PayMongo, a fintech startup that helps businesses in the Philippines accept online payments from multiple channels, has received US$12 million in a Series A financing round led by Stripe.

Existing investors Y Combinator and Global Founders Capital, besides new investor Bedrock Capital, also participated — bringing PayMongo’s total funding to almost US$15 million.

This comes exactly a year after it secured a seed investment of US$2.7 million from Founders Fund, Peter Thiel and Stripe.

Also Read: This 4-month-old Y Combinator startup wants to be the Stripe for the Philippines

The fresh capital will be used to further accelerate the rollout of PayMongo’s features and products in its aggressive roadmap and build up its product, design and engineering teams, it said in a press statement.

Founded by Francis Plaza (CEO), Luis Sia (CPO), Jaime Hing (CTO) and Edwin Lacierda (COO), PayMongo offers easy ways for merchants to receive payments online.

Its “easy-to-integrate” API accelerates internet businesses by lowering integration time to a few lines of code, while PayMongo Links product and e- commerce plugins power businesses without the need for development time.

PayMongo claims its transaction volume soared 15x since the year started. By April, a month after the government imposed a nationwide lockdown, thousands of Filipino businesses, including small entrepreneurs, restaurants and fast food chains, have signed up for its products and services.

Also Read: What does Peter Thiel-backed Bridgetown’s IPO mean for SEA’s startup ecosystem?

Noah Pepper, Stripe’s APAC Business Lead, commented: “We’ve been impressed with the PayMongo team and the speed at which they’ve made digital payments more accessible for so many businesses across the Philippines. We fully support their vision to bring many more Filipino businesses online. Given the disruption caused by COVID-19, a service like theirs is simply vital for the country’s businesses and economic future.”

“PayMongo is enabling businesses to meet rapidly-growing online demand with intuitive, easy-to-use products,” said Spencer Peterson, Principal at New York-based Bedrock Capital.

Philippine digital transactions surged by 42 per cent in value between January and April 2020, and is likely meet the targets set by the country’s central bank — a growth driven by the necessary shift online amid strict community quarantine measures.

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Image Credit: PayMongo

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In order to figure out what funding plan works best for you, let’s take a look at your goals, your time frame, and your resources. All of these are important aspects in assessing your funding style.

What are your goals?

“If we could first know where we are, and whither we are tending, we could better judge what to do, and how to do it,” said Abraham Lincoln in 1858, and he’s not far off when it comes to startups.

We’re going to take some time now to emphasize that you cannot devise an optimal funding strategy until you know where you’re starting from and what you’re trying to accomplish. Taking a serious, sober look at your goals is a vitally important part of getting funded. Whether you are starting Fitbit for Dogs or a hot dog cart or the first company to mine gold from asteroids, your ultimate goal should be to grow outside of your little corner of the globe and expand. Some businesses —restaurants or shops, for example— don’t necessarily want to leave their neighborhoods. In that case they will want to bring the globe to them through an attention to detail and a focus on excellence.

We may sound fairly mercenary in saying that businesses are all about making money. But we say this because we’ve seen far too many ideas die on the vine because the creators were thinking too much about their passion and their desire to share their creation with the world and thinking too little about building a business. To create and lead a successful startup, you have to love what you do. When you take stock of your starting resources, you will notice that most of them relate to your doing something you love. You didn’t go into cooking or art or robotics because you thought you’d make the big bucks. You built your career because you felt a deep and abiding passion for those things. But passion is not enough. You first need to know, in Lincoln’s words, where you are, and whither you are tending.

So let’s talk about your goals.

Why are you building this business? Do you want to create a lasting institution that you can pass on to your children? Do you have an amazing idea that you can commercialize? Do you believe strongly that your idea can change the world—or maybe just your corner of it? In defining your goals, we encourage you to think in broad, world-straddling ways. Instead of saying “I want to open a restaurant,” describe your dream. Describe what the world looks like after you’re done:

“We hope to create a cozy, hometown hot dog spot for families and teens that thrives and grows over 50 years.”

Or:

“We want to build the world’s best dating site for people who have a hard time approaching people in real life.”

Or:

“We want to create a method to 3D print metals without expensive heating elements and pollution-causing chemicals.”

