The end of June also marked the end of a tumultuous first half of the year –and it has been a wild ride for the Southeast Asian tech startup ecosystem.

We were rocked by news of shutdowns and layoffs that involved even the bigger players in the ecosystem. This was an anxiety-inducing knowledge. But the good news is that, even during this dark time, there is still good news.

The most important of all is that the global health crisis did not seem to affect startup investment too greatly. Yes, as acknowledged in several episodes of the e27 Webinars series by our guest speakers, investors are becoming more careful in times of crisis. There is also the argument that funding rounds announced in the first and second quarters were likely to be closed before the pandemic hit the region hard.

But let us have a look at how the ecosystem fared based on the news coverage published on e27.

1. Series A rocks

Funding announcements in June were dominated by companies announcing their Series A rounds. We counted that there were at least eight Series A funding round announcements, many of them are in the million US dollar range.

Apart from Series A, there was also some noticeable seed funding round by companies such as Ula, which raised US$10.5 million. In addition to raising a massive amount of money, the company had just launched its platform in January.

Also Read: Report: COVID-19 might result in US$28B missing startup investment this year

Some popular names such as Indonesia’s Fabelio and Thailand’s SYNQA (formerly known as Omise Holdings) had also announced their Series C funding rounds in June.

2. Making quarantines more bearable

The lockdown and self-quarantine measures imposed in many countries had led to a surge of popularity for some verticals. Instinctively, people are doing more online shopping activities as movements were restricted. Entertainment platforms, such as gaming and video streaming, had also been predicted to become more popular as customers were looking to be entertained.

This was the case with Cinepoint and GoPlay; both companies announced funding rounds involving Ideosource Entertainment. The case of GoPlay was quite unique as many video streaming platforms in Southeast Asia were known to be struggling. This peaked with the acquisition of iflix by Chinese tech giant Tencent.

Fintech also continued to remain popular, particularly for companies that implement blockchain in their platforms, such as Wallex Technologies, Sparrow, and SYNQA.

There were also announcements from other sectors such as legal tech (INTELLLEX) and construction (Hubble).

For countries such as Singapore, where the ecosystem is more prepared for the deep tech sector, we saw funding announcements by Horizon Quantum.

Also Read: Why angel investor Eddie Ler thinks startup investment is like The Lord of the Rings

3. gojek does it again

Indonesian ride-hailing giant gojek continued to make headlines. While the company had to close down several of its services due to the pandemic, it also announced a new investment by Facebook and PayPal in June.

This movement was remarkable as it marked Facebook’s first investment in Indonesia. It is also interesting to see the kind of partnership that we can expect from the investment: There is a possibility of having PayPal integrated into the gojek platform.

What is next?

Considering the likelihood for these funding rounds to be closed before the pandemic reached its peak in Southeast Asia, we do not think it is safe yet to say that the pandemic “does not affect startup investment in the region.” Because we definitely saw how the global health crisis impacted the startup ecosystem, and this is going to affect investors’ decisions as well.

The next six months will actually determine how exactly the pandemic is affecting startup investment. While the number of early stage investments may decrease, we predict that the startups might walk out with heavier pockets, especially if they are able to prove the strength of their team and products.

Another thing to note is that, while there are verticals that become more popular among investors, it does not mean that there will be no hope for startups working in other sectors. Popularity will eventually lead to saturation; besides, we will continue to need innovation in other sectors such as the law or construction. There is plenty of room for creativity, and this is where our challenge lies.

—

Image Credit: Gabrielle Henderson on Unsplash

The post In June, startup investment in Southeast Asia continued to weather the storm appeared first on e27.

B Capital Group, an active VC fund run by Facebook Co-founder Eduardo Saverin, has announced the final close of its second fund worth US$820 million.

In a Medium article, the VC firm said that the final close brings its total assets under management to US$1.44 billion.

The group has invested in nearly 30 companies across Asia, Europe and the US, including Singapore-based Ninja Van and CXA.

As per a TechCrunch report, the second fund is more than two times what the group raised for its US$360 million debut fund in 2016.

The Fund II will invest in growth-stage startups transforming large industries and scaling rapidly.

Also Read: As IDX commissioner, this is how Pandu Sjahrir aims to help more Indonesian startups go public

“Although technology is already embedded in nearly every sector and aspect of daily life, the last three months show us there is still extensive unmet need when it comes to digitisation,” said B Capital Co-founder and Managing Partner Raj Ganguly.

“We believe the next ten years will see a major shift in innovation as entrepreneurs examine industries and practices from new angles and find ways to accelerate connectivity between systems, companies and people,” he added.

Founded in 2014 by Ganguly and Saverin, B Capital invests in B2B and B2B2C companies in enterprise technology (including SaaS, infrastructure AI/ML and security), fintech, health-tech, consumer enablement technology, and transportation and logistics.

It typically invests between US$10 million and US$60 million in companies at Series B, C and D stages.

Ganguly claims that B Capital has experienced significant growth over the past year, adding key roles in areas including investing, operations and the company’s platform team.

