This article is part of e27’s partnership with CEO Roundtable Podcast and Asian Investors Podcast, and CEO TV hosted by David Kim. This edited Q&A is based on the show’s original transcript. For the full interview, watch the YouTube videocast here.
We are in the midst of raising our US$15 million Series A round to fund our go-to-market, inventory and production, starting with Indonesia later this year and Thailand, Vietnam and the Philippines in 2023. I’m looking to reach a wider audience beyond the usual fundraising circuits I have access to and seek like-minded investor-partners to build our business together.
ION Mobility
Founded in late 2019, ION Mobility is the leading electric motorbike and clean energy company in Southeast Asia on a mission to create and deliver affordable, desirable and sustainable mobility and energy for everyone.
Since 2020, the company has built teams across Singapore, Indonesia and China amidst the pandemic, raised over US$6.8 million in funding from angels and venture funds and is on track to launch its EV motorbike for pre-orders in Indonesia later in 2022.
James Chan is the founder and CEO of ION Mobility. He was trained as an electrical and computer engineer and has been a serial entrepreneur, investor and public servant on all three sides of the table at organisations he formed or was a part of, across industries the likes of fintech, internet, 3D printing, robotics and automation, venture capital and public policy.
A recipient of the EDB Singapore Inc. scholarship in 2002, Chan has over 16 years of experience and a track record in economic and industry policy formulation and implementation, venture capital, product development and management, business strategy and development, finance and operations in the technology and startup ecosystem in Southeast and East Asia.
What problems is Ion Mobility solving now?
Top EV companies like Tesla, Rivian, Lucid Motors and NIO have proven the viability and sustainability of electric mobility in their respective cars and trucks segment over the past 10-odd years. I’m looking to build and scale ION Mobility into the SE Asian equivalent of an EV mobility company with road-worthy electric motorbikes, a cleaner-energy fast-charging network, and an insane focus on SE Asian consumer markets.
Motorbikes outsell cars 6-to-1 in Indonesia, which is the third-largest Internal Combustion Engine (ICE) motorbike market in the world (by new sales each year). The ubiquitous motorbike touches the lives of over 200 million people across our region, with Indonesia and its 112+ million ICE motorbike population, Vietnam’s 50+ million and Thailand’s 22+ million.
Contrary to popular belief, ICE motorbikes are often responsible for more pollution than cars, emitting up to 16 times more hydrocarbons, three times more carbon monoxide and other pollutants across their lifespan.
Also Read: ION Mobility lands US$6.8M as it prepares to launch smart e-motorbike in Singapore
By reducing hesitation and friction and accelerating consumers’ transition away from ICE towards fast-charging electric motorbikes, ION Mobility can be in a pole position to play a significant role in the reduction of urban air (and noise) pollution, nations’ socio-economic dependency on fuel subsidies, supply chain and industrial development and a more sustainable socio-economic development centred around cities across SE Asia.
What are your value proposition and your business model?
Put simply, we (1) have built a full-stack multi-disciplinary team and supply chain across Singapore, Indonesia and China amidst the pandemic, (2) understand our users and markets in the region better than our competition, (3) adopt an end-to-end full-stack no-holds-barred approach to designing, engineering, testing and assembling our electric motorbikes for delivery, and (4) are prepared to go as direct-to-customer as we possibly can alongside our electric motorbikes, to deliver the best-in-class electric motorbike product, starting with the premium mass market.
We started developing our inaugural product at ION Mobility in July 2020, spurred on by our extensive market and user research that showed the lack of a viable electric mobility solution for Southeast Asia. We concluded that there are no compelling options for SE Asian riders to switch away from their traditional combustion (ICE) motorbikes.
These are either too underwhelming for them, in other words, short-ranged and low powered, or too expensive and in form factors that are not appealing for their daily use. We want to ease each customer’s transition into electric mobility such that it no longer becomes a point of (range, cost-to-performance) anxiety but a point of joy.
We were quickly drawn to the immense potential of Indonesia and the rest of our region’s industrial supply chain and were convinced of what we could deliver to hasten consumers’ inevitable transition towards electric motorbikes in the coming years.
We aim to control our products’ financing via a fintech business model designed for maximum value capture while having positive unit economics per motorbike without depending on sales volumes like traditional hardware companies typically would; a consumer-level electric motorbike fleet, if you would.
