LuneX Founding Partners Kenrick Drijkoningen

With Bitcoinprice plummeting and many crypto companies and funds shuttering, 2018 was a year of reckoning for blockchain. But in 2019, it’s showing signs of a rebound; the total market capitalisation of cryptocurrencies has doubled since January.

These signs augur well for blockchain, and Singapore-headquartered LuneX Ventures looks to cash in on this vast opportunity. A US$10-million blockchain and cryptocurrency-focused arm of Golden Gate Ventures, LuneX has been investing in companies building the new open financial system and Web 3.0. It has also been appointed as co-investment partner of SG Innovate.

Last week, e27 had a chat with Kenrick Drijkoningen, Founding Partner of LuneX, who shared with us insights on the current crypto and blockchain landscape.

Edited excerpts below:

What triggered Golden Gate Ventures to launch a separate fund for blockchain investments?

We looked at the blockchain and crypto ecosystem in 2016 when one of our investees Omise was preparing for the token sale. I looked deeper into the ecosystem. This is when I realised that blockchain has the potential to become revolution — similar to how the different internet industries, including content and telecom businesses.

We looked at the underlying tech and what blockchain and crypto could do. Over the next 10-20 years, this is the next iteration of the internet that will disrupt asset businesses. Money is its first applications, but there are many more applications. It can be in smart contracts, we can digitise value now, and transfer it from peer to peer without the central third party.

Blockchain and crypto also have the potential to disrupt major industries in this world. That being said, we are early in this ecosystem; it is only ten years since Bitcoin was invented. It is a very niche and specialised field. There are are no mainstream applications just yet, so that needs a very specialised approach because the companies focused on this industry are earlier stage.

It’s just infrastructural blockchain and crypto solutions. At the same time, our LPs might not be comfortable with this kind of exposure. So we created a separate US$10-million fund. We are still in the fundraising mode until November.

US$10 million is a tiny amount. Why did you not aim for a bigger fund size? Also, does LuneX have the same LPs as Golden Gate?

A couple of things. As I mentioned, many of the companies in this ecosystem, particularly in Singapore, are still early stage. So are in the US. There are a few companies that are in the later stage, like Coinbase and Gemini. There is no such thing in Singapore yet.

The other thing is that investors who are looking to invest in this ecosystem would like to have some exposure. However, they would not allocate as much capital as they would to a traditional VC, which has a proven, tested model.

Also Read: A layman’s guide on how bitcoin is aiming to transform the global economy

As for LPs, there is some overlap, but it’s mostly new LPs.

What are Lunex’s investment thesis, mandate and outlook?

Our philosophy is that we are still in the very early stage of this ecosystem. If you think of a pyramid of how this ecosystem looks, at the base layer, there are protocols like Bitcoin, Ethereum or any other chain. These are the basis of which the rest of the ecosystem will be built.

Almost 50 per cent of our fund will be invested in tokens because the base layer of this ecosystem has no equity. These are distributed, permissionless networks that operate on a token model, and there is no company to invest in. So you need exposure to the tokens and the growth of those particular protocols.

The second layer — and that’s where we invest on the equity side — is the infrastructural level. It includes everything from new exchanges to custody providers to KYC/AML to wallets. Basically, this whole layer is to make things work. That’s why we invest in it.

And after that, it could come in five years or so — you will start seeing applications emerging from that layer. We are not investing in the application layer too much yet. Eventually, from the applications, you can get a fully-fledged new financial system, which is kind of an eventual goal of this whole ecosystem

So you invest both in blockchain and crypto companies.

Correct. If you make a comparison again with the early days of the internet — you had both internet and intranet. AOL, for example, initially launched their permission version of the internet because an open web was too scary. So they thought they could launch a better version.

But all the innovation happened on the open, permissionless internet. And the same thing here. Permission blockchains, corporate blockchains –we are not interested in those. We are interested in open, permissionless chains such as Bitcoin, Ethereum etc. and the services around those.

Which are your target geographies?

Our mandate is global. So we can invest anywhere. We’ve done two deals in the US and one in Korea. But we are very focused on Singapore because we are based here, we have contacts and access here. We can help our portfolio companies much better here. And also because we have a partnership with SGInnovate on their SG Equity co-investment scheme. It means on qualified deals, we get matching co-investment from them, on which we get to retain some of the upsides upon exit of such companies.

So we prefer to invest in Singapore. But if there is a good company abroad, we can also invest in it.

Can you throw more lights on your partnership with SGInnovate?

As I mentioned, we get added upside upon the exit of a company we co-invest in. The matching is either on a 1:1 basis or 3:7 basis, depending on the nature of the company.

There are multiple benefits to this; SGInnovate is well-connected within the local ecosystem and has a massive portfolio. They are also well-connected with the regulators. So I think it’s a great combination and an excellent partnership to have.

Crypto has been going through a tough phase. How do you look at its journey from an investment point of view?

That’s why we are a long-term venture capital fund, not a short-term focus fund. Massive technologies don’t develop from one year to the next. It takes time. Just like the internet didn’t happen from one year to the next. So we see it as a much longer-term time horizon.

But I think tremendous progress has already been made. If you consider the fact that Bitcoin itself was invented only ten years ago and last week they were talking about it at IMF. It was talked about in the US congress. The President of the US tweets about it. I think it has come a long way very quickly. It’s not a short-term thing; it has a very long term outlook. And it’s normal to have the cycles that this industry goes through.

