COVID-19 has debilitated the global economy over the last few months. This pandemic is predicted to be the biggest hit to hit the global economy since World War II. The crisis continues ravaging small businesses specifically startups across the globe.

For a long time, statistics have painted a grim picture for the survival of startups in normal operating environments.

In light of such data, it follows that startups will suffer in the new business landscape created by the pandemic. This post looks at the impact this crisis might have on startups and how these ventures can improve their fortunes post COVID-19 crises.

The startup scene so far

Over the last few months, the global crisis has virtually wiped out supply chains, thus crippling most startups. Most startups rely on the latest technology to streamline their operations, and any hitches in supply chains affect operations.

Worse still, access to capital has crippled many of these businesses. In China, where the effects of the pandemic were first felt, venture capital dropped drastically from 50 to 57 per cent. If this drop in investor capital is replicated globally, it will wipe out US$28 billion in startup investment. Already, reports indicate 41 per cent of startups globally have little cash to survive more than three months during this crisis.

Add to this the fact that many startups laid off full-time employees since the beginning of the crisis. Many others have suffered a decline in revenues since the COVID-19 crisis hit.

While stimulus packages have become the order of the day, many startups don’t expect any help from policy relief measures. They might not be big enough to enjoy such assistance.

Strategies for startups to grow post COVID-19

While things are tight in the startups’ business landscape, this also presents an opportunity to rethink business models and find ways to survive. There seems to be no respite in sight even as countries start reopening cautiously.

Also Read: How do you optimise the customer experience during a festive rush?

If you own a startup or you plan to launch one in this environment, there are some factors to consider to acquire new customers. Take a look.

Analyse the impact

It’s hard to foresee an industry that will remain unchanged post-COVID-19. Your startup must invest heavily in research to determine what has changed to adapt to the new normal. You have to ask yourself not only how this crisis has affected your business but also how it has affected your target customers.

An objective evaluation will show where you stand in terms of operational readiness to continue with customer acquisition. You should also assess your key risk areas for your startup and also review the company’s financial vulnerabilities.

The data you collect from your research should be the springboard to any changes you make in your customer acquisition strategy. As a startup, you have a leeway to try new methodologies in customer acquisition. However, you need quality data to guide you on the best tactics to acquire customers.

Audit and adjust customer experience

This crisis has given a massive boost to digital marketing, but the situation in terms of customer experience is nowhere near ideal. Many startups pre-COVID-19 used their online platforms to complement their land-based operations.

For such startups, this crisis presented a big challenge as transitioning to full online operations came with myriad challenges. With lockdowns, restrictions on movements, social distancing, and other measures to counter the new coronavirus, most customers moved online.

They expected the best experience but in some cases, businesses were struggling with the avalanche of orders.

What’s worse, the breakdown in supply chains meant many startups could not deliver products. Businesses must understand what went wrong during the crisis to improve their customer acquisition rates.

Start by learning how your target customers feel about your service levels before the crisis and during the crisis. You should carry out surveys to learn what customers expect and build your customer acquisition strategy around these expectations.

Rehash your content strategy

These are no ordinary times, and as such, your business cannot continue using the same content as before. Create content with a more personal touch if at all you want to attract new customers. Post-COVID is not the time to boast about cutting-edge technology and your revenue projections. Instead, you must show empathy with your customers who have suffered through this time.

Your marketing team must go back to the drawing board and create a content strategy that’s honest and transparent. There’s no harm in showing your vulnerabilities because everyone has suffered terribly over the last few months. However, you should also display your resilience and willingness to stand with your customers at all times.

Use a robust and versatile content marketing strategy that includes blogging, social media, e-books, guides, and other types of gated offers, video production, and email marketing. All these techniques have high rates of success and ROI in acquiring new customers.

Leverage social media for customer acquisition

Facebook, Instagram, Twitter, and other social media networks play an integral in promoting consumerism today. Social media is bound to become even more critical post-COVID-19 with social distancing measures expected to continue for a long time.

In this new normal, businesses have to find the easiest contact points with their target customers. Social and digital marketing is a smart strategy if you want to acquire new customers. You can use these platforms to showcase your products, show social proof, and boost brand visibility.

Also Read: How Tokpedia’s VP of customer engagement managed his customers during the pandemic

With the right social media content strategy, it’s easy to get people talking about your brand. It is an easy way to boost engagement levels by talking to prospects and providing crucial feedback.

Employees are your biggest asset

Whether you have managed to retain all employees or not during this crisis, you have to appreciate the critical role they can play post-COVID. In a startup, employees are like family, and most of them work hard to realize the dream of the venture.

You can promote user-generated content to target new customers after the crisis. From reviews, testimonials, behind-the-scenes to COVID-19 safety videos, try creative ways to bring employees into your campaigns.

Increase engagement

This crisis has reduced human contact and many people miss going out and talking to their family and friends. You should consider using this opportunity to increase engagement through handwritten cards, check-in phone calls and personalised emails to your target customers.

You can also create contests to increase customer feedback and engagement. Now that most people will shop online, make sure you share these contests across multiple channels. The bottom line is to communicate clearly and transparently and always be available to give feedback.