In practice, this would translate into leasing and hire-purchase offerings that give consumers new choices with terms equivalent to what they are familiar with if they had gone shopping for an ICE motorbike instead.
In the end, we strive to offer desirable products with superior cost-to-performance features and total-cost-of-ownership (compared to ICE equivalents) that make the transition purchase-or-subscribe decision by our target audience a no-brainer.
What are the three reasons and rationales that you believe ION Mobility and your team will continue to grow?
I’ve touched on this somewhat in my earlier responses; it ultimately boils down to (1) me and my team, (2) our market-user-product understanding and (3) our full-stack end-to-end approach and strategy in tech, product, business model and operations.
No other team is as well-equipped to take on this complex long-cycle challenge to transform the world’s third-largest motorbike market.
The only thing we’re lacking right now is capital, resources and time to execute our plan. We’re starting our Series A fundraising for US$15 million to fund our go-to-market, inventory, production and ongoing R&D for the next two years.
Did you encounter people who doubted the viability of running such a company?
Of course!
It’s so easy to dismiss me and my team when (1) we’re not the first to come up with this idea in Singapore, (2) where the founder/CEO does not have a motorbike licence, and (3) does not have prior experience doing something like this, (4) much less try to start this company (and build our team, tech and product) from ground zero amidst the pandemic!
We’ve had investors and prospective employees pass on us. All this is part and parcel of trying to do meaningful work. Remember, “nothing worth having comes easy”. Even Elon Musk had Charlie Munger, billionaire investor and then-Vice President of Berkshire Hathaway, tell him and his table in 2009 over lunch all the ways in which Tesla would fail. What would you say in reply? Elon said he agreed with all those reasons and told Charlie that Tesla would probably die, but it was worth trying anyway.
They say that “the first step in any journey is always the hardest”.
How do you compare ION Mobility to Gogoro in business model and strategy? Why did you decide to produce your equipment (motorbike under your brand) instead of collaborating with an existing manufacturer?
This question is a tough one; it puts me on the spot.
We started our company amidst the pandemic and were forced to build and collaborate with our teams in Indonesia and China for much of the past two years remotely, so the only information I could gather about Gogoro’s past 11 years of history was via the Internet (which I think doesn’t quite cut it). I plan to visit Taiwan soon to learn more.
Also Read: How electric mobility startups are tackling climate change in Asia
I respect what Horace and Matt have accomplished with Gogoro in Taiwan, and I wish them all the best for their upcoming listing in the US. For now, we’re nowhere close to each other in terms of company size, access to resources and team maturity, not to mention being at least a decade apart in terms of founding.
If you compare Gogoro to ION in an apples-to-apples manner, it took Gogoro four years to unveil its more polished SmartScooter in 2015, while we took 18 months to unveil a pre-production prototype of the ION Mobius last December. Gogoro also raised US$50 million in its year of inauguration, an overwhelming 15+ times more than I did at ION.
Gogoro was founded in Taiwan, renowned for its more industrialised and complete supply chains and talent thanks to ICE motorbike OEMs like Kymco, PGO, Aeon Motor and Sanyang Motor. As for us, we started from Singapore, which pretty much doesn’t measure up in that regard. Gogoro has also sold only within Taiwan for much of its history, while we’re initially focused on Indonesia.
Because of our significant differences, it’s inevitable for us at ION to pursue a different path and do things differently. I think it’s a lot harder to do what we’re doing at ION from Singapore than it was for Gogoro to start from Taiwan.
The electric motorbike is also not a new concept, but our research tells us there continues to be a significant gap between what consumers want in our region and what existing players have to offer. Besides, the real competition is also not between electric motorbike players like Gogoro but between us and ICE motorbike incumbents that are dominant across SE Asia markets.
Having said that, one thing we seem to have in common with Gogoro is our shared belief in the full-stack, end-to-end approach. I believe this is the best approach that grants us business strategy flexibility while allowing us to quickly adapt and adjust our products and services to respond to market-user learnings and competitive forces.
We started in late 2019 by appointing one of China’s top 3 electric bicycle OEMs as our Original Design Manufacturer (ODM). The partnership lasted 5 months and quickly showed its limitations with a subpar prototype that demonstrated the misalignments and moral hazards that often arise from such a strategy between OEM and ODM. We stopped working with them and took a few months to form our in-house team, which led to
After all, as Alan Kay would say, “People who are serious about software should make their hardware.” And so we did (and continue to do so).
What do the future EV motorbikes look like to you?
