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December 14, 2018
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Feds like cryptocurrencies and blockchain tech and so should antitrust agencies

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While statements and position papers from most central banks were generally skeptical of cryptocurrencies, the times may be changing.

Earlier this year, the Federal Reserve of Saint Louis published a study that relates the positive effects of cryptocurrencies for privacy protection.

Even with the precipitous decline in value of Bitcoin, Ethereum and other currencies, the Federal Reserve author emphasized the new competitive offering these currencies created exactly because of the way they function, and accordingly, why they are here to stay.

And antitrust authorities should welcome cryptocurrencies and blockchain technologies for the same reason.

Fact: crypto-currencies are good for (legitimate) privacy protection

In the July article from Federal Reserve research fellow Charles M. Kahn, cryptocurrencies were held up as an exemplar of a degree of privacy protection that not even the central banks can provide to customers.

Kahn further stressed that “privacy in payments is desired not just for illegal transactions, but also for protection from malfeasance or negligence by counterparties or by the payments system provider itself.”

The act of payment engages the liability of the person who makes it. As a consequence, parties insert numerous contractual clauses to limit their liability. This creates a real issue due to the fact that some “parties to the transaction are no longer able to support the lawyers’ fees necessary to uphold the arrangement.” Smart contracts may address this issue by automating conflict resolution, but for anyone who doesn’t have access to them, crypto-currencies solve the problem differently. They make it possible to make a transaction without revealing your identity.

Above all, crypto-currencies are a reaction to fears of privacy invasion, whether by governments or big companies, according to Kahn. And indeed, following Cambridge Analytica and fake news revelations, we are hearing more and more opinions expressing concerns. The General Data Protection Regulation is set to protect private citizens, but in practice, “more and more individuals will turn to payments technologies for privacy protection in specific transactions.” In this regard, cryptocurrencies provide an alternative solution that competes directly with what the market currently offers.

Consequence: blockchain is good for competition and consumers

Indeed, cryptocurrencies may be the least among many blockchain applications. The diffusion of data among a decentralized network that is independently verified by some or all of the network’s participating stakeholders is precisely the aspect of the technology that provides privacy protection and competes with applications outside the blockchain by offering a different kind of service.

The Fed of St. Louis’ study underlines that “because privacy needs are different in type and degree, we should expect a variety of platforms to emerge for specific purposes, and we should expect continued competition between traditional and start-up providers.”

And how not to love variety? In an era where antitrust authorities are increasingly interested in consumers’ privacy, crypto-currencies (and more generally blockchains) offer a much more effective protection than antitrust law and/or the GDPR combined.

These agencies should be happy about that, but they don’t say a word about it. That silence could lead to flawed judgements, because ignoring the speed of blockchain development — and its increasingly varied use — leads to misjudge the real nature of the competitive field.

And in fact, because they ignore the existence of blockchain (applications), they tend to engage in more and more procedures where privacy is seen as an antitrust concern (see what’s happening in Germany). But blockchain is actually providing an answer to this issue ; it can’t be said accordingly that the market is failing. And without a market failure, antitrust agencies’ intervention is not legitimate.

The roles of the fed and antitrust agencies could change

This new privacy offering from blockchain technologies should also lead to changes in the role of agencies. As the Fed study stressed:

“the future of central banks and payments authorities is no longer in privacy provision but in privacy regulation, in holding the ring as different payments platforms offer solutions appropriate to different niches with different mixes of expenses and safety, and with attention to different parts of the public’s demand for privacy.”

Some constituencies may criticize the expanding role of central banks in enforcing and ensuring privacy online, but those banks would be even harder pressed if they handled the task themselves instead of trying to relinquish it to the network.

The same applies to antitrust authorities. It is not for them to judge what the business model of digital companies should be and what degree of privacy protection they should offer. Their role is to ensure that alternatives exist, here, that blockchain can be deployed without misinformed regulation to slow it down.

Perhaps antitrust agencies should be more vocal about the benefits of cryptocurrencies and blockchain and advise governments not to prevent them.