Optimise your website

Post-COVID-19, you can expect more people to shop and seek many other services online. For this reason, you must optimise your website and make it more customer-friendly. Make sure your website is mobile-friendly, provide multiple seamless payment options, 24/7 customer support, and comprehensive product and service description.

You should also find ways to integrate martech into your customer acquisition strategies. There are plenty of helpful tools out there that can support you with this.

The COVID-19 crisis has devastated the global economy. Due to their vulnerability, startups have suffered a lot during this crisis, with many collapsing. However, there’s a window of opportunity for the resilient ones post COVID. With these tips, it’s possible to revive the fortunes of your startup through customer acquisition. 

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Curlec,  a Malaysian fintech startup, has raised an undisclosed amount of funding from 500 Startups, according to a press statement.

The fresh funds will be used by the company to grow its Malaysian operations through product development and market expansion especially in Southeast Asia.

Established in 2018 as a bank-to-bank (B2B) payment system that brings direct debit facilities to businesses of all sizes, Curlec builds technology on top of the direct debit B2B payment infrastructure in order to offer easier debit access to smaller companies.

“Our vision has always been to enable businesses of all sizes to access the previously inaccessible Direct Debit system,” said Zac Liew, co-founder of Curlec.

Small to medium-sized businesses can often face trouble while accessing the direct debit system. That is because the system has mostly been paper-based while other custom-developed software needed to deal with individual banks.

Also Read: Ecosystem Roundup: OVO, Dana in merger talks; gojek CTO Ajey Gore resigns; Fincy raises US$11M; Tuas Capital, The Hive to launch SEA startup fund

Curlec allows businesses to utilise its platform via a simple API that automates the entire collection workflow, putting companies in control of their cash flow and when they get paid.

During the global health pandemic, the startup claims to have experienced an acceleration of merchants moving to subscription businesses models. This was because more founders have realised the value of obtaining more predictable sources of income in the future.

“As the market continues to evolve, we are also expanding our vision further also to help businesses grow by enabling them to enter the subscription economy firstly in Malaysia, and then Southeast Asia,” said Liew.

“In light of Covid-19, we continue to see growth in our offering, with many traditional businesses having to shift online. Despite the lockdown in Malaysia, we are continuing to average 20 per cent month-on-month growth this year in transaction volumes, which just highlights the current demand that businesses have to move towards online recurring payments,” he continued.

During the pandemic, many fintech companies in the Southeast Asian market experienced a rise in popularity as the customers become more careful about cash transaction and moving their shopping activities online.

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Image Credit: Curlec

 

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Co-living operator Hmlet expands in Japan, appoints new CFO, CTO

Hmlet, Singapore-operated co-living startup today announced it is adding 168 rooms within five new properties across Tokyo. The collection of properties is split into studios, private one-bedroom, and two-bedroom apartments, accompanied by common spaces to foster a sense of community.

Centrally situated and close to public transport, the properties are located in Sengoku, Iwatomocho, Takadanobaba, Sangenjaya as well as the famous Harajuku area. Hmlet Japan also introduced new ways to provide hassle-free living through a tailored-to-members’ requirements monthly fees, while furnishings, utilities, and maintenance can be customised.

In addition to Japan’s expansion, the startup has also appointed Rajive Keshup as its CFO, and Pramodh Rai as its new CTO, effective June 1.

Rai was previously SVP, Product & Technology in the company will now lead Hmlet’s technology platform buildout, data governance efforts and drive business efficiencies.

In Keshup’s new role as CFO, he will continue to lead the finance, accounting, investments, corporate strategy, legal teams, and be responsible for securing and maintaining supply-side relationships with landlords or developers.

Also Read: Singapore’s co-living startup Hmlet enters Japan, to sign 1,000-plus rooms in next 6 months

Enterprise Singapore, Singapore Standards Council introduces new e-commerce guidelines

Under Technical Reference 76, Enterprise Singapore and the Singapore Standards Council have announced new e-commerce guidelines to help build trust and transparency in online transactions.

Also Read: Singapore unveils two initiatives to help 12,000 people learn about AI

Rachel Peng, founder of Shopavision, a B2C hybrid shopping media platform that automates the connection between brands and consumers, lends her insight:

“The new guidelines may be a barrier to entry for small businesses as well as individuals who own micro-businesses when it comes to digitalisation. It would also be challenging for online marketplaces to ensure that all merchants on their platforms abide by these guidelines,” said Peng.

“However, these guidelines, in general, are good practices that will serve to protect consumers who shop online as it will also enable online merchants to build better trust with their customers. This is key to running a successful e-commerce business,” Peng added.

In the report by The Straits Time, Lucas Tok, a marketing and retail lecturer at Singapore Polytechnic, said the launch of the standard is “a step forward for the industry as a whole”.

“While it may take some time for businesses to adopt these practices, given that some have only just started their digital platforms, the guidelines will help them develop a customer-centric approach,” he said.

Meanwhile, merchants on Shopavision also commented on the matter. Janson Chan, CEO of merchant Mushroom Kingdom said that the guidelines are a good checklist that can help merchants who are not familiar with e-commerce get started. “It may actually help them with certain blind spots when it comes to transacting with customers online. By presenting information clearly, it is likely to help online merchants in their business as customers will have fewer questions about a certain product and more ready to make immediate purchases,” said Chan.