With the EV transition, we’re not just going to benefit from significant efficiency gains in converting stored electrical energy into mobility. We’re also going to make that evolutionary leap from being analogue devices to completely digital and always-connected personalised devices, just like the ubiquitous smartphone with nearly 100 per cent mobile connectivity in SE.
In Asian cities, with the ever-improving price-to-energy density of batteries and the cost of advanced sensors and computing power continuing to fall each year, we have the perfect building blocks from which to innovate and deliver a personalised, data-driven ride-vehicle experience; not just to our customers themselves as riders, but also to their fleet operators, vehicle or fleet financiers, insurers or even brands.
An always-connected EV motorbike with an API plays a more sophisticated role in your daily commute.
What are the biggest challenges in scaling your business and taking it to the next level?
There are several key challenges we face as a startup.
One major problem we’re solving is to achieve product-market-fit is a hardware-first company during pandemic times across 3 offices. There’s no easy way to “agile” hardware, but we’ve done our best amidst difficult times; be it by conducting ongoing market and user research with the help of our Indonesian team, developing physical prototypes amidst challenging supply chain bottlenecks by leveraging on our supply chain teams in Indonesia and China, and making design changes to our industrial design or battery pack in response to our team’s micro-learnings.
We’ve also found it harder to attract and hire the right sort of talent as a small startup, especially in Singapore and Indonesia. There’s just no automotive OEM DNA and ready pools of talent that we can tap upon in Singapore. I’ve had to import talent from Japan, India, China, and Indonesia to form our design and engineering team in a region that does not have such an (EV motorbike) industry.
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Once we’ve formed our teams, it was also challenging to manage, facilitate effective communications and encourage high-performance collaboration across our full-stack team. The Tower of Babel problem is very real. We’ve got a good mix of nationalities and languages within the company, with Singaporeans, Indonesians, Chinese, Vietnamese, Sri Lankans, Indians, Americans, and even a guy in Kazakhstan!
We continue to figure things out with the help of technology while steaming full speed ahead. I’d say our progress thus far is also an attestment to the quality of our leadership team and the motivation and morale of our team.
Last but not least, it has not been easy to attract capital from our region to support a company like ION, unlike how Gogoro was able to secure US$50m in their founding year. There’s no appreciation for the value creation that can come about from building your hardware in this part of our world, where investors and fund managers have had much more relative successes in software and services than from hardware.
How different is your life now being an entrepreneur from an investor? Tell me some interesting backstories of your experience and transition.
I didn’t want to stay in investing because it wasn’t quick enough; it didn’t give me that visceral and direct access to opportunities. I don’t think I’ve ever fully transitioned between the two; the entrepreneur was always within me, and I’ve since picked up angel investor and venture builder hats to my repertoire.
I always swap between hats when looking at things and weighing decisions from different perspectives, and the years really went by so quickly in hindsight, so much so that the lines are all blurred, and I don’t know anymore.
Still, seriously speaking, I think there’s a lot more dimensionality to my life as an entrepreneur than an investor. As an individual, I want to pursue the truth, and I can do that better as an entrepreneur than as an investor.
It’s a lot easier to roll up my sleeves and get to the heart of the problem; while as a VC, you’re always juggling capital allocation, portfolio construction, post-investment managing, making your picks and structuring your exits.
It’s not so obvious, but a lot of people have asked me why I choose to do the more difficult thing and not just spread my bets around, but to me, that’s just boring, and the building is a lot more fun but harder.
Who are the right or wrong people to hire for your growth team? What characteristics and traits do these people have that make them good or bad for growth? What questions do you ask in interviews?
Throughout all my years in venture capital, venture building and entrepreneurship, I’ve found that the talent matrix can be distilled down into 3 key components, namely his or her (1) expertise, (2) leadership and (3) fit.
Expertise is obvious; we’re hiring for the job description and the skills needed to do the job. Leadership is less obvious when it comes to assessing individual contributors (IC), but I’ve always believed that the best ICs know how to lead their managers or bosses to do well in their roles and seek greater challenges too.
The last component is fit, which isn’t just about the culture fit but also his or her personal ambitions and life stage fit. The ability to think critically and communicate is part of candidates’ expertise and leadership abilities. The desire for a challenge with us and an aligned vision would fall underfit.
An early-stage startup demands a lot from its founders, leadership and team members. Apart from the key talent components above, I also lookout for a healthy dose of self-awareness, non-toxic teamwork habits and the ability to grasp context across domains.
