Ventures
14 SOUTHEAST ASIA INVESTMENT LANDSCAPE 20184
4.3 Venture funds are getting bigger
and newer entrants are joining the fray
Venture capital firms based in Southeast
Asia are raising larger than before funds. The 6. Latitude Venture Partners –
region has also seen the entry of new players US$200 million
seeking to raise mega funds to fuel the startup Backed by Indonesian conglomerate Sinar
ecosystem. The largest funds raised by VC firms Mas, Latitude Venture Partners is a new
based in the region include: geography-agnostic fund. It is currently eyeing
investments in the US and Europe, in addition
1. B Capital – US$360 million to Asia and is particularly interested in the
Co-founded by Raj Ganguly and Facebook healthcare/ healthtech segment.
co-founder Eduardo Saverin, B Capital closed
its maiden fund in February 2018. The fund will 7. EV Growth – US$150 million
invest globally but maintain a special focus on A joint venture between Indonesia’s Sinar Mas,
Asia. East Ventures and Yahoo! Japan, EV Growth
was launched in March 2018. It plans to invest
2. Grab Ventures – US$250- in growth-stage startups in Southeast Asia with
million corpus for Indonesia a special focus on Indonesia.
Grab’s venture and innovation arm was
launched in June to partner or invest in 8. Jungle Ventures – US$150 million
startups solving mobility, food, logistics, fintech With its third fund, the venture capital firm
and other O2O challenges. The venture arm plans to double down on its investments in
has announced plans to invest IDR3 trillion Southeast Asia and India. It had previously
(US$250 million) in Indonesian startups. raised a $100 million fund from investors
including Temasek, IFC and Hubert Burda
3. Vickers Venture Partners – Media.
US$230 million
In October 2017, Singapore-based Vickers
9. ST Engineering Ventures – US$150 million
Venture Partners announced raising a total
ST Engineering launched its corporate venture
of US$230 million for its fifth fund, including
capital (CVC) unit with a corpus of $150 million
a yuan-denominated vehicle of US$40
in 2017. The new unit will target early-stage
million. The fund will focus on investments in
startups in robotics, autonomous technology,
Southeast Asia, China, India and the US.
data analytics and cybersecurity.
4. Vertex Ventures – US$210
million 10. Openspace – US$135 million
The venture capital arm of Temasek Holdings In August this year, Openspace Ventures,
closed its third Southeast Asia fund in October formerly known as NSI Ventures, announced
2017, exceeding its US$150-million target. The the final close of its second Southeast Asia
fund also marked the first time it raised money fund at $135 million with investments from
from outside investors such as Kasikornbank in Stepstone Group and state investment firm
Thailand and Cathay Life Insurance in Taiwan. Temasek Holdings.
5. Meranti ASEAN Growth Fund 11. Hatcher+ – US$125 million
– US$200 million Data-driven venture investment platform
Shanghai-based VC firm Gobi Partners Hatcher+ comes from the stable of Hatcher,
launched the fund in August 2017. Backed a VC fund and incubator. Its $125-million
by Mavcap and Korea’s GS Shop, the growth Hatcher+ H2 venture fund recently forged
fund will target Series B and C rounds and a partnership with Australia’s largest tech
concentrate on cloud services, e-commerce, accelerator BlueChilli to co-invest and build
fintech and Muslim-focused tech (TaqwaTech). 240 global startups.
SOUTHEAST ASIA INVESTMENT LANDSCAPE 2018 154
Launched in March this year, Tin Men targets
12. Insignia Ventures Partners – pre-series A investments in Southeast Asian
US$120 million startups in the B2B technology space.
Singapore-based Insignia Ventures Partners,
founded by former Sequoia Capital venture 19. Kejora-Intervest fund – US$100 million
partner Yinglan Tan, closed its maiden fund at Kejora Ventures is looking to hit the final close
$120 million early this year. The milestone came of its $100-million joint fund with South Korean
less than a year after Tan left Sequoia’s office counterpart Intervest by the end of this year.