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Image Credit: Hmlet

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This article is published in partnership with Startup SG, an initiative of Enterprise Singapore that provides comprehensive support for startup development in Singapore.

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It takes an entire village to support the startup community. When COVID-19 hit, it took a toll on human lives, and also the lifespan of companies, especially startups. 

We immediately saw an urgent issue that we wanted to resolve – to support startup founders. Amid the tragedy and uncertainty ran a strong undercurrent of hope, the startup community responded with strength and resilience. 

This was when Mentor for Hope was born.

Mentor for Hope is a programme aimed at raising money for charity while matching founders and mentors together. Through carefully curated mentorship sessions and workshops, we wanted to inspire founders and the public to pay it forward through donations and support our beneficiary charities, Willing Hearts, and Beyond Social Services.

Founded by Elise Tan in April 2020, who was inspired by an article on venture capitalists in France who were hosting virtual office hours for startups. Elise was joined by Janet Neo, who expanded on this idea to raise funds for charity while providing office hours to mentor startups through this period. She gathered a team of like-minded peers in the community, including myself, Minh Vu Hong (Qualgro Partners, based in Singapore), Clinton Swan (Codelex Legaltech, based in Singapore), Aparna Saxena (Torajamelo, based in Indonesia), Gwen Sim, Sharon Yeo (TalentTribe Asia, based in Singapore), Roy Ong and Ajith Isaac (STRIVE, based in Singapore). 

The small idea gained traction not just within the startup community but also garnered the support of the oscar@sg fund through the Temasek Foundation.

So far, over S$25,000 has been raised in three weeks, with over 200 mentors and 300 startups who have participated and benefited from the campaign so far.

A startup that has benefited is Intellect.co, a Singapore-based digital health company building a new form of digital therapy that is more affordable and accessible to the masses. Theodoric Chew, co-founder of the firm, was matched to Janet Neo, a mentor with vast experience in sustainability and mental health startups.

Also read: Meet Mentor For Hope, the startup mentorship programme that will donate 50K meals for those in need

“We benefited tremendously from the insights and expertise she generously shared over a few calls. She helped push us to think in a much bolder and exciting manner. She also plans to provide us with introductions in the industry”, said Theodoric Chew, CEO, Intellect.co

Other support for the ecosystem

As Saison Capital provides both equity from the VC fund, as well as debt from the parent company across the region, we were able to get early indicators of how different industries were performing across different countries, especially in the current situation. 

Aside from mentorship, we also understand that startups needed the right talent to tide them through this period. 

One of the first problems that we wanted to solve quite quickly was that individuals were getting laid off. Over a weekend, a few friends and I created SEAcosystem.com, which helped match great people who got laid off from COVID, with startups who were still hiring.

Being part of the Singapore startup ecosystem, we are able to tap on the vast network and get the support of 25 other funds. Together, we managed to gather a database of over a thousand people, and list over 400 jobs on the platform, with many matches happening within days and even hours of jobseekers listing themselves on the platform.

Pivoting to capture opportunities amid uncertainties

What I have learned over the past few months is that some of the best startups were very quick to identify what some of the longer-term implications of COVID were, especially under the assumption that COVID and COVID-related behaviours from businesses and consumers were likely to stick around in some form over the next few years. 

Such companies then built business units or pivoted completely to serve that segment, and were able to internalise that some of their business strategies could not be salvaged piecemeal, and really had to see fundamental revamps.

For example, to meet the global shortage, Structo, a 3D printing startup, taps on its 3D printing technology and strong product development expertise to pivot from manufacturing dental/orthodontics applications to produce COVID-19 nasal test swabs. Another example will be Move.AI, an AI-powered software, that was hit by the travel restrictions to China (largest robotics and AGV market) to deploy their solutions, quickly shifting resources to internal development.

They had enhanced their software platform such that project implementation can be done remotely from Singapore. This also puts the company in a better position to cope with a possible surge in demand eventually, as they foresee an uptake in usage of robotics in a post-COVID-19 world. 

In the immediate period, companies have been able to realise that their customers, businesses, and individuals, are human too and are equally uncertain about the future. Great startups have been able to capture immediate growth opportunities and rally customers and investors around them, by creating a narrative about how the industry is likely to evolve, and how they and their products will continue to be a big part of their lives.

Continued efforts to support startups beyond COVID-19

While the plan is currently for Mentor for Hope and SEAecosystem.com to be an initiative for COVID-19 specifically, we have been eager to continue at least the spirit of community building and have partnered with Asia institute of Mentoring (AIM), who will, over the next three months be hosting a mentoring programme dedicated to improving the state of mentoring for Singaporean mentors and founders.

We hope that these initiatives can continue to sustain and grow as more partners join us.

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India’s Jiffy.ai lands US$18M Series A investment to help businesses automate manual tasks

Jiffy.ai, an enterprise automation startup based in Kerala, has raised US$20 million in Series A funding from Nexus Venture Partners, according to AnalyticsIndiaMagazine.

