Taiwan-based VC-fund-cum-accelerator AppWorks announced today that it has made the final close of its third fund oversubscribed at US$150 million.

The new fund brings AppWorks’s total assets under management (AUM) to US$212 million.

Investors of Fund III include Taiwan Mobile, Axiom Asia Private Capital, Fubon Life, TransGlobe Life, Hongtai Group, Wistron, Cathay Life, Phison Electronics, and Taiwan’s National Development Fund.

It will continue to focus on investing in companies operating in Artificial Intelligence and blockchain in the Greater Southeast Asia region (Southeast Asia+Taiwan).

As per a press statement, the new fund is in the process of constructing a portfolio of roughly 40 deals, including 20 investments starting at US$2 million in Series A to Series C companies and 20 in the seed stage.

Additionally, the VC firm will recruit new investment associates and analysts to scale up the investment activity of Fund III. It aims to create an ecosystem encompassing 1,000 active startups with a collective value exceeding US$100 billion and generating 50,000 employment opportunities in the next 10 years.

“From a humble beginning, AppWorks is now one of the region’s leading investors, working together with other prominent venture capital firms to cultivate the startup ecosystem in fast-emerging Southeast Asia. On the AI and blockchain front, we have become a major player on the global stage,” said Jamie Lin, chairman and partner at AppWorks.

Also read: AppWorks raises US$114M for fund III to back Series A and B startups in SEA, Taiwan

Currently, AppWorks Fund III has backed more than 20 startups, including its accelerator alumni Pickone, WeMo Scooter, Omnichat, XREX, Blocto. It has also invested in companies led by a handful of AppWorks mentors, including Carousell, Dapper Labs/Flow, Tiki, Dcard, Yummy Corp, and Animoca Brands. Among them, Dapper Labs and Animoca Brands have both crossed the unicorn threshold.

Since its founding in 2009, AppWorks’s ecosystem now encompasses 414 active startups and 1,396 founders, who have collectively raised US$4.3 billion and it boasts an aggregate valuation of US$17.4 billion.

Capitalising on Taiwan market’s distinct advantages in talent and manufacturing capabilities, AppWorks offers founders a direct pipeline to talent via the AppWorks School as well as access to Taiwan’s world-leading hardware manufacturing resources to hone the competitive edge in critical areas in the future.

The firm also deploys a local seed fund strategy in the Southeast Asia market to secure proprietary deal flow. This broadens AppWorks’ exposures in the region to gain meaningful insights and access to promising deals without concerns about regional travel restrictions during the pandemic.

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Image credit: AppWorks

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How millennials and the pandemic are driving the growth of cloud kitchens in Indonesia
The country started seeing some interest in cloud kitchens in late 2018, and it became a full-blown topic in 2019, and now the pandemic is accelerating it; Now there are quite a few players, such as GrabKitchen, GoFood, Hangry, Yummy Corp., and Everplate, among others.

AppWorks closes US$150M fund III
Investors include Taiwan Mobile, Axiom Asia Private Capital, Fubon Life, TransGlobe Life, Hongtai Wistron, and Cathay Life; The fund is in the process of constructing a portfolio of roughly 40 deals, including 20 investments starting at US$2M in Series A-C companies and 20 seed-stage investments.

GIC invested an additional US$94M into Bukalapak before its IPO
The transaction, which was done through GIC’s subsidiary Archipelago Investment, increased GIC’s stake in Bukalapak to 11% from 9.45% earlier; In April, GIC, Microsoft and Emtek co-led the US$234M fundraise of Bukalapak.

Pintu adds US$35M to its Series A kitty, aims to build Indonesia’s ‘largest crypto exchange’
Investors include Lightspeed (lead), Alameda Ventures, Blockchain.com Ventures, and Castle Island Ventures; The platform currently supports 16 different dynamic cryptocurrencies for trading and intends to add more coins such as NFT tokens.

Tiki raises US$20M Series E from Taiwan Mobile
The transaction values the e-commerce firm at US$740M; As per a DealStreetAsia report, Tiki has secured US$94M in Series E this month alone; The firm is also mulling an overseas listing to secure additional capital.

Ex-Zalora CEO’s delivery experience platform for e-commerce businesses Parcel Perform lands US$20M
Investors are Cambridge Capital (lead), SoftBank Ventures Asia, Wavemaker and Investible; Parcel Perform enables modern e-commerce enterprises to optimise logistics operations with data integrations, parcel tracking, delivery notifications and logistics performance reports in real-time.

Synqa acquires SaaS platform for event creators Eventpop in an “8-digit USD” deal
According to a well-placed source, early-stage investors got more than 5x returns, and the late-stage investors also got some returns; EventPop is backed by the likes of KK Fund and InVent.

Fuse closes Series B in a GGV Capital-led round to grow its insurtech platform beyond Indonesia
Investors include GGV Capital (lead), EV Growth, Golden Gate Ventures, and Emtek; According to a DealStreetAsia report of June, Fuse raised US$30M in this round; Fuse has partnerships with more than 30 insurance companies, 300 insurance products, and 50K+ agent partners on its platform.

27 Singapore tech startups that have made us proud this year
These achievements and milestones range from securing unicorn status, confirming plans to go public, and raising more than US$15 million in a single funding round.

