After spending a considerable amount of time in China, Benny Chen, managing director of BAce Capital and ex-managing director of Ant Financial India, believes that there are similarities between Southeast Asia (SEA) and the country that can be leveraged upon.

At only 18 months old, as a VC fund that focuses on mobile-first markets in SEA, BAce Capital utilises its network and experience in China to help founders in emerging markets. The reason why this market is so attractive to Chen is because of the size of the opportunity it offers, in terms of innovation and size of the user population.

“Even though mobile phone technology, adoption has been largely prevailing in SEA, its depths and density still need a few more years to mature. There’s a huge opportunity to not just adopt but change customer behaviour,” Chen opines in an interview with e27.

For example, e-commerce’s increasing popularity can be seen in both SEA and China. In China, there is a growing trend of people buying and selling goods via live streaming platforms. Not that there are no live streaming apps in SEA and India, but the transaction amount of e-commerce via the live streaming platforms are much higher in comparison to other regions.

These are some models that, according to Chen, can be replicated in emerging markets.

And he was not alone in believing this. Other industry players such as Koh Tuck Lye, the chief executive of Shunwei Capital of Beijing, also asserts that the firm is “a strong believer that the China experience is much more relevant in India and Southeast Asia than the US experience.”

Also Read:  Blessing in disguise: How coronavirus is helping China’s tech sector

Speaking at the DealStreetAsia’s Private Equity/Venture Capital Summit in Jakarta, he further noted that the concept of a “super app” that is now so popular in Singapore and Indonesia with gojek and Grab was first pioneered by Tencent’s WeChat messenger app in China.

Learning from China

With that belief in mind, BAce helps its portfolio companies in emerging markets build from the success of business models in other successful markets, especially China.

“Thanks to our previous Alibaba backgrounds, we can utilise our network and experience to provide founders a different way of getting more information,” Chen says.

“Last December, we brought the CEO and founders of all 10 of our portfolio companies to China and hosted a big event where they were able to each interact with 200 Chinese companies. And vice versa. We also brought our China founders to Indonesia and India. So, you know, people tend to learn and exchange know-how from very different backgrounds,” he continues.

“As a VC, we are enablers, so we do our best to give them a platform to learn from. We give them a little bit of inside information through our own knowledge. But more importantly, create a platform where founders can see more what’s happening in similar successful markets.”

But Chen also makes sure that founders are not spoonfed. “We don’t mandate or dictate what is the right model. On the analysis side, we give them more information that they generally wouldn’t have access permitted to. And we enable them to communicate with the right people,” he shares.

Also Read: In brief: Temasek invests in China’s US$30M foodtech fund Bits x Bites

Currently, BAce Capital is investing in Singapore, Indonesia and India and has revealed plans to invest in Vietnam soon. Its focus is B2C mobile-first companies but remains largely sector agnostic.

Some of its portfolio companies include adtech startup AdOnMo, online printing platform Printerous, co-living startup RoomMe and female centred social media app Healofy.

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Image Credit: BAce Capital

 

 

 

 

 

 

 

 

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It is unlikely that we will go back to the traditional separation between restaurants, offices, healthcare, industrial, residential and retail.

The lines between work, home, entertainment, sports and education are blurring and the next 10 to 20 years will be all about finding a healthy balance in order to create a sustainable, liveable and smart environment.

Innovation of the real estate industry globally plays a critical role in this development, specifically in urban and suburban areas where a dense and demanding population continues to grow.

With some exceptions for areas that require a dedicated set-up such as industrial, logistics, data centres or high-end and special care residential, it is unlikely that we will go back to the traditional separation between restaurants, offices, healthcare, industrial, residential and retail.

An so, mixed-use real estate is here to stay which is an important conclusion for investors, entrepreneurs and other innovators!

The simplest definition of mixed-use development is a real estate development that contains multiple types of buildings — commercial, office, retail, and residential — all intended to coexist and ideally fill different needs and provide various benefits to the people who live and work therein.

Mixed-use real estate is not new, but COVID-19 is serving as a catalyst

Developers had set their minds on mixed-use real estate for the past decade or so with modest success as both supply and demand weren’t always ready.

However, as most fundamental changes are driven by trends that have been lingering around (most of them in clear sight) for many years. It simply takes a crisis such as a pandemic to speed up those processes of change and (re)match supply and demand.

Also Read: San Francisco’s Onerent to launch in Singapore despite uncertainty in the real estate industry

Over the past several years, industry leaders have been diversifying sources of revenue, pursuing digital strategies, and focusing on tenant experience. The COVID-19 crisis has accelerated the need for those strategic changes — and highlighted that those that haven’t yet made such investments will probably need to catch up quickly.

Key trends

To get the most out of the real estate market, an investor needs to spot trends before they become apparent to everyone.

The need for sustainability and efficient use of space due to population growth

Most of the following trends are driven by the global ongoing growth of our population. Governments and developers are continuously pushed to focus on the efficient use of land where a lot of people can live together in a sustainable way without compromising the quality of life.