Also Read: Book Excerpt: What Google, Facebook did to grow from zero to 1,000

This is your opportunity to use the language of entrepreneurship to define what you want to accomplish. You know all those Facebook posts that feature a beautiful sunrise and “Waking up to take on the world” written underneath? Those pieces of entrepreneurial theater are silly but vitally necessary. An entrepreneur’s day is a roller coaster, ranging from utter despair to absolute joy. Having a clear goal in mind every morning is the best thing you can do for yourself and your business. Some goals are big: “To build the premier speaking bureau on the East Coast.” Some goals are small: “To make it through the day without wanting to cry.” The best way to avoid despair is to remind yourself of your goals daily.

Your primary goal is called your Big, Hairy Audacious Goal— your BHAG. It is your driving force and should be behind your every move. Make a banner featuring your BHAG. Tattoo it on your wrist. Skywrite it over your office. Just don’t forget it. Your BHAG is your end zone, and it should always be top of mind. But don’t let it overtake all of your subgoals.

Everything else is subservient to this BHAG. The unfortunate thing is that in the midst of building your business, you may become so overwhelmed with daily crises that you lose sight of your BHAG. That’s why it’s imperative that you keep it close at hand. It is what will get you through the tough times when the next paycheck is months away. And, alas, sometimes a serious consultation with your BHAG will help you realize that it’s time to pack things up.

The roller coaster

As you define your goal, you must create subgoals. A subgoal will be familiar to you if you’ve been in a corporate setting, and sometimes it is called a key performance indicator (KPI): “a measurable value that demonstrates how effectively a company is achieving key business objectives.” You can call subgoals whatever you want in your business; just make sure you write them out. Imagine a new startup. You need to market your product to 100,000 to get 1,000 orders. You need to cold-call 100 times. You need 10 customers to keep the lights on. Be brutal.

Grab your whiteboard and your cofounders, and write down your goals. If it’s just you, then you should pour a cold glass of wine or seltzer and figure out what you, as a solo founder, can do. Here’s a sample goal sheet.

The list should include your BHAG and a set of subgoals. Write them down on a whiteboard or poster board, and consult them when you get lost.

Here are two examples:

BHAG: Create the best hot dog restaurant in the world.

Subgoals

• Find and support the best local suppliers of meat, bread, and condiments.
• Make people smile every day.
• Create an amazing place people want to visit daily.

Also Read: Book Excerpt: In this digital age, customer journey as we know it may no longer exist

BHAG: Make and sell pizzas using robots.

Subgoals

• Create a method for robotically preparing pizzas.
• Create a distribution model.
• Build a business that does good and does well.
• Give back to the local community.
• Teach employees how to operate pizza robots and serve customers.

Here’s a general template for your BHAG and subgoal formulation:

BHAG: Our startup wants to change the world using our unique advantage over our competitors.

Subgoals

• Raise US$1 million to roll out European arm of the company.
• Market to 1,000 potential customers through lead generation.
• Sell 100 products per month to maintain cash flow.
• And so on.

Pick about five goals or fewer. Anything more will overwhelm you.

Now, decide what you need to complete these goals. The first goal requires macrofunding and extensive pitching. The second goal doesn’t require any funding at all and involves bootstrapping and sweat equity. Then the third goal might require crowdfunding a product and then selling it on the crowdfunding platform. Some of these subgoals require your full attention. Some require only a few hours a day.

Take our original list. Here are the fundraising options for each goal, now in order of attainability:

BHAG: Our startup wants to change the world using our unique advantage over our competitors.

Subgoals

• Market to 1,000 potential customers through lead generation —boostrapping/accelerator
• Sell 100 products per month to maintain cash flow —crowdfunding
• Raise US$1 million to roll out European arm of the company —VC raise

As you work on these goals, you’ll experience the entrepreneurial roller coaster. If you attack the third subgoal —raise US$1 million— you’ll find yourself in endless meetings with investors, and if you don’t have a certain amount of revenue, you might not have much of a chance. If you crowdfund and try to achieve the second goal, you might fall short one month and get lucky the next. There’s a reason the old cartoon shown in Figure 8.1 is so popular with startup founders.

Also Read: Book Excerpt: How chatbot threatens to upend an entire industry in the Philippines

Keep your BHAG in mind as you work toward your individual goals. In the end, the methods you used to get to your end goal will fade into the background as the company grows and changes. What worked when your product was young will not work when it is older. The good news? Maybe, in the end, you might find you never even need to fundraise at all.