Singapore-based Mighty Jaxx raises US$10M
Investors include Aceville of Tencent Cloud and KB Investment; Mighty Jaxx designs and manufacture collectibles and lifestyle products in partnership with global brands such as Hasbro, Cartoon Network, and Warner Brothers;  It claims to have shipped millions of products to collectors in 60+ countries.

Fintech startup AwanTunai secures US$11.2M
Investors include Insignia, BRI Ventures, and OCBC NISP Ventura; AwanTunai is a POS financing solution aimed at digitising Indonesia’s vast economy; It offers services including affordable inventory purchase financing, integrated online ordering, and inventory management to wholesalers and micro-merchants.

Vietnamese paediatric chain Nhi Dong 315 completes Series A
Investors are BDA Capital, Thien Viet Securities, and Qatalyst Ventures; Nhi Dong 315 operates a hybrid model integrating its app into the brick-and-mortar system; The firm currently operates 14 paediatric clinics in HCMC.

Indonesian payments solution Durianpay raises US$2M
Investors include Sequoia India’s Surge (lead), AC Ventures, Kenangan investment fund and angels; Durianpay is an end-to-end payments provider that enables businesses to grow and scale through a one-stop solution for frictionless checkout and easy-to-integrate modern APIs and dashboard.

500 Startups rebrands its SEA-focused 500 Durians fund
Called ‘500 Southeast Asia’, the VC firm will continue to focus on seed-stage investing, offering up to US$500K to founders; It is also now open to provide follow-up funding up to US$5M and to potential investments via special purpose vehicles.

Singapore-based VC firm Antler launches in South Korea
The company is looking to invest in 100 startups over four years from its new office in Seoul; The operations will be led by new partner Jiho Kang, who co-founded service marketplace Soomgo; Antler will begin investing in local startups early next year.

How Singapore is leading banking-as-a-service adoption globally
Singapore fintech scene is booming because the nation is embracing technology and trying to create digital solutions for its citizens; One such area is in open banking, whereby banks share customer data with third parties to allow customers or other financial institutions to access this information for various uses.

A close look at Singapore’s thriving startup ecosystem
As of 2019, Singapore had over US$19B in PE and VC AUM, more than twice that of neighbouring Indonesia, Philippines, Vietnam, Malaysia, and Thailand combined; In that same year, the country was home to an estimated 3,600 tech startups; Start-up Genome priced Singapore’s ecosystem at over US$25B, five times the global median.

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Image Credit: Bukalapak

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In early 2020, the COVID-19 pandemic hit our shores and disrupted life as we knew it. With a series of lockdowns and worldwide travel restrictions, it seemed like the global workforce was forced to participate in a mass “experiment” of sorts. Existing operational processes were put to the test, and companies had to grapple with new measures implemented on the fly. 

Before the pandemic, the “work smarter not harder” mantra led by the world’s biggest tech companies saw free lunches, open-concept offices and additional days of childcare leave as the gold standard for an innovative workplace. With most of these office perks removed, work went back to the core: people.

Studies have shown that happier employees work better to achieve organisational goals. Engaged and happy employees who feel that they belong excel in their work and positively impact the company’s performance.

I learnt this first-hand as my company, AlphaLab Capital, evolved. With no outside investment, my co-founder Michal Krasnodebski and I had the freedom to build a company and culture based on the core values we believe in – a workplace where people can work, and have fun doing so.

We made it a point to cultivate a workplace where each employee can contribute, grow and outperform and create an environment where we would want to work.

When news of the pandemic broke and working from home became the default arrangement for non-essential businesses, we took steps to transit amid the uncertainties and rapidly evolving situation. However, the processes that we set in place prior to the pandemic helped us greatly in maintaining productivity, reducing disruption and keeping our company going.  

There is no one-size-fits-all approach to developing a people-first culture, so having tried many ways to figure out the best way to work together, here’s what we’ve learned:

Building a conducive environment

It is no secret that the environment – both physical and mental – contributes significantly to employee productivity. On the physical front, we have witnessed in this century a phenomenal shift from the use of individualised cubicle workstations to the use of “open concept” workspaces.

Whether the purpose for this shift is an attempt to save costs or boost collaboration and productivity, does an open-plan office really benefit everyone? And now, with more companies implementing hybrid work arrangements due to the pandemic, how can offices be reimagined to provide a safe, conducive yet collaborative environment for all?

In a tech environment, especially in software development, an open-plan concept may counterintuitively do more harm than good. While providing employees easier access to one another may make it seem easier for collaboration, individual contributors may find it more distracting than helpful.

Also Read: How Appinventiv Grew to 400 in Just 4 Years

AlphaLab’s office, designed especially for software engineers, accommodates the best of both worlds – a meeting and socialisation zone invites information collaboration, while dedicated workstation rooms allow employees to work away from distractions. 

During Michal’s prior stint at Shutterstock, his internal study found that 61 per cent of over 10,000 meetings were made up of pairs and small groups. Drawing inspiration from that experience, we analysed two years’ worth of meetings to help the company design the new office and meeting rooms.

We have done away with large, underused boardrooms; instead, small meeting rooms allow for quicker, more focused discussion, and the larger spaces are dedicated to our software engineers to spread out and work in peace.