Let’s have a look at several trends that will define the next few decades.

The downfall of traditional retail

Retailers and department stores that have failed to establish a successful omnichannel presence with diversified revenue are failing to attract consumers.

E-commerce is eating their revenue as it’s getting more convenient and sometimes cheaper to just stay home and get items delivered. The failing retailers are typically using traditional methods such as discounts and coupons to attract consumers, however, these methods are no longer working and insufficient new innovative concepts have been introduced.

A lot of retailers have been struggling for years where the current pandemic is now pushing them over the edge.

However, malls with mixed-use and strong (actively supporting retail tenants) managers will be able to continue and attract foot traffic as consumers simply have more reasons to visit and spend money.

Ongoing rise of housing prices

In most countries and popular cities, housing has become unaffordable and so unless the government steps in and organises proper public housing, most millennials will look for alternative solutions such as co-living or move to the cheaper suburbs.

Also Read: Has COVID-19 pushed us into the digital future?

The need to combine working from home and the office

Remote work was already growing in popularity before the pandemic. Now COVID-19 causes remote workers to make up an even larger share of the workforce. However, according to most recent research people prefer a balance between home and the office.

This in itself leads to a few trends that push for mixed-use real estate:

Millennials and offices are moving to the suburbs

We’ll see a migration away from major cities to more affordable, spacious hubs like the suburbs for both offices and workers as it’s no longer necessary to live and work in the expensive central areas. Offices can have more satellite locations where colleagues get together.

The demand for shorter commutes

2020 has shown us that much time can be saved by reducing commuting time leading to increased productivity. This again together with the move to suburbs will lead to the need for satellite offices that are close to home. We now live in a world in which we want to live-work-play in one place.

More governments are supporting mixed-use development

Singapore is a great example of a country that is leading the way when it comes to mixed-use development.

This is evident from the Singapore CBD Incentive Scheme that was being announced at the Urban Redevelopment Authority (URA) Draft Master Plan 2019. This is part of the plan to rejuvenate the city centre by encouraging building owners to convert existing office developments in the Central Business District (CBD) to mixed-use developments.

It is an effort to encompass the philosophy of Live, Work and Play into the lifestyle of hustling office workers.

With regards to residential development, the Singapore government has also been clear: Future residential precincts will continue to be sustainable, green, community-centric and car-lite, with easy access to a wide range of public spaces and amenities to meet residents’ needs.

Also Read: Why a pandemic is a good time to experiment and innovate on behalf of your customers

Co-locating amenities in one-stop hubs such as the upcoming Bukit Canberra and Punggol Town Hub in Singapore makes it easier for residents to shop, dine, and engage in family-bonding activities all under one roof.

Car-lite is becoming more and more popular

Fewer people own a car. Simply because of costs, traffic or the wish to reduce footprint. The result of this is that people are looking to have more facilities in the same place in order to reduce travel time between work, home, entertainment, sports and education.

Above trends are just a few of the driving forces that will cause the real estate market to fundamentally change towards a model where the majority of the (re)developments will focus on mixed-use.

It is safe to conclude that investors should aim to get exposure to well managed mixed-use properties or companies that focus on related innovation.

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The pandemic threw the value of remote working solutions into sharp relief. It also strengthened the earnings of innovative video messaging app Zoom, causing it to be one of the most popular video conferencing solutions in April 2020.

In the last week of March, 3.2 million people downloaded the Zoom app, far outstripping the growth of seasoned players such as Microsoft Teams and Google Meet.

Zoom had arrived on the world stage, and everyone was fascinated. The meteoric rise to fame was impressive. The CEO, Eric Yuan, had a compelling story, but it wasn’t long before security flaws began to show.

Zoom’s 2020 rollercoaster ride had started. “Zoombombing” attacks, where internet trolls hijack a call, may have derailed a lesser player. In our case, Zoom went on to become even stronger.

Despite the potential security concerns, Zoom’s growth carried on unimpeded. As it becomes clear that COVID-19 is here to stay, well-built video chat solutions such as Zoom are useful tools.

According to Eric Yuan, Zoom’s revenue grew by 355 per cent between August of 2019 and July of 2020. Analysts predict a further 454 per cent growth in turnover between August 2020 and July 2021.

Is that a realistic prediction? At first glance, it isn’t, but let’s not count the company out just yet. Instead, let’s analyse how they got to where they are, what we can learn, and if their growth is sustainable. 

Also Read: In brief: Malaysia’s OSK Venture invests in Hubble; Zoom opens data centre in Singapore

How did it become so popular?

Yuan created Zoom as an alternative to lesser messaging apps available on the market. While these apps worked, Yuan felt that clients deserved better service. Thus, he created Zoom.

The app worked well, but convincing paid clients to come on board proved challenging. Here Yuan demonstrated his marketing genius. He reached out to organisations such as universities and offered the service for free. Many of which accepted.