As Joshua, the sentient computer in WarGames once said, “A strange game. The only winning move is not to play.”

What is your time frame?

Timing is everything when it comes to early, innovative startups. Start too soon and you’ll burn cash before you can make a profit. Start too late and you’ll find endless hordes of competitors who entered the Golidlocks zone of “just-right growth.”

Further, your time frame matters in the physical world. If you’re starting a hot dog stand in a temperate zone —Green Bay, Wisconsin, for example— then surely you’ll want to be operational by the time the nice weather arrives in mid- to late spring. If you’re just starting the funding process in late February, then you’re already behind the eight ball, and speed becomes a driving consideration. If, on the other hand, you’re starting up a company to mine gold on asteroids, a few weeks’ or months’ delay won’t matter. Your time frame is years, maybe decades. Most startups fall in between these extremes. You will need a preliminary road map for at least the first two years of your business, not just for your own internal gyroscope but to explain your plan to investors. Further, you’ll need some sort of moneymaking prospect in order to stay in business and be ready for the moment you actually touch down on an asteroid.

Create a list of time blockers, as shown in Table 8.1. Each one of these will keep you from moving forward if you can’t find the cash for them. If you can’t feed your family, you can’t continue. Don’t quit your job until you have cash coming in, or you’ll bump up against this blocker. Assess the easiest funding method—including bootstrapping and a friends-and-family-round to solve this. Need to hire a programmer? Dip into your savings, bootstrap, and keep working your nine-to-five job while your developer works. At each stage, assess the funding type you might need.

We wish we could say that there will be a time when you won’t have to think about these blockers, but startups are full of implied time limits. In many cases joining an accelerator can give you a solid year of growth before you have to generate revenue. Further, you should also remember that investors are generally amenable to the founders’ paying themselves between US$5,000 and US$8,000 a month out of their early funding, especially if it means the difference between shutting down and continuing. You should always discuss this with your investors, however, as many investors prefer to pay for actual development and not marketing, sales, or other non-developmental salaries—including executive cash.

Also Read: Book Excerpt: How I survived an elevator pitch session with Tim Draper

That said, if you can’t survive on savings, then many blockers can be canceled out by the need to work a day job. In this case you’ll want to raise F&F cash and bootstrap because no investor—angel or otherwise—will ever invest in a founder who is still working a full-time job.

Take a look at the ideal fundraising methods to avoid each of these blockers. Keep in mind that you can fundraise to build a business —there is nothing that says you have to ship a physical product. That said, you should offer your backers something, or you should consider equity crowdfunding— that is, the process of selling parts of your company to many individual backers for small amounts of money (Table 8.2).

This in turn brings up another important point: make sure your investors know your timeline, and make sure they are available to help you complete it. Investors shouldn’t just want to write checks unless you are raising Series A funding or beyond. Instead, use your investors as an engine toward success. Ask them to help you raise further rounds. Ask for their support in crowdfunding efforts. And ask them to support you in the non-developmental aspects of your business so you can focus on the more important process of product creation. If they are unable to help, don’t get frustrated, but in the future find better investors.

What resources do you have?

Once you understand your goals and your time limits, it’s time to understand your resources. The best way to think about these resources is through the lens of opportunity costs. What will you gain from building a business? What will you lose? Should you quit your job? Should you try multiple startups at once? Should you quit all other projects to focus on one?

You need to address the opportunity cost associated with deciding to build this business. Will doing this preclude doing something more lucrative? Then you will need to price your product high enough to match your current monetary needs. There is no shame in living on ramen in a shared house, but most entrepreneurs would prefer to sip the occasional latte. When it comes to business, suffering for your art is silly. Just because countless college dropouts claim to have done it (and most of them didn’t really do it) doesn’t make it a badge of pride. Further, if your business will not eventually make you more money than you make now, then it’s probably not worth starting. Barring a creator with a passion project and independent wealth, a startup that does not soon supply you with monetary gain is a hobby, not a business.

