There was a time when startups, especially in the product space looked at community building as just a ‘nice to have’ option for marketing. That time has passed.

Over the past few years, changing dynamics of audience engagement and go-to-market strategy have led to incredible results for product-led businesses that engage actively in community building. Audience and community are two different things, many organisations are realising the difference post-pandemic.

Products evolving from community feedback amidst COVID-19

Since COVID-19 took over the world and physical interactions effectively disappeared, product companies took to various forms of community building to engage in real conversations about their product, find comparisons, and discuss possible new features with an engaged group of developers, creators, and product managers.

Such communities thrived on platforms like Slack, We Work, Telegram and even Clubhouse, which itself is a great example of a product that evolved from community-led feedback. Entrepreneurs are finding that a community-led approach could not only lead to selling their products to a more targeted market but also help develop future products.

Among the investor faction too, a community-led approach has replaced the existing ideas of a ‘lean startup’. Some have even re-defined the lean startups of this age as those who build a community first and develop software afterwards.

Clubhouse is a great example, where the founders took the beta version to their own community of VCs and founders before introducing new features.

In between lockdowns and restricted social interactions, the platform grew like wildfire globally bringing on board creators, business leaders and even developers who actively engaged in open conversations about the features and problems of the platform giving the team real-time insight into user preference.

Social media is cluttered, but dedicated community channels are shedding new light on the effectiveness of having an engaged group.

Co-working spaces have fostered collaboration and built niche communities

Think of co-working spaces and the reason why they became such a popular concept. People from different backgrounds started working under the same roof, and eventually found ways to collaborate with each other to build exciting things.

Graphic designers found brand marketers, technical writers found newfound startups, and product discussions happened over lunch with strangers.

Also Read: For Heartbreak Bear, community is key to the success of their NFT project

Co-working spaces fostered an environment of creative development with industry peers who are not really colleagues or employed by the same company. Niche communities like these have led to superior product feedback and ideation in real-time, from real users.

Investors today also believe that this approach could be a game-changer for the world of startups. According to Jacob Peters of Launch House, a community platform that represents a virtual Silicon Valley, building a successful community depends on two key factors:

• A good reason for people to gather
• A reason for users to re-engage

We believe another important factor that determines the rise of a great community is the quality of content being shared. If these three areas are not carefully monitored and managed, the initiative will fail eventually.

Identifying true influencers is key to developing a smart community

In the app-based world of technology, product development cannot be reverse engineered to fit into a go-to-market strategy. The time has come for businesses to truly identify their influencers; it is no longer the C-suite employees but actual developers whose personal opinions and recommendations of software can make or break the market for a product.

It is not an easy transition from the traditional thinking of sales cycles, product development, feature introduction, processing bug reports and providing customer and user support. Even the employees need to relook at the methods of engaging with a smart community for the best results.

Ultimately, considering the shift in purchase decision dynamics, companies can sell better with an engaged community.

Therefore, the investors are lining up for companies that get their communities right, even before they build new products. Companies must acknowledge this now and start investing time in identifying where their communities lie and tap them at once.

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An increasing focus on using digital channels poses both exciting opportunities and challenges for businesses everywhere, especially where innovation matters. In this webinar, executives from WhatsApp and leading Voice AI company, Curious Thing, discuss the latest technology and channels to improve engagement, efficiency, and ROI of your business-customer communications.

The topics tackled in the webinar included the value proposition of new communication channels for businesses – how leading companies are improving the effectiveness and efficiency of their communications without driving up costs; understanding the shift in communication channels – How new technologies benefit customers and how businesses can meet evolving customer expectations; and getting the most out of new technology – a deep dive into lessons learned from companies using these solutions. 

The panellists for the webinar were Adam Bowden, APAC Head of Client Management (Business Messaging) at Meta; Sam Zheng, CEO and Co-founder at Curious Thing; Rik Johnson, Head of Solutions at Curious Thing, and was moderated by Jean Alfonso-Decena, Founder & Executive Director at InSilence AI.

Paving the way for a higher level of customer service

Customer experience is a key focus in every company. Moderator Jean Alfonso-Decena kicked off the webinar by asking the audience if they had incorporated any communication channels in their business to streamline operations and improve the experience. The audience poll revealed that 80 per cent of those who answered ‘not yet’ were soon making this a priority.

Commenting on how emerging channels or innovative technologies are helping pave the way to a higher level of customer experience, Bowden explained, “We look at customer experience as being able to give customers a seamless experience, being able to engage with them at all stages of a customer journey. Whether that’s discovery, marketing, lead generation, transactional, or customer care, I think what is important now is to have that one seamless experience and to provide that experience where the customers are, not where businesses expect customers to be.”

Also read: Looking to scale your company? Hong Kong is open for business!

Johnson echoed this by explaining that customer experience is an inherently personal expectation that each of us has which is part of the challenge in the communication space. “It’s about how to make it seamless and easy and how to meet people where they want to operate, but that doesn’t mean that everybody wants to have the same experience,” Johnson explained.

“There have to be options, channels and variety there for people who want to interact in different ways. So in many ways, it’s a very personal relationship with a business,” Johnson added.

To this, Zheng added that “Building trust is essential to delivering on the ‘what’ and ‘how’. You can also invite customers to help shape their experience – decide what the best timing is for them. That’s my view of what good customer experience is.”

Connecting with businesses in today’s landscape

According to Bowden, the way people communicate with businesses is changing and that’s been accelerated because of the pandemic around the world. Now, people are messaging businesses of all sizes. Not just in enterprises but in SMBs as well – communication is happening for a variety of reasons. “People want to engage for different reasons and they want to do it in the same way that they chat and communicate with their friends and family. They want businesses to come to them wherever they are, rather than reaching out to businesses to start the conversation.” 

Zheng added, “When businesses think about touch points, they think about key customer milestones. Today, thanks to lots of technology companies, the definition of touch points are massively changing. Most businesses are required to create touch points more intelligently. You need to be proactive and very responsive at the same time. This is the trend we have seen in a lot of businesses, especially B2C. It’s a challenge and also a great opportunity for large businesses like Meta and smaller organisations like Curious Thing.”

Larger platforms like Meta have found their way around this. “We don’t have independent touch points with customers at Meta. You do not have one single touch point for customer care, sales, product information, or discovery. A customer chooses their stage of the journey and none of those is in isolation,” explained Bowden. According to him, customers that want to speak to a business with a support issue are likely to be the same people that businesses want to speak to about a new sales opportunity or get information from to help them in a future state.

He added, “I think what businesses are starting to understand is that you cannot segment those touch points across different departments and different channels. You need to bring that conversation to one place, so that’s just creating a little more complexity for organisations, but from a customer experience standpoint – that improves it significantly.”

Also read: Here’s why startups should consider South Korea for business expansion

Curious Thing addresses this challenge by pioneering the use of voice AI to have purpose-led conversations with customers, especially proactive conversations. “We’ve been speaking to people from various demographics, particularly different age groups and it’s been astonishing to learn that customers who are over 60 years old are quite happy to speak to a pleasant robot if the robot will get the job done. It’s all about the outcome and the convenience, and being very transparent. Go in open-minded because customers will surprise you as to what they’re open to. The end result of the interaction is the thing that matters to them,” said Zheng.