And again there is an analogy to the internet. Everybody got too excited too quickly about the internet in 2001, and there was a big crash. But it was by no means the end of the internet. It was just a start. You could have picked up Amazon shares for a few dollars back then, and you would have done very well. We are in a similar position right now.

Many people believe that token sales are a scam. What’s your opinion on that?

There are multiple lenses to look through that. Initial Coin Offerings/Initial Exchange Offerings/Security Token Offerings are a way to kickstart a permissionless network, but there are many degrees of black and white here.

In the boom, we went through many of those token sales, which were unnecessary for the product they were trying to build. Yes, there were a lot of scams involved. But there were also a few that made sense. So I would say 90 per cent of them were unnecessary or scams. Look at Ethereum. They had to bootstrap the network this way, and they also had a valid use case.

Are you bullish about the future of token sales?

No. I think they will mostly go away. A lot of people abuse them as a fundraising mechanism.

And these tokens are only needed for these layer one protocols. There are network effects that are starting to emerge. At some point, there will be a couple of winners at this protocol level –whether it’s Bitcoin or Ethereum, or some of the other ones.

Also Read: Is Cardano the best cryptocurrency to invest in?

And then, all the innovations will happen on these winners as developers will move there. And it will be too hard for any newcomers to catch up once these things mature. And there will be no less or no need for token sales.

What will be the alternatives for token sales?

I think you will see regulators catching up and regulatory frameworks coming in place, and it will move to something like security tokens. It’s a little bit outside of what we are focusing on.

Security tokens are tokenised versions of equity. They make it easier for people to contribute funds and exchange shares over the internet. They will look somewhat like equity with the corresponding right attached to those as well. But that will involve a lot of legal work, a lot of service providers, a lot of regulatory clarity. You get tokens, but they are classified as security.

Why is Asia critical to the global crypto conversation?

I think the whole industry is so new that a lot of these remains to be seen. A lot of tech talent is based in the US, so you see it emerge there.

But at the same time, the regulators are very slow in the US, but their counterparts in Singapore are open-minded and friendly. I do see Singapore emerge at the moment as a leader in this ecosystem.

Although I think it’s a little bit too early to tell where it’s going. You will see many different hubs emerging. Obviously, it’s San Francisco in the US, Switzerland and Malta in Europe, and in Asia, it’s South Korea which is very much at the forefront, and of course Singapore.

I always say that the US and Singapore are opposite. As I said, in the US the regulator is slow, but the private sector is very forward-thinking and innovation-driven. In Singapore, it’s the regulator who is forward-thinking, but the private sector is a little bit slower in terms of trying to push for innovation.

In your view, what is the future of cryptocurrencies in a very long term?

In a very long term, I think we are building a new parallel financial ecosystem. And I believe that gradually, more and more people will move to this permissionless form of finance.

The biggest use case is still Bitcoin as a non-sovereign, non-censorable permissionless currency. That’s a massive use case in itself. And there is a whole ecosystem, the entire industry that can be built on top.

So that’s just one area, and I think that’s the most significant use case for the foreseeable future. There is going to be a lot of other use cases as well if you think of Ethereum as an example in terms of smart contracts and execution. And there is a lot of things that can happen there.

In terms of industry, gaming might be one of the first to start implementing this.

Also Read: What does cryptocurrency mean for your small business?

But the basic premise is that you can now transfer any value, any asset from person to person without a third party in between and without a custodian. We can build all kinds of automatic execution solutions on top of that. And that has implications for many different things, including legal, fund management, financial services, gaming. Anything that touches assets will have to deal with this.

If you look at some Asian countries, they accept blockchain but completely banned cryptocurrencies. Do you think these countries are missing out on tremendous opportunities?

Yes, exactly! Because cryptocurrencies or tokens are the application. Blockchain itself is not that interesting. It’s a slow form of a ledger.

What gives these things value and application is that nobody is in control of it, nobody can stop it and reverse. And the future application of that is the actual token. So Bitcoin is the money, Ether is a transaction mechanism, some consider it also money. These assets will be in the form of tokens. Blockchain itself is an excellent term, but it’s just the means to get into the censorless, permissionless world of transferring assets.

Do you think cryptocurrencies are over-regulated in some countries and it’s not ideal for their development?

Well, it depends on how you look at overregulation. I think it’s vital that regulators clarify and make things clear without being too prohibitive of the technology. Singapore is doing an excellent job with that.

Obviously, some places are trying to ban it altogether. If you look at India, for example, it is completely illegal to have crypto. And I think it speaks about the power of cryptocurrencies. If they weren’t powerful, then they wouldn’t bother to ban it. But there is something compelling in them that they see as a threat to the financial system, to the sovereign control of central banks and governments. This new system becomes a threat to it.

I think as long as the regulators are measured and reasonable and open for innovation, that’s the most crucial part. There is a lot of game theory involved here as well. If you, as a country, ban this ecosystem altogether, you are going to lose out on a lot of talent.

Tech businesses are the main source of economic growth as we’ve seen in the build-up of the internet, the largest companies in the world today (FAANG stocks) are all tech businesses that emerged from the growth of the internet as the US embraced the technology in the ’90s. At that time this was not obvious and it could have gone the other way if rules on exports of encryption had not been relaxed. As a result, capital and talent assembled in Silicon Valley.

Similarly, today if governments are too prohibitive in allowing innovation in the crypto space to naturally occur, entrepreneurs will choose other jurisdictions to build their businesses. Arguably talent is even more mobile these days and will pick countries that provide regulatory clarity, capital and a deep talent pool to start their businesses.

Do you think its valuation of Bitcoin will, as John McAfee predicted two years ago, hit US$1 million in future?