Also Read: Facebook reveals 13 participants selected for its Community Accelerator programme in Asia Pacific

We will say this again and again: the best businesses take off immediately. This means you will have a client on day 1 whether that client is buying your product or services. When I (John) founded a company called Freemit, we had plenty of interest, but nobody who wanted to use the service Freemit offered. Freemit didn’t have a finished product to sell, but it did have a very basic formula for making money on day 1. It also had a few potential customers who thought they understood the idea and asked to use the service to move some money. Freemit could have been a nice B2B business if we had taken that route, and that service-based business could have helped finance the product-based company we were trying to launch. But many obstacles, including government regulations and limitations in blockchain technology, kept preventing us from making that first dollar. When your product is unable to launch, you’re pretty much sunk. Although we didn’t recognize it at the time, that inability to make the first dollar was a screaming neon warning sign telling us that something was wrong with our model.

Sure, there are startups that have a difficult time making that first dollar. Our hypothetical asteroid-mining company falls into that category. But most often, those non-moneymaking startups are called “passion projects,” and they aren’t ready for public consumption.

There is another way, however. If you haven’t taken in funding, you should use your collective skills to make money, thereby reducing the opportunity cost. Countless entrepreneurs quit their jobs, maintained a steady cash flow via consulting, and plowed that cash back into the product business until it took off. Some investors don’t like to see this on a business plan, but given that a business goal is to bring in revenue on day 1, it’s definitely something to consider.

Your resources aren’t just material. They are your fortitude, your dedication, and your drive. When entrepreneurs talk about “passion,” they don’t mean they have some deep-seated love for making a better marketing funnel. They mean they have a passion for something that isn’t a typical nine-to-five grind. Sure, there are some founders out there who want to —and will— solve world hunger. The vast majority won’t. Your internal drive to escape the day-to-day drudgery of a corporate job is your biggest and most important resource, and everything you do —from your fundraising to defining your BHAG to your first sale— should be focused on forward momentum.

How much are you worth?

Once you have defined your business, you can move to pricing. Pricing and selling a product are the ultimate forms of fundraising, whether that product is a box of cereal like the Airbnb crew’s cereal or it’s your services as a consultant. Pricing your products requires a bit of guesswork and a deep understanding of your market . . . and even then, you’ll be wrong. That said, you will want to consider all aspects of your product as you decide on pricing.

Your variables include these:

• Staff costs
• Rent
• Product costs or bill of materials
• Web server costs
• Development costs
• Marketing
• Equipment purchase or rental
• Opportunity costs
• Taxes and fees

As you can see in Table 8.3, we assume a great deal of capital spending upfront —say, US$40,000 for hardware and software development— and slow growth in staff.

When investors ask for a “business plan” or cost estimates, your costs document that resembles Table 8.3 is what they are looking for. In fact, we recommend attaching this document to your follow-up e-mails to investors who have expressed interest in your business. Many founders include it in their decks as well, although we recommend adding it as a separate document so you can update it as necessary.

Also Read: Startup in Spotlight: Bookurve lets Malaysians buy, sell books online

Price your product so that you can make money. Pricing yourself too low or giving away your product is never a way to win, and, increasingly, investors will not write checks for companies that have no revenue. The first rule of a business is to make money. Ignore it at your peril.

There are exceptions to this including businesses that depend primarily on virality. For example, if you create a popular app, a competitor might want to buy it in order to fold your customers into their solution. In this case, some investors might be willing to invest in your progress, but you should understand their motives: they probably already have a buyer lined up for your app. That said, current funding models rarely reward companies without revenue although, as we’ve said again and again, your results may vary.

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This is an excerpt from the book Get Funded! by Eric Villines and John Biggs. You can buy it on Amazon here.

Image Credit: Charles Deluvio on Unsplash

The post Book Excerpt: Why successful fundraising begins with understanding your company’s needs appeared first on e27.

Smallholder farmers play a critical role in Asia, producing up to 80 per cent of all food consumed in the region. At the same time, they are among the most vulnerable to external factors such as climate change, crop pests and diseases, fluctuating commodity prices and most recently, the COVID-19 pandemic.

With over 70 million small family farms in Southeast Asia, it is imperative that we support them to avoid more poverty and hunger, which in turn affects the supply of the food at the source. Smallholders face a series of interconnected problems. They lack access to information, financial services, quality inputs, machines, labour, and markets.