After all, if even a Fed is now pro-crypto-currencies, antitrust regulators should jump on the wagon without fear. After all, blockchain creates a new alternative by offering real privacy protections, which ultimately put more power in the hands of consumers. If antitrust agencies can’t recognize that, we will soon ask ourselves: who are they really protecting?

News Source = techcrunch.com

TNB Aura closes $22.7M fund to bring PE-style investing to Southeast Asia’s startups

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TNB Aura, a recent arrival to Southeast Asia’s VC scene, announced today that it has closed a maiden fund at SG$31.1million, or around US$22.65 million, to bring a more private equity-like approach to investing in startups in the region.

The fund was launched in 2016 and it is a joint effort between Australia-based venture fund Aura and Singapore’s TNB Ventures, which has a history of corporate innovation work. It reached a final close today, having hit an early close in January. It is a part of the Enterprise Singapore ‘Advanced Manufacturing and Engineering’ scheme which, as you’d expect, means there is a focus on hardware, IO, AI and other future-looking tech like ‘industry 4.0.’

The fund is targeting Series A and B deals and it has the firepower to do 15-20 deals over likely the next two to three years, co-founder and managing partner Vicknesh R Pillay told TechCrunch in an interview. There’s around $500,000-$4 million per company, with the ideal scenario being an initial $1 million check with more saved for follow-on rounds. Already it has backed four companies including TradeGecko, which raised $10 million in a round that saw TNB Aura invest alongside Aura, and AI marketing platform Ematic.

The fund has a team of 10, including six partners and an operating staff of four. It pitches itself a little differently to most other VCs in the region given that manufacturing and engineering bent. That, Pillay said, means it is focused on “hardware plus software” startups.

“We are very strong fundamentals guys,” Pillay added. We ask what is the valuation and decide what we can get from a deal. It’s almost like PE-style investing in the VC world.”

A selection of the TNB Aura team [left to right]: Samuel Chong (investment manager), Calvin Ng, Vicknesh R Pillay, Charles Wong (partners), Liu Zhihao (investment manager)

Another differentiator, Pillay believes, is the firm’s history in the corporate innovation space. That leads it to be pretty well suited to working in the B2B and enterprise spaces thanks to its existing networks, he said.

“We particularly like B2B saas companies and we believe we can assist them through of our innovation platforms,” Pillay explained.

Outside of Singapore — which is a heavy focus thanks to the relationship with Enterprise Singapore — TNB Aura is focused on Indonesia, the Philippines, Thailand and Vietnam, four of the largest markets that form a large chunk of Southeast Asia’s cumulative 650 million population. With an internet population of over 330 million — higher than the entire U.S. population — the region is set to grow strongly as internet access increases. A recent report from Google and Temasek tipped the region’s digital economy will triple to reach $240 billion by 20205.

The report also found that VC funding in Southeast Asia is developing at a fast clip. Excluding unicorns, which distort the data somewhat, startups raised $2.6 billion in the first half of this year, beating the $2.4 billion tally for the whole of 2017.

There are plenty of other Series A-B funds in the region, including Jungle Ventures, Golden Gate Ventures, Openspace Ventures, Monks Hill Ventures, Qualgro and more.

News Source = techcrunch.com

Changing consumer behavior is the key to unlocking billion dollar businesses

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In the summer of 2012, I had just learned of a new service where a driver would pick you up in their own car, not a taxi or licensed town car. You’d be able to recognize the car by the pink mustache strapped to the front. I quickly downloaded the new app called Lyft and, intrigued, started to share it with others around the Airbnb offices.

Almost everyone gave me a same response: “I would never use it.” I asked why. “Well, I wouldn’t feel comfortable getting into someone else’s car.” I said, “Wait a minute, you are comfortable allowing others into your home and staying in others’ homes while you travel, but you don’t want to get into someone else’s car?” The reply was always a version of “Yeah, I guess that’s it—a car is different than a home.”

I was dumbfounded. Here was a collection of adventurous individuals — who spent their days at Airbnb expanding the boundaries of what it means to trust another person — but they were stuck on the subtle behavior change of riding shotgun with a stranger. I then had another quick reaction: this product was going to be huge.