Bitcoin is by all measurements is the best currency humans have ever invented. It’s more limited in supply, and it is easier to store, carry and transfer.

Bitcoin is digitally native, and it can’t be censored. It’s more restricted in supply than even gold.

Of course, it’s very volatile at the moment because it’s an early-stage technology. It exists for only ten years, while gold has existed for thousands of years.

So if you assume those things to be correct — and those are entirely factual things — then you can come up with some kinds of valuation methods.

An interesting model is being discussed on social media these days by a guy called Plan B. It’s basically looking at the stock-to-flow model of monetary assets.

So if you think if gold is a monetary asset and it has been there for thousands of years, why is gold a financial asset? It’s not just because it’s a rare asset; rare is not sufficient for something to gain monetary value. The stock-to-flow needs to be low, meaning the new supply that comes above ground every year needs to be very small compared to the existing stock.

So if people store value in it, they know that even if the value raises, you can’t just print or extract 10-20 per cent more every year. That is restricted by physics and economics. Gold has value based on that, and you can also apply the same model to Bitcoin. The halving that occurs every four years in Bitcoin with the next one coming up in May 2020, when the supply growth gets cut in half, eventually to zero.

Also Read: What’s in store for blockchain and cryptocurrency?

And if you extrapolate that model next year, it will get to between 50-100 thousand per Bitcoin and four years it 10Xs from there again. So I see it as a real possibility. It will not be smooth and exact. And you will have these huge runs and massive falls. But that’s just the process of monetising the new asset.

What does Quantum Supremacy mean for the future of cryptocurrencies? Do you think it will kill blockchain?

I’m by no means a computer scientist or engineer, so in terms of actual cryptography and technical details of that, I have to give it a miss.

But I’ve looked into this and listened to the experts and people who know much more about this. I think it’s overblown. Quantum resistant algorithms can and will be developed before quantum computing is even here to crack them.

By all means, we are many years away from having commercially available quantum computing. Researchers are already well on the way in terms of developing these quantum-resistant algorithms.

And if you look at history, it’s always a race between the cryptography and people trying to break it.

Some people believe blockchain will make banks obsolete. What do you think?

I don’t think it’s going to happen shortly. But what you will see is an infrastructure inversion where banks will run on top of these open, permissionless chains as service providers. Right now, you need the banking system to gain access to crypto.

At some point, this infrastructure will invert, and all banks will be service providers on top of the blockchain. A lot of people don’t understand blockchain and think it’s too risky for them. They want a third trusted party to be the custodian and to manage their money for them. And that could be some form of banks. Whether it’s a native crypto bank or some of the existing banks that will adapt to new business models, that remains to be seen. But the infrastructure will invert.

In the beginning of the internet, you needed phone companies to dial into the internet. And right now, all phone calls are routed over the internet. Us being a primary example right now. So this infrastructure completely inverted. And I think you will see something similar for the transfer of value and money.

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Image Credit: LuneX Ventures

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According to the 2019 Telstra Security Report, 65 per cent of Australian businesses were interrupted due to a breach in 2018. Moreover, the Ponemon Institute claims that the average cost of a data breach is USD$1.99 million, resulting from lost workplace productivity, compromised band image, and the corrupted business data.

So, why are businesses losing data?

There are many reasons for that, from a malicious email your employee opened to the issues with your servers. Irrespective of its cause, downtime can affect your business’ performance in multiple ways. Most importantly, businesses don’t invest in an incident response plan. The abovementioned Telstra study shows that 1 in 4 companies are not prepared for a cyberattack.

Just because you use antivirus software doesn’t mean you’re safe from today’s sophisticated cyberattacks.

To protect your data and ensure you can survive a data breach, you need to back up everything you do. And, one of the most effective and reliable options is continuous data protection.

Here is what it is and what its main benefits are for your business.

What is continuous data protection, and why does it matter?

Today, the migration to the cloud has become inevitable for businesses of all shapes and sizes. 

There are numerous options to choose from, depending on your company’s different needs. Public clouds are more affordable and, as such, are the choice of many young companies and small businesses operating with a limited budget.

If you want to maximise your online performance and tighten your data security, then choosing private cloud providers is right for you. There are also hybrid clouds that let you combine the features of private and public cloud infrastructures. 

However, parallel with the transition to the cloud, cybersecurity risks are growing. To maintain the utmost data security, businesses need to perform regular data backups. This is where frustrating and time-consuming snapshot-based backups may fail. 

This is why many enterprises are switching to a far more sophisticated continuous data protection (CDP) backup. 

The way it works is pretty simple – it runs in the background of your network, reads any changes made to data and backs them up almost instantly. This means more efficient data storage, no impact on the server performance, and granular data recovery. To increase your data accessibility and transparency, you can maintain your backups in the cloud environment.

Now that you know what continuous data protection is, here are a few reasons why to invest in it:

Minimal impact on server performance

One of the significant problems related to old school backups is their higher recovery point objective (RPO), as they read and store far more data. With the rising amount of data that needs to be stored, each traditional backup will become even slower and may hurt your overall server performance.

Precisely because of that, many organisations choose to schedule such lengthy backups during low-activity periods, such as weekends. This may lead to some security risks, as your data will remain unprotected in the meantime. Moreover, if your system experiences any backup failures, you will need to hire an IT team during the off-hours, meaning that the costs of the maintenance will also grow. 

This is something you want to avoid, and CDN can definitely help.