in Singapore. The fund will target technology The first close of the fund came in December,
startups operating in Southeast Asia. raising more than half of the targeted size, at
$60 million, from limited partners including
13. Digital Ventures – US$100 million Korea Venture Investment Corp.
Siam Commercial Bank doubled the corpus
of its fintech-focused venture capital arm this 20. VinaCapital Ventures – US$100 million
year to $100 million. The geography-agnostic VinaCapital, one of the largest investment and
VC fund has backed Singapore-based Golden asset management firms in Vietnam, recently
Gate Ventures and Dymon Asia Ventures as launched a $100-million venture capital
well as US-based Nyca Fund II. arm. VinaCapital Ventures will capitalise on
Vietnam’s technology sector with investments
14. MDI Ventures – US$100 million of $2-10 million per company.
Telkom Indonesia’s corporate venture capital
arm, MDI Ventures, was launched in 2016 to
invest $100 million in global and domestic 4.4. As unicorns expand into
startups across four years. The VC firm invests newer services, consolidation
Series A onwards and focuses on investments
in Indonesia, APAC and Silicon Valley.
is on the anvil
The region’s unicorns are expanding their
15. Mistletoe – US$100 million services to span everything from on-demand
Started by billionaire tech investor Taizo Sun, services such as ride-hailing and grocery
Mistletoe is a combination of an early-stage delivery to financial services such as insurance
venture firm, incubator and entrepreneur-in- and payments.
residence program.
Son, who built his fortune on hit smartphone Grab has outlined its ambition to become an
game Puzzle & Dragons, plans to invest $100 “everyday super app” for users in the region;
million in Southeast Asian startups within five Go-Jek is tapping its diversified investor base to
years. accelerate growth – collaborating with Google
on platform mobility, Tencent on payments
16. Golden Gate Ventures – US$100 million strategy, JD.com on logistics operations, and
The VC has completed a first close of over Meituan Dianping on merchant transactions
$65 million in commitments and a full close and deliveries.
for the fund is expected before the end of
the year. The fund will target Southeast Asia’s Gaming major Razer has entered digital
technology sector, with a particular interest in payments while NYSE-listed e-commerce and
e-commerce, payments and mobile apps. game development firm Sea Ltd is expanding
to advertising. With these changes afoot, these
17. Qualgro – US$100 million companies are likely to look very different
In August, Qualgro announced the first close from their origins.
of its fund at $60 million. With its latest fund, it
plans to double down on B2B companies in the These developments may also cause a shift in
tech space across Southeast Asia and Australia. Southeast Asia’s startup-investor ecosystem.
Smaller startups will need to find their niche
18. Tin Men – US$100 million or risk being acquired by deep-pocketed
In August, new VC firm Tin Men Capital unicorns. This could spell additional exits for
announced the first close of its maiden investors who made an early bets on some of
$100-million fund. these opportunities.
16 SOUTHEAST ASIA INVESTMENT LANDSCAPE 20185
05
Top VC-backed
Startups based
in Southeast Asia
*Southeast Asia includes Brunei,
Cambodia, East Timor, Indonesia,
Laos, Malaysia, Philippines,
Singapore, Thailand, Vietnam
Source: PitchBook data through
August 15, 2018
SOUTHEAST ASIA INVESTMENT LANDSCAPE 2018 176
06
Growth
Projections
According to a recent survey of limited partners A net balance of about 26 per cent of LPs
conducted by Coller Capital, Southeast Asia will surveyed said that Southeast Asia will be more
become more attractive for buyouts in the next attractive for private equity in the next three
three years compared to several developed years. This compares to China’s 14 per cent and
markets in the Asia-Pacific region. Japan’s 11 per cent.
South East Asia 26%
China 14%
Japan 11%
Australasia 8%
India 3%
South Korea 3%
Net balance (more attractive minus less attractive) Graphic: Coller Capital
Another prediction comes from Malaysia’s According to KPMG14, AI is expected to be
Catcha Group that expects SEA to have 460 one of the biggest bets for the foreseeable
million internet users by the end of 2019, future in Asia, with deal activity expected to
creating a massive opportunity that will attract rise in markets including China, Singapore,
private tech funding from regional and and Indonesia. Healthtech and edtech are also
foreign investors. expected to gain more attention from investors
over the next few quarters.
14 Venture Pulse Q1 2018, KPMG
18 SOUTHEAST ASIA INVESTMENT LANDSCAPE 2018“
“Southeast Asia, like other
emerging markets such as
South America, is very attractive
but the size of the middle class
will be a determining factor
as to how fast these markets
can grow. Basic internet
infrastructure, payment
systems, these things are still
lagging behind. But the internet
giants like Alibaba and Tencent
coming in will accelerate the
growth process.”