“What’s important is we are reinventing how touchpoints are created even before people realise that – okay, I need to talk to someone,” he added.

Johnson, who comes from the world of call centres and was previously a customer of Curious Thing, cited a concrete example: “We had a challenge at the start of the pandemic where we needed to call 200,000 people in a day. You can’t do it with people; we couldn’t conjure them out of thin air – so how could we get a critical message out to people within an eight-hour span to find out who needed help? We had to find those needles in the haystack and bring them back in to be able to give support where it mattered most.”

She added, “It really showed me how we tend to think AI is going to solve these commoditised problems; essentially give AI the work that humans don’t want to do. But it’s actually more about finding ways to get humans to the work they want to do.” 

Meanwhile, Bowden argues that not every person wants the same type of experience. “It’s amazing how many of those issues can be solved by a chatbot. Even though we might say ‘I want to speak to a person,’ we actually want the most efficient and quickest way to solve the problem. If I can have an interaction with a chatbot and solve that problem in five minutes, I would be happier than being on the phone waiting for an hour to speak to an agent,” he explained.

For businesses, Meta puts a lot of emphasis on three key things: relevancy, timeliness, and expectancy. If you are not delivering across those three, you are likely providing a poor customer experience. 

Checks and balances in emerging customer communication channels

When we talk about channels, it’s about letting people direct their own journey. How can businesses help you get to where you want to be? 

Johnson remarked, “We ask customers after their call a lot of the time. How did you find this? Did it meet your expectations? The responses are surprisingly positive, particularly when you’ve got the right use case. In the health sector, we’ve found between 75 and 85 per cent of people are very positive about being able to speak with an AI bot. Because it’s available, they understand what it’s there for and they feel supported and connected with the organisation.”

For Bowden, he believes that the challenge is figuring out where your customers are spending time and what your macro-based challenges are in those markets. “Internally, what we found is that a lot of businesses don’t necessarily have all of their different systems set up to be connected. If you have a sales system, a customer support system, and a product-based system for example, and they’re not well integrated, then it could be a very hazardous approach to engaging with customers.”

Also read: Looking to expand your business? Head down to the Philippines!

When it comes to anticipating changes in the customer landscape, the panel believes that it’s a matter of understanding your customers. Bowden pointed out that nobody could have predicted that a pandemic was going to come. “It’s more about how you become agile to be able to shift and evolve very quickly,” he explained. 

The panel agrees that every interaction with a customer is a learning opportunity and as long as you learn through every touch point, you will be evolving at a pace that is similar to your customers’ changing behaviour. “I think it’s quite difficult to get ahead of that but as long as you are in line with that, you’re going to be successful,” Bowden added.

Meanwhile, Zheng explained that it is important to be curious about your customers. “Businesses should try and understand what the customer really needs, and learning from every opportunity adds to that. That’s basically where we want to go – enable businesses to be more curious so they can do better for their customers,” he elaborated.

To check out more insights from our esteemed panellists, watch the webinar here. Also, you may see general responses to several questions raised during the webinar here.

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This article is produced by the e27 team, sponsored by Curious Thing

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.

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Indonesia regulator bans trading firms from issuing certain financial products
Offshore products, crypto assets, and gold are banned; The move could affect multi-asset trading platforms such as Ajaib and Pluang, which have launched crypto assets on top of their stock business; OJK said the latest regulation is aimed at improving consumer protection.

Sendo raised US$57M via convertible loans since 2020
In 2021, the company issued two tranches of convertible notes to investors, including Econtext Asia, SBI E-Veitnam, and subsidiaries of Sendo’s parent FPT Corp.

Alpha JWC, Gojek’s VC arm pour US$35M into Indonesia’s AgriAku
AgriAku is a B2B marketplace that connects retailers of farming equipment with suppliers of agricultural input such as seeds, fertilisers, and agrochemicals; It gets revenue from the margin for every transaction that happens.

Govt-backed Korean fund KVIC commits US$23M to AC Ventures, Gobi Partners, Highlight Capital
The fund committed US$6.5M to each ACV and Gobi and US$10M to Highlight; ACV has a minimum target corpus of US$16.3M while Gobi and Highlight are seeking to raise a minimum of US$39M and US$200M for their funds respectively.

Singapore mental health startup Intellect extends Series A to US$20M
Investors include Tiger Global, Insignia Ventures, HOF Capital, K3 Ventures and Singtel Innov8; Intellect will use the funds to expand across Asia, focusing on building the region’s first digitally-enabled full-stack mental healthcare system.

Binance unit gets nod for Spanish operations
The registration, which was granted to Moon Tech Spain, will allow Binance to offer crypto asset exchange and custody services in the country; This marks the third registration that Binance has received in Europe, following those in France and Italy.

Philippines’ AC Ventures, 917Ventures partner to develop startup ecosystem
The partnership hopes to accelerate both the quantity and quality of 917V’s future companies as the unique advantages now encompass the broader Ayala group, including real estate, banking, power, healthcare, and logistics.

East Ventures backs Indonesian construction tech firm Amoda’s pre-seed raise
The company allows customers to choose and customize their buildings online and provides prefabricated materials that can help reduce construction time and costs; It caters to both individuals and businesses in Indonesia.

Vision Fund’s senior leader resigns from SoftBank
Sources said that Rajeev Misra has raised over US$6B in commitment from several LPs, such as Abu Dhabi’s Royal Group and state-owned fund ADQ; However, Misra will continue to serve as a senior executive at the Vision Fund.

Singapore’s rewards-based payments firm TWID receives US$7M funding
Investors include Rakuten Capital, Beenext, Surge, and January Capital; TWID converts rewards points into a fungible payment instrument, to be used universally across its network of merchants and brands.

Embedded insurance firm Ancileo adds Fermion as an investor
With this strategic investment, Ancileo will gain access to some 230 banks and 150 insurers; Ancileo’s SaaS platform powers embedded travel insurance distribution for some of the most recognised travel brands in the world, such as Etihad Airways and Scoot.

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The state of mental health in Asia has been troubling for many years. Key factors such as low mental health literacy and lack of human and financial resources are the main causes for people to neglect seeking help when they need it most.

Over the last few years, startups and various other companies have identified this space as a high potential area for growth. Due to the pandemic, the growth of this space has accelerated exponentially.

Currently, four to 20 per cent of adults in the Asia Pacific are experiencing diagnosable mental illnesses, with only around one in 10 seeking help. However, changes on the government and cultural levels are not quite as speedy as one would hope. Instead, we are seeing the changing situation being led by other key players like global corporations and startups in the space instead.

Understanding mental health in Asia

The World Health Organisation (WHO) found in 2001 that many mental health challenges stem from governments not implementing mental health programmes or allocating sufficient resources to treating mental illnesses.

This has created a landscape in which people usually face three key challenges regarding mental health issues.

• The stigma around mental health makes them reluctant to seek help.
• The cost of treatment is not always covered by health insurance and is not always affordable.
• Access or availability to the needed treatments or services is not always available locally.