Through its exclusive partnership with BCG, B Capital connects entrepreneurs and corporates to explore mutually-beneficial relationships that apply cutting-edge technologies at scale.

The group’s other portfolio companies include AImotive, Atomwise, Blackbuck, Bounce, Bright.md, Evidation Health, Icertis, INTURN, Plastiq, Notable Labs and SilverCloud Health.

The post Eduardo Saverin’s B Capital hits final close of US$820M Fund II appeared first on e27.

Quantum computing has gained significant interest over the years because of its potential to solve problems beyond the reach of the most powerful supercomputers.

Singapore’s Horizon Quantum Computing is a startup that aims to make quantum computing much easier to access and in turn become a part of a bigger tech revolution.

In a recent interview, Horizon’s Founder and CEO Joe Fitzsimons, originally from Dublin, sat down with e27 to give us a glimpse into his entrepreneurial journey.

Excerpts from the conversation:

Tell us more about Horizon Quantum Computing. What makes its approach unique from other quantum focussed companies?

At Horizon Quantum Computing, we are building tools to simplify the process of developing software for quantum computers.

We think about programming and quantum computers in a way that is more like programming a general computer rather than using some kind of special-purpose hardware accelerator.

Our approach is unique. We are developing capabilities that, as far as I am aware, no other
company or academic group have.

We build quantum algorithms directly from conventional computer code, automatically identifying places where it can be sped up.

What type of job were you working in before launching of your own business?

Most recently, I was a tenured associate professor at Singapore University of Technology and Design (SUTD) and a principal investigator at the Centre for Quantum Technologies.

Why did you pick Singapore to launch your company?

I did my undergrad in Ireland. But about six months into my PhD, my supervisor moved to Sydney and at that time I was going out with someone who later became my wife. And I thought that moving to Australia would not be great for
the relationship, and instead, I looked to continue my journey somewhere closer by.

So in 2005, I moved to Oxford to do a doctorate and ended up staying on as a research fellow. Artur Ekert, the then director of Centre for Quantum Technologies in Singapore and a fellow at the same Oxford college as me, suggested I apply to SUTD.

I joined SUTD 3 years later. So I’ve been in Singapore for 10 years already. It’s been a fantastic place to be in terms of support for entrepreneurship, but also culturally, it’s been a very good fit as well. Even though, it was a coincidence on how I ended up here.

What sparked your decision to quit your job?

I was at a point where my view of quantum computing was that we were at this inflection point where progress in the field was starting to shift out of academia and towards the industry.

Just in terms of judgment, I thought it was the right time to make the transition. If I had done it beforehand, I think the technology wouldn’t be quite there. And if I delayed it I felt that it would have been too late.

It would be like trying to start a computer company today. Maybe it’s possible, but it’s not the same.

Also Read: Singapore’s Horizon Quantum raises US$3.2M to make quantum computing accessible to every developer

For a long time, I have viewed quantum computing essentially as a new computer revolution. 

What have been your biggest challenges in building your company and how did you overcome it?

One of the challenges is that quantum computing inherits a hardware risk. We’re a software company but we also depend on running on hardware and that hasn’t been developed fully yet.

The other challenge is hiring. Recruiting skilled quantum computing people is tough.

But we’ve been active in the quantum area for quite a long time, so a fair number of researchers and people coming out are prepared to take the risk and work with us with the vision of making good scientific progress as well as from a business perspective.

We are also working quite closely with hardware manufacturers and have been developing techniques to reduce the error rate in processors and software. And have seen some success on this.

What are some things that quantum computers can do that other computer cannot? 

There are potentially many examples of problems that are hard for computers
to solve.

In quantum computers, there’s something we call amplitudes which allows it to solve more complex calculations than a conventional computer.

Take the example of aircraft loading. Maybe, you want to put on as much as much weight as you can, but you need it to be distributed in such a way that the centre of gravity is within a particular region. But you also have the restriction
that each of the packets you put on can only be in certain positions.

To figure out the optimal configuration or the best order to load the parcels can be very problematic. So just finding a solution to these can take a very long time on a regular computer, especially with so many restrictions.

When do you plan on bringing your product to the market?

We have already started working with our early customers right now but it will be a little while before we’re ready to announce dates on that.

What are some of the short-term milestones that you wish to achieve with Horizon?

At the moment, our priority will be getting the first version of our tools up and running. We will continue working with our existing customers and attracting more early adopters in key industries such as finance, aerospace and energy
that we feel would benefit from quantum computing.

As the quantum hardware still needs to be further developed, I would not recommend anyone to go ahead and spend US$20 million today on a quantum device to solve business-related problems.

But it totally makes sense for various industries to identify what would be the impact of quantum computing for them
and start working today on the use cases for this revolutionary technology.

—

Image Credit: Horizon Quantum Computing and EmTech Asia

The post Why this professor quit writing academic papers to start his own quantum computer company appeared first on e27.