Helen Wong
Partner, Qiming Venture Partners
SOUTHEAST ASIA INVESTMENT LANDSCAPE 2018 197
07
Comments from
PE/VC/startup
stakeholders on the
SEA ecosystem
7.1 Jeffrey Perlman, Managing Director, Head of
Southeast Asia, Warburg Pincus
On the startup evolution in have to come in to do earlier stage deals –
Southeast Asia: we need to help bridge that gap for many of
We had put together a slide in the past these companies to get them to the larger
which showed there were 7 or 8 unicorns in institutional rounds later on. Over time, you will
SEA, and then another 300+ companies that see private equity firms like us go earlier into
have basically raised series A or pre-series A the life cycle of these companies in SEA.
funding. There were only a few companies
who had even raised Series B or C and it is On increased competition
mainly because the Go-Jeks, Garenas and the in SEA and growing interest
Grabs, and the other unicorns have been big among North Asian strategics:
absorbers of capital. It’s a fact of life in almost any market, not just
in the context of SEA, that a lot of investors
Most investors were new to SEA and they went are looking at a limited number of deals.
with these platforms, and as a result, these Alibaba has been looking at e-commerce
companies have been able to expand across and payments-related businesses in SEA,
multiple verticals – but in markets like China while Tencent has been looking at the
or India, there would have been multiple gaming ecosystem with VNG and Garena,
competitors in each of those verticals that and obviously stepping in a little bit broader
had raised funding on their own. And because with service e-commerce with their Go-Jek
there wasn’t much of this local capital in SEA, investment.
these unicorns took most of the external
capital that came in. These investors are also very targeted with
the markets they are looking at within SEA. I
I think what you’re going to start to see is the think as they get more comfortable, they will
next series of companies start to emerge, and then want to build ecosystems around some
it means that firms like Warburg will likely of the platforms they have invested in, or bring
20 SOUTHEAST ASIA INVESTMENT LANDSCAPE 20187
“
in some of their portfolio companies from
China to get the ecosystem in place. Look at
the number of portfolio companies the likes of
Tencent and Alibaba have.
On Vietnam:
It is not surprising that Vietnam is seeing
interest from investors. Even in the past, there’s
always been an interest in Vietnam but, on the
back of successful deals like Vincom Retail, the
country grabbed a lot of attention, because
(these deals) validated that you could invest
in scale and also exit in scale. The competition
level has certainly grown from when we first
started investing in Vietnam over five years
ago.
On untapped opportunities
in SE Asia:
“What you’re going to start
We’ve probably done more startups in Asia on to see is the next series of
the real estate side than we have even on the
technology side. There are many residential-
companies start to emerge,
focused businesses across emerging Asia and it means that firms
which offer the highest rate of returns, and
so a lot of focus and capital has gone
like Warburg will likely
into this space. have to come in to do earlier
Our vision has been to create the other key
stage deals.”
slices of the pie – the largest retail players,
largest office, logistics, industrial and
hospitality players and to do so always as
platforms. We’ve done it both in Vietnam
Jeffrey Perlman
Managing Director,
and Indonesia, on the retail side with Vincom
Head of Southeast Asia,
Retail and NWP Retail, respectively, and we’re
Warburg Pincus
building it in logistics with ESR, BW Industrial
in Vietnam and with Embassy Group (in India).
So I think that’s one key proprietary area where
we can build platforms.
I think there are opportunities in the financial
services and healthcare sectors too where we
can spin people out from some of the existing
institutions to build something behind a key
thesis and we have a track record for building
companies in this space in both India and
China as well.
SOUTHEAST ASIA INVESTMENT LANDSCAPE 2018 217
7.2 Jenny Lee, Managing
Partner, GGV Capital
On considering a more active
presence in SEA:
There are a couple of trends that have led us to get USD coming in. I think Southeast Asia is
consider doing something more actively in the at that phase now, it’s a net positive to have
[Southeast Asia] region. One, Chinese startups more players. It will give the local VCs more
are migrating and exporting their business competition for sure, but it also means they
model to Southeast Asia – Indonesia or the can up their game. The local VCs may have
rest of the region. This trend is increasing in thought that they get to seal all the deals
velocity. and less was done on the value-add part
after the investment.
