I’ve had quite a few conversations recently with founders on this topic, but one recently stuck out. A co-founding team of a company I’m fond of (but not invested in) has 90 days of cash in the bank and has had 50+ investor meetings recently. While raising previous rounds was relatively easy for them, now… crickets.

It is a difficult situation, but it can be navigated. We spoke for a while, and I thought I’d share the summary here if it helps other founders who have raised previous rounds and have a revenue-generating business.

What’s going on?

• There has been a correction in the public markets, which is now filtering to private markets
• There is a potential recession looming, and it seems unlikely central banks will intervene in the short term
• Several other issues are at play impacting confidence (inflation, supply chain, geo-political, etc.)

Investors have bigger funds than ever. Why aren’t they investing?

There has been an incredible amount raised by fund managers (across venture, private equity, private debt etc.) over the last few years. Still, the above events have created a challenging environment for raising money for founders and have put pressure on valuations:

• The previously popular method of creating private valuations based on public comps is unattractive at the moment
• Confidence of investors has shifted, meaning higher thresholds are required for new funding and (except for elite companies) potentially a new way of viewing valuation
• We are seeing instances of investors pulling term sheets (and hearing about some investors not completing funding commitments)

Also Read: Base.vn founder’s new SaaS startup True Platform attracts US$3.5M seed funding

What should I focus on?

• Work out whether you are default alive or default dead
• Prioritise survival and maintaining control, make difficult decisions early
• • Understand the potential change (depending on your stage and growth rate) in how others will appraise your company (revenue vs free cash flow)
  • Consider if there are alternative ways to achieve customer-led funding (or increase your runway), there may be options available outside traditional equity
  • If you need to let people go, do it quickly and respectfully. Help them get other roles where you can

• Ensure your updated operating plan is robust and has buy-in. It either gets you to cash flow positive or to your next funding milestone (with a meaningful safety buffer)

  • Road test your plan with key stakeholders

  • Consider getting external input from potential subsequent round investors as to what milestones they’d expect to see

Additional reading

• Adapting to endure – Sequoia

• A Framework for Navigating Down Markets – a16z

• YC advises founders to plan for the worst – YCombinator

• The upside of a downturn – Lightspeed

–

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.

Join our e27 Telegram group, FB community, or like the e27 Facebook page

Image credit: Canva Pro

The post How to stay positive and seek sustainable growth in a tough funding environment appeared first on e27.

Southeast Asia’s internet economy alone is poised to surpass US$300 billion by 2025. The wealth of opportunities offered for startups in the region is immense but startups will need to future-proof their processes in order to build scalable businesses. Startups in this region face several challenges associated with scaling in Asia, as they go from startup to scaleup mode.

Businesses not equipped with the right tools and knowledge can end up trying to reinvent the wheel —  inadvertently wasting valuable dollars on technology platforms or software in their quest to accelerate new business opportunities and scale up revenue channels.

Mentoring is therefore extremely important — allowing startups to receive the guidance needed to ensure success. Navigating the various challenges associated with scaling in Asia needs capable mentorship from those with experience in scaling up in these markets. Establishing the ability to go to market requires careful planning and organisations need access to important insider tools and insights that will enable them to build the kind of infrastructure and processes required to scale.

Learn from experts on how to innovate, grow, and scale your startup

So much more than just securing funding

Startups operating in Southeast Asia are also hampered by the lack of access to a constant source of funding that can enable scalability and accelerate growth. Even when they are able to secure funding, there is often a knowledge gap on how to spend it effectively and achieve maximum impact. Talent acquisition and retention is another area where startups often overlook the importance of building a great company culture, specialisation of roles, career paths, onboarding and other factors which affect their talent resources.