Empowering employees with open communication and ownership

As remote and hybrid work arrangements become a norm, it is more important than ever to have open workplace communication and keep genuine feedback flowing. By creating a supportive environment to encourage employees to speak up, you can help your team members remain engaged and valued.

According to Google’s Project Aristotle research, which studied 180 teams across the company, psychological safety is the most important factor in achieving successful teamwork. Harvard Business School professor Amy Edmondson defines psychological safety as the “belief that one will not be punished or humiliated for speaking up with ideas, questions, concerns, or mistakes.” 

At AlphaLab, we espouse this through monthly agile retrospectives, where everyone on the team is encouraged to share feedback and propose ideas or suggestions, regardless of roles or hierarchy.

These exercises help uncover valuable insights about management, work processes and even solutions, which lets us address issues effectively. These meetings have seen cross-pollination of ideas – as more ideas mean better ideas – and even transformed our planning process.

Open communication goes beyond our monthly “all hands” meetings as we constantly seek feedback from all employees on all matters. Our employees are empowered to state hard truths and process unvarnished feedback with an improvement mindset away from blame; this is crucial in developing a learning environment that drives progress and constant improvements.

We also strongly value self-direction and encourage employees to take ownership of their ideas and breakthroughs. Instead of a top-down management structure, our employees are wholly responsible for delivering their own results. With decentralised planning meetings, our staff own their responsibilities and backlogs, and how and when they do work is entirely up to them.

We also entrust our staff with unlimited vacation days – although this is currently under utilised due to pandemic-related travel restrictions. This helps promote a culture of accountability, and employees feel empowered and trusted at work. 

Also Read: Why startups need to embrace experimentation culture to thrive in the pandemic

Beyond operational processes, we also encourage self-direction and ownership in the company. We take pride in giving all employees broad exposure to all parts of the business – infrastructure, core trading technology and even in strategy development. By taking on fluid roles and responsibilities and working directly with a diverse team, everyone, even the interns, is empowered to discover their interests and unlock potential areas of growth.

We have two colleagues who were initially hired as engineers but have since transitioned to becoming quants because they were allowed to work on different aspects of the business and developed interest and aptitude for quantitative trading.

Investing in future generations with a people first culture

COVID-19 or not, the industry is still charging forward. A people-first approach doesn’t just stand us in good stead for the present; it also lays the groundwork for the future. We saw the importance of investing in the future generation of engineers to ensure growth while the economy recovers.

In a time when other organisations began cancelling their internship programmes, AlphaLab took the opposite approach and hired an outsized team of interns. We currently have eight interns (including a high-school graduate) who are well supported and contribute greatly to our team. 

More than just boosting our recruitment pipeline, our internship programme is driven by the belief that education and opportunities have the power to change lives. Our interns benefit from hands-on practical experience that will give them a leg-up in the career paths they wish to undertake, whether continuing with us or not.

In the bigger picture, the training and experience for engineers-to-be– students pursuing their passions – is our way of investing in Singapore’s future and contributing to a growing industry: a rising tide lifts all boats.

In a fast-paced industry where technological advancements can serve as either a creative or destructive force for companies, upskilling is important. Employees are encouraged to pursue upskilling opportunities, and we support them in their development. Since they control their schedule, they can take time off during the workday to attend class and fit their education around deliverables.

We are proud to note that several of our employees have since embarked on such academic endeavours during their stint with us – from earning a Machine Learning degree to embarking on a Master’s programme.

These various methods of fostering ownership and employee engagement in the workplace have proven beneficial amid the new norm. Productivity and the sharing of knowledge have remained at an all-time high, and this shows that physical proximity isn’t everything – employee empowerment is.

We strive to provide every employee with the right environment to feed their instinct for innovation and have fun at work. While we’re proud to have recently earned the Great Place to WorkCertification, our people-first culture reflects that when staff thrive, so does the company that works hard to nurture them.

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This article runs in collaboration with Makan For Hope, a non-profit initiative by Asia Startup Network. The Makan For Hope Festival brings together notable mentors and aspiring entrepreneurs in 30 meaningful virtual conversations over food to raise S$125,000 for Fei-Yue to support the children and seniors from low-income families.

A few traits come to mind whenever you consider the success of the Silicon Valley ecosystem: be it the steady flow of entrepreneurs, a pipeline of brilliant tech minds or groundbreaking research that flows out from the neighbouring top universities, or easy access to a saturated pool of wealthy investors and funds.

During one of 30 Makan For Hope Festival sessions, hosted by Kuo-Yi Lim, Co-founder and Managing Partner at Monk’s Hill Ventures, a group of us gathered to discuss whether Singapore was set on its path to becoming the Silicon Valley (SV) of Asia. The question at hand has also been discussed by those beyond our shores, such as a 2020 article in Techcrunch that stated that Singapore is poised to become the next Silicon Valley.