Two, we are also seeing the Southeast
Asia market maturing. Indonesia has over What the entry of strategic capital
100 million internet users and their usage from China could mean for SEA:
behaviour is very similar to China five to 10 When you have strategic capital or GGV-
years ago. So the maturing market on the type of capital coming in, we don’t just bring
consumer side is becoming pretty interesting. capital, we bring relationships, networks and
experiences. And when you’ve fought a war
The fact that we were in China all these years, in China, you have more knowledge since you
we have the natural advantage to track those know how battles are being fought. These
companies that are exporting their business battles are not about fighting over 10,000 users,
models and that makes us want to do a bit it’s over millions of users. So the challenges,
more. We’re now monitoring very cautiously the pitfalls, all lessons learnt from the Chinese
how the Southeast Asia market will shape up. companies getting to unicorn status and IPO –
If it makes sense, we will do something more those are accumulated experiences. Southeast
there. Asia’s local VCs have not seen those. Maybe
a few have seen one or two but they haven’t
On SEA’s pain points: fought the battle.
The biggest issue in Southeast Asia now
is the funding gap. There are ideas – some So, when you have an influx of more
good, some not so good – but when there is experienced capital, it will make the
a funding gap, it will prevent or scare away ecosystem better and hopefully there will
entrepreneurs who have ideas because they end up being more experienced investors
feel that they cannot get funding or they get in the market. Better investors mean better
one round of funding and then they cannot companies will be funded, and those
continue. So historically, the funding gap is a companies will have a chance to be successful
big issue. Now with more players setting up in a shorter amount of time.
investment funds, the diversity of capital is
pretty normal as to how emerging markets
grow. So I would say that it’s a positive trend.
In the level that the capital is interested in,
it’s still not competitive enough. I would say
that there’s still not enough capital going
around. if you look at how China has grown,
the first wave of capital wasn’t strategic – Intel,
Microsoft, IFC, they are the ones who first
started investing in startups and trained the
first generation of VCs in China. After that you
22 SOUTHEAST ASIA INVESTMENT LANDSCAPE 20187
“
7.3. Thomas G. Tsao, Founding
Partner, Gobi Partners
On what makes Southeast
Asia attractive:
Looking at Southeast Asia, the demographics
are incredibly favourable – it’s one of the
youngest populations in the world – and
they’re going to leapfrog even China in terms
of tech adoption. So how could you not be
excited? Fortunately for us, we identified that
opportunity eight years ago. We were one
of the first Chinese venture capital firms to
expand out to this region, so we got a head
start. In many ways, we are enjoying that first-
mover advantage because of the relationships
and networks that we already have in place.
We’re delighted that other firms are now
“With Chinese VCs going realizing the potential of Southeast Asia, but for
newer entrants, it’s like coming into the middle
into Southeast Asia, it of the movie; we have the benefit of being here
means that incumbent since the opening credits.
VCs really have to grow On expanding in Southeast Asia:
up really fast. With varied We’ve been expanding; we just opened an
office in Bangkok, on top of the on-ground
capital, CEOs of startups teams we already have in Singapore and
could also grow up faster Jakarta. Overall, we have 21 team members
– this brings the total to four offices across
and if they become serial Southeast Asia now. We believe having people
entrepreneurs, it’ll be good on ground is the key to having access to
exclusive deals, network strength, and a deep
for the ecosystem.” understanding of the markets. What sets Gobi
apart is that we chose Kuala Lumpur as our
regional headquarters, and we now have a
Jenny Lee team of 12 here. Thus far, it has proven to be the
right choice for us. We are currently managing
Managing Partner, GGV Capital
three dedicated funds of different stages, to
capitalize on the full funnel in Southeast Asia.
The firm has now invested in 50 startups, with
20 of them being in Malaysia.
On exits:
My mentor told me that being a good investor
is not knowing when to invest, but knowing
when to sell. In China, we went through these
cycles, and we ultimately know that we have to
return money to LPs. We’ve already achieved
four exits in Southeast Asia; companies like
Hermo, and a more recent one that has not
been publicly announced yet. We believe that a
lot of exits in Southeast Asia will be generated
SOUTHEAST ASIA INVESTMENT LANDSCAPE 2018 237
through M&A, an area where we have a lot of On other opportunities
experience. For example, in China we recently in the region:
sold Dianwoda to Cainiao – for a 22x return. 24 per cent of the world’s population is Muslim,
but they only generate 8 per cent of the
On Kuala Lumpur as a startup hub: world’s GDP. Many people feel that the glass
Kuala Lumpur, as a startup ecosystem, is on is half empty, but we think that the glass is
par or may have even surpassed Singapore. half full. Will this market normalize and grow
Look at Alibaba: they recently announced that 3x? We think it will, and we believe there is
they’re setting up a Digital Free Trade Zone tremendous upside.
