Day: February 22, 2020

Having been reported since last year, today Bloomberg published a coverage that confirmed Indonesian ride-hailing giant gojek acquiring minority stake in taxi operator giant Blue Bird.

The e27 content team considered this update big enough that it deserved its own stand-alone coverage, instead of going to our newly minted Morning and Afternoon Roundup. However, when the news came out, we received questions from different parties: Why does this matter so much?

Yes, gojek is a major player in the Southeast Asian startup ecosystem and we are accustomed to keeping a close watch of their every move. But it seems like there is nothing new about this move, because so far, they have:

– Acquired companies
– Secured a partnership with Blue Bird

So why was it a big deal that they eventually bought stakes at the company?

The question is even more prevalent especially when we consider Blue Bird stocks’ performance. While their stocks climbed from IDR2,410 (US$0.17) on Friday, February 14, to IDR2,500 (US$0.18) on Tuesday morning, the numbers have been sliding down since August 2019 and peaked on December 2019 at just around IDR2,890 (US$0.21). Not exactly the kind of performance you would imagine could attract a tech startup of gojek’s level.

Also Read: gojek purchases US$30M stake in Indonesian taxi operator giant Blue Bird

For us, the answer lies in the tech giant’s long-term plan to go public.

In this coverage by The Jakarta Post, gojek co-CEO Andre Sulistyo revealed the company’s goal to do a double listing on Indonesia Stock Exchange and “other major stock exchange overseas.”

While Sulistyo also stressed that this IPO can only happen in the long run, we could see that gojek has begun to take baby steps towards that goal.

A known fan of the cash-burning method, gojek begins to inch away from it to the point where it begins to shut down services that are facing stagnant growth. A report by Ipsos even stated that 54 per cent of Go-Pay users –gojek’s e-wallet service– would continue to use the service even without promotions such as cashback, as explained in this KrAsia report.

gojek is making a move to be more efficient with its war chest. This is only the first step it needs to take to prepare for a public listing.

Having been an asset-light company, gojek certainly sees merit in owning a minority stake in Blue Bird. Their stocks’ performance may have been lacklustre recently, but Blue Bird owns 29,000 fleets –consisting of a variety of vehicles from regular taxis to buses– by 2019 and is operating in major cities in Indonesia.

We must also never forget the power of brand-building and strong public perception. Blue Bird is the top-of-mind for taxi operator in Indonesia, even after it was being disrupted by ride-hailing services such as gojek itself. If you have ever been in the country, you may have had well-meaning friends or colleagues reminding you to “take only Blue Bird” if you ever need to hail a taxi.

Also Read: Morning News Roundup: gojek’s accelerator program introduces 3rd batch of retail startups

From gojek’s side of the house, to be able to own a stake in a major, traditional corporation like Blue Bird is an achievement of its own. It is certainly a promising publicity move.

The remaining question would be, what is next?

Only time would tell. But we have this gut feeling that this may not be the last from gojek.

 

 

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The number of millennials entering the workplace in Singapore is increasing rapidly, presenting a new challenge to employers in the region.

It is impossible to bury your head in the sand and ignore it—by 2025, three out of four workers in Asia will be from that generation. While managing a workforce made up of workers across multiple age brackets can seem like a headache, the reality is that research has made it easier than ever to be a positive influence on them.

Getting to grips with it now will give you a great head start when it comes to retaining the talent that you desperately want to keep within the organisation.

As long as you’re willing to use that data to understand the expectations of your employees, and can adapt to try and accommodate them, then you can be reassured that you’re already winning the battle.

Understanding the starting point

It is worth being aware that millennials are, generally speaking, an unsettled group. Growing up around their data being misused, media frenzies predicting the worst for the world’s future, as well as dealing with the aftermath of a global financial crisis, has resulted in a generation who are sceptical about everything.

Whether their goals are owning a home or seeing their career prospects being fulfilled, the bottom line is the same; their overall optimism is low, and according to Deloitte, Singapore’s millennials sit slightly below the global hopefulness average.

Their expectation is also that the responsibility for improving this scepticism lies at businesses’ feet rather than anyone else, which makes it essential that you do your bit to address it.

Also Read: The millennial force: changing the workplace and its culture

Look at what they want from you, understand it and act on it. If you don’t, be aware that this disrupted generation will move on: in a recent survey we carried out amongst AWS professionals, 26 per cent of millennials said they were actively looking to change employers in the next 12 months, with less than half being satisfied enough that they see themselves staying where they are.

What makes them leave?

The most common reason any member of staff leaves will always be around salary, which can be the most difficult thing to control.

Your resources are finite, but as millennials have an eye on more than just their paycheck, it is important to ensure you are doing the most you can to hold onto them. At the heart of it all is company culture.

Millennials place the greatest importance of any generation on their work-life balance, meaning that offering benefits such as flexible hours or working from home will help go towards them facilitating this.