Leading up to 2019, when Zoom issued its IPO, the company had a large client base. Users had the option to remain on the free plan. Many chose to upgrade because they’d seen the value of the service.

Therefore, lesson one is that a “try before you buy” offer might be crucial to a startup’s success.

By doing things this way, Zoom also built goodwill in the community. Consumer consciousness is shifting toward companies that display charitable tendencies. Microsoft and Google both followed Zoom’s example and provided more free features. 

Lesson two is that it’s better to set the trends rather than follow them.

The academic community raised concerns about scalability initially. Yuan created built-in contingencies to ensure that the company could cope with an influx of users. When lockdowns started in China, Yuan realised that significant change was inevitable.

Entering the pandemic

At that stage, no one realised that we were dealing with a pandemic. Zoom’s early response, however, may well have turned into a disaster for the firm. The company’s network is highly scalable and can handle as much as 100 times its regular traffic.

Also Read: Zoom in: 7 ways to make online meetings more interesting

With data centres in several countries on different continents, it’s easier to deal with the effects of a nationwide lockdown.

Lesson three is to plan ahead and put those plans in place early.

In March, it became clear that the contingency measures weren’t quite adequate. Free users had problems connecting, and clients flooded the company’s support desk with requests. This problem was common with many service providers due to the high numbers of users logging on simultaneously.

The Facebook scandal

In March of 2020, the news that Zoom sent user data to Facebook leaked. It didn’t matter if the user had a Facebook account or not; Zoom sent it through.

Yuan stepped forward with an apology and an explanation. The program that linked the two allowed Zoom users to login using their Facebook credentials. He went on to say that the firm did not send any data that might identify you personally.

The metadata that Zoom sent included things such as the type of your device, your time zone, your screen time, and your language. Zoom has since removed the programme.

Lesson four is to own up to mistakes and take concrete steps toward repairing the damage.

Zoom bombing and data security concerns

Zoom bombing is a relatively new phenomenon and might be attributable to mischief rather than an attempt to steal data. With zoom bombing, hackers gain access to a meeting and typically share sexually explicit videos. 

Yuan admits that he fails to see the logic in these attacks. The perpetrators have little, if anything, to gain from their actions. Yuan realised that it was short-sighted not to predict that people might abuse the technology.

In his defence, he developed the app for use by professionals. Businesses typically take better precautions when it comes to security.

Also Read: Zoom in: 7 ways to make online meetings more interesting

Yuan went on to say that Zoom had security features in place. Users can lock screens and request passwords to enter a meeting. He did admit that the company provided little information on how and why to use such features.

Since then, the company has changed its features to ensure better security.

Of more concern was Zoom’s early assertion that the tools were encrypted end-to-end. This claim was later proven untrue. Shortly after this revelation, Time published a piece in which it claimed that agents acting against the US’ interests were using Zoom to spy on other Zoom users.

The company’s share price sharply dropped by 20 per cent.

Lesson five is simple: don’t lie to your users and shareholders.

Yuan once again issued an apology and committed to shelving new feature development until the security measures were in order.

Are security concerns warranted?

Security concerns raised are warranted, but that’s true of any digital medium. To single Zoom out and label them unsafe is an interesting reaction. Particularly when you consider that Facebook has made far more “mistakes.”

Overall, Yuan seems to have the right attitude. He spoke about stripping cookies and tracking from the company’s website, increasing the reward for those who find bugs, requiring password protection for all meetings on the platform, and making the code available as open source software if necessary.

Paid clients using the service agree that the company is on the right track. Many didn’t fall prey to zoom bombers because they used the password protection features.  

Also Read: 10 mistakes that new entrepreneurs tend to make and should avoid in 2020

Zoom is a workable, well-designed application that’s a victim of the hype. Designed as a B2B communication system, Zoom blossomed into an app used by almost everyone due to circumstances.

The brand has made mistakes along the way, but they’ve worked hard to rectify those. They’re willing to acknowledge errors and put forward solutions that show a dedication to customer service.

The result is a company journey that startups can learn from and a ride that is far from over. Is Zoom’s growth sustainable? It certainly seems so. 

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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.

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Should startups begin with an exit in mind?

There are different ways of looking at this question. When founders present their companies and have a fully fleshed-out exit strategy, it might spook investors.

At the early stage of your startup, it’s nearly impossible to construct an exit strategy. At a time when you’re still figuring out product-market fit, user retention, product roadmap and other vital parts of the business, considering an exit strategy is premature.

Also Read: Become the entrepreneur you dream to be in 11 sessions

Investors want founders to focus on building their business and adding value with the least distraction possible. The saying goes that any strong company can fundraise (or exit). An exit event is an important milestone for a company. It doesn’t necessarily mean a departure for the founder.  

When and how to exit

The timing and exit strategy are crucial to maximising the returns of the VC firms and founders.