Effect of COVID-19

The COVID-19 pandemic has worsened the farmers’ problems and disrupted the food supply chain. Restrictions in movement from one area to another have resulted in a string of issues, such as a shortage of labour to plant or harvest crops, the lack of assistance from extension workers, a shortage of input supply, the inability of buyer agents to travel to the farms, and difficulties in moving trucks through checkpoints. 

In some cases, this resulted in oversupply in production areas and short supply in urban areas. In May, tomato farmers in the Philippines dumped their produce by the roadside due to difficulties in reaching the market.

In other cases, farmers are unable to continue production as they lack guidance on how to operate with safety measures. In Indonesia, farmers’ incomes dropped due to lower prices and supply chain disruptions.

Also Read: Fertile ground for partnership: How agritech boom in SEA holds a promise for Latin America

Governments and civil society actors have moved quickly to alleviate some of these issues. However, many of the smallholders’ problems are the same as before. They have just been exacerbated by the pandemic, and this makes finding appropriate solutions even more urgent.

Solutions from smallholder agritech startups

Smallholder agritech encompasses tech startups working to create a positive impact for smallholder farmers. These startups have had to tweak their operations to support the farmers during this pandemic, but their core solutions remain unchanged, aimed at tackling farmers’ problems.

Thailand-based startup ListenField provides access to weather prediction and crop advisory. They were able to disseminate information and advice about COVID-19, thereby reducing health risks for farmers and enabling them to continue their work as much as possible.

RegoPantes (part of 8villages) from Indonesia, which connects farmers to buyers, made a switch in tactics to focus more on direct selling to consumers. This allows farmers to sell more produce at better prices to make up for reduced demand from food businesses.

Also in Indonesia, NeuraFarm uses AI to help farmers deal with pests and diseases and optimise usage of crop protection inputs, which in turn reduce pressure on the input supply chain.

Cropital in the Philippines, which provides farmers with low-interest loans, acts as a distribution channel for people who want to fund and support the farmers, because they have already set up systems to disburse funds, monitor and advise farmers.

Corporate-startup partnerships and ecosystem support

We believe large corporations can leverage the work of startups to achieve their strategic and sustainability goals. The Open Innovation approach works best when both the corporation and startup have distinct strengths and value propositions that complement one another to create a greater impact.

For example, a rice company can partner with a startup focusing on building a digital community to provide contracted farmers with a platform to connect with other farmers or post questions to experts. A crop protection company can partner with a startup that provides pest and disease diagnosis and recommendations, as a means to increase sales. A seed company can partner with a startup focusing on low-interest loans to help reduce the risk of default while ensuring that farmers receive quality seeds.

Also Read: A comprehensive guide to Indonesia’s agritech ecosystem

Some have already done so. In Thailand, Thai Wah has been piloting with Adatos AI to provide a yield prediction solution using satellite data, which will enable Thai Wah to better support farmers.

In the Philippines, Yara has piloted with Cropital to reduce credit risk and provide quality input. In Myanmar, Golden Sunland is partnering with Village Link to collect farmers’ data and provide advisory services.

Ecosystem enablers also help facilitate these corporate-startup collaborations. Grow Asia, a multi-stakeholder partnership platform focusing on smallholders, has been creating digital programmes that provide corporations with a platform to engage startups and explore potential partnerships through pilots.

IFC, the private sector arm of the World Bank Group, has also launched a programme to bring agritech startups into Vietnam to explore partnerships with local agribusinesses.

In line with many corporations’ vision of being purpose-led businesses, these outcomes are good for business whilst improving the smallholders’ livelihood, ultimately contributing to the resilience of the food supply chain.

Opportunities for investment

The pandemic presents investment opportunities by validating the problems that farmers are facing and creating urgency to shift to more innovative and digital solutions. The fact that these startup solutions are working out during the pandemic shows how fundamentally important they are.

Restrictions are making people rethink the way they work. They are encouraging farmers to use digital solutions, think of more labour-efficient methods, and sell directly to consumers. Restrictions also encourage consumers to be more aware of food issues and demand higher sustainability standards and traceability.

Investors have started taking advantage of this opportunity by investing in Indonesian digital agrifood marketplaces. Three startups in this segment, TaniHub, ChiliBeli and Kedai Sayur, account for roughly 95 per cent of all smallholder agritech fundraising in 2019-2020 in Southeast Asia. Other regions such as China and India are seeing similar trends with investment money flowing into the digital marketplaces that connect farmers to buyers.