Behavior Shifts in Consumer Internet

Truly transformative consumer products require a behavior shift. Think back to the early days of the internet. Plenty of people said they would never put their credit card credentials online. But they did, and that behavior shift allowed e-commerce to flourish, creating the likes of Amazon. Fast forward to the era when Myspace, Facebook, and other social networks were starting out. Again, individuals would commonly say that they would never put their real names or photos of themselves online. It required only one to two years before the shift took hold and the majority of the population created social media profiles. The next wave included sharing-economy companies like Airbnb, Lyft, and Uber, prompting individuals to proclaim that they would never stay in someone else’s home or get into their car. In short order, times changed and those behaviors are now so commonplace, these companies are transforming how people travel and move about the world.

The behavior shifts were a change in socially accepted norms and previously learned behavior. They alone don’t create stratospheric outcomes, but they do signal that there could be something special at play.

Build an Enhanced Experience

Still, just because a product creates a behavior shift does not mean that it will be successful. Often, though a handful of loyal users may love them, there is ultimately no true advantage to these products or services.

One prime example comes to mind, the product Blippy. In late 2009, the team built a product to livestream a user’s credit card transactions. It would show the purchase details to the public, pretty much anyone on the internet, unlocking a new data stream. It was super interesting and definitely behavior shifting. This was another case where many people were thinking, “Wow, I would never do that,” even as others were happily publishing their credit card data. Ultimately there was little consumer value created, which led Blippy to fold. The founders have since gone on to continually build interesting startups.

In successful behavior-shifting products, the shift leads to a better product, unlocking new types of online interactions and sometimes offline activities in the real world. For instance, at Airbnb the behavior shift of staying in someone else’s home created a completely new experience that was 1) cheaper, 2) more authentic, and 3) unique. Hotels could not compete, because their cost structure was different, their rooms were homogenized, and the hotel experience was commonplace. The behavior shift enabled a new product experience. You can easily flip this statement, too: a better experience enabled the behavior shift. Overall, the benefits of the new product were far greater than the discomfort of adopting new behavior.

Revolutionary products succeed when they deliver demonstrable value to their users. The fact that a product creates a behavior shift is clearly not enough. It must create enormous value to overcome the initial skepticism. When users get over this hurdle, though, they will be extremely bought in, commonly becoming evangelists for the product.

Unlock Greenfield Opportunity

One key benefit of a behavior-shifting product is that it commonly creates a new market where there is no viable competition. Even in cases where several innovative players crop up at the same time, they’re vying for market share in a far more favorable environment, not trying to unseat entrenched corporations. The opportunity then becomes enormous, as the innovators can capture the vast majority of the market.

Other times, the market itself isn’t new, but the way the product or service operates in it is. Many behavior-shifting products were created in already enormous markets, but they shifted the definition of those markets. For instance, e-commerce is an extension of the regular goods market, which is in the trillions. Social media advertising is an extension of online advertising, which is in the hundreds of billions. Companies that innovated within those markets created new greenfield but also continued to grow the existing market pie and take market share away from the incumbents. The innovators retrain the consumer to expect more, forcing the incumbents to respond to a new paradigm.

(Photo by Carl Court/Getty Images)

Shape the Future

A behavior shift also allows the innovator to shape the future by creating a new product experience and pricing structure.

When it comes to product experience, there are no prior mental constructs. This is a huge advantage to product development, as it allows teams to be as creative as possible. For instance, the addition of ratings in Uber’s and Lyft’s products changed the dynamic between driver and rider. Taxi drivers and passengers could be extremely rude to each other. Reviews have altered that experience and made rudeness an edge case, as there are ramifications to behaving badly. Taxis can’t compete with this seemingly small innovation because there is no mechanism to do so. They can’t enhance quality of interaction without taking the more manual approach of driver education.

Another benefit to the innovator is that they can completely change the economics of the transaction, shaping the future of the market. Amazon dictated a new shopping experience with online purchasing, avoiding the costs of a brick-and-mortar location. They could undercut pricing across the board, focusing on scale instead of margin per product. This shifted the business model of the market, forcing others to respond to follow suit. In many cases, that shift ultimately eroded the competition’s existing economic structure, making it extremely challenging for them to participate in the new model.