The digital age is making it less essential that your staff are based permanently on-site, so if you can allow your employees more flexibility, then you’re going to be more valued as an employer. An environment that allows a better mental headspace will result in a more productive workforce as well as a more loyal one.

Also read: Startup pointers: essentials for aspiring millennial entrepreneurs

Catering for staff development is also essential. Paying for relevant training is an investment that makes your staff more valuable—both to your own organisation as well as to others—but it’s a vital spend if you want to foster a culture of loyalty.

Millennials may be sceptical about the world, but having an employer placing that much importance on their development will always pay dividends. When your workers trust that you have their best interests at heart, why would they look elsewhere?

Talking to them

Ultimately, regular and direct communication is never a bad way to manage if you are unsure of what it is you need to be doing. Regular 1-to-1 meetings, away from the shop floor, will give a safe space for an employee to tell you their concerns that will not always happen in front of their colleagues.

It also provides you with the opportunity to ask them for any issues that they have, giving you a chance to address them before they spiral into something that can result in them looking at alternative employment options. The easiest way to find out what’s happening inside your employees’ minds is to ask them!

Different trends emerge and will continue to do so as the digital age progresses. Within our own business, we’ve found that a younger workforce doesn’t want to be provided with devices to work from, and would far rather use their own.

We’ve invested in software and security measures that make that possible, but without asking outright we’d have been behind on that. Asking for feedback isn’t a sign of weakness, and acting on it only puts you in a stronger position.

It’s down to you

You may not be up to date with the latest Netflix series, or have heard of the social media platform that everyone is using now, but that unfamiliarity doesn’t mean you are trying to navigate unchartered territory.

Understand that you are dealing with a pessimistic generation, but one whose needs are largely the same as any other part of your workforce. Communication is the way to overcome all of the hurdles that millennials may provide you with. And knowing what they want is easier than you may think, too!

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Last December, the South Korean bio venture fund Aprogen Pharmaceuticals became Korea’s 11th unicorn, according to tech market tracker CB Insights.

The firm that specialises in antibody engineering and recombinant protein engineering received US$16.7 million investment earlier in the year from venture capital firm Lindeman Asia Investment, helping take its valuation over US$1 billion.

The rise of Aprogen temporarily made Korea home to the fifth-largest number of unicorn startups in the world, though Berlin-based delivery company Delivery Hero’s blockbuster US$4 billion purchase of Korean delivery service Baemin in December 2019 reduced Korea’s unicorn total to 10.

This still places Korea in sixth place behind the US with 210, China with 102, the UK with 22, India with 18 and Germany with 11.

The growing number of Korean unicorns — and the blossoming of Korea’s venture ecosystem the trend represents — comes as nations around the world look increasingly toward startups to provide fresh growth engines in the innovation economy.

For investors, the emergence of Korea’s unicorns demonstrates not only that Korea’s has become one of the world’s premier startup ecosystems, but also that excellent investment opportunities for late-stage investors exist if you’re willing and have the local connections to make the plunge.

A growing herd, now growing faster

Not only has the number of Korean unicorns increased but over time they are also emerging at a faster rate.

Korea’s first two unicorns, e-commerce giant Coupang and mobile business platform Yello Mobile, emerged in 2014. The next unicorn, L&P Cosmetic, did not emerge until 2017. In 2018, three companies joined the herd: game developer Krafton, fintech startup Viva Republica and Woowa Brothers, the operators of the aforementioned food delivery service Baemin. 

Also Read: Why the Singapore tech scene is a big draw for Korean startups

In 2019, no fewer than five Korean startups attained unicorn status. Motel booking service Yanolja and e-commerce platform WeMakePrice became Korea’s seventh and eighth unicorns in February and April, respectively. Cosmetics firm GP Club became number nine in June.

In November, the online fashion platform Musinsa became Korea’s 10th unicorn on the back of a KRW200 billion (US$165 million) investment from a consortium of global venture investors. And then Aprogren became number 11 in December.

E-commerce rules

The growing number of unicorns — and the nature of those unicorns — demonstrates much about Korea’s fast-developing startup ecosystem.

E-commerce services such as Coupang and WeMakePrice account for over half of Korea’s unicorns. This can be attributed to the rapid growth of the country’s market for online and mobile shopping and delivery apps.

That market has drawn record levels of venture investment, beginning with Softbank’s US$3 billion investments in Coupang in 2015 and 2018. Even the conservative National Pension Service felt the market attractive enough to invest KRW350 billion (US$290 million) in SK Planet’s online shopping platform 11Street.

Some of Korea’s unicorns have attracted significant investment by targeting overseas markets from the start. Game developer Krafton is perhaps the best example.