Temasek to invest US$100M in India’s food delivery business Zomato

Singapore government-owned Temasek is in talks to invest up to US$100 million in India’s food delivery company Zomato, according to The Economic Times.

The discussions between the two parties have been ongoing since the end of last year, said the report citing unnamed sources.

The round was almost finalised, but the terms of the deal are being renegotiated given the impact of COVID-19 on business operations, India’s investment policies and competitive landscape with Amazon’s launch (of its food delivery business, said the source

Temasek currently owns a 3 per cent stake in the startup.

SGInnovate launched new AI accelerator Deep Tech for Good

Singapore-based deeptech facilitator SGInnovate has announced a new initiative called Deep Tech for Good.

Also Read: Why this professor quit writing academic papers to start his own quantum computer company

According to a report by the Singapore Business Review, the initiative aims to accelerate the development and use of Artificial Intelligence (AI) along with other technologies to improve the human condition and drive sustainable development across different markets.

Furthermore, the report stated that the project seeks to drive awareness among global leaders across the public and private sectors to facilitate the sharing of knowledge and success cases where research-based innovations have helped improve lives.

It’s also on a mission to build and scale deeptech solutions as well as catalyse collaborations amongst corporates, startups, and governments.

Deep Tech for Good will follow through with a series of thought leadership events that are expected to involve startup founders, investors, corporate leaders, researchers, and government representatives in 2020.

One of the events that will take place on July 23 is AI for Good, headlined by Professor Yoshua Bengio, Scientific Director of Mila and Co-founder of Element AI; and Dr Kai-Fu Lee, Chairman and CEO of Sinovation Ventures and President of Sinovation Ventures Artificial Intelligence Institute.

Sunway iLabs launches new super accelerator programme

Sunway iLabs today announced the launch of a new 4-month “super accelerator programme” for early-stage startups.

The programme is aimed at improving startups’ chances to successfully commercialise their products and services in the market.

Supported by Sunway Group, SunSEA Capital and Gobi Partners, the programme will provide the startups with capital, mentorship and market access.

Led by Sunway Group chief innovation officer and Sunway iLabs director Matthijs Van Leeuwen, the Super Accelerator programme focuses on delivering value within five key verticals — smart cities, edutech, digital health, food and agritech and e-commerce.

The programme will provide selected start-ups up to RM100,000 (US$23,000) of seed funding and assist them in getting a followup funding after graduation.

Embracing and leading the new normal due to Covid-19, the programme will be mostly delivered virtually through iLabs Dojo, a newly developed online learning and training platform.

Interviews, pitching, mentoring and business meetings will be conducted via video conferencing.

Also Read: In June, startup investment in Southeast Asia continued to weather the storm

Participating startups can also look forward to academic support from Sunway University in talent recruitment and research and development opportunities.

Unicorn India Ventures invests US$650K in blockchain startup ChitMonks

Mumbai-based early stage venture capital fund Unicorn India Ventures has invested US$650,000 pre-Series A in Hyderabad based fintech/blockchain startup ChitMonks.

ChitMonks has developed a product to empower the state government regulators to administer chit fund operations across the state on a private permissioned blockchain network.

They are extending their services to Chit fund companies of any size and anywhere in India by digitally enabling them with process efficiency (payment collections, online* auctions, eKYC, eSign etc), better underwriting (bank statement analysis, credit profiling, credit liabilities) and making their offerings more inclusive.

The post In brief: Temasek reportedly in talks to invest US$100M in Zomato; SGInnovate launches ‘Deep Tech for Good’ appeared first on e27.

Singapore-based Qualee Technology, which offers customisable employee on-boarding and engagement solution for companies, has raised US$1 million in funding from Tandem Technology Partners.

Qualee said in a press release it will use the capital to enhance its product, recruiting, consulting, marketing and support.

“We are humbled by the success of this fundraising round, particularly during challenges COVID-19 has presented all companies,” said Qualee Co-founder Vipula Samarakoon.

Also Read: Why this professor quit writing academic papers to start his own quantum computer company

Qualee is an online platform for organisations of all sizes to enhance their engagement and on-boarding processes with employees. Using the latest in cloud and mobile app technology, its proprietary self-service, digital platform automates procedures and provides clients with the ability to securely create employee experiences that measurably improve employer familiarisation and engagement.

Its cloud platform, featuring AI and Machine Learning at its core, provides clients with the ability to design customised on/off-boarding and micro-learning journeys, manage multimedia content repositories, meet compliance requirements and regularly engage staff.

“Qualee was founded on the principle that people are the driving force behind every business,” said Charley Zuidinga, COO of Qualee. “Our mission is to enable companies with a highly secure, self- service application to empower their talent and instil a sense of belonging. Every day.”

Also Read: Eduardo Saverin’s B Capital hits final close of US$820M Fund II

Bob Boughner, Managing Partner at Tandem Technology Partners, said: “There is an strong synergy between Qualee and our extensive insights into contingent and mobile workforces across multiple verticals. Many organisations have been forced to furlough staff recently and using Qualee allows employers to remain connected with displaced staff and quickly reinitiate as conditions improve.”