The COVID-19 pandemic sent most countries into isolated lockdowns. The prolonged lockdowns have undoubtedly created today’s environment where a nuanced awareness of mental health issues and challenges has increased exponentially. This has led to a market where funding for the space has nearly doubled in the last 24 months.

Also Read: How to tackle employee mental health to build a resilient workforce

On the flip side, today’s landscape has also created a fortuity, where large companies and startups alike are more exposed and understanding of mental health issues, which serves an important purpose, to destigmatise mental health and unveil the mystery that is mental health solutions.

As a result, we are seeing three main trends emerging within Asia as the need to address the mental health of a nation becomes more important.

Mental health literacy is increasing

Many countries across Asia are trying to remove the stigma around mental health by raising mental health literacy within the country. This can be seen in examples of an increase in soft-power movements, encouraging dialogues about mental health in South Korea.

This is seen through the increased mental health topics being discussed on television shows and present within popular K-Dramas. In Singapore, the government has invested US$13 million into community efforts to raise awareness of mental health and improve the mental health literacy of the country.

A rise in mental health is assessed in companies through Employee Assessment Programmes (EAP)

Although not a fully resolved challenge, many labour legislations around Asia have started implementing a requirement for companies to have some sort of stress assessment or employee wellness assessment.

Countries like Japan have made this a part of the workplace requirements for companies of certain sizes, and other countries in the region have implemented or advised on a similar practice. This creates a space within the HR and Workplace Management sector for solutions as companies seek new tools to improve employees’ health.

An increase in solutions for mental health across the spectrum

As mental health literacy increases in Asia, understanding the spectrum of mental health needs is becoming prominent. The funding for current treatments in Asia, particularly in South Korea, sits at an institutional or hospital level.

The market is becoming more aware of opportunities in spaces for different mental health needs at earlier stages in the spectrum. This leads to a rise in solutions being offered to address all stages and methods, from self-maintenance to regular counselling and mental health care.

There is also a shift in some businesses turning to these new solutions as an addition, or even replacement, to their current EAP offerings.

How startups are impacting and changing the mental health space

Using South Korea as an example of the changing trends within Asia, there has been a history of the majority of the mental health funding going towards treating mental health illnesses in hospitals, which account for 68 per cent of all mental health facilities and institutions in South Korea. This has highlighted the need for mental health treatment and support at a community level rather than just at an institutional level.

Also Read: Singapore mental health startup Intellect raises US$10M to extend Series A round to US$20M

Over the last few years, South Korea has been seeing a steadily increasing number of startups and new solutions in the space of community-level mental health services, focusing on helping people gain understanding and access to mental health support easily and effectively.

Services such as Mind Cafe, which offers non-face-to-face counselling, have grown as users seek ways to handle their mental health during the pandemic. Furthermore, Trost has offered users mental wellness through services such as ASMR, mind management chatbots and meditation.

Through the increase in solutions like these, we can also see in Asia that the increase in startups has correlated with the increase in adoption as people prioritise mental health and mental wellness more through these mental health services.

Recently Singapore-grown startup, Intellect has been leading the innovation in the mental health space through their offerings to both users and corporates to help people gain access to an end-to-end solution for all items covering mental health, from cognitive-behavioural therapy techniques to also helping companies support their employees’ mental health through EAP-like programmes.

How Intellect is facing and changing the mental health market

Intellect, founded in 2019, has been growing rapidly within Asia, raising a total of US$20 million for their Series A led by HOF Capital and Tiger Global, and reaching three million users this year.

Intellect focuses on tailoring and localising mental health solutions to Asian markets, predominantly focusing on two key areas that they have identified as important problem statements within the mental health industry in Asia.

• People need more mental health support across the spectrum, not just at an institutional level. Intellect helps users build healthy mental habits through their app and supports users’ move from clinical support to proactive support. This gives end-users the tools to effectively navigate their own mental health needs at all stages.
• Helping customers and the public learn more about mental health. Intellect aims to continue to support and celebrate the increase of public awareness of mental health and has been hosting complimentary events for the public, such as their Mental Health Festival Asia held in Singapore last year.

With these key missions as their focus, Intellect has built a mental health care platform that is palatable, accessible and tailored for the Asian population.

It currently serves over three million lives and covers 14 languages across 20+ countries. The team aims to not only create a self-care app or a marketplace for therapists but also focus on connecting the dots at all levels of mental health support that anyone may need.

To reach this goal, Intellect has been working to impact the Asian market at multiple levels and is currently navigating market entry into key markets to support this.

They have spent the last two months working closely with the Rainmaking Expand team through their South Korea programme in order to deep dive into how the South Korean market approaches mental health, with their learnings focusing on the best way to enter the market and support the people within it.

How Intellect is expanding into new markets

CEO and Co-Founder Theodoric Chew has highlighted that the most important element for them when entering new markets is understanding the country, market and cultural nuances deeply.

Also Read: YC-backed mental health startup Intellect bags US$10M Series A

They have spent their time over the last couple of months focusing on identifying the current mental health structures, the key players in the space, and the key people they need to work with to successfully make their services available to the people of South Korea.

Chew attributes success in new markets to determined by localisation. Intellect has focused within Asia on hiring local, native language-speaking teams to handle the creation and localisation of the content. It is more important to implement the local, cultural context and nuances within the mental health solutions they provide and not simply translate content from other markets.

Since the company’s founding, Intellect has focused on providing people with knowledge, awareness and support. Since mental health is a key area that needs to be addressed for many markets in Asia, it has also been a challenge to make it clear to people where they can find the support they need for the challenges they face.

Intellect hopes to bridge this gap by supplying people, both as individual users or as part of a corporate/organisation, with the right tools and connections to find the support and guidance they need. Ultimately, Intellect wants to build these capabilities to empower people across all of APAC to manage their mental health.

Why innovation can help solve bigger problems

The cultural shift within the mental health space in Asia is heartening. The rise of regionalised startups, like Intellect, continues to transform millions of lives across Asia. Intellect’s proactive localised approach towards solving key challenges in mental health has created a new mental healthcare system for workforces and individuals.

Intellect is leading the changes in the mental health space through its proactive approach to the key challenges that the industry faces, as well as helping each individual market gain access to fully localised support and tools to empower their populations.

This is leading to evolution through innovation for the different markets as both governments and corporates are turning to these new solutions and approaches to challenge the larger problems within their markets.

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It is hard to remember what work at the office was like before we worked fully remotely during the peak of the pandemic and as we toggled between a hybrid and remote model during the great work experiment that followed.

On the surface, hybrid work is the ability to work from home, the office, and anywhere. While it may seem like a simple concept, it requires a complete rethink of the employee experience, and a much greater focus on inclusive culture, employee well-being, as well as trust and leadership.

Hybrid work has changed the workplace for good

Our latest global Hybrid Work study reveals that work is no longer about where you go, but what you do. This has never been clearer, with almost two-thirds (65 per cent) of employees in ASEAN believing that their quality of work has improved with hybrid work and 66 per cent share that their job knowledge and skills have improved.