Other participating investors include executives from tech companies Charles Goldman, CEO of AssetMark; Richard Galanti, CFO of Costco; Sri Viswanath, CTO of Atlassian; Tony Thomas, CIO of Nissan Motors; and Bob Ward, the former COO SunGard Wealth and Retirement.

The fresh funding will be used for research and development, scaling, and global expansion across the United States, Europe and Southeast Asia.

Jiffy.ai is a software company that offers an AI-powered intelligent and integrated platform to help businesses automate manual tasks. Its solutions are designed to make customers operations more time and cost-efficient.

In a press statement, founder of Jiffy.ai, Babu Sivadasan, said that the company’s overall goal is “to promote sustainable, compassionate entrepreneurship”. He further added that the founding team is aligned around this core belief that the company has a huge responsibility to give back to the community through our social programmes and build a better workplace for the future leaders.

Jiffy.ai is currently working with companies to upskill and provide job training and placement programmes for people whose positions are presently displaced.

Also Read: Ecosystem Roundup: OVO, Dana in merger talks; gojek CTO Ajey Gore resigns; Fincy raises US$11M; Tuas Capital, The Hive to launch SEA startup fund

Edvizo raises US$150K+ to help students search for coaching institutes

Edvizo, an early-stage edutech startup, has raised over US$150,000 in a seed round from Inflection Point Ventures, according to a press statement.

The Bangalore-based startup will use the new capital to improve its platform and current data quality.

Unlike other edutech companies who focus on schools and universities, Edvizo plans to tap into India’s coaching centres. These centres are extremely popular in the region with nearly 71 million students utilising its help to pursue mainstream competitive exams.

Edvizo acts as an online marketplace to search, compare and enrol in the best institutes for competitive exam preparation.

Currently, the company claims to have around 2650 institutes in its platform with over 50,000 registrations.

 

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As an angel investor, it is important to construct a portfolio and not just place a few bets and hope for the best. Or worse: putting all your money in one basket and essentially gambling with your funds.

The chances of your sourcing and investing in the next Uber (and make a 50 or 100 times on your investment) are close to zero and there’s no playbook for finding those kinds of companies.

However, that doesn’t mean that with a lot of research and hard work you can’t achieve amazing returns (substantially outperforming the markets while getting the satisfaction of being part of growing a successful business).

The emphasis is on ‘hard work and research’ though, if you are not willing to put in the time & money, angel investing might not be right for you.

Why is angel investing risky and rewarding?

The reason that angel investing is so risky is that most startups do not achieve their founders’ goals and are closed. Among the successful companies, nine per cent provide investors with returns of 10 times their investments (home run), which compensates for failed investments.

Angel investing is both an art and a science.

The nine-per-cent-rule and other numbers mentioned in this article are by no means true for each and every portfolio. They merely reflect averages as measured in developed markets.

And so this article is not meant to preach an exact science and needs to be read as (realistic) considerations one can have when building a portfolio. Also, it is important to understand that you will still need to master the art after you understand science.

Do VCs have home runs?

Within VC funds the percentage of home runs is around five. Typically VC invests in later stages (less risky) where the valuations are higher and the company has more traction, so the chances of hitting of home runs are smaller.

Also Read: What should you consider before becoming an angel investor?

However, the absolute returns might be higher as they have more resources to diversify and get broader exposure in order to generate bigger home runs.

We will speak about diversification for angels in another article as we think this is a great method to try and amplify returns.

What did we learn ourselves?

With HH Investments VC we have been investing in early-stage (Seed/Angel and pre-Series A) companies with a focus on mainly Southeast Asia and we are seeing similar results in our own portfolio. This gives us confidence that the metrics and expectations as described in this article are correct.

Next to the nine per cent, data from our own portfolio shows us that 50 per cent of the investments is a write-off (simply because 50 per cent of new companies don’t make it) and the remaining 41 per cent return somewhere between three to five times (we will take the average of four times for sake of calculations).

Write-offs don’t matter

We don’t have to worry too much about whether those numbers on write-offs and mediocre returns reflect that of a successful angel or the averages for that matter. The best performing (seed & VC) funds actually have more loss-making deals than the average funds, as you can see in the below graph.

Source: Horsley Bridge

Conventional financial portfolio management strategy assumes that asset returns are normally distributed where the bulk of the portfolio generates its returns evenly across the board. Moving away from public markets and towards angel investing this wisdom does not apply.

Having the nine per cent that returns 10 times (or more) is the main thing that matters if you construct your portfolio properly. Below provides a tangible example of the Pareto Principle 80/20 law:

Source: Horsley Bridge

We know that better funds have more home runs (and as we’ve seen above, more write-offs too), but they also have even bigger home runs.

Source: Horsley Bridge

Investing in a unicorn

The chances of you as an angel hitting a 50 times returning investment in a unicorn company are slim. The probabilities range from 0.07-2 per cent. As this seems to be more a game of luck (‘spray and pray’: an angle followed by many accelerators) rather than strategy we are not including those types of returns as a realistic expectation while building our portfolio.

Fundamental portfolio strategy

Let’s have a look at two different portfolio strategies which I have named ‘active-passive’ and ‘active’.