Namely, continuous data protection backups use the so-called changed-block tracking, meaning that your data is continually being replicated as it is written to your storage. Servers need to process just the incremental changes that happen between two backups, meaning that you won’t need to store massive amounts of data at once. 

More efficient data storage

Storing data using CDP is undoubtedly simpler. As no snapshots are created, continuous data protection can dramatically save your disk space. Namely, with continuous data protection backups, you’re basically performing a full backup only once.

After that, you’re recycling existing data over and over again, without using any additional disk space. Most importantly, freeing up your disk space may also impact your cloud storage plan, keeping the costs of the storage more affordable.

Improving data recovery

One of the major disadvantages of traditional backups is data security. Namely, if you schedule backups every day at 8 PM, this means that the data you create during the next day will remain unprotected until the next backup. Therefore, if your server breaks or you experience a cyberattack, chances are you will lose your data. 

CDP works differently, as it uses journal-based replication technologies. Just like I’ve already mentioned above, the data is stored as soon as it is created. Therefore, the backup system is always-on, providing more granular data storage and having lower RPOs than snapshot-based alternatives, meaning that there is no data loss. 

Providing granular backups

Now, you’re probably wondering what happens when an employee deletes a file accidentally or wants to view a previous version of a document?

Well, CDP solutions store multiple versions of each file. Therefore, an employee can roll back a day, week, or month to find previous versions of the file, without having to restore the whole system. 

Over to you

For example, you should know that the processes of data recovery, as well as backup granularity, vary a lot, based on a wide range of factors. The costs of investing in CDP may also grow, as it requires you to invest in expensive hardware.

However, this is an investment that, in the long run, may benefit your business in multiple ways. From real-time data monitoring and protection to the sophisticated data recovery processes, CDP still has numerous advantages when compared to legacy backups.

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It is true that the idea of working for a startup can be very compelling and exciting at first. They are widely popular for their unique working culture, unlike other typical well-established companies.

If you are a newbie with startups then you must be feeling a bit confused regarding how these companies operate.

You must have definitely heard a number of exciting stories about how people have become successful with startup businesses. But the truth is that for every startup that succeeds, there are a lot of them that do not thrive at all.

If you are new to the startup world then it must be difficult for you to decide whether you should actually join a startup or not at the first place.

Is there a way to identify a promising startup? In fact, if you can do some proper research beforehand you will be able to get a clear picture about the startup company that you wish to be a part of. I’m here to tell you seven things you should consider before joining a startup straight away.

1. Background of the founders

It is really important to do some background research on founders before being a part of a startup. An organisation can thrive only if it has a good founder who knows exactly what to do.

You should get to know about their academic background, professional background, vision, mission, skills, and past experiences including both successes and failures.

You can always Google, visit their LinkedIn profiles or watch some of their past interviews to get a clear picture about their overall personality.

You should join a startup only if its founders show promising characteristics of leadership.

2. Financial stability

One of the most common reasons for the failure of a startup is not having sufficient money.

If a startup does not have enough funds coming in, it will not last that much longer. It should at least have sufficient amounts of money in bank accounts if it is to survive the next couple of months.

Therefore, never forget to make sure that the company is financially stable enough to support its employees before jumping into accepting the job offer.

At least ask for some assurances for your future benefit.

3. The stage of the startup

Joining a startup that’s in its early stages is a great risk to take as it can go either way; totally down-hill or up with success.

If you are 100 per cent sure that the organisation is going to succeed eventually, then it is acceptable to take some risk.

Usually, the early-stage startups that do not receive traction for their products are more likely to fail in the future than the early-stage ones that have received initial traction.

A well-funded company with a good customer base is less likely to fall.

Therefore, you should assess the situation wisely and jump right in if it is stable and things go smoothly.

Also read: 4 tips for building a culture to help your company succeed

4. What do they expect from you?

Before joining a startup you should be confident that you are very well capable of providing the service they expect from you.

During the early stages of a startup with less resources at disposal, the responsibilities of its employees become significantly high.

Also Read: What do investors look in a startup

You should join such an organization only if you feel like you can do it.

Therefore, before joining a startup you should have a sound knowledge of its job description, key result areas, and the role you are going to play once you wade in.

5. Will the culture fit you?

You should be certain that you have the capability to fully adapt to startup culture.

If you can get used to the new working environment where you are expected to work long hours or have a sense of community, you will be able to perform well towards achieving corporate goals.

On the other hand, if you fail to do so the outcome will be unfavorable for both you and the company.

6. Compensation

Startups offer various compensation and benefits like ESOP (Employee Stock Options) to attract employees with talent. ESOP is usually paid once the startup is settled and more investments have started to come in.

If the organisation does not succeed, there is a risk of not receiving any compensation at all.

Therefore, you should be wise enough to request for a compensation package that you can be totally satisfied with.

It is always better to settle for a structure where you receive a fixed amount of payment.

Also read: How do you size employee ownership of your startup? This is your comprehensive guide to ESOPs

7. Stable management

You should join a startup only if the top management is stable and show a willingness to continue their service on behalf of the company.

There are many reported incidents where the founders have resigned from their startup as a result of internal conflicts.

Such incidents greatly distort the stability of the organization and endanger the future of its employees.

Therefore, you should never join a startup without doing some proper research on recent exits of its board members and the top management.

Trust me when I say that you’ll never want to work in a startup where everything is crumbling from its top management itself.

Joining a startup can either be your downfall or the first step towards success.

You should be wise enough to assess both risks and benefits before becoming a part of a startup.

Once you calculate the risks well and choose a startup with a promising future you will be able to work towards your own success.