Expect Unintended Consequences

It can be difficult to imagine at the outset, but if your product is encouraging massive behavior shifts, you will undoubtedly encounter many unintended consequences along the way. It is easy to brush off a problem you did not directly and intentionally create. But as the social media companies are learning today, very few problems go away by ignoring them. It is up to you to address these challenges, even if they are an unintended byproduct.

One of the most common unintended consequences nearly all behavior-shifting companies will run into is government regulation. Regulation is created to support the world as it is today. When you introduce a behavior shift into society, you will naturally be operating outside of previously created societal frameworks. The sharing-economy companies like Airbnb and Uber are prime examples. They push the boundaries of land use regulation and employer-employee relationships and aggravate unions.

I want to emphasize that you should not ignore such matters or think that their regulation is silly. Regulation serves a purpose. Startups must work with regulators to help define new policy structures, and governments must be open to innovation. It’s a two-way street, and everyone wins when we work together.

What’s Next

My advice is to start by thinking about existing categories that represent people’s biggest or most frequent expenditures. The amount of money you spend on your home, transportation, and clothes, for example, is enormous. Is there an opportunity to grow and capture part of these markets by upending old commercial models and effecting a behavior shift?

Scooter networks are a real-time example of a behavior-shifting innovation that is just getting going. It has the same explosive opportunity of prior game-changing innovations. There are still many individuals who state that they will never commute on scooter. But applying this framework tells me that it is just a matter of time before it is more widely adopted as the technology keeps evolving and maturing.

There is no magical formula for uncovering massive, behavior-shifting products. But if you come up with an innovative idea, and everyone initially tells you that they would never use it, think a little harder to make sure they are right…

News Source = techcrunch.com

Indonesia e-commerce leader Tokopedia raises $1.1B from Alibaba and SoftBank’s Vision Fund

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Indonesia-based e-commerce firm Tokopedia is the latest startup to enter the Vision Fund after it raised $1.1 billion Series G round led by the SoftBank megafund and Alibaba.

SoftBank and Alibaba are existing investors in the business — the Chinese e-commerce giant led a $1.1 billion round last year, while SoftBank recently transitioned its shareholding in Tokopedia to the Vision Fund. That latter detail is what held up this deal which had been agreed in principle back in October, TechCrunch understands.

Tokopedia didn’t comment on its valuation, but TechCrunch understands from a source that the deal values the company at $7 billion. SoftBank Ventures Korea and other investors — including Sequoia India — also took part in the deal. It has now raised $2.4 billion from investors to date.

The deal comes weeks after SoftBank made a $2 billion investment in Coupang, Korea’s leading e-commerce firm, at a valuation of $9 billion. Like Tokopedia, Coupang countered SoftBank as an investor before its stake transitioned to the Vision Fund.

Founded nine years ago, Tokopedia is often compared to Taobao, Alibaba’s hugely successful e-commerce marketplace in China, and the company recently hit four million merchants. Tokopedia said it has increased its GMV four-fold, although it did not provide a figure. Logistics are a huge issue in Indonesia, which is spread across some 17,000 islands. Right now, it claims to serve an impressive 93 percent of the country, while it said that one-quarter of its customers are eligible for same-day delivery on products. That’s also notable given that it operates a marketplace, which makes coordinating logistics more challenging.

The firm plans to use this new capital to develop its technology to enable more SMEs and independent retailers to come aboard its platform. On the consumer side, it is developing financial services and products that go beyond core e-commerce and increase its captive audience of consumers.

Indonesia’s super app

Despite this new round, CEO and co-founder William Tanuwijaya told TechCrunch that there are no plans to expand beyond Indonesia, which is Southeast Asia’s largest economy and the world’s fourth most populous country with a population of over 260 million.

“We do not have plans to expand beyond Indonesia at this moment. We will double down on the Indonesia market to reach every corner of our beautiful 17,000-island archipelago,” Tanuwijaya said via an emailed response to questions. (Tokopedia declined a request for an interview over the phone.)