The post Qualee raises US$1M to offer customisable employee on-boarding solution for businesses appeared first on e27.

NextBillion.ai, an Artificial Intelligence-powered hyperlocal solutions startup in Singapore, today announced the completion of its Series A investment co-led by Lightspeed Venture Partners and Falcon Edge Capital.

This brings the firm’s total funding raises in Series A to US$7 million.

With a presence in Singapore, China and India, the startup will utilise the capital to grow its team, product and R&D in future focus areas.

NextBillion.ai was co-founded earlier this year by Gaurav Bubna, Ajay Bulusu, and Shaolin Zheng — all former tech-leadership members of Grab who developed Grab Maps.

The AI startup is focused on building hyperlocal solutions, particularly in emerging markets where language and geospatial infrastructure challenges are significantly complex and unique.

Among its product is nextbillionmaps, which provides customisable features, such as routing and navigation, matrix calculation, and map data curation.

The second product currently under-the-making is nextbilliontasks, where AI is used for decoding of data to simplify multilingual texts, image classification, sentiment analysis and video annotations.

Also Read: Singapore’s Botsync closes seed round to scale up its heavy-duty autonomous mobile robot solutions

Co-founder and CTO Shaolin Zheng said: “From mapping to natural language processing, content moderation, facial-recognition and cybersecurity related challenges, our AI solutions are aligned with hyperlocal nuances in both emerging markets and developed markets, which is ideal for companies who wish to expand on a global level.

We see great opportunities in China and the potential to support more and more businesses with NextBillion AI solutions for their expansion into emerging markets in the Southeast Asian, Middle Eastern, North African and Indian region,” he added.

Co-founder Bubna said: “Emerging markets across the world are far more complex, with different languages, cultures, hyperlocal nuances and densely populated cities, than the developed markets.

With our first product nextbillionmaps, we are building an intuitive and intelligent location AI-platform by using open-source data combined with proprietary client data, that makes logistics, transport, ride-hailing, delivery, e-commerce solutions accessible, effective, efficient and affordable. We intend to expand into multiple verticals by delivering world-class AI-powered solutions to our customers,” he added.

NextBillion.ai has already on-boarded several global brands in the social media, ride-hailing, food delivery, freight and logistics industries across China, Southeast Asia, India and the US.

The post NextBillion.ai, a 6-month-old startup founded by the brains behind Grab Maps, raises US$7M Series A appeared first on e27.

We know investment decisions are personal and logic (‘gut feeling’ about a deal and founder) does not always apply. We do recommend however to build an evaluation framework and stick to it, simply because investing is a constant learning process and you want to construct a portfolio of companies and look back in a few years to evaluate your framework and sharpen your decision-making process.

By using the four-layered structure below one should be able to touch all essential aspects while evaluating a deal:

• Pre-qualification phase
• Interview phase
• Research & Review phase
• Due Diligence phase

With HH Investments VC we have refined this framework over the years and it’s proven to be successful. Our ratio of investments is typically one out of 100 companies that we evaluate.

It is important to realise that the answers to the questions below do not make the investment decisions for you. We have to accept that no company nor founder is perfect and it’s fine to make exceptions to your decision framework, just make sure you have the logical reasoning to do so.

Also Read: Tips for drawing in angel investors for your startup

You wouldn’t be the first angel that makes the difference for a startup that wasn’t perfect when the investment was made:

Time

We have broken down the approach in multiple layers in order to introduce the ‘time’ factor. Investors might fall in love with a startup or a founder immediately after the first interactions.

It is important however to take a step back and see if the founder is persistent and pursues the investment opportunity or if we simply feel a deal is not ready for our investment yet but it might be in several months from now, we want to spectate.

Or perhaps we want to see if the founder can find other investors to join as you don’t want to be the only one?

It is important to take a step back before making decisions

Fear-of-missing-out (FOMO)

The really (rare) ‘amazing’ deals and founders typically don’t allow you to spectate and you simply have to make fast decisions as the funding round will likely fill rapidly and you should be grateful that you are allowed to have a place on the cap table. Worse; you might not even see these types of deals as they are typically concluded in small circles of investors.

Also Read: Confusing Angels with VCs is a common startup mistake

However, the majority of the deals are not immediately ‘amazing’, they are ‘potentially good’ (diamonds in the rough) (even though a lot of founders attempt to create FOMO, it’s probably better to wait, nine out of 10 times these founders are still trying to raise money in two months from now), you need to have patience and take a proper deep dive before making a decision.

Pre-qualification phase (One week — six months)

During this stage, we typically haven’t spoken much to the founders yet. We let them fill out a form or we simply extract information from the investment deck that we ask them to share with us.

Note: I try to refrain from using classifications such as pre-seed, seed, and pre-series A in this article as they can be confusing and are not helpful metrics for evaluation. It’s fine to put a staging label on a company, but let’s do it AFTER the evaluation.