Getting more done has allowed them to take more time for themselves. Most respondents said that hybrid work has improved various aspects of their physical, financial, emotional, and social well-being by allowing them to reinvest time from their commute and rigid work schedules into more time for family, friends, and pets. This has ultimately made them happier.

While employees are saying they want a hybrid work arrangement, only one in four (28 per cent) think that their company is “very prepared” for hybrid work. This boils down to challenges on two fronts: technology and culture. 

Technology is an enabler in the hybrid work world

Working from anywhere is only possible if you have technology that allows you to connect from anywhere. A key enabler of this is a software-defined, modern network that can seamlessly and securely connect any employee to any application or cloud, across any platform, all with a consistent user experience.

Smart collaboration tools, which seamlessly integrate voice, video, and content sharing, also play an important role in enabling employees with a consistent work experience and in keeping them engaged.

Collaboration is not just a business for Cisco, but the way we work. Our collaboration tools such as Webex provide a smart, seamless, secure way for people across different work environments, languages, and technological proficiency to connect, with features such as noise cancellation, real-time translations, and artificial intelligence (AI) speech enhancement levelling the playing field for all meeting participants.

Also Read: Is hybrid work the future for APAC?

All these technologies need to be underpinned by a Secure Access Service Edge (SASE) architecture, which converges networking and security functions to protect an organisation’s entire infrastructure. 

The bigger challenge comes with making hybrid work inclusive

While technology is critical in a hybrid work world, it cannot succeed alone. The harder fix is the culture shift needed to build an inclusive environment for hybrid work to be successful truly. More than half of our respondents from the Hybrid Work study believe that fully remote workers will have challenges engaging with their colleagues (67 per cent) and company (66 per cent), compared to those who toggle between remote and in-office work.

These findings illustrate the need for organisations to rethink how they engage employees and create new rituals that promote team engagement in a hybrid work arrangement. Businesses must build an inclusive environment where everyone feels accountable, empowered, and heard regardless of whether they are working from home or in the office.

This success relies on flexible, empathetic leaders who can “walk the talk” and show employees that they are committed to embedding trust, flexibility, and listening in the hybrid world.

One way leaders can do this is by setting up a consistent platform for employees to share their sentiments on their work experience.

For example, Cisco conducts Quarterly Engagement Pulses to evaluate and spark conversations about how employees feel about their team, the work environment, and themselves.

In addition, all employees participate in weekly check-ins with their managers that allow employees to have a focused conversation about their work sentiments, priorities, and strengths.

This includes what they loved and loathed doing and the support they need from their managers each week. We found that this has helped employees feel seen, heard, supported and helps us ensure that they are given equal opportunities to thrive in their roles.

While hybrid work is not possible without the right infrastructure and tools for connectivity and cybersecurity, what will be critical for leaders to rethink is how they can cultivate trust and empathy within their organisation to embed inclusive fully collaborative work arrangements for hybrid work to really work.

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In the e-commerce industry, it’s no secret that everyone wants to sell more. Whether it’s via social media, through user testimonials, offering discounts or displaying how many items are left in your inventory to urge consumers to purchase, there are many ways to sell.  

Yet, most importantly, if you manage to drive people to click the buy button, they need to be able to check out first. And the checkout is crucial for conversion.

The likelihood of a conversion increases the farther along customers are in the buying journey, and this likelihood tops 80 per cent if a consumer makes it to the payments page. So, in theory, customers will most likely buy if your checkout is good. 

So, what can be done to ensure your checkout is set up to increase your conversions?

Keep it simple

The more trouble your customers navigate your website, the less likely they will buy. But when it comes to the checkout, the more fields and steps a checkout has, the less likely people are to convert.

As such, keep the checkout simple and streamline the number of fields or pages by only asking for the necessary information to complete the transaction. On the checkout page, use clear, everyday language consistent with the language on the rest of your website.

Be honest

Trust is key in payments, so honesty with your customer is essential. Pricing should be transparent at all times, so there aren’t any surprises at checkout. 48 per cent of shoppers abandon carts because of extra costs such as shipping, taxes, and higher fees than expected. 

The solution? Let customers know of any estimated fees early on.

Make it secure

Shoppers do not only want simple and honest checkouts that are easy to navigate. They also want to feel safe when shopping online.  

Also Read: How to scale up your DTC game with payments

On the merchant side, estimates say online fraud can cost merchants over US$12 billion annually. So, your checkout must be secure. Artificial intelligence can be used to put off fraudsters without getting in the way of discouraging real customers. Showing a security designation, such as an SSL certificate, which means your website is authentic and connections to it are encrypted, can also help to reassure customers.

Diversify your devices

We live in an age where shopping on mobile devices, including laptops, phones and tablets, is the norm. Worldwide, there are around 15 billion mobile devices, and you need to ensure that your shopping experience runs smoothly on all devices, including when it comes to checking out.

The right payment methods

This may seem obvious, but you must offer your consumers the right payment methods at checkout. The “right” payment options are the ones your customers use and want. Since the preferred methods change depending on where you are in the world, you need to know how people like to pay wherever you are selling. 

77 per cent of online purchases in 2021 were made with local payment methods (LPMs). For example, a popular LPM in Singapore is GrabPay, whereas if you are in Indonesia, GoPay and Kredivo are favoured options that belong to the payments mix. 

How to know you have nailed the conversion

E-commerce is complex, and getting things right at the checkout is not simple. By considering all of the above and putting yourself in your customers’ shoes, you will be able to make their online shopping experience as seamless and easy as possible, ultimately increasing your conversion rates and realising the sales you are striving for.

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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.

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

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Globally, the last couple of months have witnessed many layoffs as companies began to tighten their belts to tide over the current financial slowdown. Hundreds of thousands of people lost their livelihoods. In Southeast Asia, companies, including Shopee and Crypto.com, handed pink slips to hundreds of people. Many more companies are likely to reduce their workforce in the coming weeks.

The situation is grim, but there is some silver lining, says Oswald Yeo, Founder and CEO of Glints, an online talent platform in Southeast Asia.

In this interview, he discusses the crisis, the silver lining and more.

Edited excerpts:

Globally, companies have started laying off people in doves to tide over the funding winter. What does the overall job situation look like in Southeast Asia?

If you are in engineering or product [development], your job situation is good as these are still highly sought-after roles, and there is still higher demand for these roles across markets than supply. We see that non-revenue generating roles, such as marketing, operations, and HR, tend to be more affected in the current downturn.

Also Read: Tech companies lay off, now or never for smaller startups

However, we do not see the situation as all doom and gloom. There is a silver lining in all this: many companies and talent in Southeast Asia have proven themselves resilient. What we see is that companies and talent are adopting more of a borderless mindset. Strong talent is looking outside of their local markets for opportunities.

How do tech companies in different markets in Southeast Asia react to the situation differently? Is there a panic among tech firms?

We see more layoffs in Indonesia and Singapore, the markets that attracted significant investments over the past few years. Now, major corrections are happening on the ground.

In other markets, such as Vietnam and the Philippines, we are yet to see many layoffs. We see that not all markets have been affected equally. And not all businesses are being impacted equally either. Prudent tech startups with strong unit economics will continue attracting funds and will likely continue hiring.