Also Read: Why agritech startups will call for the next e-commerce revolution

That aside, we see a few areas worth exploring, such as Traceability in the Philippines, Mechanisation Platforms in Vietnam, and Digital Lending in Thailand. These country-specific gaps present opportunities for investment in new startup solutions and existing AgriTech startups that could provide an adjacent product.

The challenges faced by smallholder farmers today are fundamentally the same as their challenges pre-COVID-19. To reboot the food systems and emerge with a more resilient food supply chain, we must tackle the problems they face, and we believe supporting startups is a good way. Corporations and investors can play a role to support the startups while achieving their business and impact goals.

Supporting Smallholder AgriTech is a win for all – creating a better livelihood for smallholders, stronger agribusinesses, a more resilient food supply chain, better environmental outcomes, and safer, more nutritious food.

We at Padang & Co support UN SDG 2 – Zero Hunger. We help accelerate innovation in the Smallholder AgriTech sector through open innovation programmes such as Grow Asia Hackathons, AgTech Vietnam, and Digital ASEAN Program. We also encourage conversations through the Grow Asia Digital Learning Series.

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Image Credit: Ashraful Haque Akash on Unsplash

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Do you know if your startup is ready for international growth?

It is virtually every startup’s goal to go global, but doing so entails a multitude of challenges. Before you decide to expand your business internationally, you need to ascertain that your business is ready for it.

How do you know if your business is prepared for the challenges of operating on an international level? What are the indicators to watch out for? The following are three essential details you need to know.

Inherently global nature of business

Having a business that can be operated internationally without requiring major investments or capital, extensive market studies, and product changes.

Some businesses already meant to go global from the get-go. These are startups that can serve customers as they don’t have the logistical and operational requirements that most other businesses need to deal with, in order to be able to serve clients in various foreign markets. In particular, they exhibit the following characteristics:

• Being able to conduct most business activities online
• Not much difference in serving local and global customers
• No need for establishing a clear local market presence or business network
• No necessity for putting up physical bases of operations in the new target markets abroad
• Offering a product that does not require major modification to be viable in other parts of the world

One good example of a business that exhibits the aforementioned attributes is online content creation: publishing articles, videos, and other content on the web for monetisation. In addition to attracting direct advertisers, neither requires the establishment of a solid local business presence.

The business can be conducted online for the most part. The employees can be web-based with teleworkers hired in different countries. Hence, take advantage of their localised viewpoints and expertise in developing content deemed suitable in their respective regions.

Also Read: Will the gig economy in Asia sustain its growth?

Another excellent example is the business of selling or monetising mobile apps or software in general. These apps don’t have a physical presence and can be sold to users online through the official Android or iOS app stores and through websites and online ads.

All transactions can be undertaken online even with the freemium model

Wherein apps are offered for free but users are given the option to buy items or upgrades within the app.

In these startup businesses, there’s no significant difference in offering the products locally or internationally. It would even be counterproductive to limit the sales to local customers. Additionally, the products have potential demand in various locations worldwide. They don’t need to undergo major changes to be useful to international customers. Except maybe when it comes to the language.

Localisation may be needed to make products more appealing to target customers in certain foreign markets. This is not going to be a major problem though, as it’s not difficult to find localisation solution providers. You can even find companies that provide global marketing services to help with the promotion of the products in different markets. You just have to make sure that you are choosing a reputable and experienced language service provider to handle the localisation of your products and marketing campaign.

Other startup businesses that can be operated internationally right from the start

This includes service-based ones such as those that offer search engine optimisation (SEO), web development, creative work, marketing, digital asset sales, accounting or bookkeeping, and online publishing services.

There are also niche stores that can be started as an international operation with most of the transactions conducted online. A store that offers salt-powered (no traditional battery or power source) LED emergency lights, for example, can easily find customers abroad. Typical online stores that sell the usual items being sold online. They may also be able to find customers in foreign markets, but not with the same chances of success as those of niche stores.

Also Read: iWEECARE adds US$2.4M its coffers to accelerate growth of its remote wearable thermometer

And of course, in case you forget the obvious, export/import businesses are international in nature right from the start. It would be totally illogical for an export business to be locally-bound.