Also read: oVice, a virtual office platform, uses innovative technology to redefine remote work

Faced with these challenges, prioritising the right capabilities and infrastructure becomes highly critical. But with the right tools and insights, and propelled by a fast-growing base of digital consumers and merchants, your start up could enjoy a slice of the US$360 billion digital economy projected by 2025. In the MasterClass Accelerator 101 Series, notable industry leaders outlined the priorities startups should focus on so they can continue to scale:

• A Customer obsession: building in the usability and intuitiveness to delight their customers constantly. Invest in customer experience and customer success. 
• Driving exponential growth while keeping investment under control — going from startup to scale-up requires a change of mindset so that you build your business around the idea of scalability and use your resources optimally.
• Improve the way they run their businesses. This entails investing in talent and culture for improved productivity, optimised operations to focus on core strengths, and lower operational costs through best practices, automation, and investing in the right tech stack

How you can innovate, grow, and scale your startup: A masterclass webinar

The MasterClass Accelerator 101 Series is a new programme series by Salesforce crafted with customised offerings and designed to help startups and SMEs scale their businesses.

In the first webinar of the series held on 28th April, an expert panel of startup investors and entrepreneurs discussed the roadmap for startups moving from exploring their potential to scaling their company and actually taking advantage of those opportunities.

Also read: Alpha JWC Startup Series: pitching & fundraising through the lens of a VC

Moderated by Garry Huang, Entrepreneur-in-Residence at 500 Startups, the webinar panel featured Daisy Hoang, SVP of Sales and Success at test automation startup platform Katalon; Danny Chong, Senior Investment Director at Gobi Partners China; and Thomas Lim, Regional Vice President of ESMB Emerging and Growth Business at Salesforce. 

Apart from the challenges and priorities discussed above, the topics discussed by the panellists were: 

• What startups should keep in mind when fundraising — a discussion of the things VCs look for from startups and their founders, that get them noticed and funded.
• Current trends that VCs are seeing in startups that have successfully raised funds in the recent months
• The importance of setting a company culture to scale properly
• Focusing on your core strengths: choosing the right tech stack to support your growth
• How being data-driven can improve your business productivity and operations 
• Small business is big business. How Salesforce is ready to help startups accelerate.

Scaling a business on an international scale involves tackling significant challenges in building a company culture across countries, evolving your product, and putting the right processes in place. The Masterclass Accelerator 101 Webinar provided valuable insights on how startups can scale up people and processes, build the right tech stack, and navigate the funding journey. 

Even as Southeast Asia is poised to enter a digital-first future, Startups and SMEs will need to equip themselves with the tools and insights so they can implement strategies for digitisation. The pandemic has been a major catalyst in accelerating this process of digitisation but even post-pandemic these changes are here to stay. Participants in the Masterclass Accelerator Series can learn how to view digitisation as an opportunity to grow even faster in Southeast Asia’s digital economy.

Also read: Get to know the startups in the 2022 APT 5G Challenge

The webinar series shares important lessons for Startups and SMEs on how to adapt to customer expectations, differentiate their customer experience from competitors, and the technology enablers that can help them continue scaling in the digital-first future. Learnings that will enable startups to build businesses that are sustainable and create long term value for customers and stakeholders.

To learn more about growth tips, watch the webinar during your free time and learn how to drive the future of business with growth and success in this fast-changing landscape.

Watch the MasterClass Accelerator 101: How you can Innovate, Grow, and Scale your startup webinar here.

– –

This article is produced by the e27 team, sponsored by Salesforce

We can share your story at e27, too. Engage the Southeast Asian tech ecosystem by bringing your story to the world. Visit us at e27.co/advertise to get started.

The post How to build a business with scalability in Asia’s vibrant economy? appeared first on e27.

Twitter recently has become profitable and beat Wall Street’s low expectations. Profitability does not solve the issues that the company has going forward.

The company is not the only social media company that has to deal with fake accounts, trolling, and foreign agents spreading misinformation to influence US elections.

These issues, combined with stagnant growth and executives quitting, have led to questions about who is actually running the company. All the solutions Twitter has offered have resulted in more problems or calls for Twitter to take more action.