Is the situation in Singapore better?

Compared to other markets, Singapore is adapting more quickly than other markets. The city-state is adapting faster than other markets partly because it is much more connected to global markets.

Many international companies’ regional headquarters are based in Singapore and, where needed, have taken decisive cuts.

How can companies tide over this crisis without resorting to workforce reduction?

It depends on the company and its current financial position and balance sheets. For companies that unfortunately need to make difficult decisions to adapt to the new economic realities, we see the best companies do it with compassion and honesty, supporting their employees through it.

Is it a short-term phenomenon? When do you think the world will come out of this? Do you see the light at the end of the tunnel?

Unfortunately, it is likely just the beginning of a correction. In the next six months, markets like Indonesia, Vietnam, and the Philippines will probably see further belt-tightening. However, we see a silver lining: now, many companies are not only thinking about how they can hire talent locally but also how to build a strong workforce borderless way.

We’ve been working with companies like AIA and Setel to hire remote teams in markets like Indonesia and Vietnam. This is also an excellent opportunity for talent in emerging markets as they are no longer constrained to just local opportunities – they now have access to opportunities all around the region and even around the world with this new remote work trend.

How do you compare the current recession with the COVID-19 crisis?

The decline during the COVID-19 crisis was a sudden shock to the system and much steeper, but recovery was also swifter due to massive fiscal stimulus. Recovery was speedy in the tech industry due to the vast funding available at the time.

Also Read: Compassionate layoff — Airbnb shows the way

The current decline seems to be more gradual, more companies realise the changes in the economic environment over time, but some may realise these changes too late. Recovery is unlikely to be as swift as the cost of capital has changed. Eventually, we believe it will recover, but we need to maintain patience and resiliency.

Southeast Asia companies and talent have proven themselves resilient by adopting a borderless mindset. Talent is looking for opportunities outside their local markets, and companies adapt to borderless workforces for greater cost efficiency.

What lessons can we draw from these crises?

There are a few lessons learned in this time. The first is being able to confront reality. Companies that do best during crises are those that confront reality instead of being blind to the real challenges.

It’s essential to be pragmatically hopeful instead of sheer blind optimism. It’s also important to recognise the problems and not just tolerate them.

The second is to be resilient. We have seen many founders and companies looking for new ways to adapt to the new realities. For example, many of our employers have adapted by adopting a borderless workforce.

The third is to look for opportunities in times of crisis. For companies in a strong position, now is the time to look for senior talent with less competition. It is also a great time to strengthen the current bench with more top talent.

Do you think the “aggressive growth at any cost” era is over? Should companies now focus on fundamentals and achieving profitability?

We certainly see more focus on fundamentals and profitability now. And we believe the best companies will be able to deliver growth efficiently.

Profitable and cash flow-positive businesses are in a good position particularly prudent tech startups with strong unit economics will continue to attract funds and therefore likely to continue hiring.

However, early-stage companies that do not have a strong cash position or are very dependent on liquidity (for example, Buy Now, Pay Later) or inventory-holding businesses like retail and e-commerce will be negatively impacted.

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The cybersecurity talent crunch has been one of the perennial problems of the past years for businesses.

With industries set to continue their digital transformation post-pandemic; and as cybercrime grows in scale and complexity, the challenge is only set to intensify.

Startups, in particular, have borne the brunt of the talent crunch. As businesses characterised by a “grow at all costs” ethos, cybersecurity has not traditionally been a business priority for startups, with resources typically channelled to product development and user acquisition.

The fiercely competitive market for recruiting cybersecurity talent doesn’t help either. A recent YouGov survey of ICT professionals in Singapore ranked “cybersecurity” as the top specialisation lacking in tech talent. A combination of these factors has meant that startups often operate with lean cybersecurity resources, and thus become prime targets for cybercriminals.

It is with little coincidence, then, that startups in Singapore and the region have found themselves on the receiving end of the biggest data compromises. These include the leak of user data records from ShopBack, Love, Bonito and RedDoorz Singapore, e-commerce, retail and hospitality startups respectively, to underground forums in 2020; and a more recent theft of 1.26 million users’ personal data from edutech startup GeniusU earlier this year.

With the talent crunch forecast to persist in the near term, how can startups address the cybersecurity conundrum?

Finding the right balance, augmenting manpower with automation

The answer lies in striking the right balance when allocating resources within the security operations centre (SOC). Simply put, a SOC is a centralised function within a business comprising people, processes, and technology that work together to continuously monitor and improve its security posture through the prevention, detection, analysis; and subsequent response to cybersecurity incidents.

Also Read: Best cybersecurity practices for startups to stay ahead of the curve

Regardless of size, all businesses could and should have an effective SOC shaping their cybersecurity posture. In an ideal scenario, a company would have a fully functional SOC manned by full-time analysts working around the clock, every day of the year to identify possible signs of intrusion and compromise that may require a response. However, we know well enough that the hiring landscape has made such an arrangement a pipe dream for most startups.

While startups can rely on a lean SOC comprising of a small number of analysts who wear different hats, such a setting would mean that security events are not consistently monitored around the clock. This leads to major delays in responding to many incidents, while other incidents go completely unnoticed.

The silver lining, however, is that prevailing technologies in cybersecurity today have made it possible for lean businesses to assemble a SOC with few manpower resources by augmenting it with the right solutions to effectively perform constant security event monitoring and analysis and detect possible intrusions.

When dedicating resources across people, processes and technology, startups lacking in manpower can dedicate their analysts to concentrate their energies on the most complex and challenging tasks, doing away with legions of analysts that traditionally spend most of their time performing time-intensive, mundane tasks.

Here’s how the three factors can work together to shore up a company’s cybersecurity posture, within the limits of its resources:

People

No matter how well automated a SOC is, certain roles are fundamental, and shouldn’t be replaced, in particular, the security analyst and the incident responder. These roles demand a level of analysis, inter-department liaison and decision-making that cannot be automated viably, and should be staffed by a skilled practitioner at all times

• Security analysts work primarily in the monitoring and detection phases of a SOC.
• Meanwhile, incident responder tasks may include conducting a deeper analysis of suspicious security events using various tools; and keeping the management apprised of the status of incident response efforts.
• On top of these two full-time roles, the security architect is also important as a part-time team member. This is typically someone within the security organisation with a deep understanding of the organisation’s security programme and infrastructure. This person would help design the initial SOC solution and oversee its implementation to ensure it is efficient and effective.

Technology

In investing in the right cybersecurity technology, the key lies in identifying an all-in-one platform that the SOC will be shaped around. Such a platform includes and integrates all the needed forms of security automation and incident response orchestration processes into a single display.

• For instance, an all-in-one platform could centralise all forensic data that underpins effective machine analytics, which can subsequently be utilised to identify events of particular interest, eliminating the need to have people looking at the raw security event data on monitors 24 hours a day.
• In addition, such a platform could enable automated responses that trigger actions that can be initiated without human interaction, or that require single-click approval, which would greatly benefit a team’s time to respond to an incident

When an effective platform is combined with a sensible SOC staffing model and robust processes, there will be seamless integration, workflow, and communication for all SOC-related tasks, even in instances where an external contractor is needed.