Active-passive in Portfolio 1, because after you have deployed your funds you will essentially be passive while waiting for returns. Portfolio 2 on the contrary will need an ‘active’ approach and solid decision-making during the whole lifecycle of the fund.

Portfolio 1 (active-passive)

Let’s assume you invest evenly a total of US$1 million in 11 early-stage companies (US$90,000 per company) using the nine per cent benchmark and you don’t reinvest any of the returns:

• 1 will be a home run and will return you US$90,000 * 10x = US$900,000
• 5.5 will be a write-off so you will lose US$90000 * 5.5= US$495,000
• 4.50 will give you a mediocre return of4x: (US$90,000 * 4.50) * 4 = US$1,620,600

Total return: US$2.5 million on US$1,000,000. The average return of a good performing angel portfolio is 2.6 times the original investment, hence with the above strategy we are slightly underperforming the statistics and because of that, we have no room for mistakes.

Portfolio 2 (active)

Let’s assume you invest a total of US$1 million in the same 11 early-stage companies, again using the nine per cent benchmark.

This time you only invest US$500,000 in the first stage (US$45,000 per company) and you reserve the other half for the home run company that might develop within your portfolio (we are still not reinvesting our returns, so there’s no compounding which could amplify our returns even further):

• 1 will be a home run and will return you US$45,000 * 10 + USD$500,000 * 5 (the return multiple is adjusted as the US$500.000 was invested later so you will have to pay a higher valuation) = US$2,950,000
• 5.5 will be a write-off so you will lose US$45.000 * 5.5= US$247,500
• 4.50 will give you a mediocre return of 4x: (US$45,000 * 4.5) * 4 = USD$810,000

Total ROI: US$3.7 million on USD$1 million invested, a stunning return of 3.8 times. Again, the average return of a good performing angel portfolio is 2.6 times the original investment, hence in the above example we are outperforming while even keeping a margin of safety allowing us to have a worse performance and still be better than average.

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

Keep in mind that in both portfolios we invested in the same companies and we never hit a ‘unicorn’. However, the difference in returns by applying a different portfolio strategy is staggering.

I didn’t take into account any tax benefits you might have while writing off your losses.

Do you see the challenges and why this is hard but rewarding work?

• Both portfolios: every investment must be made with a separate mentality of whether it can be a home run deal while sticking to the portfolio strategy. Note: it would be a mistake to invest smaller tickets in companies that you think have less potential than others. You simply should not invest and wait for a deal that matches your expectations.
• Portfolio 2: this portfolio is not just generating a higher return (3.8 times vs. 2.5 times), the downside is also lower as the losses are only half (USD$247,500 vs. USD$495,000) the size of portfolio 1, giving effectively a bigger margin of safety in case things don’t fully work out with the home run or we pick too many write-offs
• Both portfolios: had we invested in less than 11 companies we would likely have made a loss on our invested USD$1,000,000 as it would be hard for the statistics to work out and find a home run
• Both portfolios: it would have been better to increase the number of companies (up from 11) and leave more room for the statistics to work out. This we could have accomplished by decreasing the average ticket size per company or by increasing our total fund size.
• Portfolio 1: we didn’t invest enough in the home run and we were too concentrated on balancing our money evenly across our investments. Instead, it’s better to invest less money in each company and then double down on the winner as proven in Portfolio 2.
• Both portfolios: how to find 11 companies that all individuals have the potential to deliver a 10x on your investment?
• Both portfolios: we could have tried to control the downside and have even fewer write-offs by trying to pick better, or maybe we would have picked the wrong companies and have even more write-offs. The bottom line is that it doesn’t matter. We needed the one big home run in both portfolios to get a decent return.
• Portfolio 2: how do we know who is going to be a home run and when to double down? This is an art more than science and we will discuss it in another article.
• Portfolio 2: it might not always be possible to invest more money. The company might not have given you ‘preemptive rights’ or even if you have them you might not be able to invest as much as you’d like as these rights are typically connected to the percentage of ownership

Can I not have a portfolio that is smaller than USD$1 million and/or invest less in each company?

You can. You could invest the same USD$45.000 from Portfolio 2 in less than 11 companies or you could invest smaller tickets per company.

However, there are a few challenges with doing that:

• The companies that are at an “investable stage” (we will discuss in another article what we think that is) might not let you invest less than US$45,000 (rule of thumb: successful companies don’t need your money, you’ll have to fight to get on the cap table and bring experience rather than only money), and;
• Even if they do allow you to join, they might consider your investment not substantial enough to give you the preemptive rights to re-invest more money later on, and;
• If you go ‘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 with at least 6 months of data that we should focus on
• If you choose to invest in fewer companies than suggested, it brings us back to the problem where we can’t let the statistics work properly and you might not find a home run

Obviously, you do not need to have US$1 million in cash right now to get started. It will take you time to find the right companies and the follow-on investment for the home runs might also only happen one or two years after you’ve made the initial investment. Commit to being an angel for the next 10–15 years.

How about a bigger fund?

You could increase your fund and invest bigger tickets in each company. Assuming you are still looking for the same companies as in our example above, I would still recommend to not only increase the ticket size but also the number of companies you will invest in so you can substantially increase the chances of hitting home runs.