William Tanuwijaya, co-founder and chief executive officer of PT Tokopedia, gestures as he speaks during a panel session on the closing day of the World Economic Forum (WEF) in Davos, Switzerland, on Friday, Jan. 26, 2018. World leaders, influential executives, bankers and policy makers attend the 48th annual meeting of the World Economic Forum in Davos from Jan. 23 – 26. Photographer: Jason Alden/Bloomberg

That Indonesia-only approach is in contrast to Go-Jek, the Indonesia-based ride-hailing firm which is rapidly expanding across Southeast Asia. Go-Jek has already moved into Vietnam, Singapore and Thailand with doubtless more plans in 2019.

But Go-Jek and Tokopedia do share similarities in that they have both expanded beyond their central business.

Go-Jek has pushed into on-demand services, payments and more. In recent times, Tokopedia has moved into payments, including mobile top-up, and financial services, and Tanuwijaya hinted that it will continue its strategy to become a ‘super app.’

“We will go deeper and serve Indonesians better – from the moment they wake up in the morning until they fall asleep at night; from the moment a person is born, until she or he grows old. We will invest and build technology infrastructure-as-a-services, in logistics and fulfillment, payments and financial services, to empower businesses both online and offline,” Tanuwijaya added.

Vision Fund controversy

But, with the Vision Fund comes controversy.

A recent CIA report concluded that Saudi Crown Prince Mohammed bin Salman ordered the murder of journalist Jamal Khashoggi. The prince manages Saudi Arabia’s PIF sovereign fund, the gargantuan investment vehicle that anchored the Vision Fund through a $45 billion investment.

SoftBank chairman Masayoshi Son has condemned the killing as an “act against humanity” but, in an analyst presentation, he added that SoftBank has a “responsibility” to Saudi Arabia to deploy the capital and continue the Vision Fund.

“We are deeply concerned by the reported events and alongside SoftBank are monitoring the situation closely until the full facts are known,” Tanuwijaya told us via email, although it remains unclear exactly what Tokopedia could (or would) do even in the worst case scenario.

Given that the Trump administration seems focused on continuing the status quo with Saudi Arabia as a key ally, the situation remains in flux although there’s been plenty of discussion around whether the Saudi link makes the Vision Fund tainted money for founders.

Son himself said recently that he hadn’t heard of any cases of startups refusing an investment from the Vision Fund, but he did admit that there “may be some impact” in the future.

Tanuwijaya didn’t directly address our question on whether he anticipates a backlash from this investment. The Vision Fund’s recent deal with Coupang doesn’t appear to have generated a negative reaction.

Even the involvement of Alibaba throws up other questions, given that it owns Lazada — which is arguably Southeast Asia’s most prominent e-commerce service.

Unlike Tokopedia, Lazada covers six markets in Southeast Asia, it is focused on retail brands and it maintains close links to Alibaba’s Taobao service, giving merchants a channel to reach into the region. According to sources who spoke to TechCrunch earlier this year, Tokopedia’s management was originally keen to take money from Alibaba’s rival Tencent, but an intervention from SoftBank forced it to bring Alibaba on instead.

Tanuwijaya somewhat diplomatically played down the rivalry and any rift, insisting that there is no impact on its business.

“Tokopedia is an independent company with a diversified cap table,” he said via email. “No single shareholder owns the majority of the company. We work closely with our shareholders’ portfolio companies and tap into available synergies.”

“For example, Tokopedia works closely with both Grab — a SoftBank portfolio — and Gojek — a Sequoia portfolio. We see Lazada having a different business model than us: Lazada is a hybrid of retail and marketplace model, whereas Tokopedia is a pure marketplace. Lazada is [a] regional player, we are a national player in Indonesia,” he added.

Tokopedia has many similarities to Alibaba’s hugely successful Taobao marketplace in China

“How can we be less excited about this moment?”