Indeed, Singapore shares quite a few similarities with SV, while boasting our own unique advantages in the region, such as:

• Over 4,000 tech-enabled startups, a handful of unicorns and aspiring unicorns, and, over 100 accelerators and incubators, as shared in a PWC report
• High quality education institutes churning out top-notch talents
• A growing number of VC funds within the startup ecosystem – with 45 new funds authorized in 2019 alone!
• A myriad of big tech companies packed together, which provides the startup ecosystem with mentorship and early funding opportunities.
• A long-standing track record as a leader in venture capital investments, drawing in four billion dollars and accounting for well over half the total aggregate value of deals in the Asean region, in 2020
• And, strong governmental support with close to a third of a billion dollars set aside to grow the ecosystem

At present, Singapore is clearly the frontrunner within Southeast Asia. Still, what would it take for us to secure its position as Asia’s Silicon Valley?

On August 9, we turned yet another year older as a nation. I am reminded of Prime Minister Lee’s words years back, at the National Day Rally 2016:

“What I would like to have is that we are blessed with divine discontent. Always not being quite satisfied with what we have, always driven to do better. At the same time, we have the wisdom to count our blessings, so that we know how precious Singapore is, and we know how to enjoy it and to protect it.”

Let us take a moment to look back at how much our startup ecosystem has developed, and plot out what our path ahead could look like.

Also Read: Meet the new batch of 8 Vietnamese startups joining VSV Capital’s accelerator programme

While the government has done a remarkable job, it may need to place more ambitious bets to bring us to the next level

Our host for this session, Kuo-Yi, shared that the government had indeed played an outsized role for Singaporean startup ecosystem to arrive at where it is today. He credited the government’s patience and willingness to focus on the long term goal— something that may be hard for many other countries which require short-term tangible results to justify their investment into the startup ecosystem.

The government has also continued to support startups, through providing grants to entrepreneurs, such as the S$50,000 SG Founder Grant. However, given the high hiring and living costs in Singapore, Nigel Lim, CEO of Payboy, quipped that perhaps the government could consider writing larger cheques to enable entrepreneurs to cope better with the startup costs. Elise Tan, founder of Asia Startup Network, added that along with the larger grant amount, there could also be more dedicated mentorship support, as well as measurable milestones to keep these expenses in check.

While we have an undeniably well-educated workforce, mindsets and cultures need to shift to encourage Singaporeans to take more risks

Yiping Goh, Partner at Quest Ventures, reminded us that Singapore already had a high level of academic excellence – for example, other countries are often intimidated by Singapore’s Mathematical rankings, O and A level scores, or, when Singaporean students take classes in Western universities! Yet, this constant strive for academic excellence might just be Singaporean’s own stumbling block – do we dare to take risks, make mistakes and startup, or will we be held back by our own fear of failure?

Kuo-Yi also mentioned that Singaporeans tended to be overly fixated on linear career pathways, beginning from the time we start schooling. In fact, as a product of the system, he had studied to become a doctor initially, just like most of his friends – a decision that was made when he was only 12 years old! Yet, he argued, that the world is never linear. We live in societies that are in constant flux and most people in other countries actually have non-linear career paths.

To that end, Sanjay Gujral, Chairman at the Singapore Venture Capital & Private Equity Association (SVCA), encouraged Singaporeans to try and study or work overseas for at least a couple of years, as the exposure will add a differentiated world view as compared with the relative certainty and efficiency that Singapore provides.

While our educational institutions are pedagogically robust, we need to empower people to broaden their horizons and establish crucial networks beyond the island

Yiping added that, after all, going to school was not just about getting educated. It was also a lot about being in a tightly knitted community and network. In institutions such as Stanford, Harvard, INSEAD, Tsinghua, one gets more than just classes, but also an affiliation to its strong alumni network that often accords trust to its members.

These institutions also churn out many incredibly successful alumni that tended to give back to their schools too. She shared about the US-effect or China-effect, where a few extremely high-achieving entrepreneurs would not just do well themselves, but be effective in inspiring those within their own alma mater and country. To that end, she suggested the need to push Singaporeans to go overseas to broaden their networks, and for local universities to build a culture of a tight knitted alumni community that seeks to help each other and to give back.

Moving ahead, programmes such as National University of Singapore Overseas College Program or Singapore Management University’s Global Innovation Immersion would be crucial in enabling Singaporean students to broaden their horizons and networks in meaningful ways. At the same time, we need to gear these students sent abroad with the necessary networking skills to make those few months count.

Also Read: How these India-based startups are changing the way we live, play, and learn

All in all, how close is our startup ecosystem to becoming Asia’s Silicon Valley?

At present, according to The Global Startup Ecosystem Report 2020 by Startup Genome, Singapore was ranked 17th place, trailing behind Beijing (4th), Shanghai (8th), and Tokyo (15th). Our ecosystem is valued at US$21 billion – in contrast, Beijing’s ecosystem is valued at ~16.4x greater, at US$345 billion.

Without a doubt, Singapore loses out by the sheer size of our population and corresponding talent pool. Ye, our strong and open business environment, coupled with our commitment to fair and safe innovation … might just be our winning edge.

After all, one would not need to look too far into the past to see the opposite scenario play out, such as when Jack Ma’s declaration that “we cannot regulate the future with yesterday’s means” crossed the Community part and led to governmental regulations being thrown his way.

In this case, could Singapore be seen as the more predictable, safer and thus more reliable alternative moving ahead? An irony that the very traits that stifle personal risk-taking that we need to address as a culture, is the very reason why we might just retain our cutting-edge position in the world.

While much remains to be done for Singapore, the future sure looks promising!