Find out if you have enough funds, expertise, experience, and skilled people to sustain a venture into the international market.

If your business does not possess the characteristics mentioned above …

You need to establish your business locally first before you can plan for global expansion. The main reason for this is to have enough resources.

Resources here, by the way, don’t only refer to money. Indeed, funding is vital in pursuing an international expansion, but it’s not the only resource you need.

You also have to accumulate adequate experience and insights into how the business would work in other markets by conducting market research; they can achieve it by operating the business locally for a good amount of time. As the business gains experience and insights, when doing business on an international scale, their employees (human resources) could also be ready for advanced roles.

There are no standards as to how much cash, liquid assets, expertise required, or employee skills a business should have to say that it is ready to go global.

Abundance of resources

One study by Crane found that more than 50 per cent of SaaS companies averaged more than US$10 million in revenues before they decided to expand to foreign markets, and it took them around 5.5 years on average before pursuing a new market. These details rarely apply to other businesses, though.

The decision to expand internationally, with regards to the level of resources available can’t be based on benchmarks or industry averages. The management has to evaluate everything prudently to decide if the business has enough to have reasonable chances of succeeding in the international market.

Also Read: Ecosystem Roundup: Should SEA startups jump the SPAC bandwagon?; SEA becomes centre for instant cross-border payments growth

High demand in foreign markets

Determine if there is a compelling demand for your products in new markets.

Sometimes, your business resources may not be the deciding factor in proceeding with business expansion. It could be the demand in foreign markets. Consider these:

• You may have an abundance of financial resources, skilled people, expertise, market intelligence, and other resources. But there is no demand for your products abroad.
• You may not have enough resources to enable a less-risky international expansion. But there is an immense demand for your products abroad.

In these cases, demand becomes a more important factor. If you don’t have enough resources, you can find ways to make up for it. You can accept additional investments, consider crowdfunding, or forge business partnerships. To gather the resources needed to pursue highly feasible opportunities abroad. You would be willing to take risks in the presence of persuasive potential rewards.

Conclusion

Essentially, the three ways in determining if a startup business is ready for the international market can be summarised by the following questions:

• Is your business inherently international in nature?
• Do you have enough resources to support the expansion?
• Is there a compelling demand for your products in the global market?

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The article first appeared on nfinitiv.

Image Credit: Erik Odiin on Unsplash

The post How to know if your startup is ready for growth appeared first on e27.

How Sea is surfing Southeast Asia’s digital wave; Sea, which operates online gaming, e-commerce and digital financial services, is among the biggest beneficiaries of the COVID-19 pandemic; Its market capitalisation has more than quadrupled since the beginning of this year to over US$70B. Nikkei Asia Review

Singapore’s banking-as-a-service startup RootAnt raises US$1.46M from Linear Capital, KZM & Company; It will use the money for expansion in SEA, Japan; RootAnt specialises in embedded financing for enterprises and connects enterprises and financial institutions with new digital financial products for faster financing services. e27

German firm LikeMeat’s founder launches plant-based meat startup Next Gen in Singapore with US$2.2M seed funding; Next Gen produces and commercialises plant-based meat products; The startup is preparing to raise its Series A in 2021 to drive its global expansion into China, the US and Europe. e27

Esports entertainment firm Ampverse secures pre-Series A funding; Investors include Robert Gilby (ex-MD at Disney Southeast Asia), Axel Wehr (Partner at Firestartr and formerly of Bain Capital), Matt Sutton and David Ng; Ampverse will use the capital to drive further regional expansion across SEA. Tech Coffee House

Singapore’s workflow automation startup Augmenteed in talks for US$450K funding; The firm helps companies optimise and automate their processes, guide technicians in real-time with remote experts, and train technicians efficiently with AR solutions; Augmenteed is looking to expand to other countries and currently are in discussions with potential clients in Korea, HK, Japan, Germany. e27

SEA’s PE firms start to attract money from Europe; Despite SEA’s emergence as a high-growth region, European investor activity has remained slow; Of all PE and VC investors who have invested in ASEAN fund managers and are tracked by Preqin, 56% were from North America, 21% from Asia and 18% from Europe. Nikkei Asia Review

Survival or revival: Realigning process and vision for organisations in the post-COVID-19 world; Businesses that focus just on short-term survival might get through the initial situation; However, they’ll be in a far worse position to compete when things settle down than those businesses that see the pandemic as an opportunity for revival and reinvention. e27