in Malaysia. Gobi has worked with Khazanah,
MAVCAP, MaGIC, and MDEC, and they have Unfortunately, this market is currently
been doing a great job at boosting the underserved. That’s why we are focusing
ecosystem. on ‘TaqwaTech’ – startups that are using
“
innovation and technology to serve the
If you’re a startup, I think it’s really attractive to Muslim community. We have announced
be based in Malaysia, where your dollar can go three TaqwaTech deals – Tripfez, SimplyGiving
a lot further and you will get the same access and Offpeak. There is no doubt that there will
to equivalent, or even better talent. And this be unicorns emerging from the Taqwatech
does not only apply to Malaysia, it also applies space. The only question is: will Gobi be
to other cities such as Bangkok, Ho Chi Minh invested in them?
City, Jakarta, and Manila, and that’s why you
see them flourishing.
On what could be done to foster
investments in Malaysia:
Malaysian institutional investors have
traditionally been more risk averse and
preferred investing into the later stages of big
tech startups. However, many times these
deals come with an inflated price, and may not
actually be less risky.
A better approach may be to gain exposure “At Gobi, we want to be
to these companies in the earlier stages by in underserved markets
investing in a VC fund. That way, you are
paying a lower entry valuation, and you are where innovation is
able to track the companies’ progress so that occurring at the edge.
when they have scaled up, you will have the
conviction to invest substantially more directly
That’s where the returns
into the company. are the highest – that’s
In Singapore, Temasek makes strategic
what we did in China and
investments to promote local VC champions. now, in Southeast Asia.”
Maybe the new government could adopt a
similar strategy in Malaysia. Then you could
make Kuala Lumpur the venture capital Thomas G. Tsao
funding hub for Southeast Asia. The foundation
Founding Partner,
is already here.
Gobi Partners
24 SOUTHEAST ASIA INVESTMENT LANDSCAPE 20187
7.4 John Riady, Director,
Lippo Group and Managing
Partner, Venturra Capital
On why Lippo ventured into VC: On the untapped potential in the
The challenge for traditional businesses, e-commerce market:
including Lippo, is that we get caught up in our I continue to be very optimistic about
own little world, not realizing that the whole e-commerce. Right now, e-commerce is only
world has moved beyond us. Because we are 2 per cent of the market. But it will go to 10, 12,
concerned about this we created Venturra. 13 per cent. My second thought is that when
we talk about e-commerce, we need to think
And obviously, we also want to make money omnichannel because if you take a look at even
investing. We have invested in a total of 22-23 a market like China that’s already so advanced
companies. Right now, I think we are probably in e-commerce, their online penetration is only
eight times our portfolio, so it’s a successful 20 per cent, which means 80 per cent of the
“
fund and it’s interesting to see how the whole market is still, quote-unquote, offline.
industry has grown over the last four years.
That’s why right now, Alibaba and these online
players are buying offline companies. Alibaba
On evolution of the VC ecosystem: is creating their own offline stores, JD as well,
Three years ago, there were very few players. Tencent as well. So they’re seeing that sure,
Now the ecosystem is much more mature. online is big, but even in China, it is 20 per cent
We see that as a good thing. If you’re the only of the market. The other 80 per cent is offline.
one investing, there is nobody else supporting.
So in the investing world, it’s good to have
company, so to speak.
On staying focused on SE Asia:
Generally, we think Southeast Asia is one of
the most exciting tech spaces, so we really
want to focus here. There are exciting things
everywhere but you need focus, and these
companies require due diligence, require you
to put in the work and make sure you can also
add value to them. “We think Southeast Asia
On finding the right founders in Indonesia: is one of the most exciting
It’s improving. Indonesia has excellent tech spaces, so we really
entrepreneurs. Obviously, entrepreneurship
is very difficult. For every 100 companies that want to focus here.”
start, only maybe one or two really make it
– that’s the nature of the business. But that
doesn’t mean we have bad entrepreneurs, that John Riady
just means entrepreneurship is inherently very Director, Lippo Group and
challenging. Managing Partner, Venturra Capital
SOUTHEAST ASIA INVESTMENT LANDSCAPE 2018 257
7.5 Finian Tan, Chairman,
Vickers Venture Partners
The evolution of Southeast Asia’s sector is too is still young and developing its
start-up investments: entire ecosystem.