In reality, there’s no definitively optimal time to exit. As the future business circumstances are not set in stone and are extremely difficult to plan out, an exit is more a matter of the reasons to exit and in which circumstances the startup is ready to do so.

The first myth is that startups’ original exit plans come to fruition. There are too many unforeseen situations to predict what an exit will look like five or seven years later.

Also Read: GFC-backed Klikdaily plans to launch IPO in 3 years

The reality of when to exit needs to be supported by how to exit. Founders and shareholders can explore several avenues, but what is more important is to make sure incentives align across all parties.

The technicalities of an exit will differ from case to case, but there are a few similarities.

The most important one is getting the house in order. It doesn’t matter whether you’re preparing for an exit or a late-stage fundraising round — on both occasions, you want to make sure the company’s house is in order. 

(1) Are all the financial reports up-to-date and audited? (Acquirers want to review audited numbers. In the case the numbers are unaudited, the company needs to present clear arguments on why that is the case). 

(2) Are all the company procedures in place and documented? 

(3) What is the financial forecast based on historical financial results? 

(4) What is the outlook for the company, product and market roadmap? 

(5) What are the exit scenarios for all founders, staff and shareholders? In case of an earn-out, are incentives aligned?  

IPOs and Southeast Asia

The holy grail of exits is an IPO, but in Southeast Asia (SEA), acquisitions make up the vast majority of exits. The rise of unicorns explains this.

SEA’s unicorns yield buying power, which has increased the opportunity for smaller startups to be acquired by them.

As many as 28 acquisitions have been made by SEA’s unicorns from 2015 to 2020. This number will increase over the next few years as more capital is coming to the region. 

Also Read: 5 things entrepreneurs need to know about running a business in the new normal

On top of the obvious rise of unicorns in SEA, the most overlooked yet pivotal circumstances that make exits possible are the startup support from stock exchanges and the first SEA funds currently reaching their vintage.

Both the US and local stock exchanges have programmes that establish SEA startups’ impetus to list on the respective exchanges.

For instance, NASDAQ has established a collaborative listings agreement with SGX to help startups eventually list on the former. With the success of Sea Group IPO, it’s clear that US Stock Exchanges offer an exit route.

And what about the local and regional exchanges? Up until now, local exchanges haven’t played a big part in tech IPOs. We do see an opportunity for SEA-based startups to consider Hong Kong and, in some cases, Japan for an IPO. These markets have growing liquidity for tech IPOs. 

An important driver for future exits is Southeast Asian VC funds approaching their maturity. With most major funds incepted in the early 2010s, funds across SEA are looking to generate a return on their investments before closing their first funds.

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

By nature, they will make an effort to either locate acquirers for portfolio companies or, if appropriate, initiate secondary transactions. No matter how favourable the circumstances to exit are, many startups aren’t ready.

The number of companies in SEA valued over US$100 million is growing each year. We’re bullish on the exit landscape maturing at a fast pace.

Besides regional unicorns, more international companies are looking to increase their SEA exposure through funding and later on acquisitions. 

(Timo Fukar, an investment intern at Golden Gate Ventures, also contributed to this piece)

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Photo by DDPon Unsplash

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.

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Singapore’s leading seed-stage VC firm KK Fund has announced a partnership with the Singapore arm of Industrial Growth Platform (IGPI), one of Japan’s largest management consultancy firms.

The partnership is aimed at facilitating the creation of new businesses by large corporations in Southeast Asia by combining the consultancy firm’s expertise in corporate transformation (CX) with the VC firm’s knowledge in growing startups.

As part of this, KK Fund and IGPI will co-launch an accelerator programme, SEA Point, for multinational companies (MNCs) to collaborate with regional startups and conglomerates on creating businesses.

Also Read: The secret is out: The missing piece that will boost your corporate innovation strategy

“There are many accelerator programmes for startups in Southeast Asia, but there are none for bigger companies who want to invest in new businesses or create their own startups for vertical integration purposes, especially in new markets,” said Koichi Saito, General Partner of KK Fund. 

“With SEA Point, we are able to reinvent the idea of the startup ecosystem from being top-down to being more collaborative on multiple levels,” he added.

Southeast Asia, home to some of the world’s fastest-growing economies, is an immense emerging market that has attracted significant investment in the last decade. The region has over 70 million small and medium-sized enterprises and 30 per cent of the world’s top startup ecosystems.

With the Southeast Asian Internet economy expected to hit US$300 billion by 2025, the region is a focal point for international business expansion and provides many cross-industry opportunities for collaboration and growth – specifically in terms of social infrastructure development and SME consolidation.

“We are increasingly seeing enterprises becoming active partners in and even establishing small companies of their own to service new markets — particularly in Southeast Asia, which is a very competitive market. Some may create their own branches while others may look for local partners to set up a joint venture,” said Koki Sakata, CEO of IGPI Singapore.

“Their approach to creating new businesses must be different from typical small, agile startup teams, which is why we are pleased to collaborate with KK Fund in supporting these large corporations and create a more diversified ecosystem,” he remarked.