According to Michael Connor, the man behind a company called Open Mic pushing tech companies to be more transparent about problems, Twitter is playing whack-a-mole with their problems. In fact, Connor says that Twitter does not even know what problem they face.

Leadership trouble

The biggest issue Twitter has is its lack of leadership due to the departure of Chief Operating Officer, Anthony Noto to become CEO of SoFi. Noto played a critical role in running the company because the CEO and founder of Twitter, Jack Dorsey, also serves as the CEO of Square. 

Dorsey has taken control of Twitter without Noto despite investors calling for a more focused CEO. Dorsey has rejected those claims and stated that the amount of time he spends is not as important as how he spends his time at the company.

The issues are more profound than that thought. Dorsey has been called an authoritarian leader that is not open to innovation, which is apparent in the lack of innovation at Twitter. This lack of innovation could be the difference between the proper handling of these issues and improperly handling these issues. 

For instance, Mark Zuckerberg has the final say on Facebook as he is both the CEO and Chairman of the Board. However, he is still open to his team changing Facebook so long as he can make the final decision on the change. This has resulted in Facebook successfully navigating their own set of issues.

Also Read: How to use Twitter to market your product as a founder

The leadership trouble that Twitter faces is the biggest issue. Once Twitter can figure out their leadership, it will be better suited to navigate the problems listed below.

Stagnant user growth

The first major existential issue that Twitter has is its stagnant user growth. They have practically no user growth but remain steady with their monthly active users. Much of this might be because of their clamping down on fake accounts, which make up a surprisingly large number of accounts on the platform. 

However, Twitter has faced issues with user growth since its inception because they do not lock its content. A Twitter account is not necessary to view tweets on the site, which means fewer users can receive advertisements.

For instance, a user can bookmark President Trump’s Twitter page and view his tweets without ever having a Twitter account. This makes Twitter a great platform for businesses, but it is terrible for generating revenue. This is an issue that Twitter will have to resolve if it wants to continue making a profit.

Fake accounts

The next issue Twitter faces is the proliferation of fake accounts on the platform. It is estimated that over 15 per cent of accounts on Twitter are actually fake accounts created by either bots or used by individuals to harass users.

This fake account epidemic ties into most of the other issues plaguing the site. For instance, foreign intelligence agencies will use fake accounts to push their fake news stories to the top of the Twitter feed.

Fake accounts are also used to manipulate Twitter hashtags, which can sway public opinion on certain topics. On the other hand, there are entire networks of accounts people use when they buy retweets on their accounts’ posts and tweets.

This makes eliminating the fake account problem one of the most important issues for Twitter. If they can eliminate the fake accounts on the platform, then most of the other problems will resolve themselves. 

Bans will be more effective, foreign governments won’t use Twitter as a weapon, and hateful users will be permanently banned from the platform.

Foreign interference and regulation

Foreign officials using Twitter to spread disinformation amongst Americans is a major issue. In fact, this is such a major issue that social media companies have been called before Congress to testify about the problem.

This has led to many rumours that tech companies will face regulation. Some US senators have even stated that the tech companies will almost certainly meet regulations at some point.

However, no legislation has been drafted, and the Department of Justice has not brought a case against any social media company concerning regulation.

Also Read: Twitter is the most powerful company in tech

At the moment, Twitter will just have to focus on removing as many foreign intelligence agencies from the platform as possible. So far, they have done well with that task. Twitter recently banned over 300,000 accounts linked to a Russian and Iranian plot to interfere with the 2018 general election. 

Dorsey has stated that there is still much more that needs to be done and that these issues will not be resolved before the 2018 election. He does believe that the 2020 presidential election will resolve the issues.

However, Congress will likely force some form of regulation on the tech giant before 2020, but that is still only speculation at this point.