In the early days there weren’t much high-
growth tech businesses in the region. Then it Overall, however, ASEAN – for the foreseeable
began in China and now Southeast Asia and future – will continue to adapt new technology
India have started to have their own unicorns from the West to suit its own specific needs.
too. Although It is still only a small family
action of China, it should grow relatively as the Staying ahead of the regional
economies undergo long-term high-growth VC competition
led by the new economy. We are different in many ways. We don’t
necessarily try to be different for the sake of
Greatest challenges towards the it; it’s just in our DNA. We are global and are
regional VC ecosystem: not focused on any one sector or geography.
The Venture Capitals (VCs) will naturally come We also have a big team and many offices
when the opportunities present themselves. compared to our total funds raised.
Sometimes they are even too early. Like in
India, where the early birds saw some losses We believe that, in order to achieve results, we
due to an overheating of the market; thinking only need to do three things right: a good deal
that India is just a decade behind its peers flow; a good filter; as well as the ability and
when it is actually several decades behind. willingness to spare no effort when nurturing
the growth of our portfolio companies.
In fact, a lot of capital has recently come from
China and not just the traditional sources from
the developed countries. This ha been primarily
from the big corporates and Chinese VCs
looking to expand beyond china.
Emerging start-up trends in
Malaysia and ASEAN:
The trends in the West are generally led by
the macro technology trends of the world. In
emerging markets, they are driven more by
needs which are solved by new applications of
Western technology. For example, the choking
congestion in Jakarta led to the birth of Go-Jek;
which is a twist on Uber’s ride-sharing model
but for motorcycles.
But the sharing economy has not run its course
yet. It began with ride-hailing and then Airbnb.
Now it’s freelance photographers, drones and
even farming vehicles. As for e-commerce, the
26 SOUTHEAST ASIA INVESTMENT LANDSCAPE 20187
7.6 Amit Anand, Co-Founder
& Managing Partner, Jungle
Ventures
On the SEA ecosystem: On the fragmented nature
We see more capital coming into the region of SEA market:
and I think that’s a good thing. But I still think I think we’re doing a huge disservice to
there are more companies than capital. In ourselves if we keep focusing on geographical
2012, our total dealflow was 200 to 250 a year. fragmentation in SEA. The reality is that the
Today, we look through 2000 deals a year, meet market has actually become much more
more than 300 companies a year, and do deep homogenous at the consumer behaviour level.
dives on 50 to 60 companies, before investing
in four to five. So, definitely more companies Look at Go-Jek and Grab - they’re going
than capital. Even if you put together our peers into every market. Google and Facebook
I don’t think we are collectively investing in are already in every market. So are Pomelo,
more than 100 Series A rounds in the year. So Reddorz and iflix. In less than three years, our
still less than 10% of companies in a year are portfolio companies have scaled from one
getting institutional-type Series A capital. city to 10-15 cities across the region. That’s not
fragmentation. That’s the ease of being able to
On valuations: transport one product into multiple markets.
Have valuations shifted and has this made it So, I don’t think fragmentation is the real issue.
difficult to invest in the region? I don’t think If anything, operational fragmentation is a
so. Most of the Series A investments that we’ve barrier to entry for overseas players. That’s why
done in SEA over the last 12 to 24 months are you see a lot more mergers and acquisitions
still in the range of $7 to 15 million pre-money. (M&A) happening here.
In US and China, the valuations are significantly On VCs in SEA moving up the
higher than that. So vis-a-vis the opportunity fund chain:
where per capita GDP in SEA is quite high In China, Seed to Series B is considered early
compared to India, where the valuations are stage. They write both a $2-3 million seed
still muted. You still have more companies than investment and also a $20-30 million growth
capital, so you get to pick and choose. stage cheque.
I think SEA will eventually move towards
On the availability of talent in SEA: where China is, in terms of its ecosystem and
We see a growing trend of talent moving to evolution. You’ll begin to see more early-stage
this region to build businesses. After all, it funds like us blurring the lines in terms of
is one of the youngest and fastest growing cheque sizes - but still operate in the early-
internet markets in the world. stage.
The talent that we see today is significantly On the perceived funding gap in SEA:
better than what we saw seven years ago. I’m Some investors are concerned about a gap
sure it’s different from the talent that China in Series B, but I don’t think there’s any gap
sees today because they’ve got a lot more there. In the last eight years each and every
experience, but that doesn’t mean that they’re key investment in the Jungle portfolio has
not quality entrepreneurs. raised Series B, mostly from leading marquee
investors. Series C and D is going to be an
interesting space, and hopefully Chinese
investors and the regional and global PE funds
can play a bigger role there.