How to bring the smartphone revolution to your small business; Many small business owners are adopting new digital habits in their personal lives, but often they aren’t as quick to adopt the same digital mindset when it comes to running their business; They assume digitising their sales channels and back-office involves massive investments in infra and personnel. e27

How to know if your startup is ready for growth; If your business inherently international in nature, has enough resources to support the expansion, and there’s compelling demand for your products in the global market, then your startup is ready to grow international. e27

The co-foundery model: A different way to build a startup; Two of the most common reasons for startup failure are hiring poorly and choosing the wrong co-founder; The co-foundery approach negates these by providing a proven and experienced startup team and co-founder from day one, without founders having to find or employ anyone. e27

Vietnam seeks investment from Japanese IT firms, says Deputy Minister of Information and Communications; The government has been completing its models, mechanisms, and policies for the breakthrough development of concentrated IT and high-tech areas in Vietnam’s major economic hubs. Viet Nam News

Amazon to take office space from Citigroup in Singapore; It will lease three floors covering about 90K sqft at Asia Square Tower 1 in the heart of the financial district; Citigroup is trimming its office space to better use its real estate as its 10-year lease is due to expire soon. Bloomberg

Which neobanks will rise or fall?; Neobanks have led the charge of the US$3.6B in VC funding for consumer fintech startups this year; The space is also becoming more crowded and it will only accelerate with fintech eating the world and creating greater infra that enables any company to include a bank account as a product extension. TechCrunch

Visa, Mastercard working with affected Wirecard clients in Singapore to limit disruption to transactions; Mastercard referred merchants to a list of acquirers on its website; MAS had earlier this week directed the troubled German firm to stop payment services and to return all customers’ funds by Oct 14. Channel News Asia

Coffee break? Check out Singapore’s first robot barista outlet; Crown Coffee said the outlet was launched in an effort to push automation and reduce physical interaction in the light of Covid; The robot, Ella, is able to make up to 200 cups of coffee an hour. The Straits Times

Emerging markets achieve US$834B e-commerce sales, says Euromonitor; A COVID-19 Survey says 60% of business professionals in developing countries believe that consumers will increase online shopping and reduce in-store shopping in the mid-term or permanently. The Malaysian Reserve

Sea Group commits to hiring 500 Singaporeans in tie-up with IMDA; The group will hire and train 500 people, comprising 400 entry-level and 100 mid-career job seekers; Under the tie-up, Sea will receive subsidies for monthly salaries, training course fees and any overseas attachment costs. Channel News Asia

New 10-year road map to promote tech adoption in Singapore’s legal industry; The Legal Industry Technology and Innovation Roadmap was launched by Second Minister for Law Edwin Tong; Law firms seeking to use AI in their operations will be able to rely on an upcoming guide by IMDA and the Lee Kuan Yew Centre for Innovative Cities. The Straits Times

How to perfect your fintech story and close your next funding round; If you’re looking to broaden your reach, you have to pinpoint how your products and features appeal to the everyday person; Identifying the USPs of the startup will give your story legs and help the media understand where in the ecosystem you fit in and why they should write about you. The Next Web

Why B2B fintechs are ready for prime time; Looking at current fintech funding trends, it’s apparent that a shift from consumer fintech to B2B fintech is happening; According to an analysis, 21% of all fintech funding of the past year has gone towards firms B2B fintech firms. Fintech News

Filinvest launches programme to aid digital transformation of companies in Philippines; With the Filinvent.io, companies can tap startups, emerging technologies and innovations to solve business challenges; The group is also investing in its digital infra and green technologies and incubating new tech-driven ventures with its f(dev) unit. ABS-CBN

Visa, Shopee ink agreement to spur MSMEs into digital economy; The agreement will include incentivising MSMEs to digitalise their business on Shopee and adopt digital payments through Visa, and provide MSMEs with marketing and campaign support to drive awareness, traffic and sales to online stores. Bernama

One size doesn’t fit all: The rise of customer personalisation and why startups should care; More and more companies have adapted to the use of AI and Machine Learning  to help them directly target the demographic most likely to buy their products by essentially getting into the consumer’s head and giving them exactly what they want. Tech Collective

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