Our focus is Southeast Asia and we like Singapore to be the country where the HQ (legal and tax safe-haven) is established. Your preference can be different but you want to look at the legal aspects and whether you feel comfortable to invest in the relevant country or not.

Stick with what you understand. As an angel investor, you need to be able to envision growth in this industry, so you’ll need to understand it. Also, you want to add as much value to the company as you can (the founders will need it). Sure, you can venture into new industries but be prepared to put in the extra work.

We want companies to raise money for growth and not for survival. So we like to see at least 18–20 months of the runway after the round has been closed.

Also Read: Angel investors appreciate these 5 uncommon things that founders do

Is there a minimum viable product with at least 6 months of data?
If you like to invest ‘very’ early stage with smaller tickets you’ll find companies that are still in the idea stage and I personally think you’ll be taking an unnecessary risk of the company not even being able to launch a product or service. Instead, there are sufficient good companies with traction out there (coming out of accelerators, venture builders, or started my second-time founders) with at least six months of data that we should focus on.

Is there a business- and financial plan?
We want founders that have thought things through even though a lot of it might still be guesswork.

Is it clear from the deck what problem the company is solving and how they are solving it?
We like to see a clear problem statement and a deck built around it. This shows that the founder and the company have a focus. Even though the problem might be very complicated, a great founder is able to break it down in understandable chunks of information.

Raising how much?
The size of the amount by itself doesn’t say much, but it does show how realistic the team is when you look at it in combination with the problem statement and the goals of the company. Typical angel rounds are between US$100,000–US$500,000.

Also Read: Angel investing is full of risks –but that is why it is so rewarding

Did the founders run a startup before?
Working with founders that have ‘done it before’ whether successfully or not can save a lot of learning costs.

Interview phase (Two to three hours)

Once a company passes the pre-qualification phase we speak to them personally and take a deep dive. A lot of the questions below are meant to establish how the founders react to potential challenges and help us to try and understand their personalities better. A lot of times there’s no right or wrong answer and we simply want to see the right mentality.

How did the founders find us?
We like to be introduced through our trusted connections. Or we want to hear why a founder wants to work with us. We have to be mindful when working with founders that are shopping for any money they can find.

What is the background of the founders?
Why did they start this venture? Was it a personal problem they were facing and how passionate are they about this idea? Do they have the relevant expertise? Building a successful company can take up to 10 years, so we want to founders to be resilient.

Did the founders run a startup before?
We already looked at this question before during the pre-qualification. But if they did build a startup before, we want to understand more. What happened? Did they exist? What did they learn from any success or failures? Why did they start a new venture?

What is the company trying to achieve?
We want founders to lay out a clear goal for us. They can be aiming for the stars which are fine as long as there is a realistic plan for execution. The bigger the goal the more detailed the founders should understand the execution plans.

Also Read: [Updated] Singapore’s WeInvest raises US$12.2M in Series A funding round from Schroders, angel investors

What is the market size?
Marketing sizing is important, even though it might be a process that is completed with a lot of assumptions, it shows that founders understand the potential value that the company is trying to (and realistically can) extract from the market.

We don’t just want to see that the total market of ‘product X’ is worth $X billion. We want to always see:

• Total Addressable Market
• Service Available Market
• Serviceable Obtainable Market

Why is now a good time?
Timing is critical when launching a new startup. We want the founders to be able to explain why right now is not too early or too late.

The competition
We want to understand who the direct- and indirect competitors are. It is critical that founders deeply understand the landscape and who else is trying to get a piece of the pie. Saying ‘there is no competition’ means that the founder doesn’t understand the landscape well enough. There is always competition.

We also want to see a competitive advantage that can be validated with the limited data that the company already has.

What is an unfair advantage?
We want to see a logical explanation of why this team is better than other companies that are trying to get into the same industry. Effectively this can be things like; contacts, unique knowledge, etc.

The unfair advantage typically relates to the team and less to the product or service that the company is selling.

Also Read: I met with some of the biggest angel investors in Southeast Asia, and here are some insights I learned

How much revenue does the company have?
For B2B companies we want to see some revenue in the range of US$5–10,000 per month. For B2C or C2C companies we can typically look at user growth alone if there’s no revenue.

How large is the team?
One of the skills of a founder that we are looking for is the ability to attract a talented team around him. By the time we invest, we want to see the essential skills already hired or a very clear hiring plan in place.

How do you make money?
We want to understand the business model and the logic behind it.

How much do you charge your customers?
We want to see a competitive price point that can provide healthy (top line) margins. Also, the best solutions out there have some form of pricing power or might get it down the road.

How much does the average customer spend?
With this data, we can start to predict the potential lifetime value of a customer. At the same time, it shows us how ‘sticky’ the product/service is if there are recurring customers.

How much money have you raised in this round?
We like to see founders that are able to secure (soft- or hard commitments) funds from other investors besides ourselves or get existing investors to reinvest.

What are the top 3 reasons the business might fail?
We always end the interview with this question. We are looking for founders that are realistic and understand the risks of doing business.