Also Read: How much does cybersecurity cost and how to budget for it?

This combination also enables immediate access to the information, data, events, and investigation records that are needed by authorised in-house and outsourced parties at any time and from any location.

Processes

• While technology brings people and processes together, processes help people to work with each other. Robust processes ensure that collaboration at critical times is instantaneous and seamless.
• Again, an all-in-one platform has a big role to play in coordinating processes, including sophisticated communication, collaboration, workflow, and orchestration capabilities for SOCs. An all-in-one platform is essential because it performs security automation and orchestration to ensure that everyone is kept up to date on the status and has access to all necessary information.
• In addition, it provides staff with the tools they need to work together and route tasks from one person or team to another, and check on workflows to ensure that nothing is overlooked or handled too slowly. For example, a security analyst may mark a set of events in the platform that an incident responder needs to further investigate. The all-in-one platform provides workflow capability that transfers responsibility for the work from the security analyst to the incident responder.
• For instance, when a major incident occurs, numerous security analysts, incident responders, and forensic specialists may all help to resolve it, and others within the organisation such as system and network administrators may also be involved.

Ultimately, startups operate in highly competitive and volatile landscapes, where cybersecurity lapses can make or break their growth trajectory. The imperative, thus, is for companies to work around today’s competitive cybersecurity talent landscape, by empowering their existing teams with the right technologies to augment their jobs.

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Of COVID-19 and funding winter: Why these 2 VC firms are bullish about SEA amid back-to-back crises
Intudo Ventures and Altara Ventures discuss how they view the recent crises and what to expect in the long term, and whether unicorns are to be celebrated.

VNG eyes Nasdaq debut, may offer 12.5%
The proceeds will be used to expand across different business segments and build a bigger presence beyond Vietnam; Tencent is currently the largest shareholder in VNG with 29.6% interest, while Singapore’s GIC holds 7.8% and Temasek 4.9%.

AC Ventures said to be raising US$500M across two funds
It is targeting US$250M for its early-stage Fund IV and a separate US$250M for a new ‘select fund’ to double down on growth-stage winners from its portfolio.

Animoca Brands banks US$75M+ more to fund strategic acquisitions, investments
Investors include Liberty City Ventures, Kingsway Capital, Alpha Wave Ventures, and 10T; Animoca will also use the money to secure licenses for popular IPs and advance the open metaverse.

Alibaba to lay off over 30% of investment team
This means that the strategic deals team, which has more than 110 members, will be trimmed to around 70. The layoffs will mostly affect mid-level and senior staff based in mainland China.

Lightspeed sets aside US$500M for India, SEA startups from US$7B global fund
The Silicon Valley-based fund has invested in several prominent startups in India and SEA such as Energy Exchange, Oyo, Byju’s, Grab, Acko, Razorpay, Udaan, and ShareChat.

3AC founders drop off the map, hinder liquidators
Lawyers representing 3AC founders Su Zhu and Kyle Davies had previously informed a British Virgin Islands judge that the two intend to cooperate with the court’s order for the firm to liquidate, but those tasked to see the process through had not received any “meaningful cooperation” from the hedge fund.

KKday extends Series C round to US$95M for domestic expansion
Lead investor is TGVest Capital; KKday, an e-commerce platform for tours, experiences and activities, will roll out its SaaS solution rezio to manage bookings and inventory for merchants to 1,600+ merchants worldwide, reaching 2.7M travellers globally.

Temasek leads US$100M round of Indian fintech OneCard
This puts the startup in the unicorn club with a valuation of US$1.3B; OneCard is a mobile-first metal credit card; Its parent firm also operates a credit score tracking and credit management platform, OneScore, which reportedly has nearly 70M users.

Indonesia’s Doku buys Malaysian fintech firm SenangPay for US$7.5M
The acquisition will help SenangPay adopt new services – such as e-wallets, remittances, and offline transactions – that can help its merchants go from brick-and-mortar models into digital businesses.

Razer seeks US$7M from Capgemini for 2020 data breach
The breach resulted in leaking the personal information of more than 100K Razer users; Razer alleges that the breach was the result of a misconfiguration of the “ELK Stack,” caused by one of Capgemini’s employees.

Singapore mental health startup Intellect raises US$10M in Series A+
Investors include Tiger Global, K3 Ventures, JAFCO Asia, Singtel Innov8, Insignia Ventures, and HOF Capital; The fresh injection will be used to scale Intellect’s commercial expansion plans and teams across Asia.

Axie Infinity sales bounce back after US$620M hack
Co-founder Jeffrey Zirlin said in a tweet that daily sales of Axies had reached 22K earlier this month, an over 3x surge from 7K a few weeks prior; He also highlighted that the Ronin Bridge is operational again.

Indonesian proptech startup Tanaku raises US$5.5M pre-seed capital
The lead investor is East Ventures; It will use the fresh capital to build the product, expand the team, acquire homes, and execute the go-to-market strategy; Tanaku aims to build a ‘pre-mortgage solution’ for owning a home.

Indonesia’s Imajin raises pre-Series A from Init-6
Imajin is a platform that bridges demand and supply in the manufacturing industry; In its home market, Imajin plans to expand to several cities in Java and the Riau Islands province.

Ex-Grab director launches firm for Indonesian influencers
Albert Lucius has launched TipTip, a digital platform aimed at monetising social media influencers; The company previously raised US$10 million in a seed round led by East Ventures.

TNB Aura funds ex-Grab founding exec’s brand aggregator
Tjufoo was co-founded in 2022 by TJ Tham, a former founding member of Grab, where he headed GrabBike Indonesia and was also the CEO of GrabWheels; Tham is bringing an “Indonesia first” approach to helping small businesses through equity capital.

1982 Ventures backs SG wealth management startup Hugosave’s US$4M round
Hugosave helps customers spend, save, and invest through its automated online platform; It said its platform has since acquired over 40,000 users.

Coinbase-backed Vauld files for 6-month moratorium amid growing liabilities
The company disclosed that it currently has US$330M in assets and US$400M in liabilities; The mismatch is mainly due to losses on Bitcoin, Ether, and Polygon trades, as well as exposure to failed stablecoin UST.

Why Buhler believes that collaboration is key to support the alternative protein industry
Dr Aparna Venkatesh of Buhler explains the important role that partnership plays in their mission to support the alternative protein industry.

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The post Ecosystem Roundup: VNG eyes Nasdaq debut, Alibaba to lay off 30% of investment team, Animoca banks US$75M+ more appeared first on e27.

With the startup world undergoing a funding winter following a global recession caused by various macroeconomic factors, including the Russia-Ukraine war and inflation, the early-stage investment has tapered down. Many tech companies, including high-profile ones, have reduced their workforce in doves, anticipating a tougher fundraising climate and slower growth. The new crisis comes as a double whammy as the world has yet to recover from the onslaught of COVID-19. 

The collateral damage has not spared VCs either. They have become frugal and are now urging their portfolio companies to spend wisely and expect a long and hard winter. Many VCs, who have witnessed similar crises, including the 2008 economic slowdown in their previous avatars as founders/top executives, are seeing similarities between the recent crises.