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Editor’s note: e27 aims to foster thought leadership by publishing views from the community. Share your opinion by submitting an article, video, podcast or infographic

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Synqa Group (formerly Omise Holdings), a blockchain-powered fintech company based in Thailand, announced today it has agreed to acquire a majority stake in Eventpop, an online platform for event creators in the country.

While neither of the companies officially disclosed the transaction details, a well-placed source told e27 that the amount is 8-digit USD.

“Synqa does not disclose the acquisition price, but the price is eight digit USD,” the person said on the condition of anonymity. “Early-stage investors got more than 5x returns. The late-stage investors also got some returns.”

We are contacting Synqa as well as Eventpop for more details, and will update this article as and when we hear from them.

As per a statement, Synqa believes Eventpop can help further its group vision of providing access to financial products for everyone across the globe, allowing it to reach users in new creative ways. EventPop is one of the top customers of Synqa payment gateway (Omise).

The two firms had earlier collaborated to develop an omnichannel e-commerce platform that focuses on digitising operational processes and providing a solution where business users can offer products to customers seamlessly. The product is slated to launch by the end of the year.

“Our relationship with Eventpop goes way back when we first started our payment businesses. In the past few years, we have been partnering with Eventpop, working on projects together. By collaborating on previous projects, we could have a deeper understanding of each other’s strengths. By combining forces, I believe we can grow to become a stronger company,” said Jun Hasegawa, founder and CEO of Synqa.

Started in 2015, Eventpop has developed an end-to-end digital ticketing and event management platform. It enables organisations to provide a range of services, including customising web pages for events, digital and physical ticketing, and event check-in tools. Organisers can also use its analytics tools to manage their events more efficiently.

Also Read: Synqa lands US$80M in Series C funding round led by SCB 10X, SPARX Group

The event industry was one of the hardest hit due to the COVID-19 pandemic. To continue to scale the business during these difficult times, Eventpop expanded into new sectors that would allow it to leverage its existing technologies, such as 020 solutions and platform user experience specialisation, bringing innovative approaches to new industries.

Since its inception, Eventpop has secured US$2.5 million in funding from five investors, including KK Fund and InVent. It includes a US$2 million Series A in September 2017.

Eventpop’s business as an event platform provider will continue to grow under Synqa, strengthening its platform capabilities to prepare as the world slowly returns to normal.

A demand for a multifaceted experience will increase, requiring innovative solutions to provide an excellent customer experience. By joining forces, Eventpop will further solidify its position as an event platform provider and Synqa to grow its product ecosystem.

Founded in 2015, Synqa specialises in online payments and blockchain technology for fintech applications. As of June last year, the company had more than 140 employees spread across offices in Bangkok, Tokyo, Singapore, and Jakarta.

A year ago, Synqa raised US$80 million in a Series C funding round, led by SCB 10X and SPARX Group. The round also saw participation from Toyota Financial Services Corporation, Sumitomo Mitsui Banking Corporation, SMBC Venture Capital, Aioi Nissay Dowa Insurance Corporation and other investors.

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Image Credit: Synqa

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Cloud kitchen is not an entirely new concept in Indonesia. In a sense, Domino’s Pizza and Pizza Hut are cloud kitchens and have been around for many years. These fast-food chains follow a model wherein a single kitchen is managed and operated by a single brand focused only on delivery and takeout.

This model has evolved over the years and adopted a ‘co-working style’, accommodating multiple brands from the same or different owners operating on the same premises.

Trends indicate that cloud kitchens are fast becoming a vital part of the food delivery market in Indonesia. According to a March 2021 report by Savills Research, the cloud kitchen market in the archipelago is on a growth trajectory. The tech pioneers in the space are Grabkitchen (Grab) and Dapur Bersama (Gojek).

As the industry grew, the list of companies entering the sector also increased. Savills estimates that seven operators in Jakarta alone operate 70 cloud kitchen branches comprising 500-plus kitchen pods. The names include Yummy Corp., Hangry, Everplate, Kita Kitchen, Telepot Co-Kitchen, and Eatsii.

The different models

Cloud kitchen encompasses mainly three business models:

• Online food court or space rental (e.g. Everplate, GrabKitchen, and GoFood)
• Online restaurants (e.g. Hangry and Dailybox)
• Managed kitchens (e.g.Yummykitchen by Yummy Corp.)

Then there are companies such as Lookalkitchen, which aim to connect underutilised commercial kitchens with a network of brands to create revenue-sharing opportunities. 

The archipelago started seeing some interest in cloud kitchens in late 2018, and it became a full-blown topic in 2019. An already booming food delivery industry contributed to this boom.

In addition, some F&B brands have been able to gain significant volume from food delivery channels and significantly higher ROI than traditional restaurants.

Millennials also accelerated this growth. This new generation of youngsters is already familiar and dependent on on-demand delivery due to their tech-savvy nature and busy lifestyles within urban and rural cities. 

Also Read: How Philippine cloud kitchen industry is piggybacking on the country’s unique food culture, shifting customer behaviour

The COVID-19 effect

However, the most significant contributor to this accelerated growth has been COVID-19.