Also Read: 6 Asian celebrity angel investors you may not have heard about

Did the founder follow-up after the interview?
Finding investors means ‘selling’ for the founders. Investors don’t close directly during or after the first meeting.

Do the founder’s follow-up with more information? Do they follow-up again after two weeks if they haven’t heard from us?

Are they keen to share with us what they have achieved and kept us updated on the progress of the company while we were doing our research or if we have indicated that now might not be the right time to invest but we like to stay updated?

A lot of the questions are meant to establish how the founders react to potential challenges and help us to try and understand their personalities better. A lot of times there’s no right or wrong answer and we simply want to see the right mentality.

Review and Research Phase (One to four weeks)

This is the phase where we typically involve other investors with relevant knowledge.

What has been the monthly revenue growth for the past 6 months (B2B)?
We like to see companies in the early stages grow revenue by at least 10–20 per cent on a monthly basis.

What has been the daily active user growth for the past 6 months on a weekly basis (B2C or C2C)?
We like to see companies in the early stages grow their user base by at least 10–20 per cent on a weekly basis.

Customer Acquisition Cost (CAC) to Lifetime value (LTV) ratio
When evaluating the financials we like to see a healthy CAC to LTV ratio of at least 1:3 within the next two to three years. More information can be found here.

Also Read: China’s top 6 angel investors

Burn multiple
Capital efficiency is an important metric when looking at the financials of a company. As an angel, we want to understand how much money the company is burning or expects to burn (on a monthly, quarterly, or yearly basis) to generate new revenue. We typically calculate the multiple as follows:

• Efficiency Score = Net New ARR / Net Burn

Any score below 2 is considered efficient (and could be unrealistic). Anything above 2 is cause for investors to take a closer look at the financials. The score can be higher in the early stages as the company is burning money to gain traction. However, the company should never use raised capital inefficiently and scores above 3 are unacceptable.

Is it realistic that the company can reach its goals with the funding raised?
This is where our industry knowledge and entrepreneurial experience kicks in. Imagine yourself at the helm of the company. How would you do it? Are the goals realistic? Should they raise more funds?

They will likely run out of money in the next 15–20 months, but would the team by then have created sufficient traction to raise follow-on funding from a venture capitalist, or is there a big risk that they will require more angel money?

Valuation
Pricing the company in the early stages is challenging since there are little revenue and data available. Many companies offer a convertible note to investors and basically postpone the valuation discussion until the next funding round closes.

In case founders or investors would like to price the round there are a few methods they could try to use:

• (net Monthly Recurring Revenue * 12) * 5–10x (multiplier to be negotiated)
• Discounted Cashflow
• Trying to predict what a future VC might want to pay for the business in the next 24 months. An investor can then decide whether this is a worthy multiple on the ‘current’ valuation.
• Look at the valuation of similar deals in the same industry and region

From experience, we know that the value of a company in the stages that we look at is typically between US$1–3.5 million pre-money.

We will discuss valuations a bit more in a future article as there’s a lot to say about it.

Also Read: Tips for drawing in angel investors for your startup

Cash flow positive
At what point in time will the company be cash flow positive? Every business will need to generate cash at some point in time (aside from the fact that more investments might be needed to grow).

Try out the product or service
We typically sign up for the product/ service that the company is offering to try it out and put ourselves in the shoes of the customer.

External investors
We usually bring in other investors to share ideas and opinions. This is a critical part of the process and helps us to defy biases.

Market / competition research
It is important that we do our own market and competition research. This will give us a deeper understanding of the challenges and possibilities in the market.

At the same time it helps us to compare other companies that are trying to solve the same problem to the company that we are evaluating.

What is our exit strategy?
Maybe one of the most important topics. We need to decide how long we want to stay in the company. Will we be trying to sell our shares in secondary transactions or do we wait until a company might be acquired (IPOs are unlikely in Southeast Asia)?

If I’m going to be invested for five years I want to try and see if I can predict what (I hope) the company could be worth at that time?

Due diligence (One week)

The due diligence is the tail that starts after we have evaluated the company. At this point in time we likely already have made a decision for ourselves that we like the company.

Due diligence is performed for two reasons:

• We want to make sure what we heard from the founders so far during our discussions matches with the reality
• We want to make sure there are no irregularities

The due diligence can be executed using a standardised checklist. Examples can be found here (keep in mind that most companies raising capital from angels might not have a whole lot of data and documents yet):

Evaluating companies is hard work. As mentioned; for each investment we typically look at 100 companies. There are good companies out there but one has to be willing to put in the effort to find and evaluate them.

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InfraDigital, a digital school management startup in Indonesia, has announced the closing of its Series A funding from Taiwanese accelerator AppWorks.

The deal size has not been disclosed.

This capital infusion follows seed round of funding last year.

Edutech has the potential to substantially elevate Indonesia’s quality of education, while improving outcomes and overall standards of living for over 50 million students. Unfortunately, most schools struggle with tracking even basic student data and often lack the digital tools for proper financial management and planning.