SOUTHEAST ASIA INVESTMENT LANDSCAPE 2018 277
On SEA versus India:
Both regions have significant opportunities for
tech startups but if we compare the top metros
in SE Asia versus India then one can find an
equally large but more monetizable digital
consumer base.
The region has seen a steady growth in venture
investments and funds raised for the last five
“
years even outside of the mega deals but there
is still a gap. Some reports put investment
per internet user in SE Asia to be around $11
(excluding mega deals in the region) which
is significantly lower than the reported ~$50
per internet user in India whereas SE Asia is a
better ARPU market. This is natural though and
I see this region accelerating at a faster and
more consistent pace than India.
“The talent that we see today
[in SEA] is significantly better
than what we saw seven years
ago. I’m sure it’s different from
the talent that China sees
today because they’ve got a
lot more experience, but that
doesn’t mean that they’re not
quality entrepreneurs.”
Amit Anand
Co-Founder & Managing
Partner, Jungle Ventures
28 SOUTHEAST ASIA INVESTMENT LANDSCAPE 20187
7.7 Roderick Purwana,
Managing Partner, Sinar Mas
Digital Ventures
“
On the availability of talent in SEA:
People with capabilities are in abundance. The
hunger is hard to find. What is also lacking is
people with maturity and experience. There are
a lot of founders, but how many have exited?
Not many. Good founders, they get capital,
grow business, exit. After they exit, they do one
of two things: they use the money to invest or
mentor others, or they start a new business.
Maybe it’s just not the time yet in Indonesia for
that. It should be better in the future.
On competition from
other VCs in Indonesia:
I don’t really see it as competition because
today there is a mismatch between supply
and demand of capital. The demand is huge,
everyone wants capital but the ones supplying
the capital are limited. There are a lot of people “For a group like Sinar Mas,
doing seed investments. A few are doing Series technology needs to be
A, but not many. Those doing Series B -- those
that can write a check of $10-15 million -- are given attention to, or else
not many in number, especially those that are we’ll just stand still and be
dedicated.
disrupted.”
And then there are private equity and hedge
funds who come in with huge money of
around $50 million to $100 million, even $200 Roderick Purwana
million. But in the middle stage, there is a gap. Managing Partner, Sinar
So we support a large amount of VC coming in Mas Digital Ventures
because VCs are different than private equity.
Private equity firms usually go into an
investment alone, so they are in competition
with the others, whereas for VCs, it is very rare
that startups only have one investor. So, for us,
it’s also de-risking.
It’s different in China and the US where the
competition is tight and VCs try to fend off
competitors. Here, we invite others to join us.
So, sourcing so far has not been too much of a
problem.
SOUTHEAST ASIA INVESTMENT LANDSCAPE 2018 297
“
7.8 Michelle Suteja, Director,
Central Capital Ventura
On Indonesia as a fintech market:
We are still in the early stages. We are still
in the lending stage. Insurance is set to kick
off. There are some asset management
companies, but I think we need to wait a bit
more – the market is not ready for it. Education
is expensive, and you have to know that the
market is ready enough for that. There must be
a balance. We are still far away.
On growth in different fintech sub-sectors:
Payment is always number one because it is
transactional. Everybody needs to do payment.
Lending is the next step. Indonesia is a “One thing that has to be
very credit-hungry country, where credit
penetration is very low. There are a lot of clear is why you are getting
qualified people that do not meet the banking into venture capital. That
criteria for credit.
is key. Is it because of the
And then you could talk about insurance fear of missing out? Do you
which provides a certain level of service for
consumers of e-commerce companies, travel
know what you’re missing
companies and so on. out on? If it’s just investing,
After that as we grow and this economy grows,
well investing is easy. But
we will talk about asset management, because why are you investing?
people will have to think about alternative ways
to save money. So, everything will come into
What is the aim of that
place when the market is ready. investment? Those are
Fintech is a long play. There’s no need to rush.
key values that I think not
There are certain things that you need to rush many people understand.”
into like optimization, enabling and so on. But
there are certain services that you don’t have to
rush into, in my opinion.
On what entrepreneurs
Michelle Suteja
need to be mindful of: Director, Central
Fintech is not about just solving problems, Capital Ventura
fintech is also about risk; fintech is also
about regulations. I find that many startup
companies that don’t focus on what regulators
are saying are dying. You can’t break through
a wall that’s already built. I think that’s
something that we have to be careful of.