Also Read: PolicyStreet raises US$1.8M from KK Fund, Spiral Ventures to grow its millennial-centred insurance platform

Since its establishment in 2015, KK Fund has invested in over 20 mobility and internet-related firms in Southeast Asia across a wide range of industries, such as fintech, logistics and healthcare. The names include Infofed, a Thailand e-sports community hub; Med247, a Vietnam-based O2O platform addressing post healthcare treatment; and Policy Street, a Malaysian insurtech startup.

In Q1 2020, the firm collaborated with public and private ecosystem players to launch its Meet Your Match initiative across seven Southeast Asian countries, which saw over 130 investors virtually meeting promising startups in each country. 

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Photo by Headway on Unsplash

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Intro

My experience with my brother in Panama was amazing, until my concussion that is. After being fired from my job in China, I was shocked and confused. I had spent 10 months working my ass off to develop the HR management system, teacher training programme, and curated a massive library of thousands of pieces of educational content our teachers could quickly access from a local network I set up. And my thanks for making the private school a better place to work and study was getting the boot without a second thought. The sad part was, the owner (my boss) was an American like myself. So much for Americans sticking together. But I digress, let’s get to the lesson I learned.

The lesson

When the accident happened, I blacked out. During that precious minute, I could have been run over by a car that wasn’t paying attention. I could have broken bones, been paralysed, brain damaged, or even dead.

But, none of that happened. Even though it took me a year and a half, to quote, “fully recover.” I’ve never felt like the same person in that my personality changed. It was almost instantly noticeable, probably due to the hard-hit I sustained. Even my mom remarked on it as soon as I returned to the US a few days after the accident.

Despite all this, I feel like the accident made me a more patient, calm, considerate, and generous person. I was determined to make sure I didn’t waste my second chance at life. From that point in time moving forward, I was going to focus only on how to improve myself so I could do the thing I’ve wanted to do my whole life: help others find their passions.

Also Read: Podcast: Doing these 4 things will immediately make you happy

I feel like Panama completely challenged my understanding of life and the world, and made me become more focused and passionate about the things I love. My accident taught me that life is short, and even if we are enjoying our life, we could die at any time, so we must make sure we not only enjoy life, but plan for our future, and don’t forget to tell others we love them. I now tell friends I love them (if I do), and I am more much affectionate with people because we need love and support in our lives to be happy. I know it’s hard for some people to be so direct with their feelings, but I hope one day you’ll come to realise that love and emotions are a wonderful thing to be shared with others, not something to be hidden and kept to yourself.

Life is long and hard, and mostly unfair, but that doesn’t mean we can’t strive to be better humans and treat others with kindness because we don’t know what they are going through. Think about your parents or your grandparents. Call them, maybe they feel lonely because you’re not living with them anymore. Call that friend, don’t text, CALL! Call them, hear their voices, do a video call, meet them face to face if you can.

I know during this time with the virus, it’s hard to meet people, but do your best to rekindle those connections and allow people to feel your love, because what you’ll get back is their love, too. What I know of humanity is that we all crave to be loved and accepted. And remember, entrepreneurship is a marathon, not a sprint.

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This article was first published on We Live To Build.

Image Credit: Michal Czyz on Unsplash

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Global multi-stage VC firm Lightspeed Venture Partners has announced the launch of the third edition of Extreme Entrepreneurs (EE), a learning programme designed to train budding high potential founders hungry to build market-leading businesses.

Launched in 2018 with a mission to nurture industry-disrupting founders and companies, EE takes neither equity nor does it collect fees for the programme.

The sole selection criteria for the participants is whether the founders will benefit from, and make the most of, the programme.

Also Read: Lightspeed Venture Partners raises maiden India fund of US$135M

EE3.o will see two cohorts participate annually in the six-week-long programme. Expanding on previous editions, the new edition will involve startups across Southeast Asia and India and it will be fully remote.

As part of the programme, the founders can look forward to masterclasses with mentors for insights into building successful businesses. Past mentors include Max Levchin (co-founder of PayPal and Affirm), Alex Chung (co-founder of Giphy) and John Thompson (Chairman of Microsoft).

Additionally, they can anticipate honest but constructive business feedback from Lightspeed investors and clinics to hone their skills across areas such as marketing and product design.

Also Read: Lightspeed opens Singapore office to ramp up investments in SEA

“EE takes your blinkers off; it inspires founders to dream bigger and illuminates new ways of thinking, in addition to opening minds to new possibilities,” said Vaibhav Agrawal, Partner at Lightspeed.

“When founders ‘feel’ and ‘see’ differently, it automatically changes the trajectory of their businesses,  just like how Raghu, Jaya Kishore and Rashid – founders of Yellow Messenger who participated in EE2018 – have executed their business’s growth after joining the programme,” he added.