Candidates don’t have to check every box, as I believe there is always room for good-enough talent, but superstar unicorn hires check more of these boxes than others.
One favourite question combo of mine I always ask candidates is for them to share with me their highest professional peak they’ve scaled and their greatest hardship in life. It’s my way of forming the psychological make-up of the candidate with regards to ambition, inherent grit and hardships they can endure.
How do you interact with your Board, and how do you think CEOs should extract the most value from their board?
Given that I’ve got a pretty diverse range of exposure, skills and experiences, the trust factor is between me and my Board. Despite having clear control at the Board level and only being a pre-Series A company, I still make an effort to keep my Board apprised quarterly of our financials, milestones, progress and developments.
I also spend 1-on-1 time with each of my board members to deepen our ties more personally. In return, my Board is also my sounding board and sanity anchor; they look out for my mental well-being, even though I tell them I’m tough as nails and chose to build this butt-ass difficult company of my own free will to begin with, hah!
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Less-experienced founders and CEOs may view their Board as a scary authoritative setup to govern over them, and rightfully so. I believe it’s important for the founder-CEO to always subject themselves to greater authority and scrutiny so that your Board can have your back. These ties bind and transcend your existing company, hopefully for life!
Tell us about fundraising. What was the biggest challenge? What were the early investors most excited about?
It was not easy, but we soldiered on and were able to convince investors and fund managers to back us with US$6.5 million. I invested SG$650k into the company over two rounds, once at incorporation and again in between our Seed Convertible note in 2021 and Seed Preference raise in 2022.
I’d already alluded to the generally-weaker investment ecosystem for hardware companies in Singapore and SEA. It was made even harder because I’m not known to be a motorcycle enthusiast and have never founded a hardware company before. I haven’t even found time to complete my motorbike driving license yet!
Despite being a relatively seasoned founder myself, with an equally seasoned leadership team and having accomplished much with very little resources in 18 months, we faced plenty of investor rejections and snubs.
This is part of the game; the angst that we carry on our shoulders motivates us to do even better and hopefully makes them regret having passed on us years down the road.
I’m no Elon Musk, so I don’t have his wealth or a Paypal mafia to count on, but I’ve stuck to my principles and have a bit of a track record and personal reputation in the region as an investor and entrepreneur, so several individuals and fund managers have chosen to back me and my team on our crazy adventure to achieve the impossible against all odds.
For that, my team and I are truly grateful.
I think most investors do not argue for the potential for EV motorbikes to transform the transportation industry and value chains across SE Asia. They’re also equally convinced of our selection of Indonesia as our first market.
We’re raising a US$15 million Series A to fund our go-to-market, inventory and assembly plans while remaining on schedule for a preorder launch later this year. I believe we’re the best team with the best product-market fit to take on the Indonesian opportunity; for starters, our future investors will need to be convinced of them to know and for me to find out.
How do you balance the growth expectations of your investors on a quarter by quarter basis with the long term vision and strategy?
There’s nothing magical about it; I rely on transparent, data-driven communication and active steps toward maintaining a healthy personal and professional relationship with our investors and board members.
Plans are made by leaders with the best of intentions on paper but executed by bigger complex teams in a dynamic and complex real world; targets and timelines are bound to slip, especially when it comes to constrained global supply chains and industries as complex and as end-to-end as the tech-automotive play that ION is.
What are the next step and the future and long-term vision for ION mobility?
As I’ve said, we’re in the market to raise US$15m for our Series A round to fund our go-to-market, inventory, assembly, sales and marketing and motorbike deliveries for Indonesia through 2023 and 2024.
Also Read: BlueSG: Is electric car sharing really cheaper than other alternatives like Grab and Uber?
My team and I hope to sell more of our ION Mobiuses and future models in the coming years. I hope we’ll have a chance to roll out our planned fast-charger networks across SE Asia as the final solution to alleviate consumers’ range anxiety and possibly our energy storage solution to augment urban and suburban grids in homes and offices.
I have some blockchain-based ideas that I can only dream of for now; hopefully, stuff that my team and I can work on in the coming years after we’ve garnered steady and growing cash flows from our EV product sales in SEA.
Longer-term, I hope that we can achieve positive EBITDA and list our company so our investors can have their desired exit multiples and not think that our crazy plan was that crazy after all.
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Image Credit: ION Mobility
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