The company unveiled its smash hit PlayerUnknown’s Battlegrounds on the global game platform Steam, where it met with commercial success and critical acclaim. As a result, the company’s value skyrocketed from KRW920 billion (US$762 million) to KRW1.5 trillion (US$1.2 billion).

L&P Cosmetics sells its popular facial mask Mediheal in 26 counties, including China, Japan, Singapore, the UK, Italy, Canada, Australia, and Brazil. The overseas market accounts for over 60 per cent of the company’s sales. This was enough to attract the attention of Credit Suisse, which invested KRW40 billion (US$33 million) in the company in November 2018, propelling it to a KRW1.2 trillion (US$995 million) valuation.

The case of fintech company Viva Republica, the operator of the mobile remittance service Toss, shows another path to unicorn status: reshaping a traditional industry. Toss revolutionised Korea’s cumbersome online payments system with a Venmo-style payments engine.

Now the company offers a wide range of thirty financial services from a single mobile app that pays ruthless attention to user experience, in stark contrast to the experience Koreans had dealing with banks.

That kind of innovation drew the notice of US venture capital firms Kleiner Perkins and Ribbit Capital, which invested US$80 million in Viva Republica in December 2018, helping power them to unicorn status.

Government funds playing a part

Perhaps surprisingly, government policy has played a role in the emergence of Korea’s unicorns. Since the launch of the Moon Jae-in administration in 2017, the government has invested KRW800 billion (US$663 million) in its Fund of Funds, to improve the venture investment environment.

It allows the government to cultivate Korea’s venture capital sector by investing in funds rather than investing directly in companies themselves. As of July 2019, seven of Korea’s then-nine unicorns had received funding from the government’s fund-of-funds.

The example of Yanolja, Korea’s most popular hotel booking service, is illustrative. Yanolja became Korea’s eighth unicorn last year after a KRW50 billion (US$41 million) investment from Singapore-based booking platform Agoda.

Prior to that, however, the company received KRW8 billion (US$6.6 million) in investment government fund-of-funds vehicles in 2016 and 2018.

This fueled the company’s aggressive expansion, including acquisitions of hotel booking service Hotel Now in 2016 and leisure activity platform LeisureQ in 2018.

Also Read: South Korea’s thriving startup ecosystem: How “aggressive” VC investment, gender diversity play a role in it

WeMakePrice, too, received an injection of KRW10 billion (US$8.2 million)  in 2015, which is used to hire 1,000 new employees and improve its price competitiveness. And Krafton credits sizable investment from the fund-of-funds for giving it the breathing space to develop PlayerUnknown’s Battlegrounds.

An official from the company told the South Korean daily Dong-A Ilbo that game companies make little money during the long game development period and that fund-of-funds investment provided the momentum for future growth.

Success has bred success, too. Though the fund-of-funds has proven critical in early funding rounds, international investors have driven the late-stage investment that has produced all but one of Korea’s 10 unicorns.

Until recently, however, global venture firms had few reference points that could convince them to take the plunge into the Korean market.

The success of e-commerce giant Coupang — the Amazon of Korea — proved that Korean companies could grow fast even without sizable profits or an IPO.

The subsequent success of other Korean unicorns — let alone the US$4 billion dollar acquisition of Baemin by Delivery Hero — has further emboldened international investors by proving that lucrative opportunities exist in Korea.

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Editor’s note: e27 aims to foster thought leadership by publishing contributions from the community. Become a thought leader in the community and share your opinions or ideas and earn a byline by submitting a post.

Join our e27 Telegram group, or like the e27 Facebook page and sign up for our upcoming webinar on how to manage founder’s burnout. 

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Finance

Indonesian e-procurement platform Mbiz raises US$20M in Series B funding

Indonesia-based B2B-targeted e-procurement platform Mbiz has raised US$20 million in Series B funding.

This follows a Series A investment from Tokyo Century Corporation in 2017.

According to a DailySocial report, the funding will be used to focus on in-country expansion for the next two years to increase e-procurement awareness in Indonesia, as well as for platform improvement and team hiring.

The Series B funding, according to Mbiz CEO Rizal Paramarta, is still ongoing and is open for more investors. Specifically, Paramarta said that the company hopes to collaborate with fellow e-commerce ecosystem providers or with brands with a high awareness level.

Mbiz provides a B2B Commerce service with an e-procurement digitalisation system, automating a time-consuming process like tax cut reports, bookkeeping, and others.

In Indonesia, Mbiz’s head-to-head competitions are Bhinneka Bisnis and Bizzy, along with Bukalapak that has begun to address B2B segments by providing e-procurement BukaPengadaan.

Vietnam’s HR platform Sieu Viet to get US$34M funding from Singapore’s private equity firm Affirma Capital

Affirma Capital, a Singapore-headquartered private equity firm targeting the emerging markets, plans to invest US$34 million in Vietnamese online recruitment firm Transcendental Human Resources JSC, or locally known as Sieu Viet.