EE.3.0 will run live every Tuesday and allow founders to learn alongside running their startups. Applications for the programme, which will start in  January 2021, are now open. 

Entries for EE 3.0 are now live at https://ee.lsvp.com. 

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Photo by Proxyclick Visitor Management System on Unsplash

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Ant Group’s much-awaited stock market debut received a huge blow after the Chinese market regulators surprisingly suspended it at the last minute.

The group, which spun out of Alibaba in 2010, was anticipating a record US$34.5 billion debut on the Shanghai Stock Exchange (SSE) and the Stock Exchange of Hong Kong (SEHK).

The suspension came as a shock for many as Ant has long been seen as a champion of China’s economy.

Also Read: What Ant Group’s upcoming IPO means for the Southeast Asian startup ecosystem

As per several reports, the plug was pulled on the IPO due to regulatory changes in the fintech space and “possible failure to meet disclosure requirements” by Ant. Its founder Jack Ma’s public criticism last month of financial regulations as stifling innovation could also have acted as a trigger.

e27 spoke to several industry experts in Southeast Asia to know how they look at the overall episode. They all agree that this will send a wrong signal to the investor world out there.

“The suspension demonstrates the depth of complexity of investing in China,” according to Chia Jeng Yang, Principal at Singapore-based VC firm Saison Capital.

“While investors around the world have a lot to learn about the rich Chinese fintech (or techfin) ecosystem, understanding the regulatory and political undercurrents is still an important dimension to being part of the country’s fintech story. As a general lesson, being able to navigate through the developing regulatory frameworks remains an important cornerstone, especially for fintechs in emerging markets,” he says.

For Jasmine Ng, former CEO of Razer Fintech, the decision is a definite blow to investor confidence in Chinese-listed stocks.

“That a regulatory body can allow it to go this far before it pulls the plugs is a huge concern and plays a big impact on investor confidence. I believe moving forward, there needs to be greater transparency to processes before investor confidence can be fully reinstated,” she comments.

The move is unlikely to make an impact on the fintech sector in China, opines Dave Ng, General Partner of Singapore-based new VC firm Altara Ventures. “But what is more important is the potential perception on the Chinese capital market and exchanges instead.”

Also Read: Should you start a business with exit in mind?

When any company plans to go public, there is a lot of preparation and co-ordination required among the different stakeholders, including the management, regulators, relevant authorities, securities exchange and investors. It is a comprehensive process. Hence, when an IPO gets delayed, it will to a certain extent reflect upon the various parties involved.

“In a landmark IPO such as Ant Financials, you can imagine that a lot of work has been done and continues to happen in the backdrop. The temporary setback is such that market participants, especially the international community, will ask if China’s system is ready and comparable to the NYSE or NASDAQ, which I think it is,” he observes. “Even though the Ant IPO is delayed, it could likely take place by Q1 next year.”

“In the meantime, as the various parties work out the kink, it will actually make the eventual process and outcome stronger. That will be the bright spot to look forward to when the IPO does happen,” he concludes.

Ma wanted Ant to be seen as a technology company that closely works with financial institutions and he envisioned less regulations and more freedom under the Chinese laws for the group.

However, as the company grew exponentially, Chinese financial regulators began to feel that its business model of connecting lenders and borrowers should be closely monitored.

Also Read: Koh Boon Hwee-backed US$100M+ VC fund Altara Ventures to invest in 20-25 firms in SEA

“The whole perception of China’s fintech market won’t change because it has never been a free market to begin with,” says Sergei Filippov, Managing Partner, Morphosis Capital Partners. “Fintech is closely regulated and monitored in every leading country, including China. In all these countries, financial services companies want to be seen as technology firms to enjoy less regulatory oversight.”

He further adds that the IPO halting is a warning for high-level entrepreneurs that every private company should follow the rules of the game and it’s not businesses that set rules in China.

“Business and politics have always been deeply intertwined in China. Additionally, President Xi Jinping is extremely concerned about the safety and stability of China’s financial system, and loosening the control over the Ant lending platform would be seen as a direct risk,” Filippov concludes.

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Image Credit: Alipay

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Ant’s IPO fiasco set to clip its wings and dent its value; The last-minute ambush by China’s regulators was seen by analysts and investors as an attempt to cut Ant founder Jack Ma and his financial services empire down to size but they expected it to eventually list as planned; Ma’s public criticism last month of financial regulations as stifling innovation had put him on a collision course with regulators. Reuters

Despite pandemic, Indonesian startups raised US$1.9B over 52 rounds by Q3 2020; As per a Amvesindo report, fintech, edutech, SaaS dominated the funding rounds; It predicts social commerce, foodtech, and any verticals that are related to digitalisation of supply chain and SMEs will continue to experience growth. e27

How two-year-old GudangAda managed to keep VCs interest ‘intact’ despite COVID-19; The firm raised two big funding rounds in quick succession in Feb and March 2020; Since its launch in early 2019, GudangAda’s transaction volume had more than doubled every single month, until hitting US$1B GMV in the first 12 months. e27