Also Read: Angel Investor: The right catalyst for your startup

At the same time, you should ask yourself if you can still handle this by yourself or it’s time to build a team or perhaps work together with other angels.

Do the above strategies apply if I’m just getting started as an angel?

If you are just getting starting as an angel investor, I do not recommend you to immediately implement the portfolio strategies as described in this article. I suggest you participate in an angel network or syndicate first and do at least three deals investing small tickets (US$10,000–US$20,000 per deal).

The main reason for this is that you will take less risk while trying to understand the dynamics and learn from other angels.

1. Getting exposure to home runs matters most
2. An active approach during the whole lifecycle of your fund matters. Generating good returns is a combination of science & art
3. You will need to create enough (diversified) exposure and allow statistics to work in your favour
4. Be prepared to lose all your money on half of your angel investments
5. Hard work and research is needed to set yourself up for success

I will go more in-depth in the next article on how to actually start building your own portfolio and discuss topics such as qualifying potential deals, compounding, balance and diversification, the art of follow-on funding & setting yourself up for a home run.

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Genesis Alternative Ventures, a private venture debt fund in Singapore, has secured an undisclosed amount of investment from American global investment fund Capria, as it looks to double down on investing in impact-focussed startups.

The firm, founded in 2018, has invested in a significant and diverse number of startups till date, including cybersecurity company Horangi, coworking space GoWork, co-living startup Hmlet, cloud-based platform Matterport and mobile connectivity company Lynk Global.

Moving forward, Genesis plans to leverage on Capria’s expertise in impact investing to fund companies that have meaningful objectives such as financial inclusion, sustainability, small business digitisation, and gender diversity as it accelerates its growth across Southeast Asia.

On the other hand, by infusing capital into Genesis, Capria marks its first entry into Southeast Asian waters.

The Seattle-based investment fund’s primary focus has always been in private funds and companies operating in emerging markets.

“The idea of investing for superior financial returns coupled with sustainable impact is catching on in Southeast Asia, and Capria is proud to partner with Genesis to further this wave,” Capria co-founder and managing partner, Dave Richards said in a statement.

Also Read: MC Payment takes controlling stake in Genesis to tap into Chinese commerce

“Until recently, ‘impact investing’ was very nascent and mostly associated with concessionary financial returns in Southeast Asia. This has started to change with more leading funds implementing impact strategies to tap into underinvested sectors and companies,” he added.

As the challenges of COVID-19 unravel, Ben J Benjamin, co-founder and partner of Genesis Alternative Ventures, believes that “fleet-footed entrepreneurs can tap opportunities that emerge during a crisis to create
meaningful products and services to be accessible during turbulent times,”.

Dozens of Southeast Asian companies such as Kopi Kenangan, NinjaVan, Nium, and Tanihub have continued to raise investments despite COVID-19 unravelling and ravaging daily life across the globe, cites Benjamin.

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Image Credit: Genesis

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The pandemic has shaken the world, sunk economies and forced many to reset their businesses. A calamity like no other, it has perhaps influenced all to never take things for granted and spotlighted the importance of always being ready for disruption.

Running a blockchain business with my business partner has been an eventful journey, one which has demanded us to stay nimble and flexible, owing to the nature of the emerging technology, which is growing every passing day. In the face of the pandemic, we are motivated to put more resources in massively pushing blockchain applications to solve real-world problems, especially in the fields of healthcare and supply chain. But not everyone has been in that fortunate position.

Singapore’s labour market has been showing a strain with retrenchments and withdrawn job offers on the rise, as companies including startups look to conserve capital. For fresh graduates, this is a challenging time, as they look to start their careers amidst a pandemic.

Specific industry growth has been hampered, businesses are having to manage cash flow problems, and existing professionals are worried if their jobs are secure.

Though the overall job market looks grim, all is not lost in the face of adversity, and there exist opportunity areas in industries especially e-commerce, with companies still holding their doors wide and apart, for tech talent with specialised skills.

The tech industry players such as Shopee, Foodpanda, and Zalora are looking to hire up to 150 IT experts and programmers amidst the pandemic in Singapore which has seen one whammy after another, as several other employees lose jobs and are put on unpaid leave by companies in the industry. But where is the talent needed?

Also Read: ‘Southeast Asia has the talents to make it a global AI hub’: Skymind Founder Shawn Tan

According to the SEAcosystem.com, the database put together by VC firms, in the current environment, the bulk of the roles that firms are hiring for are related to the specialised field of engineering. 46.2 per cent of the startups are hiring for engineering roles according to this report.

Ironically, in the region though, there has been a huge demand for sophisticated programmers but not enough talent.

GoSchool, a digital programming school based on income share agreement launched recently by OpenNodes (powered by Tribe), Ngee Ann Polytechnic and Indorse intends to help bridge this talent demand and supply gap in the technology space.

At a time when graduates are hunting for jobs, they can use their Skills Future Credits to learn this new skill and pay the remaining amount upon getting a job. Designed for success, the virtual learning programme will kick off with the first batch in June and has onboarded hiring partners such as Shopee, Foodpanda, Zalora amongst others to secure jobs for students.