30 SOUTHEAST ASIA INVESTMENT LANDSCAPE 20187
7.9 Albert Shyy, Principal,
Burda Principal Investments
On the evolution of the
investment landscape in SEA:
I think that angels will play a more important a unique point of time in this market. I’m sure
role in this region going forward. In Southeast there will be multiple unicorns that will come
Asia, individuals are getting more comfortable out of this space. We are definitely exploring
investing in tech. It could be entrepreneurs and trying to understand how best we can get
who exited or investors investing money on involved.
their own. That will play a more important
role. Not as many funds are focusing on seed. On the e-commerce market:
Entrepreneurs are pretty smart too. They know I think there are still opportunities for
where the money is and where it’s going to be. e-commerce in this region. The only segment
That’s the value that VCs like 500 Startups have that is well covered is a generalised, horizontal,
– they can bring $500K to the table quickly and somewhat-electronics focused market.
easily.
It doesn’t really make sense to invest in a
Meantime, I think earlier stage funds are also horizontal marketplace player that will be
seeing the value in moving up. In doing that competing with a Tokopedia or a Lazada.
there’s also a vacuum to fill, and it will get filled
as long as the ecosystem is growing, and there Looking at specific verticals and brand-led
are returns to be made. models – whether it’s a direct-to-consumer
model or a vertically-integrated consumer
On pain points and market potential: model – there are still a lot of white spaces. For
First it’s about ensuring that you are growing example, consumer sectors like pets, beauty,
and spending at a reasonable pace. Part of this and kids and babycare. These are areas where
has to do with the Series B crunch. If you don’t spend is typically high and retention is good
know if you can raise money, you’re not going because these are quasi-subscription based.
to spend lots of money to grow the company, You’re going to need to buy pet food and baby
right? You can’t be growing at 100 per cent and diapers on a regular basis once it runs out.
losing money at 200 per cent.
There’s a lot of opportunity to bring these large,
That said, there are interesting companies with high frequency, solid margin categories online.
interesting verticals in interesting markets. For If you can build a brand and content around
these companies, the capital will be there if the that, that’s even better. This will significantly
company is fast enough. We think it is about help reduce acquisition costs. The toughest
whether the company is in the right space, part for these businesses is that (customer)
with the right story and growth potential. acquisition costs are so high that you have
to spend six months to more than a year to
On fintech: recover just the initial cost of acquisition.
As with a number of VCs these days, we’ve
been looking at the fintech space quite a
bit. These include areas such as lending,
credit scoring and financial services. It’s an
interesting space but still a work in progress at
the moment.
The appetite for credit and digital financial
services is very big, and I think we’re entering
SOUTHEAST ASIA INVESTMENT LANDSCAPE 2018 317
7.10 Nicko Widjaja, CEO,
MDI Ventures
“
On the need to be a strategic investor:
Spray-and-pray’ model clearly doesn’t work
anymore. I don’t believe even traditional VCs
nowadays invest solely in financials only as the
return rates are in fact so questionable in this
region.
Unfortunately, none of Indonesia’s VCs have
ever published their return rates. Quantitatively
speaking, this makes it difficult to find any
hard data regarding their returns for LPs.
However, we can make some rough estimates
by looking at their portfolio performance. If we
try to roughly calculate the current mark-to-
market values for VCs in Indonesia, assuming
that currently most of them have at least two
portfolio companies valued at $50 million
with between 8 per cent and 10 per cent fully
diluted ownership (as most of them have
“Our view is that the started investing since the seed level), then
fintech landscape is still the values of their “champions” likely weigh
in somewhere between $8 million and $10
super fragmented right million. This does not justify the $30 million to
now. It makes it difficult to $50 million investment that their LPs initially
made.
figure out who is going to
be the winner, but that’s On co-investing with leading investors:
Venture investment is a high-risk business. If
obviously why there’s an you don’t find the right co-investors, then most
opportunity to invest in this likely the company you’ve invested in is illiquid.
Then for sure, the company will collapse in the
space too.” next couple of years.
This is why since the beginning of our
Albert Shyy existence, we only co-invest with Tier-1
Principal, investors because we validate each other and
Burda Principal not the other way around.
Investments
On overvaluations and hype in the
environment:
The startup scene is still full of misinformation
and irrational valuations. There’s too much
hype and noise around startups these days.
Almost anyone can technically be a startup
founder. Almost any idea could be a million-
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