Is SEA the world’s next HR-tech hub?; Having a reliable HR ‘tech stack’ doesn’t just improve workers’ efficiency, collaboration and engagement – it can also help transform workplace culture in the process; HR tech can also level the playing field for employees who are historically underrepresented, from the candidate selection to the promotion process. HRD

Accelerating Asia plans to launch a new ‘up to US$50M fund’ in Q1 2021; It already runs an MAS-licensed fund, from which it plans to invest up to US$7.3M in the first four to five cohorts; The accelerator-cum-VC fund is also expanding into India, Bangladesh, Sri Lanka. e27

Microsoft (MS) makes strategic investment in Indonesia’s Bukalapak; Bukalapak is raising US$100M, in which Microsoft will co-invest, along with existing backers GIC and Emtek Group, for a valuation between US$2.5B and US$3B; The e-commerce firm will adopt Microsoft Azure as its preferred cloud platform. e27

Indonesian B2B logistics-tech startup Logisly nets US$6M Series A led by Monk’s Hill; It connects shippers with trucking companies from a network of verified corporate carriers; Since 2019, Logisly has partnered with more than 1K businesses, including 300+ corporate shippers and has 40K+ trucks in its network. e27

Beamstart launching US$10M early-stage fund in SEA; The fund will invest in tech startups mainly at the pre-seed/accelerator to late-seed stages and will cut a cheque of up to US$100K per company; According to founder, with the rise of China, COVID-19’s after-effects, the emergence of 5G, rising ‘individualism’ among Gen-Z, and the exponential growth of mobile-internet usage offer huge opportunity in SEA. e27

Pre-seed VC firm Hustle Fund secures US$30.4M commitments for Fund II; The US$50M fund, based in Singapore and the US, has secured commitments from 78 investors, including Chinese online giant Shanda; Hustle Fund invests US$25K in pre-seed startups; Fund I has invested in 80 startups. DealStreetAsia

Singapore crypto wallet operator Math Global secures US$7.8M Series A+; Investors include Alameda Research (lead) and Multicoin Capital; MathWallet enables storage and cross-chain exchanges of over 50 major public blockchain tokens such as BTC, ETH, Polkadot; In the past, it has raised a significant amount of investments from from Fenbushi Capital, Fundamental Labs, etc. DealStreetAsia

Monde Nissin CEO, Temasek invest Bits x Bites China foodtech fund worth US$70M; The fund has hit the first close at US$30M; Bits x Bites aims to back early-stage Chinese and international entrepreneurs that are focused on the Chinese market and coming up with solutions for the Chinese food supply chain. GreenQueen

B2B marketplaces will be the next billion-dollar e-commerce startups; For many entrepreneurs running B2B marketplaces, the pandemic created new demand for their platforms; They are discovering creative new ways to monetize their networks, ensuring their approach is tailored to the complex and nuanced world of B2B e-commerce. TechCrunch

Indonesian omni-channel sales SaaS platform iSeller secures Series A from Mandiri, Openspace; The company claims its revenue and active merchant pool doubled, driven by an increased volume of online transactions during COVID-19; It currently processes 5M+ transactions a month. e27

iMedia Group acquires 90% of Malay language portal BeautifulNara; With BeautifulNara joining OhMedia, Ittify and Goody25 in the group, the combined network will have a reach of over 13M Malaysians; BeautifulNara will focus on the overall expansion of iMedia’s websites, covering trending daily news and Kimchi Daily, featuring all things KPOP. e27

Business management platform for SMEs Osome raises US$3M from XA Network, AltaIR Capital; The Singapore startup uses AI and ML techniques combined with the experience of human experts to solve problems in the fragmented accounting and corporate services industry; Osome’s product is used by 4100+ firms across UK, Singapore, HK. e27

SociaBuzz raises funding from UMG IdeaLab to connect businesses in Indonesia with creators, talents; It runs five platforms — Gigs, Shoutout, Tribe, Shop and Affiliate; The platforms together have around 72K influencers/creators/talents and 1,350 active users. e27

GGV Capital investor Hans Tung shares his definition of a fundable startup; People with bad personality are still very young but they still get the right thing; But it’s still hard because bad personalities in entrepreneurship are not easy to get along with, they’re tough to handle and they obviously have their own faults. e27

Malaysian edutech AOne secures US$500K led by Wavemaker; AOne brings together a B2C marketplace and B2B backend management software for all kinds of local enrichment lessons across SEA; It currently serves 800+ enrichment centres, managing 50K+ lessons, 100K+ learners and educators across multiple cities. e27

How to tackle fraud and counter-party risk in an increasingly compromised world of finance; AI is showing great promise in identity verification; There are business opportunities in using advanced technology, complying with KYC and AML regulations is proven to give companies a competitive advantage. e27