At nearly a decade old, Tokopedia was one of the earliest startups to emerge in Indonesia. Famously, Tanuwijaya and fellow co-founder Leontinus Alpha Edison famously saw nearly a dozen pitches for venture capital rejected by VCs before they struck out and raised money.

Compared to now — and entry to the Vision Fund for “proven champions,” as Son calls it — that’s a huge transition, and that’s not even including the business itself which has broadened into financial products and more. But that doesn’t always sit easily with every founder. Privately, many will often concede that the ‘best’ days are early times during intense scaling and all-hands-to-the-pump moments. Indeed, Traveloka — a fellow Indonesia-based unicorn — recently lost its CTO to burnout.

Is the same likely to happen to Tanuwijaya, Edison and their C-level peers in the business?

Tanuwijaya compared the journey of his business to scaling a mountain.

“Leon and I are very excited entering our tenth year. When we first started Tokopedia, it was like seeing the tip of a mountain that is very far from where we stand. We promised ourselves that we were going to climb to the top of the mountain one day,” he told TechCrunch.

“The top of the mountain is our company mission: to democratize commerce through technology. Today, we have arrived at the base of the mountain. We can finally touch the mountain and we can start to climb it. With this additional capital, we have the tools and supplies to achieve our mission at a faster rate. Should we think whether we are burned-out and go home to rest, or should we climb our mountain? How can we be less excited about this moment?” he added.

Tokopedia has certainly become a mountain in itself. The startup is the third highest valued private tech company, behind only Grab and Go-Jek, at $11 billion and (reportedly) $9 billion, respectively, and the fairytale story is likely to inspire future founders in Indonesia and beyond to take the startup route. What happens to the Vision Fund and its PIF connection by then is less certain.

News Source = techcrunch.com

Payment service Toss becomes Korea’s newest unicorn after raising $80M

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South Korea has got its third unicorn startup after Viva Republica, the company beyond popular payment app Toss, announced it has raised an $80 million round at a valuation of $1.2 billion.

This new round is led by U.S. firms Kleiner Perkins and Ribbit Capital, both of which cut their first checks for Korea with this deal. Others participating include existing investors Altos Ventures, Bessemer Venture Partners, Goodwater Capital, KTB Network, Novel, PayPal and Qualcomm Ventures. The deal comes just six months after Viva Republica raised $40 million to accelerate growth, and it takes the company to nearly $200 million raised from investors to date.

Toss was started in 2013 by former dentist SG Lee who grew frustrated by the cumbersome way online payments worked in Korea. Despite the fact that the country has one of the highest smartphone penetrations rates in the world and is a top user of credit cards, the process required more than a dozen steps and came with limits.

“Before Toss, users required five passwords and around 37 clicks to transfer $10. With Toss users need just one password and three steps to transfer up to KRW 500,000 ($430),” Lee said in a past statement.

Working with traditional finance

Today, Viva Republica claims to have 10 million registered users for Toss — that’s 20 percent of Korea’s 50 million population — while it says that it is “on track” to reach a $18 billion run-rate for transactions in 2018.

The app began as Venmo -style payments, but in recent years it has added more advanced features focused around financial products. Toss users can now access and manage credit, loans, insurance, investment and more from 25 financial service providers, including banks.

Fintech startups are ‘rip it out and start again’ in the West –such as Europe’s challenger banks — but, in Asia, the approach is more collaborative and assistive. A numbe of startups have found a sweet spot in between banks and consumers, helping to match the two selectively and intelligently. In Toss’s case, essentially it acts as a funnel to help traditional banks find and vet customers for services. Thus, Toss is graduating from a peer-to-peer payment service into a banking gateway.

“Korea is a top 10 global economy, but no there’s no Mint or Credit Karma to help people save and spend money smartly,” Lee told TechCrunch in an interview. “We saw the same deep problems we need to solve [as the U.S.] so we’re just digging in.”

“We want to help financial institutions to build on top of Toss… we’re kind of building an Amazon for the financial services industry,” he added. “We try to aggregate all those activities, covering saving accounts, loan products, insurance etc.”

Former dentist SG Lee started Toss in 2013.

