After spending a considerable amount of time in China, Benny Chen, managing director of BAce Capital and ex-managing director of Ant Financial India, believes that there are similarities between Southeast Asia (SEA) and the country that can be leveraged upon.

At only 18 months old, as a VC fund that focuses on mobile-first markets in SEA, BAce Capital utilises its network and experience in China to help founders in emerging markets. The reason why this market is so attractive to Chen is because of the size of the opportunity it offers, in terms of innovation and size of the user population.

“Even though mobile phone technology, adoption has been largely prevailing in SEA, its depths and density still need a few more years to mature. There’s a huge opportunity to not just adopt but change customer behaviour,” Chen opines in an interview with e27.

For example, e-commerce’s increasing popularity can be seen in both SEA and China. In China, there is a growing trend of people buying and selling goods via live streaming platforms. Not that there are no live streaming apps in SEA and India, but the transaction amount of e-commerce via the live streaming platforms are much higher in comparison to other regions.

These are some models that, according to Chen, can be replicated in emerging markets.

And he was not alone in believing this. Other industry players such as Koh Tuck Lye, the chief executive of Shunwei Capital of Beijing, also asserts that the firm is “a strong believer that the China experience is much more relevant in India and Southeast Asia than the US experience.”

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Speaking at the DealStreetAsia’s Private Equity/Venture Capital Summit in Jakarta, he further noted that the concept of a “super app” that is now so popular in Singapore and Indonesia with gojek and Grab was first pioneered by Tencent’s WeChat messenger app in China.

Learning from China

With that belief in mind, BAce helps its portfolio companies in emerging markets build from the success of business models in other successful markets, especially China.

“Thanks to our previous Alibaba backgrounds, we can utilise our network and experience to provide founders a different way of getting more information,” Chen says.

“Last December, we brought the CEO and founders of all 10 of our portfolio companies to China and hosted a big event where they were able to each interact with 200 Chinese companies. And vice versa. We also brought our China founders to Indonesia and India. So, you know, people tend to learn and exchange know-how from very different backgrounds,” he continues.

“As a VC, we are enablers, so we do our best to give them a platform to learn from. We give them a little bit of inside information through our own knowledge. But more importantly, create a platform where founders can see more what’s happening in similar successful markets.”

But Chen also makes sure that founders are not spoonfed. “We don’t mandate or dictate what is the right model. On the analysis side, we give them more information that they generally wouldn’t have access permitted to. And we enable them to communicate with the right people,” he shares.

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Currently, BAce Capital is investing in Singapore, Indonesia and India and has revealed plans to invest in Vietnam soon. Its focus is B2C mobile-first companies but remains largely sector agnostic.

Some of its portfolio companies include adtech startup AdOnMo, online printing platform Printerous, co-living startup RoomMe and female centred social media app Healofy.

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Image Credit: BAce Capital

 

 

 

 

 

 

 

 

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