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Southeast Asia is no stranger when it comes to strategically playing the e-commerce card, Thailand as a case in point. Although yet to see its first unicorn, Thailand’s e-commerce sector has blossomed and produced a total of US$3 billion in market value in 2018, as stated in an article by Bangkok Post.

In the industry, these are the seven local players that flourish in the Thai e-commerce market

PantipMarket

Founded by Wanchat Padungrat in 1997, Pantip started off as a Thai-language online magazine, Pantip.com. The website didn’t take off, and Padungrat got inspired to turn it into an online forum for discussion.

According to an exclusive interview with Tech In Asia, Pantip started to make money from internet ads when Intel Australia took a chance to place an ad on its platform. Since then, more ad agencies came knocking for ad placement, and more people offer to invest in Pantip.

However, Padungrat said he didn’t believe an internet company needs so much money to run, so to this day, Pantip is still owned 100 per cent by the CEO.

Pantipmarket grew later, a classified listings marketplace, and now has 180,000 unique visitors per day.

Tarad

One of the oldest e-commerce in Thailand is Tarad.com, with a total of 200,000 merchants, with 20 per cent comprises of big brands and the remaining 80 per cent SMEs.

Recently in March 2019, the company announced that it has pivoted its business to include a full-service e-commerce services provider. Tarad launched U-Commerce, an integrated e-commerce management system for SMEs/merchants/vendors to help them manage a variety of online stores from a single platform.

Also Read: 5 initiatives by the Malaysia government that is spuring the growth of e-commerce

The new management system allows clients to have a single view of product management and sales on every channel. It mainly aims to serve large and mid-sized brands that are offline but eager to expand online.

Tarad was founded by Pawoot Pongvitayapanu. Tarad is 51 per cent owned by TSpace Digital Co, the digital arm of TCC Group, and was also backed by the Japanese giant Rakuten.

ShopSpot

ShopSpot was founded in 2012, launched as a Craigslist-style mobile app before shifting the business model from C2C to B2C marketplace platform for SMEs. The changes happened in 2013 after graduating from JFDI and raising its first seed round led by angel investor Kris Nalamlieng.

Shortly after, it raised an additional US$565,000 from Singapore-based Jungle Ventures as well as SingTel Innov8.

Founded by its CEO & Co-founder of ShopSpot Pte Ltd, Natsakon Kiatsuraron, ShopSpot is a mobile phone app that lets users snap a picture, tag the item they want to sell, and post it on the ShopSpot marketplace.

In 2016, it stroke a deal with King Power Group that saw it run only as ShopSpot Co., Ltd, made a change in its internal structure.

Blisby

Blisby is an online marketing website that sells handmade crafts and design products from Thai artists. It self-identifies as marketing websites to gather handmade artists into one community.

Blisby is also an online flea market for new arts and crafts. It was founded in 2013 by Phuvadol Thongthavorn, operates similar to the global handicraft marketplace Etsy, where users can sign up to create, sell, and purchase handicrafts.

In 2015, the company nabbed US$300,000 in a seed round led by East Ventures and Japanese mobile Internet giant DeNA.

Kaidee

Kaidee is a platform that facilitates a range of wares including smartphones, amulets, vehicles, and even properties.

In 2014, Kaidee joined forces with OLX.co.th to become a joint venture with 56 per cent holdings by kaidee and 44 per cent ownership by current OLX shareholders Naspers.

In 2017, Kaidee launched a dedicated car marketplace called RodKaidee, which enables users to search for cars via their make, car type, model, year, and engine type, and price range.

WeLoveShopping

WeLoveShopping is a C2C platform that caters to resellers and small merchants in Thailand. It claimed to house more than 320,000 stores in Thailand.

At first, WeLoveShopping began as a flagship e-commerce platform of Ascend Group, a privately owned e-commerce company headquartered in Bangkok, Thailand as a spin-off of True Corporation. Ascend Group also owns another notable e-commerce in Thailand, iTrueMart.

Also Read: 3 trends that will drive Vietnam’s e-commerce sector in 2019

Recently, it’s reported that WeLoveShopping has shifted to support True Corporation’s business. It worked as an arm of Charoen Pokphand Group, the largest agro-conglomerate.

iTrueMart

Another Ascend Group’s extension, iTrueMart is an e-commerce platform for home appliances and electronic products in Thailand.

In 2015, it announced its expansion into all 10 countries in Southeast Asia, including Indonesia, Malaysia, the Philippines, and Singapore. However, iTrueMart PH ceased trading in September 2016 and has since closed the business in the Philippines.

iTrueMart claimed to service an average of over 14,000 orders per day. iTrueMart is ongoing a rebrand as WeMall to also cater to marketplace sellers.

Thailand is full of international e-commerces that has localised its operation, presenting competition for the homegrown e-commerces.

In an article by Bangkok Post published last year, some of the local e-commerces’ players shared their insight on what’s needed for the local companies to survive amidst fierce contests. Pawoot Pongvitayapanu, founder of Tarad.com, said that companies need unique positioning and additional services instead of burning money by trying to compete with international players.

According to Google/Temasek e-Conomy 2018 report, the top five exports sold through cross-border trade in Thailand’s e-commerce are jewelry and watches, health and beauty products, auto parts, home and garden, and collectibles. Even with the fully-packed industry, both local and international players are expected to surge to US$13 billion by 2025, contributing to Southeast Asia’s forecasted account for US$103 billion in market size by 2025.
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T9L Founder and CEO Fahad Moti Khan

At a glance, T9L looks just like any other startup incubator or accelerator programme.

