Joseph Phua
SoundOn, a one-year-old podcasts platform in Taiwan, has just been jointly acquired by Singapore-based Kollective Ventures (KV) and Turn Capital (TC), a family office launched last year by Joseph Phua, co-founder and non-Executive Chairman of M17.
With this strategic deal, the two VC firms have big ambitions and they want SoundOn to grow beyond the home market into Southeast Asia. According to Phua, while the region’s podcasts market is still in the nascent stages, it offers massive growth potential.
In this interview, Phua shares the rationale behind the acquisition and how this deal allows them to further invest and develop the podcast ecosystem.
Edited excerpts:
Kollective Ventures and Turn Capital have jointly acquired SoundOn. How does this joint acquisition work? How does this deal benefit each other as well as SoundOn. What is the synergy?
The joint acquisition creates a Special Purpose Vehicle (SPV) in which both parties inject capital into this SPV and it then acquires SoundOn. Given my background, I will provide operational expertise as well as advice as a shareholder. This joint acquisition will then become a rocket ship – powered by capital injection, operational expertise as well as network – for SoundOn to accelerate its growth trajectory.
The podcasts industry is still in the early stages and hasn’t gotten much traction in Asia yet. Despite this, why did KV and TC make a bet on SoundOn, which is just over a year old?
The industry has taken off in a significant way, as can be seen by the number of podcast downloads that SoundOn has achieved just after slightly a year into the business, with over 35 million downloads a month, and fast growing to 500m this year.
We strongly believe in the business of audio entertainment/podcast industry in Asia. Already, we see global giants like Spotify and Apple making huge forays into the space. We expect this trend to continue into Asia sooner rather than later.
How is the podcasts industry growing in Taiwan vis-à-vis Singapore/Southeast Asia. What are the key characteristics of the Taiwanese market and consumers?
There’s a burgeoning number of podcasters in Taiwan. For SoundOn, we work with more than 7,000 active podcast programmes/podcasters and we have over 70 per cent of the market share. In fact, the pace of growth is in line with the growth of YouTube during its initial popularity in Taiwan.
Likewise, we expect the same trend to occur in Southeast Asia. After all, podcasts are another medium for the transfer of information and the sharing of content which is much like videos on YouTube and other significant content distribution platforms.
As per a press note, KV and Turn Capital will look to continue to accelerate the growth of the company and the industry in the near future. How do you plan to achieve these two objectives?
The responsibility of educating the general public of any industry that is in its early stages of growth usually falls on the leaders. Thus, it’s not any different in this case with the podcast industry.
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We expect that we will be investing resources, from time to capital, into SoundOn and the podcast industry at large, to assist SoundOn on its path to become the dominant podcast platform in the region.
Do KV and TC have plans to bring SoundOn to Southeast Asian markets like Singapore? Do you see massive growth potential for SoundOn in the region?
Yes, SoundOn has near term regional ambitions because of the massive growth potential.
Where is Southeast Asia’s podcasts industry headed for? What is the growth rate? Do you expect new ventures to pop up in the podcast industry?
It’s super early, and so rate of growth will be very high. We expect there to be significant number of similar ventures pop up soon, and are looking to make further investments/acquisitions in the general audio entertainment space.
What is lacking in Southeast Asia when it comes to the adoption of podcasts platforms? What is hindering the growth? Do podcasts companies struggle to generate revenues unlike SoundOn, which relies on ads? What kind of business/revenue model will suit Southeast Asia?
Certainly, podcasts are ripe for adoption in Southeast Asia. What we need to do to facilitate its adoption is to educate the public, in terms of consumers and content producers.
Using SoundOn as an example, they have been profitable relatively early on given its market leadership and strength in advertising sales. There are multiple monetisation models available that SoundOn can tap into and this goes beyond relying on advertising as we see in other global comparables.
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Hence, we expect SoundOn to experience exponential growth in its revenue and profitability in the next 24 months.
Last May, KV acquired Paktor. Does KV have plans to integrate SoundOn into Paktor?
Under the Paktor Group umbrella, there is an audio social entertainment application called Goodnight, which provides live entertainment and audio dating services. We believe there to be synergies between the platforms and will actively explore bringing them together.
We believe that the future of audio entertainment is just beginning and this acquisition marks a step towards establishing an Asian beachhead on this front.
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Image Credit: Turn Capital
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