GoSchool was built through a collaborative endeavour, with the aim of empowering developers to learn and upskill without having to worry about the common issues faced before making the decision to embark on an education – cost and employability. This is even more compelling given the times face.

This is an approach meant to treat students as investments rather than cash cows — a fundamental shift that could finally lift the crippling debt load we routinely push onto students. At the same time, it also ensures that the talent and skill demand of the market are being met.

The concept of “Income Share Agreement’, was first proposed by economist Milton Friedman in the 1950s as a “human capital contract,” and has been heralded by some as a market-based solution to student debt. One of the early proponents of income share agreements was Lambda school based in San Francisco – a buzzy coding boot camp that promised world-class instructors and a top tier curriculum.

But such a model of education is not static and needs to be reared carefully to ensure the desired impact. If there is a time to really push through with this and make a change, it is now. It is evident that for it to be a success, a critical lever is having a strong network of hiring partners and sealing lucrative employment opportunities for the students, amid the tectonic shifts in the market.

Also Read: Is Indonesia killing its local talents’ potential with the new proposed law that allows startups to make more foreign hires?

Virtual education has arrived. Online learning and education had been taking precedence slowly over traditional classroom setups, primarily due to its ease of accessibility and the quality of teachers it can attract. But internet speeds and connectivity, as well as reliance on set methods, had been dissuading the growth of virtual classrooms. The push induced by COVID-19 is seeing digital learning grow by leaps and bounds, and newer avenues for education access.

We must not forget that fuelling the Asian growth engine requires us to overcome talent challenges that the markets within are facing, especially the tech talent that will be responsible for facilitating the smart nation vision.

It is imperative to watch for the tech demand and supply like a hawk and drive public-private-academia collaboration, to furnish an accessible higher education system that caters to the market as well as keeps student interests at the centre.

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Companies are scrambling as their day-to-day activities are disrupted by the coronavirus pandemic. For many businesses in Southeast Asia, this is a real fight for survival. To adapt to this uncertain “new normal”, some of them are looking to diversify into new areas, such as logistics.

There are many good reasons for this. Southeast Asia is a rapidly growing market, the demographics support increased consumer spending, and it is the world’s manufacturing heart.

However, it’s not an easy place for new businesses to launch. Competition is fierce, and the region is burdened by unique obstacles, including the lack of zipcodes, developing infrastructure, and a lack of digitalisation in comparison to more developed countries.

To help bridge these gaps, those businesses are increasingly turning to startups such as Quincus. Over the last two months, we’ve been receiving regular inquiries from those looking to expand their operations into the logistics industry and seeking our technology, experience, and expertise to help them overcome the unique challenges of the Southeast Asian supply chain.

Why startups are positioned to help the supply chain adapt?

Startups are about specialisation, about finding a problem in the system and then fixing it. It’s a concept that the entrepreneur Paul Graham astutely summarised when he said that “The best startups are the ones that are tackling an urgent issue.” In Southeast Asia, that sense of urgency is palpable.

Startups have the right tools and the experience to progress the supply chain forward now.  E-commerce startups are at the forefront of this innovation. In response to the coronavirus pandemic, their acceleration of contactless deliveries and paperless payments are reducing transmission risks and will revolutionise the logistics industry’s best practice.

Also Read: Roundup: Singapore’s e-commerce market expected to reach US$9.5B this year

In addition, these kinds of innovations will enable it to mitigate disruption, increase the amount delivered, and ensure the health and safety of their workforces and the customers.

Beyond a startup’s willingness to embrace new technological innovations, what I’ve discovered is that the unique values and culture of startups give us a vital leg up with innovation and creativity. Forbes famously asked the question: “Why is it that many of the brilliant ideas of the last decade have come from start-ups?”

Startup teams are usually full of ideas, waiting for an opportunity to apply their problem-solving skills, and always looking for a way to simplify business processes that will improve customer experience and satisfaction.

Data will unlock the region’s supply chain

The effective use of data will be one of the keys to unlocking South East Asia’s supply chain potential. However, for the most part, logistics businesses in this part of the world are struggling to collect the data they need to make informed strategic decisions.

All too often, however, companies recognise the need for more data but do so without a clear understanding of how they should collect the data or smartly apply it.

An example of the right kind of data and its effective implementation can be seen by looking at driver experience. There is a lack of data shared with many drivers which could make a big difference.

One example I’ve seen consistently at Quincus is the value of knowing the best time for a driver to be ready at a warehouse to collect her packages. Our partners often tell me that this information makes the difference between a driver making her quota or creating a happy customer.

Also Read: E-commerce trends: What to expect in 2020

There’s a motto in the e-commerce world: traffic makes you innovative. Countries throughout Southeast Asia struggle with infrastructure that is not capable of dealing with the increased traffic leading to congestion.

E-commerce startups, using data from the drivers and roads, can translate it into optimised routes and times allowing drivers to avoid delays and therefore achieving their target.

Innovate to survive

The coronavirus pandemic has exposed the fragilities of the South East Asian supply chain, and it will have a significant short-term impact on the region’s economic health. The challenges presented by the pandemic are not insurmountable, but for the supply chain to flourish it will require partnerships with startups that have the necessary skills, experiences, and technology to reinvigorate core capabilities and establish new competencies.