“The cloud kitchens sector has been growing tremendously through the pandemic as F&B brands get disrupted in the traditional model of serving up food to consumers,” said Yiping Goh, Partner at Quest Ventures. “This trend will continue as the pandemic evolves into an endemic eventually. Indonesian F&B owners are tired of the numerous, extended lockdowns imposed and are forced to look for new models that are more endemic-resilient.”

She, however, believes that it is still early days in the cloud kitchen growth story. More innovation in the model, especially in the food delivery and experience, will continue to grow.

Momentum Works notes that the online food delivery market size in Southeast Asia nearly tripled in size from US$4.3 billion in 2019 to US$11.9 billion in 2020, mainly attributed to the COVID-19 pandemic.

In Indonesia, which alone accounts for 31 per cent of the opportunity mentioned above, the growth is filled with inequity. Kitchens — which are slow to adapt, conduct rapid menu changes, and adopt new technology and marketing strategies — continue to fall behind. 

“In general, the pandemic has greatly accelerated the digital adoption of most digital services; online food delivery is no exception. This is because people are still confined to their homes, and dining out option is not feasible,” said Abraham Viktor, CEO of Hangry.

However, Mario Suntanu, CEO and co-founder of Yummy Corp., believes that regardless of COVID-19, consumer behaviour was moving towards significant consumption via food delivery due to a population that was getting busier and the traffic that was getting worse. 

“Cloud Kitchen mainly addresses the merchant problem, and the merchant problem remains the same. It’s just that the urgency was higher during the pandemic, which accelerated the adoption,” he noted.

“We learned that products that sell well via delivery channels hadn’t been necessarily the same products that sell well in malls and shopping centres, especially when seen from the perspective of form and pricing. So it means that as malls open, there may be some readjustments of share of wallet, but overall the intersection of consumers would not be large enough,” Suntanu stated.

Branding and maintaining quality are key

Viktor believes that as a brand, the most significant risk for Hangry is not earning customer’s love but maintaining food quality (and consistency) and branding.

“One one of the main challenges is how to keep our product consistent among all of our outlets, including the taste, quality, and how we package it. As a brand, we should also stand out from other F&B companies so customers can choose us from the available brands,” he said.

Also Read: Hangry swallows US$13M Series A to scale its cloud kitchen and multi-brand concept in Indonesia

The other task at hand is to ensure that delivered food is of the best quality. “For traditional F&B companies that started as a dine-in service, it will be more challenging to do food delivery. It is because their operations are designed to serve good quality food for quick consumption,” Viktor elaborated. “But when it comes to delivery, it is challenging for them to maintain the same quality even after it is prepared and delivered by the rider. 

“In our case, our operations have been streamlined since the beginning. Our recipe has been optimised to maintain the highest possible quality and consistency, even after the food delivery,” he claimed.

Hangry follows a multi-brand culinary model; it builds all of the brands by itself. In other words, it has developed its proprietary cloud kitchen-inspired concept that it uses exclusively to support its brands.

Startups such as Lookalkitchen work with highly scalable brands that are easy to prepare and have a high taste quality. “Brands invest in expansion through a revenue-sharing structure with the partner kitchen, and everybody earns revenue only when a transaction is made,” said Peter Choi co-founder and CEO of Lookalkitchen and ex-VP of Gojek.

“As a result, Lookalkitchen provides the quickest way for a brand to expand and enables them to open up new locations in less than two weeks. We help outlets onboard to the delivery platforms, and in parallel, we set up the technology and operations,” Choi noted.

Investments are pouring in

The amount of capital injected into the sector has been on the rise, evident from the number of players in the market compared to a few years ago. VCs and prominent tech companies, especially ride-hailing giants, have doubled down on their cloud kitchen facilities in Indonesia.

Recently, Yummy Corp. extended its Series B round with an investment from Sembrani Nusantara, a fund managed by BRI Ventures. This round came less than a year after it bagged US$12 million in Series B, led by Softbank Ventures Asia, in September 2020.

Hangry has also seen some investment coming in in the recent past. In May, Hangry announced “oversubscribed” funding of US$13 million in an Alpha JWC Ventures-led Series A round.

But why is the vertical attracting investors? 

The cloud kitchen startups are fixing many operational efficiencies and pain points from both the operator’s and the customer’s perspectives.

Additionally, the F&B industry always offers ample opportunities with new trends constantly emerging. As a result, this space has attracted investors from private equity, venture capital, and even strategic investors such as large F&B groups (both local and foreign).

“With a cloud kitchen, customers have instant access to many choices for cuisines with the convenience of one order and location while businesses have better operational efficiencies, better unit economics, and access to more comprehensive customer data. In addition, with multiple brands at play, operators have more customer data that they can leverage off of to have greater insight when determining the next brand to create,” according to Eko Kurniadi, Partner at Alpha JWC Ventures. 

He further noted that today, F&B infrastructure is more established with technology at the forefront, from the customer-facing point of view to the business supply chain and operations. As a result, local brands start to thrive, bringing processes to international standards. 

“Online food aggregators help F&B players to extend their coverage. Leveraging data is important to build a sustainable brand; players establish direct-to-consumer channels by launching their apps to order and even deliver. Furthermore, supporting systems like ERP and POS that allow businesses to digitise their workflow and continually improve their economies are getting mass adoption,” Kurniadi elaborated.