Headquartered in Singapore with a development office in New Delhi, the company selects startups from India and Southeast Asia and support them in both execution and strategy.

But there are some factors that set it apart from other similar programmes: Its approach to help startups use their runway more effectively.

In an interview with e27, T9L Founder and CEO Fahad Moti Khan explains the three factors that determine success for a startup: Market, execution, and team.

“There is this urban legend that more than 90 per cent of funded startups failed. What we realised is that most of these failures happen in these three areas. Either they’re not entering the market at the right time, or they’re unable to execute properly,” he says.

Dubbing itself as a venture-as-a-service (“VaaS”) company, T9L helps startups grow by expanding their runway.

Also Read: Indonesian wellness startup RIDE gets US$1.25M Pre-Series A funding, rebrands into R Fitness

While a typical startup might spend approximately 70 per cent of their seed fund to take the product to market, with the help of T9L team, they can cut down the number to around 40 per cent –leaving the remaining fund to be invested in growth experiment, team-building, business model pivots, and fundraising.

This will be achieved through the following steps: Selecting the startups through a rigorous process, using pre-developed components to create and deploy product ideas, and introducing the startups to a network of partners to help them scale up.

This has been proven to work, as the company’s success stories included Docquity, which is currently known as the largest doctors’ network in Southeast Asia with around 100,000 doctors on board, and UOLO, which already secured over one million downloads.

T9L Co-Founder & COO Nitin Awasthi

By April 2019, T9L has 30 startups from 20 different verticals in its portfolio. They have a cumulative valuation of US$280 million with more than US$10 million in asset value.

From a startup to a startup studio

Despite its success, T9L has been flying mostly under the radar.

Khan points out that once at an event, an investor told them that despite looking to invest in T9L’s portfolio companies, he had never even heard of the startup studio itself.

“Our philosophy is that let your work speaks for you,” he says.

Also Read: iflix launches short-form video content production house Studio2:15

T9L itself began its journey as a startup that builds various tech solutions for other businesses. At some point, when the companies that they had been working with raised funding from notable VC firms, T9L began to consider pivoting their business.

“Instead of just doing it as a service, why don’t we start taking stakes at these companies?” Khan says.

The change seemed to work as COO and Co-Founder Nitin Awasthi notes that investors that are working with them feel “more comfortable” when they know that T9L is supporting the product.

“They know that no matter what happens, the technology is secured,” he stresses.

T9L Co-Founder & Chief Growth Officer Abhisek Mohan

T9L self-financed its operations for the first few years, but once they have started to raise external funding, the company learned that they can push for greater result by bringing in more startups.

It is currently raising for a Series A funding round, with the goal to further expand its business through talent and startup acquisition. The company is also looking forward to further investing in deep tech implementation.

Within the next five years, it aims to grow its portfolio to more than 120 companies.

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Image Credit: T9L

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Indonesian mPOS platform Cashlez announces IPO plan – DailySocial

Indonesian mobile point-of-sale (mPOS) platform Cashlez announced a plan for IPO in 2020, DailySocial reported.

Cashlez CEO Teddy Tee said that the company plans to get listed on the development board instead of the acceleration board, which was prepared for startups such as Cashlez.

He also stated that the company is currently preparing for the public listing.

Cashlez claimed to have worked with more than 6,000 merchants in Indonesian cities such as Jakarta, Bandung, Surabaya, Jogjakarta, Denpasar, and Medan.

Indian ride-hailing giant Ola to IPO in “less than two years” – Dealstreet Asia

ANI Technologies Pvt. Ltd, the operator of Indian ride-hailing giant Ola, is reported to be planning for an IPO in less than two years after meeting profitability goals required for such listing in the country, according to Dealstreet Asia.

Citing two people aware of the discussions, the report also stated that Ola is expected to have turned its maiden annual profit in the year ended 31 March, the first step towards the goal of an initial public offering (IPO).

Local exchanges require companies to be profitable for at least three years before they go public.

Ola’s investor ARK Impact Asset Management has recently set up a pre-IPO trust fund.

Also Read: Aiming to add 4 new startups, Mandiri Capital Indonesia targets insurtech, investment management sectors

The US, allies call on Facebook to drop encrypted messages plan, citing concerns for terrorism and child abuse – Reuters

The United States, the United Kingdom, and Australia are to call on Facebook to drop its plan to introduce encrypted messages to its platform, Reuters reported.

The report stated that the three countries plan to sign a special data agreement that would fast track requests from law enforcement to technology companies for information about the communications of terrorists and child predators.

The agreement would enable law enforcement to get information in weeks and even days, instead of the current waiting period of six months to two years.

Facebook’s plan is being seen as a potential barrier to this goal.

The agreement will be announced alongside an open letter to Facebook and Mark Zuckerberg.

SoftBank, OYO jointly acquired Japanese rental apartment operator – Nikkei Asian Review

Indian hospitality startup OYO and its investor SoftBank Group have jointly acquired 80 per cent stake in Japanese rental apartment operator MDI, Nikkei Asian Review reported.

Citing a person familiar with the deal, the acquisition is said to cost over US$100 million.

OYO confirmed the transaction but declined to comment on the price and its stake in the company.

SoftBank and MDI had also declined to comment.

According to the report, the deal signals SoftBank CEO Masayoshi Son’s appetite for new investments despite WeWork’s recent IPO “disaster.”

Also Read: Mandiri Capital Indonesia prepares fresh funds for 4 startups this year

Indonesian fishery platform Aruna raises funding – Dealstreet Asia

Indonesian integrated fishery platform Aruna has raised a funding round from SMDV and East Ventures as lead investors, Dealstreet Asia reported.