Lee said the plan for the new money is to go deeper in Korea by advancing the tech beyond Toss, adding more users and — on the supply side — partnering with more companies to offer financial products.

There’s plenty of competition. Startups like PeopleFund focus squarely on financial products, while Kakao, Korea’s largest messaging platform, has a dedicated fintech division — KakaoPay — which rivals Toss on both payment and financial services. It also counts the mighty Alibaba in its corner courtesy of a $200 million investment from its Ant Financial affiliate.

Alibaba and Tencent tend to move in pairs as opposites, with one naturally gravitating to the rivals of the other’s investees as recently happened in the Philippines. It’s tricky in Korea, though. Tencent is caught in limbo since it is a long-standing Kakao backer. But might the Ant Financial deal spur Tencent into working with Toss?

Lee said his company has a “good relationship” with Tencent, including the occasional home/away visits, but there’s nothing more to it right now. That’s intriguing.

Overseas expansion plans

Also of interest is future plans for the business now that it is taking on significantly more capital from investors who, even with the most patient money out there, eventually need a return on their investment.

Lee is adamant that he won’t sell, despite Viva Republica increasingly looking like an ideal entry point for a payment or finance company that has missed the Korean market and wants in now.

He said that there are plans to do an IPO “at some point,” but a more immediate focus is the opportunity to expand overseas.

When Toss raised a PayPal-led $48 million Series C 18 months ago, Lee told TechCrunch that he was beginning to cast his eyes on opportunities in Southeast Asia, the region of over 650 million consumers, and that’s likely to see definitive action next year. The Viva Republica CEO said that Vietnam could be a first overseas launchpad for Toss.

“We’re thinking seriously about going beyond Korea because sooner or later we will hire saturation point,” Lee said. “We think Vietnam is quite promising. We’ve talked to potential partners and are currently articulating ideas and strategy materialized next year.

“We already have a very successful playbook, we know how to scale among users,” Lee added.

While the plan is still being put together, Lee suggested that Viva Republica would take its time expanding across Southeast Asia, where six distinct countries account for the majority of the region’s population. So, rather than rapidly expanding Toss across those markets, he indicated that a more deliberate, country-by-country launch could be the strategy with Vietnam kicking things off in 2019.

The Toss team at HQ in Seoul, Korea

Korea rising

Toss’s entry into the unicorn club — a vaunted collection of private tech companies valued at $1 billion or more — comes weeks after Coupang, Korea’s top e-commerce company, raised $2 billion at a valuation of $9 billion.

While that Coupang round came from the SoftBank Vision Fund — a source of capital that is threatening to become tainted given its links to the murder of journalist Jamal Khashoggi — it does represent the first time that a Korea-based company has joined the $100 billion mega-fund’s portfolio.

Some milestones can be dismissed as frivolous, but these two coming so close together are a signal of increased awareness of the potential of Korea as a startup destination by investors outside of the country.

While Lee admitted that the unicorn valuation “doesn’t change a lot” in daily terms for his business, he did admit that he has seen the landscape shift for Korea’s startup ecosystem — which has only two other privately-held unicorns: Coupang and Yello Mobile.

“More and more global VCs are aware that South Korea is a really good opportunity to do a startup. It is getting easier for our fellow entrepreneurs to pitch and get access to global funds,” he said, adding that Korea’s top 25 cities have a cumulative population (25 million) that matches America’s top 25.

Despite that potential, Korea has tended to focus on its ‘chaebol’ giants like Samsung — which accounts for a double-digital percentage of the national economy — LG, Hyundai and SK. That means a lot of potential startup talent, both founders and employees, is locked up in secure corporate jobs. Throw in the conservative tradition of family expectations, which can make it hard for children to justify leaving the safety of a big company, and it is perhaps no wonder that Korea has relatively fewer startups compared to other economies of comparable size.

But that is changing.

Coupang has been one of the highest profile examples to follow, alongside the (now public) Kakao business. But with Viva Republica, Toss and a charismatic dentist-turned-founder, another startup story is being written and that could just inspire a future generation of entrepreneurs to rise up and be counted in South Korea.

News Source = techcrunch.com

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