Also Read: NextBillion.ai, a 6-month-old startup founded by the brains behind Grab Maps, raises US$7M Series A

The high cost of existing solutions has also inhibited widespread access to digital technologies, especially for schools in more rural areas which are often strained for resources.

Founded in 2018, InfraDigital aims to assist schools to address these pain points, targeting two of the most impactful areas of school management — financial operations and data transparency.

The edutech firm helps schools digitise student and financial data, automates back office processes, and facilitates online tuition payments. To achieve this goal, it has partnered with a variety of stakeholders, including banks, education foundations, and government bodies.

Through its platform, schools can transition to cashless tuition collection, increasing income up to 16 per cent in some cases. With InfraDigital, school administrators are granted full visibility into the operational health of their organization, enabling them to make smarter financial decisions and create a better student experience.

InfraDigital is also offers Jaringan IDN, a payments processing network established in conjunction with gojek, Tokopedia, LinkAja, Alfamart, Ayopop, and Indomaret to help educational institutions seamlessly collect tuition fees both online and offline.

The edutech company is active in 13 provinces in the archipelago, from North Sumatera to South Sulawesi, with its platform deployed in over 350 schools serving over 165,000 students.

The company is currently dedicating all its resources to assisting new and existing clients and helping them meet the added demands and complexities during COVID19 closures.

Moving forward, InfraDigital hopes to expand its footprint to other regions of Indonesia and eventually become a full-stack digital solution for educational institutions.

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Image Credit: InfraDigital

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On Monday, June 22, in Jakarta, the Indonesia Stock Exchange (IDX) released the list of its new commissioners for the 2020-2023 period, which is to be confirmed through an annual general stakeholder meeting today.

One of them was a familiar name in the local, perhaps even regional, tech startup ecosystem: Pandu Sjahrir.

Currently holding the position of Founding Partner of AC Ventures, Sjahrir has a long track record in the startup scene. He is widely known for his involvement in leading names such as gojek (as Board Member) and Sea Group (Chairman of Indonesia) as well as Xurya (Board Member) and Antler (Advisory Board).

He is also the Managing Partner of Indies Capital, which controls Indies Special Opportunities Fund, the leading alternative asset manager in the region, and Indies Pelago, a secondary tech fund in Southeast Asia.

Outside of the startup ecosystem, Sjahrir is the CFO of publicly listed energy company PT. Toba Bara Sejahtera Tbk, that was selected as Forbes’ Top 30 leading companies in Indonesia.

“My goal here is to find an outlier,” he speaks to e27 over the phone.

Also Read: Portable wifi rental service startup Passpod officially listed on IDX, raises US$3.2M

In this special interview, the startup investor reveals more details about the vision and mission for IDX –and how he is going to bring more Indonesian startups to get listed on the stock exchange.

A fresh start for IDX

Sjahrir begins our conversation by explaining the stock exchange goals in the next period: Increasing the participation of the younger generation –particularly Gen Y and Z– in the capital market and encouraging Indonesian tech startups to go public.

“As you might be aware of, there has not been any major tech company listed on the IDX,” he points out.

“It’s a completely different story with China and the US where the top 10 capitalisations are owned by tech companies. In Indonesia, it is still being dominated by banking and telco companies –exactly how it was 10 years ago,” Sjahrir continues.

He further elaborates how these two goals will support each other. By having more younger investors, major tech companies such as the local unicorns are expected to consider listing in Indonesia instead of other capital markets.

“We need to take a more active role in preventing them from leaving to other capital markets. Because we have to remember: The bigger guys, they have options,” Sjahrir warns.

Also Read: IDX-listed M Cash launches new partnership to digitise ‘warung’

By having these “cool” tech companies on IDX, the younger generation is also expected to be more interested in investing in the capital market.

“What we are doing here is deepening the demand, particularly by having more young investors on board. This is something that starts with education about the capital market,” Sjahrir says.

Trouble in the ecosystem?

In 2017, Kioson and M Cash made headlines when they became the first local tech startups to get listed on IDX, followed by several other companies.

These movements had led to speculation in the media on the possibilities for major tech startups in Indonesia –particularly the unicorns and decacorns– to have their IPOs soon after. But three years have passed and we are still waiting for these companies to make their move.

What will be the stock exchange’s strategy to encourage these unicorns to get listed on IDX, and not anywhere else?

“We have to be more market-friendly in various aspects, [starting] from regulation to the founder’s shares treatment. Like in the US, there is a difference in the treatment, and this is what Indonesia is currently studying. There is also got to be minority shareholder protection, which OJK is concerned about,” Sjahrir states.

Also Read: Portable wifi rental service startup Passpod officially listed on IDX, raises US$3.2M

But what is actually the challenges faced by Indonesian startups that have been preventing them from being listed? According to Sjahrir, there are two main hurdles: Profitability and founder shares treatment.

“The latter is the part where we are still ‘stuck’ on. In the US, founders are allowed to have different voting rights. We aim to address these issues to remain competitive with the other stock exchanges,” he says.