Aruna is a platform that uses digital technology to help fishermen in Indonesia improve livelihoods through better market access and fairer trading opportunities. It recently won The Alipay-NUS Enterprise Social Innovation Challenge, and has raised a seed funding round in 2017.

A spokeperson for East Ventures has declined to comment on the report.

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Image Credit: M. B. M. on Unsplash

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One of the keys to success in a start-up journey is to perfect the elevator pitch.

Whether you are meeting with investors, recruiting like-minded individuals, acquiring customers or users to your start-up platform, a good elevator pitch instils the necessary confidence not just in your start-up, but fundamentally the people who are running the start-up.

Why? If you can distil the philosophy, unique selling points and execution path of your start-up in a clear and concise manner, it shows that your start-up is the brainchild of much careful planning and a clear direction.

After all, whether a start-up grows spectacularly or crashes and burns instantly is only 30 per cent the function of a brilliant idea, and 70 per cent a function of execution.

So what makes a good elevator pitch?

Know your business

It goes without saying that knowing your business inside and out sets out the foundation for a good pitch. One of the first investors that I pitched to jumped onto the idea within two sentences of my pitch.

The beauty lies in the simplicity of the pitch. In those two sentences, I explained that my start-up is aimed at allowing retailers to offer a commission to users who successfully refer customers to retailers.

The benefit to retailers is that they do not pay any upfront fees but the only reward upon customer spending (a win-win!), and the benefit to users is that they earn from word of mouth referrals and social media sharing, which are activities that they already engage in any way.

There is a clear mapping out of the benefits to both sides of the platform, and the gaps in the current market which the start-up aims to solve.

Immediately, the opportunity was clear to the investor. If private car hires are a success because they leverage on idle assets which users have, and the problem of not enough taxis on the roads when people need them, why not pay for word of mouth referrals where the idle asset is the social media presence, and the problem is not enough advertising solutions that reward for sales conversion.

Also read: The art of the hustle — in elevators, on flights, and even in the toilet

Know yourself

What makes a start-up more compelling is not just the brilliant business idea, but that the people running the start-up have a clear idea of what the flaws are, and what needs to be done to address the flaws.

A start-up that claims to have no flaws cannot be a credible one because the founders are not able to see where the risks and threats are.

Where there are these blind spots, it is very easy to be trapped in unbridled optimism and squander precious opportunities, whether it be well-meaning advice from other people in the community or areas in which partnerships could be critical to the survival of the start-up.

And no investor, employees or customers would want to sign-up with a start-up that claims to have no flaws, only to be taken by surprise and burnt when the start-up fails. Because start-ups are tough, and failure common, everyone wants to, and should, go in with their eyes open.

One of the questions I’ve had to address in my startup is knowing that as a founder, while I have a clear idea of the direction I want the company to go, I also have to recognise that I am not an expert in all the areas critical for the growth of the company.

The question is, therefore, how do I find the right people to fill in those gaps, and properly incentivise and motivate them to do their best for the company? I also have to ask myself seriously whether the market is ready for my platform.

How do I grow this new category and actively condition the behaviour of retailers and merchants to use our app when no one else is currently doing this in the market? What are the strategies that the company will need to have in place, and how is the company going to go about implementing these strategies? These questions form a big part in a realistic elevator pitch.

Know your audience

An elevator pitch may only take a few minutes, but it is still easy to lose the attention (or worse, bore) the listener if the pitch is not nuanced to the interest area of the listener.

For investors, they want to know the trajectory to growth, revenue projections and exit strategies. For employees, they want to know what the career development and mentorship would be. For customers, they want to know what the benefits are to them, and why, of all the start-up noise out there, your platform is the one they should entertain.

The struggle for the short attention span of listeners is real. Focus on keywords that you know will get the listeners to perk up. “Revenue”, “exit plan”, “training”, “scalability”, “no upfront fees”, “limited downside risks”, “ease of making cash”, “idle resources”.

These are the keywords that work in the context of my start-up. However, the same keywords do not work for all elevator pitches and all start-ups, which is why knowing your audience comes after knowing your business and yourself.

At the same time, do not throw in words that are the flavour of the month just because you think that these are what the investors, employees and customers want to hear. For example, “gig economy” and “sharing economy” – these are the hot buzz words, but do they capture the essence of what your start-up is about?

It is perhaps more important to coin a new buzz word that captures your essence than to use terms that are not appropriate. In my context, we are starting a “referral or ripple economy”. After all, it is the next new wave and opportunity that matters. Once a concept has become a buzz word, you’ll need to ask yourself whether the opportunity has already peaked, and space is starting to become overcrowded.

Also read: How to pitch your startup on Facebook without being too salesy

A final word

Finally, this is not a point for the preparation of the elevator pitch but one of implementation. It is important to make sure that the entire start-up team is clear on the elevator pitch.  I’ve had the shocking experience of finding out that a senior executive had misrepresented what our start-up is about to a customer.

This can easily happen because as a founder, we are the ones taking most of the time on the vision and business plan of the start-up, but how often do we get our own employees, and senior executives to repeat the vision and business plan back to us in their own words to ensure that they truly understand what the start-up is about?

As a founder, we cannot be everywhere all the time, and we will have to delegate. The executives represent the company and the experience has taught me to never assume that because someone has heard the same elevator pitch 100 times that the person has internalised it the same way that it is intended to be.