Future plans for Twitter

Overall, it is great for Twitter to make a profit after 12 years in business finally. It gives their investors some relief. Their next major hurdle is to resolve the leadership issue, which can likely be solved by placing the right person as COO. 

Alternatively, Dorsey might even be forced by the company if investors are not satisfied with his leadership as Twitter faces regulation.

Investors have grown increasingly annoyed at Dorsey’s apparent lack of leadership and refusal to answer investor calls for him to step down from Square or remove himself from the CEO position at Twitter. Once the leadership issue is resolved, many of the other issues facing the company will be resolved.

–

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.

Join our e27 Telegram group, FB community, or like the e27 Facebook page

Image credit: Canva Pro

The post Is Twitter playing whack-a-mole with its problems? appeared first on e27.

Singapore-headquartered HitPay, a payment gateway for small and medium enterprises (SMEs), has secured US$15.75 million in a Series A round of funding led by Tiger Global.

Returning investors Global Founders Capital and HOF Capital also joined the round.

With the capital raised, HitPay will develop SME-friendly features, including support for local and international payment methods and integrations with accounting and e-commerce platforms.

The fintech firm will also invest in top-tier talent to support its clients globally.

Also Read: The future of fintech: The latest trends in the industry

The fintech firm was founded by Nitin Muthyala and Aditya Haripurkar. HitPay was recently accepted to Y Combinator’s accelerator programme.

HitPay is a one-stop payment platform for SMEs. It provides solutions such as local and cross-border payment acceptance and payouts, an online store platform, POS software with card readers, plugins, and payment links. The firm claims over 10,000 merchants use HitPay, and its transaction payment volume has grown by over 8x in 2021.

HitPay is available in Singapore, Malaysia, Hong Kong, Australia, New Zealand, Canada, the US, the UK, Europe, and the UAE. It plans to expand to new markets in Southeast Asia in the coming months.

—

Fundraising or preparing your startup for fundraising? Build your investor network, search from 400+ SEA investors on e27, and get connected or get insights regarding fundraising. Try e27 Pro for free today

The post HitPay raises US$15.75M Series A to expand its payment gateway biz in SEA appeared first on e27.

MoEngage, a customer engagement platform for consumer brands, announced today it has raised US$77 million in a Series E round of funding.

Led by Goldman Sachs and B Capital, the round also saw participation from its existing investors Steadview Capital, Multiples Alternate Asset Management, Eight Roads Ventures, and Matrix Partners India.

This is the third fundraising for MoEngage in the last 12 months, which includes US$32.5 million in July 2021 and US$30 million in December.

MoEngage will use the new capital to deepen its geographic footprint in the US, the UK, and Asia markets and also expand in new markets like Latin America and Australia. A portion of the money will be used to explore strategic acquisitions.

Also Read: Five ways startups can improve their customer engagement

Established in 2014, US-headquartered MoEngage provides marketers and product managers with consumer behaviour data and the ability to act on those insights to engage customers across web, mobile, email, social, and messaging channels. The firm claims it has clients in 35 countries. Its clientele includes Alfagift, AllValue, Astrapay, Blibli, CIMB Bank, JD.ID, Lummo, POPS, Syfe, Telekom Malaysia, theAsianparent, and XL Axiata.

In the last 12 months, MoEngage claims to have grown annualised recurring revenue by more than 105 per cent, added 500 new customers, and doubled its headcount to more than 650.

MoEngage has a presence in the UK, Germany, Singapore, Vietnam, Thailand, and Indonesia.

The firm launched offices in Singapore and the Philippines this year, with an Australian office coming soon.

The startup had earlier raised US$9 million in Series B funding from Ventureast and Helion Venture in 2018.

—

Fundraising or preparing your startup for fundraising? Build your investor network, search from 400+ SEA investors on e27, and get connected or get insights regarding fundraising. Try e27 Pro for free today.

The post MoEngage nets US$77M Series E led by Goldman Sachs, B Capital appeared first on e27.