We spoke to two prominent and active early-stage VCs in Southeast Asia — Intudo Ventures and Altara Ventures — to understand how they view these crises.

There are several reasons why we believe their views are relevant in this matter. First and foremost, these two VC firms are actively investing in tech companies in the Southeast Asian region. As a player on the ground, they see first-hand the changes that are going on in the ecosystem and have taken steps to adjust to it accordingly. Their insights could provide us with a window to how to best approach startup investing in this climate.

Second, both VC firms are actively investing in the Indonesian market, with Intudo Ventures even putting it as its core focus. With Indonesia being the largest and one of the most prominent tech hubs in the region, we believe that whatever is happening in the market –and how investors are approaching it– will eventually determine where the regional tech ecosystem is going.

This article will look into how the two VC firms deal with this situation and the insight that we can get from it. Hopefully, this can help us prepare ourselves better for what is coming.

The VCs and the people behind them

We need to start by understanding the VC firms that we are talking to and the spokespeople representing them.

Intudo Ventures: Founded in 2017 by Eddy Chan and Patrick Yip, Intudo is an ‘Indonesia-only’ VC firm. It has launched three funds so far — Fund I, worth US$20 million (2017 vintage), Fund II, worth US$50 million (2019 vintage), and Fund III, worth US$144 million (2021 vintage). It seeks opportunities in agriculture, B2B & enterprise, education, finance & insurance, healthcare, logistics, and new retail & entertainment. It invests in the seed/pre-A stage with a ticket size of US$1-3 million, Series A with US$3-8 million, and Series B and beyond with US$8-25 million.

Also Read: Indonesia-only Intudo Ventures hits final close of Fund III at US$115M, to back 12-14 firms

The VC firm has invested in 25 companies, including Xendit, Pintu, BeliMobilgue (acquired by OLX Autos), Kargo, PasarPolis, Halodoc, Pinhome, Nalagenetics, Populix, Andalin, TaniHub, and Yummy Corp.

In this interview, we speak to the Founding Partner of Intudo Ventures, Eddy Chan. He works closely with top Indonesian “Pulkam SEA Turtles” and local Indonesian talent via professional and student associations. He has been featured as a speaker at the annual Harvard Asia Business Conference (2019-2022), MIT Asia Business Conference (2020-2022) and Southeast Asia MBA Weekend (2018-2022).

Before co-founding Intudo, Chan worked on venture investments in startups in the late 1990s, including PayPal, Palantir, and Affirm, founded and operated venture-backed technology companies with operations in Silicon Valley and Asia, practised corporate/M&A law and worked as an investment banker.

Altara Ventures: Singapore-based Altara is a US$130 million early-stage VC fund launched in 2020 by a group of tech and investment veterans, including Koh Boon Hwee, Tan Chow Boon, and Seow Kiat Wang. Its focus verticals are fintech, consumer, enterprise software, logistics, healthcare and edutech. Its average ticket size is US$3-5 million in pre-Series A, Series A and selectively some Series B companies.

The firm plans to support 20-25 companies operating primarily in the Singapore, Indonesia, Vietnam, Malaysia, Thailand and Philippines markets.

Altara has invested in more than ten companies, including Tonik, Stasfin, Sampingan, Med247, FreeAgent, PolicyStreet, Clevai, Saturdays, Senseye and Oddle.

In this interview, we speak to Dave Ng, General Partner at Altara Ventures, where he focuses on working with promising entrepreneurs building for the region and beyond.

Previously, he was the Head of Southeast Asia for Eight Roads Ventures, where he led investment and portfolio activities for the region. Before that, he was Venture Partner at B Capital Group, where he helped launch the Asia office.

Over the past decade, Ng has partnered with many talented founders and firms, including Ninja Van, Carro, Akulaku, StashAway, Icertis, FreeAgent and LeadIQ. Besides investing, he has also spent many years building and operating within the technology industry. He was previously at Oracle, leading strategic activities in its Cloud business. He was also an early team member at enterprise SaaS pioneer Zuora. Before that, he was a management consultant at the Boston Consulting Group.

Investment thesis

There are both differences and similarities in the way Intudo Ventures and Altara Ventures approach startup investments.

Intudo Ventures: Its mandate is defined by the three ‘Ins’ of Intudo: Indonesia, Independent, and Involved.

Indonesia-only: Intudo Ventures takes an Indonesia-only approach to investment. In its view, any successful venture-backed business in Southeast Asia must eventually go through Indonesia to be relevant. It only invests in Indonesian homegrown companies.

An independent firm: Intudo Ventures is an independent VC firm. Every LP is capped at no more than 10 per cent of the total fund size to ensure that Intudo acts as an independent firm that can invest in the most return-driven manner and ensure that all LPs are treated equally.

Involved/concentrated approach: It strives to take the lead/co-lead positions in almost every company it backs. It looks for non-consensus overlooked companies, emerging leaders, and undisputed category winners instead of trying to index the market.

Altara Ventures: The VC firm says it has seen many activities over the last ten years in Southeast Asia and is excited about the next 20 years. Several areas excite Altara. The first is the irreversible rise of the region as a sustainable tech ecosystem. This has been driven by a rising consumer middle class and hence, consumption power, which spurs the entire digital and Internet economy.

The second is the adoption of technology among businesses, both large and small. All companies must have a digital playbook or face disruption or irrelevance. Finally, SEA’s economic structure is shifting to become more tech biased. It has seen this in S&P 500 and will happen to IDX, SGX, KLSE and the likes. It is just a matter of the speed it is happening.

The opportunities they see

Before we can understand how they approach the incoming (ongoing?) crises, first we need to understand the opportunities that these firms are seeing –and seizing.

Intudo Ventures: Indonesia’s venture funding sector is entering a maturation stage, where capital, talent, and ideas are more abundant than ever. The influx of global capital has changed the game, with more investors looking at the market. We are seeing more capital and talent being recycled into the ecosystem, creating new companies and opportunities for growth.

For Indonesia, the underlying dynamic is the digitisation and transformation of traditional industries, a process that has only accelerated with the pandemic and correlating economic fallout. Technology enablement was historically a ‘nice to have’ for companies of all sizes. However, post-pandemic, it has become a ‘must have’. There will be a continuation in the scaling of ‘pick and shovel’ foundational businesses such as payments, logistics, and enterprise services to support e-commerce and key traditional economic sectors.

Digitisation is happening across the Indonesian economy, ranging from conglomerates, the government, SMEs, to small mom & pop businesses. We have witnessed this throughout our portfolio in the sectors in which they operate. Consumers have also flocked to digital offerings throughout the crisis, and many will continue to adopt technology to meet daily needs. This dominant trend will continue to be the driving force for the Indonesian venture market for the foreseeable future.

However, as optimistic as we are about the future of Indonesia, it has been a long journey to get here. Over the past decade, Indonesia has gone from a VC backwater to becoming one of the most compelling emerging markets for investors. For fundraising, founders had few options, with only a few mainstay firms to choose from at the early stage and even thinner in growth.