A bright future

Nicko Widjaja, CEO at BRI Ventures, believes that only 37 million people use food delivery, accounting for billions of dollars of untapped potential each year. As this model helps merchants grow their businesses providing more options to customers, the Indonesian cloud kitchen industry is heading to a bright future. 

“Cloud kitchens help small businesses to stay afloat amidst the pandemic by helping reduce capex and give them access to stronger partnerships with online platforms such as Grab, Gojek, Shopee and so on,” he remarked.

“There is a considerable high barrier to entry, as operating a cloud kitchen requires heavy capital. Therefore, local nuance is highly required in helping this model grow — just as home-grown startups have been successfully working in the Middle East (Kitopi), the US (Kitchen United), and India (Rebel Foods), to some sense.

Also Read: Gojek’s VC arm invests US$5M in India’s cloud kitchen startup Rebel Foods

“Providing a standardised food court does not work, as different areas have different favourite F&B types. Partnering with various cuisines makes cloud kitchen play a modular one, thus making this model very interesting to grow in Indonesia,” Widjaja went on.

But are cloud kitchens missing out on something?

Indonesia has a rich entrepreneur culture, and food-selling is the largest category among micro and small businesses. Many people make food, sells it through social media, and use services such as Gojek or Grab to deliver the food products to customers.

“This trend is growing, and these kinds of businesses are becoming more popular. However, it doesn’t look like cloud kitchens are tapping into this massive opportunity,” said my colleague Anisa Menur, who hails from Jakarta.

If the current consumption and investment trends are anything to go by, cloud kitchens are here to stay. But the success of this model depends on the quality of the food delivered in the quickest possible time. “Cloud kitchen would need to be carving out a distinctive experience to elevate the overall food delivery experience, such as speed, customer service, and packaging,” remarked Yummy Corp.’s Suntanu.

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Photo by Eugenia Clara on Unsplash

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Parcel Perform, a Singapore-headquartered cloud-based delivery experience platform for e-commerce businesses, announced today that it has secured US$20 million in Series A investments led by Cambridge Capital.

New investor SoftBank Ventures Asia also joined the round, alongside existing investors Wavemaker Partners and Investible.

The startup will use the strategic investment to expand globally, build out its technology offerings, and invest further in artificial intelligence (AI) solutions. It includes scaling its proprietary ‘Date of Arrival’ prediction engine that allows customers to know precisely when their parcels will arrive.

With over 100 employees across Asia-Pacific and Europe, the new funding will also enable the company to establish a regional headquarters in North America and grow to 150 employees globally by the end of the year.

Parcel Perform was co-founded by Dr Arne Jeroschewski (CEO) and Dana von der Heide (chief commercial officer). Jeroschewski previously co-founded Zalora and was its CEO. He has also held senior leadership roles in Singapore Post and DHL, where he worked with der Heid.

Also Read: SaaS parcel tracking platform Parcel Perform lands in Europe

The startup enables modern e-commerce enterprises to create “unique end-to-end customer journeys” and optimise logistics operations with data integrations, parcel tracking, delivery notifications and logistics performance reports in real-time.

It claims its SaaS platform executes more than 100 million parcel updates daily. It has integrated with 700-plus carriers, providing real-time visibility of tracking data and helping businesses to increase customer lifetime value by up to 40 per cent.

With offices in Singapore, Vietnam and Germany, the firm claims its revenue grew 5x since the onset of the COVID-19 pandemic.

Parcel Perform’s clients include Nespresso, Decathlon, and Singapore-based Love, Bonito.

The startup recently extended its B2C website Parcel Monitor — initially a tracking service for end-consumers — into a global community page providing free access to logistics data insights for e-commerce logistics professionals.

In 2018, Parcel Perform raised a US$1.1 million seed round from Wavemaker Partners, and 500 Durians.

“With e-commerce becoming the primary retail channel, the need for merchants to provide an excellent post-purchase experience has become business-critical. Parcel Perform is uniquely positioned to capitalise on this opportunity with its enterprise-grade solutions and its globally standardised logistics data integrations,” said CEO Jeroschewski.

Based in the US, Cambridge Capital is an investment firm focused on the applied supply chain. It provides private equity to finance the expansion, recapitalisation or acquisition of growth companies in transportation, logistics and supply chain technology.

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Image Credit: Parcel Perform

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Pintu, a mobile-first crypto wallet and trading platform in Indonesia, has secured US$35 million in an extended Series A financing, led by Lightspeed Venture Partners.

Existing investors, including Alameda Ventures, Blockchain.com Ventures, and Castle Island Ventures, also joined the round.

The first tranche of this round came from Pantera Capital, Intudo Ventures and Coinbase Ventures in late May — bringing Pintu’s total Series A investment to US$41 million.

With the fresh capital, Pintu aims to aggressively employ fresh people across all major functions and build Indonesia’s “largest cryptocurrency exchange”.

Besides, Pintu also plans to develop new products and features to improve user experience and make inroads into other asset classes, as well as to conduct mass-market education programmes.

“As the fourth-most populous country in the world and with only 1-2 per cent of Indonesians having exposure to cryptocurrencies, there is an immense opportunity for retail investors to gain access to diversified and dynamic investment opportunities through Pintu’s unique crypto assets trade offerings,” said Jeth Soetoyo, co-founder and CEO of Pintu.