So practice the elevator pitch, and have your staff repeat the elevator pitch back to you whenever you can. Make sure that the people who represent you on a day to day basis are able to represent in a fairly accurate manner, or you risk undermining your start-up from the inside when there are already so many challenges in ensuring the survival of your company.

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Image Credit:  Waldemar Brandt

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Malaysia’s Oil and gas company Petronas has set up a US$350 million venture capital fund, which aims to make direct investments in technology startups around the world, as per reports.

The corporate venture capital will pick a minority stake in early to growth-stage firms.

“A US$350mil fund for investment has been allocated for Petronas corporate venture capital (CVC) to target direct investments in technology startups in industry 4.0, advance materials and specialty chemicals, future of energy as well as access into new markets,” the company said in a statement.

Also Read: Petronas teams up with 500 Startups to launch startup accelerator in Malaysia

Petronas, in partnership with 500 Startups, recently launched a startup programme, called Petronas FutureTech, which aims to discover and nurture home-grown technology entrepreneurs, scale them up to global standards, as well as build and influence the tech-driven startup ecosystem in the country.

FutureTech’s focus themes for the first batch are Industry 4.0, specialty chemicals and advance materials, future of energy, digital transformation and retail innovation. Up to 20 local startups will be selcted to undergo an intensive 8-week programme. At the end of the programme in November, the startups will pitch their to Petronas, investors, potential collaborators, and the media.

“Petronas CVC will be immersed in the venture capital ecosystem, be it in the Silicon Valley or Kuala Lumpur, to scout visionary entrepreneurs to solve critical problems in industrial and energy space through breakthrough technology and innovative business models,” the company said.

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A statement of intent between ABAC Indonesia, the country’s name for APEC Business Advisory Council and UNDP has been signed in New York on September 30. The agreement seeks to accelerate financial inclusion for SMEs through the creation of ABAC Indonesia Impact Fund (AIF).

“The partnership that we have between ABAC Indonesia and UNDP aims to support the achievement of continuous programme in Indonesia to provide access to social investment or impact fund for SMEs, in line with the SDG, or Sustainable Development Goals,” said Shinta W. Kamdani, who represent as member of ABAC Indonesia signing the statement of intent.

Kamdani signed the agreement alongside NDP Acting Regional Director for Regional Bureau for Asia and the Pacific (RBAP), Valerie Cliff on “Leveraging Blended Finance for the Sustainable Development Goal” event last Friday, September 27 in United Nation General Assembly, New York.

The event was organized by UNPD jointly with the Government of Indonesia, the Government of Canada and the Government of Jamaica, as well as Tri Hita Kirana Forum for Sustainable Development

The event highlights the crucial role blended finance mechanisms play in financing the SDGs. It draws on the commitment and experiences of these countries and discusses methods to attract private capital towards achieving the SDGs — which could be applied to other countries.

Also Read: Singapore’s data protection framework gets a boost with new appointment, initiative

Present to witness the signing are Coordinator of Maritime Ministry Luhut Binsar Panjaitan, Head of UNDP Achim Steiner, as well as the representative of international regional and multilateral organisations.

The initiation of the impact fund, Kamdani noted, is the first of its kind in Indonesia. “We hope that the arranged structure can attract more investors to contribute for the development of SMEs and SDGs, and to also take into consideration not only the financial sustainability, but also the measurement of social impact with numbers to give the right and impactful decision,” Kamdani added.

Head of UNDP Achim Steiner also expressed the importance of having a domestic and international financial ecosystem through an innovative partnership between public and private, including the blended finance scheme and impact fund to increase the number of funding needed for SDG and leave no one behind.

“Blended finance can unleash much-needed opportunities to fill the massive gap of global funding in achieving the Sustainable Development Goals (SDGs), but faster actions to harness the financing are needed to meet the development agenda, the head of the United Nations Development Programme (UNDP).”

Also Read: In a recent APEC workshop, we learned that SMEs must learn to “survive” digital attacks

“The real issue is that the global financial system is not channeling financial flows effectively towards investments for sustainable development. Reorienting even a fraction of the global stock of financial assets would accelerate sustainable development. That requires creating domestic and international financial ecosystems that accelerate the deployment of public and private finance including through innovative partnerships and finance instruments,” said Steiner.

Furthermore, the partnership will see ABAC Indonesia and UNDP focusses on identifying potential SMEs and UNDP’s support in developing ABAC Impact Fund-backed SMEs, encourage inclusive finance for small and medium enterprises.

ABAC Indonesia Impact Fund uses blended finance – combining public, private, and philanthropic funds – to support impact ventures and SDGs in Indonesia.

ABAC Indonesia will provide guidance on the local investment ecosystem and facilitate the mobilisation of seed funding, up to US$5 million, as First Loss Capital, to attract further investors and encourage the capitalisation of the Fund. UNDP will provide technical assistance to identify and evaluate potential impact ventures, using the IMM (Impact Measurement Management) parameters.

UNDP is working alongside governments and other stakeholders to raise awareness, build institutional capacity and increase understanding of the gaps and opportunities in financing the SDGs.

In Indonesia, UNDP has established the Innovative Financing Lab as a collaborative space, bringing all stakeholders from the government, investors, entrepreneurs, religious organisations, financial institutions, and development partners to leverage new finance for the SDGs.

Under the Lab, UNDP has supported the successful issuance by the Government of Indonesia of the first Green Sukuk with a total amount of US$2 billion.

UNDP has also tested blended finance instruments with Islamic charity funds, resources from a state-owned Bank and GEF funding to give access to energy bank to poor community in remote areas, which are currently being scaled up.
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