Also Read: Altara Ventures hits the final close of inaugural fund oversubscribed at US$130M

From an investor landscape perspective, Indonesia has evolved from a market dominated by corporate VC firms and regional fly-in investors to one where local investors have begun to dominate the landscape and gatekeep access to the market. Talent, still cited as an issue today, was even more scarce.

Awareness of Indonesia among investors has grown dramatically. When we started as a firm, some investors even laughed at us for the notion of setting up a firm to exclusively invest in Indonesia. We had to spend hours educating potential investors on Indonesia, including what now feels like basic market knowledge. Those days are gone.

Founders are now blessed with an abundance of options. Capital has become a commodity through the maturation of Indonesia’s venture market. With the market flush with capital, founders now want more than just money. Unless it is a global firm with significant brand power and know-how, founders expect their investors to offer concrete value-add deliverables—in particular in-country resources, access to customers and regulators and hands-on guidance. Gone are the days of fly-in fund managers.

Altara Ventures: It is looking to partner up with passionate folks who have the audacity, grit and right mindset to build for the future. It seeks to back companies that 1) meet the consumption, mobility, education and healthcare needs of the 650 million population, 2) in the digital transformation of businesses, logistics and supply chain and 3) groundbreaking deeptech.

It finds large domestic markets like Indonesia, the Philippines, Thailand and Vietnam especially interesting for consumption-driven models, solving large market gaps. It is also excited about Singapore’s potential in deeptech and healthtech. It also likes the creativity and regional mindset of Malaysian founders.

COVID-19 vs funding winter

So how should we approach these back-to-back crises?

Eddy Chan: The pandemic was an unprecedented crisis that permanently changed how people live and conduct business, underscored by mass digitisation. This is true for Indonesia, which experienced several shocks over the past couple of years, but has shown resiliency as a market and people.

These two events are interrelated cause and effect issues. The human toll– not just the lives lost but also the second-order effects — continues to play out, including the current market downturn, which is the fallout of monetary policy, supply chain shock, and geopolitical factors.

When money was easy due to pandemic-related policies, it was being doled out irrationally, creating bubbles along the way. As the spigot has been tightened, businesses dependent on easy money suddenly have to rely on operational fundamentals. 

Companies that took high valuations based on irrational investor demand will have to rationalise these valuations through changes in business strategy and a shift to sustainable growth.

In the early days of the pandemic, we believed that the crisis would compel the shuttering of many startups in Southeast Asia, and there were many examples. Still, the boom in fundraising masked many of these issues. Now that we’re on the other side of this process, we expect startups to struggle in fundraising. For those with means in our portfolio, it will be an ideal time to consolidate their market position and adopt an M&A strategy.

Also Read: Funding winter: VCs ask startups to focus on corporate funds from developed countries

Ultimately, we believe that there will be a greater appreciation for local expertise among founders and investors alike. Local investors are best suited to deal with in-market crisis events and have the tools and resources needed to support company growth in both good and bad times. Many regional investors with Indonesia exposure have tried to shore up their Indonesia credentials through junior hires over the past couple of years to mitigate in-market issues. 

For global investors who first tasted Indonesia during the recent bull run, it may be challenging to support founders as the market cools off and their attention is turned elsewhere. Indonesia is our sole focus, and we act as their eyes and ears on the ground for many global investors. We expect many investors who made their first investment in Indonesia during this period to visit the country and gain a greater appreciation for in-market dynamics.

Dave Ng: I have seen a few more cycles — the late 99 and 2000 iconic dot com boom and bust, the housing market bubble in the US in the mid-2000s and then the 2008-2009 recession. 

The impact of each of these is somewhat similar and comparable, although slightly different in the degree of severeness.

This time, we are talking about inflationary pressure much higher than we’ve seen before. If we draw a comparison, it takes us back to even the inflation in the 70s and 80s.

It will cause the capital to go up, especially on the debt on the lending side of things. Imagine your business (large and small) leveraged many times; your cost of doing business will go up substantially with the increase in interest rate. All this will have a trickle-down effect. 

Therefore, we are already seeing that many large tech companies are tightening their belts, either by slowing down or stopping hiring or, even to some extent, starting to trim down or organise their workforce and laying off people. 

We have seen that even in our ecosystem here in Southeast Asia among some tech startups. This will have a ripple effect across the economy. 

The worry here is we get into a stage of stagflation, meaning that you have high inflation and very little growth. So you’re stuck in that state, and we don’t want to be in that situation. 

Should we celebrate unicorns?

For many years, in the global startup ecosystem, there has been heavy emphasis on the unicorn status. This has led to many companies (and investors) rushing to be (and invested in) the next unicorns. But is this a worthy cause, especially as more companies are encouraged to be more sustainable these days?

Eddy Chan: Unicorns are a proxy for success but are not successful in themselves. There are many examples of companies that have flopped after gaining market accolades and attention due to valuations and fundraising amounts.

Global attention comes with these companies as proof points for market viability for the market as a whole. It generates considerable pride among employees, investors, and local stakeholders to show that Indonesia can build such calibre companies.

So, celebrating unicorns is not unwarranted, but chasing unicorn status can lead to unhealthy business and investment practices. Unicorn chasing is often a FOMO game, and it’s not the space we operate in as an “early-stage” investor.

As early-stage investors, we aspire to cut through the noise and hype to look at ideas and founding teams that have the potential to shake up the market and create new business models and categories in their own right before they take off. We are naturally very excited when our companies raise money and gain market attention, validation, and share in their success.

Conversely, some deals we’re most proud of may never reach unicorn status. Still, they’re successful businesses already, generating positive income, providing employment, and creating value for Indonesian society. Some of them were once considered “unfundable” before Intudo put money in and raised capital from top global investors. With a consensus return to fundamentals across the market, we believe that investor mindsets may coalesce around more sustainable business models and fundamentally strong teams.

Also Read: Funding winter? Indonesia marches on … and why it will survive the gloom

Dave Ng: In the early days of coining the term ‘unicorn’, it was all about companies achieving certain milestones. For example, a SaaS company gets to US$100 million in ARR (annual recurring revenue), or a consumer company’s net revenue reaches a substantial level. It was the point when most companies crossed the billion-dollar valuation.

So I am always for celebrating positive milestones. It is important for founders to recognise every little milestone they achieve because starting and building a company is challenging. It’s also crucial for investors investing or partnering with companies to celebrate and help them celebrate every little milestone. 

However, I think there has to be a balance. We shouldn’t disproportionally celebrate milestones that are pretty on the surface but have no real substance. 

So it’s important to celebrate every milestone, which could sometimes be non-financial related. Sometimes it could be people-related, culture-related, or product-related.

Wrapping up

Globally, VC investment is under severe stress or, in other words, undergoing a course correction. There are many reasons to be anxious about this. First, nobody is sure what will be the outcome of the ongoing financial slowdown. Apart from that, experts have also warned that the winter will likely last longer than expected with even the biggest companies having their valuations inflated. How many unicorns with inflated valuations will remain unicorns when things are finally settled? What will happen to the rest of us?

The answers to these questions remain elusive. However, we also like to point out that this is not the first time a crisis has happened.

If we have survived one before, there is a likelihood that we might survive the next one.

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