‘What I learned from funding my second startup… with a credit card’; You need to consider interest rates from the practical, logistical side; A small business administration loan, for example, usually is only 5.5- 8%; So using a credit card is an expensive route that’s going to take you much longer to pay back; The longer you’ve got money tied up in debt, the longer it will be before you can channel money into real growth and innovation. The Next Web

Here’s how AI is helping cities improve traffic management; Today’s cars are generally equipped with features such as park assist, cruise control, adaptive front lights and lane keeping assist; These devices support drivers in terms of providing aid, warning and assistance, rather than replacing them in driving activities. The Next Web

Fintech sector to create more jobs in Singapore; The emergence of digital banks in Singapore will open doors for several opportunities for jobs and collaborations; But finance professionals must reskill or upskill their digital capabilities in areas such as data analytics; The demand for jobs in areas like UX/UI design and cloud applications may also increase. hrmasia

Visa partners with Nexttech to promote digital payments adoption in Vietnam; This is aimed at expanding the network of sellers and buyers on social commerce platforms; Along with the rise of e-commerce, consumers have also been adopting digital payment methods more; The value of mobile and online transactions in Vietnam has increased by 238%. TechInAsia

Vietnam shows significant progress among APAC digital societies, says GSMA Intelligence report; Its digital society index went from 37 in 2016 to 49 in 2020, a 12-point difference; The result placed Vietnam in 8th spot among the 11 surveyed countries, putting it in the group of “transitioning” nations, besides Malaysia, Thailand, Indonesia and India. VN Express

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It is hard to believe that four years had passed since the last US presidential elections.

While politics have never been our focus at e27, we always believe that the tech industry does not stand in a silo. Thus any major global events will affect the industry –no matter how far-fetched it seems.

When President Donald Trump won the election in 2016, his America-first policies have made Silicon Valley anxious. As elaborated in this post by Daniel Fries, the immigration crackdown that the Trump administrative championed had potentially made it harder for global tech talents to obtain travel and work visa to the US. Even the Indian tech leaders had to meet Trump officials to discuss the changes in the H1-B visa requirements.

The move turned out to be just the beginning as we later witnessed how the US government aims to tackle down major Chinese tech giants with their data security issue.

Four years passed and despite the initial shock, the global tech startup ecosystem continues to thrive. Startup hubs around the world continues to thrive, with a great number of them being in the Asia Pacific (APAC) region, providing alternatives for both talents and investors to focus their attention in.

But for the Southeast Asian tech startup ecosystem, there are other opportunities to shine in: The US-China trade war.

Also Read: Koh Boon Hwee-backed US$100M+ VC fund Altara Ventures to invest in 20-25 firms in SEA

The eagle, the dragon, and the tiger

Within the past five years, the Southeast Asian (SEA) tech startup ecosystem continues to become a favourite of global investors, from both the US and the APAC region. Even leading names in the Silicon Valley ecosystem such as Tim Draper and Peter Thiel are making great moves in SEA.

But the excitement peaks with the rise of the US-China trade war. In Jumpstart, Sharon Lewis wrote how ASEAN countries are “reaping the benefits” of the rising tariffs that the US has been imposing on China.

“For instance, Vietnam has benefited considerably, with 46 per cent of US imports worth US$31 billion shifting out of China and into Vietnam this year, subsequently adding an additional US$14 billion in exports to the US … Big tech companies are also looking to move their China bases, looking to Indonesia, Vietnam, and Thailand as alternatives. Naturally, the Trump administration is fully supportive of this,” she elaborates.

This update opens up opportunities for startups particularly those in the logistics and supply chain sector.

In a recent interview with e27, Marc Dragon, Managing Director of Reefknot Investments, reveals how the US-China trade war has led industry players to consider how their businesses are being run. He divides it into the “three buckets” of impact: Digitalisation and visibility of supply chain, sourcing strategy (including the supply chain sourcing design) as well as cash flow management, resilience, and financial stability of the supply chain.

When there is an opportunity, there are investments flooding in. And the numbers are not playing around. For example, even during the pandemic, Indonesian startups raised US$1.9 billion in funding by Q3 2020, according to the Indonesian venture capital association Amvesindo. A similar situation happened throughout the region; the pandemic might cause a glitch in the matrix, but it is only temporary.

Also Read: A closer look at Zendesk: fostering better customer relationships for startups everywhere

So how does this translate to the US election result?

Whether this situation will continue or not depends on who the next president his and his approach in handling the matter. Interestingly, even if candidate Joe Biden wins the election and becomes president of the US, there is no guarantee of a significant change, given that his take on the matter remains “uncertain”, according to experts.

Biden has been quoted stating that he will “get tough on China” as per this CNBC report while criticising the measures that Trump administration has taken.

Regardless of election results, in the past years, the SEA startup ecosystem has proven its ability to grow from strength to strength. From financial crises to a global outbreak, even when the situation gets tough, our entrepreneurs have shown its capacity to rise above it.

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Image Credit: Luke Stackpoole on Unsplash

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