Also Read: Meet 9 CEOs steering through Vietnam startup ecosystem

According to a report by DealStreetAsia, the investment is still subject to regulatory approval. It will be used to help Sieu Viet strengthen its value proposition in its core segment and launch more value-added services across its platform.

In the past, Sieu Viet acquired local HR website MyWork.com.vn with the intention to bring its network to a total of four job portals that caters to both small and medium businesses as well as large corporates.

Affirma Capital is owned and operated by the former senior leadership of Standard Chartered Private Equity. Sieu Viet becomes Affirma Capital’s fifth investment in Vietnam since 2014.

Video editing platform InVideo secures US$2.5M funding led by Sequoia’s Surge

San Francisco- and Mumbai-based video production and editing platform InVideo
raises US$2.5 million in funding led by Surge, an accelerator programme run by global venture capital firm Sequoia Capital.

According to a VCCircle report, Surge joins investors in the company such as angel investors Anand Chandrasekaran and Gokul Rajaram in total funding of a little over US$3.2 million raised.

The startup plans to use the funding to grow its global audience, invest in its community, and expand its product pipeline.

InVideo aims to democratise access to professional video software using AI to automate the entire video-making process. Operated by Abstrakt Video, InVideo suggests real-time improvements with the help of an autocorrect assistant that include font and animation choices, and colour palettes.

InVideo was part of Surge’s second cohort of 20 startups from across Southeast Asia and India.

Business

honestbee continues to suspend habitat’s operation, stating concerns over Covid-19 virus outbreak

Online grocery shopping platform honestbee has suspended its tech-enabled offline operation of habitat supermarket until February 29, stating concerns over the Covid-19 virus outbreak in Singapore. Besides the outbreak, the slowdown in the retail and food and beverage sector also influenced the decision.

Also Read: [Updated] Honestbee describes CEO Joel Sng departure as resignation, names replacement

According to a report by The Business Times, habitat has halted operation since February 10 with the initial plan to resume operation on February 23. The company said the decision to remain closed will be an opportunity to improve its technology infrastructure to enhance the customer experience.

Singapore’s government raised the Disease Outbreak Response System Condition to Orange — the second-highest level — for the virus early this month.

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Photo by Afif Kusuma on Unsplash

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Finance

JD.id to confirm unicorn status after closing funding from gojek

After a rumoured funding from gojek since last year, today Indonesia-based e-commerce company JD.id announced today that it has received an undisclosed amount of funding from gojek, DailySocial has reported.

This round takes the company’s total valuation to over US$1 billion, making it the sixth unicorn in the country after gojek, Tokopedia, Traveloka, Bukalapak, and OVO.

At the beginning of last year, JD.id announced a joint venture with gojek and logistics company JX.

JD.id is the Indonesian arm of the strategic collaboration between Chinese e-commerce behemoth JD.com and private equity firm Provident Capital. The latter is also gojek’s backer.

Indonesian e-commerce has reached US$21 billion in valuation according to
e-Conomy SEA report in 2019 and is well on its way to growing to US$82 million in valuation in 2025. JD.id has said that its strategy is to focus on logistics, especially the same-day delivery features.

Sequoia leads US$32M Series C in Indian tech startup Whatfix

Sequoia Capital India, along with existing investors Eight Roads Ventures and Cisco Investments, has invested a US$32 million in Series C funding in digital adoption solutions provider Whatfix.

Also Read: Morning News Roundup: Indonesian e-procurement startup Mbiz raises a US$20M Series B funding

The company reveals that it plans to use the funds to drive product development that unifies the employee experience, improves digital journey across desktop, mobile and web applications, simplifies enterprise-wide search across fragmented content repositories and increases user productivity via workflow automation, personalisation, and BOT-based data entry. It also plans to accelerate expansion into markets such as Europe and Australia.

Whatfix was founded in 2014 by Khadim Batti, CEO, and Vara Kumar, CTO. It seeks to provide a digital adoption platform for enterprises to help drive digital adoption, realise user productivity, and elevate user experience across enterprise applications.

Online food ordering platform Swiggy snags US$113M funding led by Naspers

Online food ordering platform Swiggy has raised a US$113 million funding led by existing investor South African internet giant Naspers. According to a report by ETtech, the new fund is part of a larger US$150 million funding round, bringing the latest capital raising values the company has at nearly US$3.6 billion.

Other existing investors, Hadley Harbour Master Investments and Chinese local services platform Meituan, also participated in the round.

Naspers is its largest investor with around 40.6 per cent stake while Meituan holds 6.35 per cent in Swiggy.

Sriharsha Majety, CEO and Co-founder of Swiggy, said that the company has recently started a grocery delivery service Swiggy Stores, concierge service Swiggy Go as well as scaled-up SuperDaily, an everyday micro-delivery service.

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Picture Credit: JD.id

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