The focus

In this new period, IDX aims to get 20 to 40 companies on board, but Sjahrir says that they do not wish to be burdened by quantity. There is got to be a focus on the quality as well, he stresses.

“We need to start with the mindset first, how to capitalise on tech companies in Indonesia. Because the main difference between us and Singapore and Thailand is that our capital market is smaller than our GDP,” Sjahrir points out.

“So our focus is on how to increase the market capitalisation of the companies on the stock exchange,” he closes.

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Image Credit: Pandu Sjahrir

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Grab CTO Mark Porter quits to join MongoDB

Mark Porter, CTO (Core Technologies and Transport) is leaving Grab, making him the second CTO to depart the firm since the start of 2019.

Group CTO Theo Vassilakis had relinquished his position in April last year but remained an advisor at the Singapore-based company.

Porter wrote in a blogpost that he will be assuming the CTO role at NASDAQ-listed SaaS firm MongoDB on July 20.

Also Read: As IDX commissioner, this is how Pandu Sjahrir aims to help more Indonesian startups go public

“Grab has been a privilege and a gift; being a tech leader with the mission to bring the economy and people of Southeast Asia forward has been amazing. I’m leaving one family and joining another – and for anybody who knows me, they know that’s hard – I’m pretty sappy and emotional about this kind of stuff,” he said.

“My goal at MongoDB is to help our great teams develop technology and products that delight anybody who touches them. That’s been my goal for over 40 years, from my first 6502-assembly game or HP41CX program, to the latest Grab ride-hailing app,” he added.

Singapore’s health-tech startup Plano receives investment from Santen

Singapore-based health-tech startup Plano has received an undisclosed sum in investment from Japanese company Santen Pharmaceutical as part of strategic alliance between the two firms.

Under this deal, Santen, through Plano, will initiate to tackle the burden of myopia using both a holistic approach and innovative technological solutions.

“This funding and strategic alliance with Santen will play an instrumental role in growing Plano’s user engagement, strengthen its Big Data analytics and Artificial Intelligence capabilities, and drive its international expansion plans,” said Plano’s Managing Director Associate Professor Mohamed Dirani.

Launched in 2017 by Dirani, Plano is an eye health-tech company and is a spin-off from the Singapore Eye Research Institute (SERI). Its key products include the plano application and the online optometry booking system, Plano Eyecheck.

The science-based plano application has been adopted by more than 250,000 households.

Santen specialises in ophthalmology based on a thorough customer orientation, including patients and healthcare professionals.

In recent years, it has focused its attention on medical devices and digital technologies, and has continued to take on the challenge of contributing to the health of the eyes of people around the world through activities that meet the needs of customers in each region, as well as offering products and solutions that cover a wide range of disease fields.

Eko acquires Thai chatbot platform ConvoLab

Eko, a virtual workspace technology platform in Thailand, has acquired Artificial Intelligence (AI) and chatbot platform ConvoLab in a “8-figure USD” deal.

Additionally, Eko has has launched parent company Amity, which is focused on helping organisations, teams, and people to fully-benefit from new mobile technologies and digitisation.

Amity brings together three pre-existing technology solutions to make up its portfolio — Eko, Upstra (an app development kit for building in-app community experiences), and ConvoLab.

Further, the company will continue to power and expand these products out of their four core global offices in Bangkok, London, Austin, and Milan.

ConvoLab’s acquisition, completed through a mix of stock and cash, was finalised ahead of Amity’s launch.

Established in 2016, ConvoLab automates business processes by helping their clients engage with their customers through various channels using best-in-its-class AI natural language processing (NLP).

“ConvoLab is at the forefront of developing machine learning, chat management platforms and work automation. By joining forces, we’ll be able to provide customers with an ecosystem of expertise and services competitive and unique at a global level,” said Korawad Chearavanont, who now becomes the CEO of Amity.

Cocoon Capital launches Female Founders Mentoring Hours in SEA

Cocoon Capital has launched Female Founders Mentoring Hours (FFMH) for Southeast Asian entrepreneurs.

FFMH will offer female founders 1-on-1 remote mentoring sessions with some of the region’s most prominent VCs, creating a rare opportunity to both pitch ideas and to receive friendly, on-the-spot advice.

Also Read: AppWorks joins Indonesian edutech startup InfraDigital’s Series A round

Supported by Enterprise Singapore and Amazon Web Services (AWS), the inaugural FFMH event will allow over 50 female founders to meet investors over four 15 minute sessions to discuss their tech business ideas, ask for advice, and/or simply pitch for investment.

The focus will be on tech startups at the seed and Series A stages.

The venture industry has long acknowledged that there is still a huge funding gap between male and female founders. A large part of a successful fundraise is in building relationships with investors over time.

FFMH aims to give female founders a good starting point, with the chance to cultivate relationships with the best of the best early on.,

The post In brief: Grab CTO quits; Cocoon Capital launches initiative for female founders; Santen invests in Plano appeared first on e27.