No matter where a company falls on the supply-chain maturity curve, supply chain reinvention will help it become a leader.

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JD reportedly secures US$3.87 billion in Hong Kong secondary listing

Chinese e-commerce retailer JD reportedly has priced its shares at HK$226 (US$29.16) each and raised about US$3.87 billion in its Hong Kong secondary listing, according to a report by Channel News Asia, in the wake of Chinese companies delaying plans for US listings.

JD is already listed on the Nasdaq in New York but recently warned that it would sell 133 million shares. Citing sources familiar with the matter, the report said that under the terms of the deal, one of JD’s American depositary shares will be equal to two Hong Kong shares. This means the Hong Kong price represents a 3.9 per cent discount to the firm’s closing share price of US$60.07 on the Nasdaq on Wednesday.

JD stock will begin trading on June 18 which coincides with the company’s annual sales festival.

KoinWorks, Mandiri Manajemen Investasi to provide lenders with fund automation

PT Lunaria Annua Teknologi (KoinWorks) has announced a collaboration with PT Mandiri Manajemen Investasi to manage lender funds which will be automatically invested in the capital market instruments of the Mutual Fund Mandiri Investment Money Market 2 (MIPU2 T + 0).

Through this partnership, KoinWorks users are allowed to be capital market investors under one single financial platform.

In the overall process, the lender funds that settle on Koinworks for more than two days will be automatically converted into Mutual Funds managed by Mandiri Investasi. Lenders are allowed to use their funds directly without having to disburse their mutual fund units.

Also Read: [Updated] Indonesia’s KoinWorks raises US$20M from Quona Capital

The lender funds will be invested in Mandiri Money Market 2 (MIPU2 T+0) mutual fund instruments and will be saved and recorded by a trusted Custodian Bank that has been licensed and supervised by the Financial Services Authority (OJK).

Benedicto Haryono as the CEO & Co-Founder of KoinWorks said, “We believe besides offering alternative funding for the productive sector, the growth of capital market investors that can be seen through the ownership of Single Investor Identification (SID) can push the financial inclusion in Indonesia.”

Thailand approves draft bill for foreign digital service providers to pay VAT

On Tuesday, Thailand reportedly has approved a draft bill requiring foreign digital service providers to pay a value-added tax (VAT). The move put Thailand into the list of other Southeast Asian countries that seek to boost tax revenues from international tech companies, just after Indonesia and the Philippines.

According to DealStreetAsia, the bill still has to be voted on by Thailand‘s parliament, requires non-resident companies or platforms that earn more than 1.8 million baht (US$57,434.59) per year from providing digital services in the country to pay a 7 per cent VAT on sales

Deputy government spokeswoman Ratchada Thanadirek said that Thailand’s main industries include music and video streaming, gaming, and hotel booking, and it’s only fair if foreign businesses also paid the tax just like the Thai owners.

MatchMove, KPMG partner with Expand Group to facilitate foreign migrant workers’ e-remittance need

MatchMove, Singapore-headquartered fintech companies, and KPMG, has announced their partnership with the Expand Group, a homegrown building construction group with integrated civil engineering and construction support service capabilities, to facilitate Employer Assisted contactless e-remittance for foreign migrant workers quarantined in dormitories.

The COVID-19 pandemic and heightened number of cases amongst the foreign migrant worker segment has led to them being quarantined in dormitories. As they are unable to leave their dormitories due to the Stay Home Notice, they are unable to make the trip to their usual remittance centres, which has accelerated the adoption of cashless digital payments among the foreign migrant workers.

Also Read: MatchMove acquires stake in P2P lender MoolahSense to strengthen its SME financing capabilities

With the partnership, MatchMove and KPMG are collaborating with Expand Group to onboard their foreign migrant workers onto the Boss Mobile Money remittance application and training them virtually so they can carry out the transaction at ease. MatchMove’s Boss Mobile Money application is a B2C application that enables cross-border transactions to more than 10 countries including India, Bangladesh, and the Philippines.

Alibaba to support the globalisation of Singapore’s SMEs

Alibaba has launched an initiative to help businesses in Singapore go online and go global. Small and medium-sized enterprises (SMEs) in Singapore will be among the first beneficiaries outside Greater China of this programme, which is part of the broader 2020 Spring Thunder initiative by Alibaba Group to help SMEs survive and thrive via digitisation in the wake of the pandemic.

Project Sprout Up will help existing and potential Alibaba users in Singapore better access B2B trade opportunities available in the vast global market. Over 90,000 products from Singapore-based businesses are currently listed on the platform, including items in key local industries like food & beverage, machinery and home & garden.

Alibaba will help lower the barriers to entry for SMEs looking to kickstart or accelerate their online B2B trade operations. Eligible SMEs can apply through Innovative Hub, Alibaba’s local channel partner, to enjoy a one-time 70 per cent subsidy for a solution package, enabled via Enterprise Singapore’s grant under the national Grow Digital initiative, available before July 2020.

SMEs interested in learning more about Project Sprout Up can click here to fill in a survey form, after which a representative of Alibaba will reach out to them with further details.

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Picture Credit: JD.com

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