Also read: Coinbase Ventures, others invest in Indonesia’s crypto exchange Pintu

Founded in 2020, Pintu provides solutions to deal with the pain points of investing in crypto-assets such as Bitcoin, Ethereum for millennials and retail users. It “offers comprehensive trading tools, simple UI/UX, advanced security features”, and educational content to assist investors in trading, analysing, managing assets, and learning about cryptocurrencies.

Pintu also claims that its app downloads saw a 3.5x rise in the first half of 2021, accompanied by a 4x rise in active traders on the platform — all through organic growth.

The platform currently supports 16 different dynamic cryptocurrencies for trading. It intends to add more coins in high demand by investors, including NFT tokens.

According to the Indonesian Ministry of Trade, there were over 6.6 million crypto investors in Indonesia as of June 2021, almost twice the country’s 2.2 million public equities investors.

Government support has been the strong tailwind for Indonesian crypto-assets development as it promotes regulations to ensure safe and responsible crypto asset investing activities through legally licensed crypto-assets brokers such as Pintu.

In 2018, the Indonesian Commodity Futures Trading Regulatory Agency (also known as Bappepti) under the Ministry of Trade of the Republic of Indonesia has elected to regulate bitcoin and other crypto-assets as commodities.

Other Indonesian cryptocurrency exchanges are Indodax and Binance-backed Tokocrypto.

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Image Credit: Pintu

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Some of the biggest barriers to technology adoption are whether a business has a need for it, if they can afford it, and if it drives value. Perhaps this is why the food and beverage industry, a primarily offline and relationship-driven sector with tight margins and legacy practices, had never quite seen the need for technology adoption, until the pandemic. 

In what has been possibly the toughest 18 months for any customer-facing industry, F&B has been hit particularly hard. In Singapore, some venues have reported losing as much as 90 per cent of their revenue, while others went under, despite their best efforts. 

These aren’t easy circumstances to bounce back from, but there is a silver lining. Many F&B businesses are now sharing their experience of how being backed up against the wall actually pushed them to pause, pivot or overhaul how they do business.

Whether that’s exploring new avenues for revenue generation, optimising their workforce and back offices, or planning ahead to future-proof for the long-term.

Technology, while far from being a silver bullet, has played a crucial role in enabling these changes. Growing competition and demand has also driven down prices and improved its accessibility to businesses of all sizes, yet participation remains an obstacle to widespread adoption within F&B. 

At OrderEZ, we’ve seen these challenges play out in many ways for our clients over the last year, as well as the opportunities.

After speaking with countless distributors, craft brewers, distillers and roasters, here’s our take on three (out of many) crucial ways in which technology can create value for them in the near and long term. 

Cashflow security 

The elephant in the room for businesses across the board, and particularly F&B, is cash flow management. The pandemic has made it clear that F&B businesses need more diversified revenue streams if they are to build their cash reserves and comfortably pay their staff during hard times.

Also Read: How Warung Pintar builds tech solutions to help warung owners embrace the future

We’ve seen this play out with many F&B businesses adopting bottled cocktails, for example, and/or adopting e-commerce solutions to reach their customers.

But what this points to overall is the need for a fluid business model that is agile enough to pivot and change. Ways of working have had to change. And while technology is not the only solution, it is a critical tool in building new revenue streams by allowing businesses to take a step back, review their business and see how they can reach new customers and make money. 

Supply chain security

One of the biggest lessons for F&B  has been prioritising supply chain security – something that was almost taken for granted pre-pandemic, and particularly in a hub like Singapore. Statistics show that globally, only 22 per cent of companies had a proactive supply chain strategy and that restaurants that used SaaS ordering systems were able to reduce wastage by over 80 per cent. The writing was on the wall, but it took a crisis of this magnitude to finally bring these concerns to a head.

With so many F&B businesses seeing their cash flow seriously impacted by pandemic-induced logistics issues, forward-thinking supply chain planning is becoming an  increasingly fundamental part of future-proofing.

Technology, be it inventory management, transparent ordering processes, data analysis or simply connectivity, will play a crucial role in enabling this. 

Workforce optimisation

Technology influences every aspect of business optimisation, but workforce is an incredibly crucial area for F&B businesses that often run on lean teams.  One prominent example of this is efficiency i.e. doing more with less and with less room for error.

Already, technology platforms such as ours that digitise manual processes and integrate with other software are helping create seamless workflows between different functions, from sales to accounting and HR. 

A less obvious example is the role of technology in connectivity and helping the workforce stay connected, accountable and productive, which goes a long way in improving  employer-employee relationships.

To drive employee participation in such solutions, the onus is on businesses to adopt systems and solutions that are simple, useful and effectively cater to their specific business needs. 

Different ways of working, new customer preferences and imminent crisis situations are here to stay– for the next few years at least, if not for good. The important thing for F&B businesses at this time is to move out of survival mode and into planning mode, with the last 18 months serving as a crystal ball for the years ahead of us. 

Also Read: Ghost kitchen startup MadEats makes it into Y Combinator, in talks for fresh round of investment

Technology will undoubtedly play a role in helping F&B businesses navigate and grow into the demands of the evolving industry landscape. What they do next comes down to which technology they choose, how it will serve their business, and how they can drive participation and value for both their employees and customers.

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