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August 18, 2018
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Southeast Asia

Singapore’s Openspace Ventures closes new $135M fund for Southeast Asia

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It seems like everyone is out there raising new funds in Southeast Asia. Weeks after we reported Golden Gate Ventures hit a first close on its third fund aimed at $100 million, so Openspace Venturesthe Singapore-based firm formerly known as NSI — has announced a final close of $135 million for its second fund.

Founded in 2014 by entrepreneur Hian Goh and finance exec Shane Chesson, Openspace is best known for being an early backer of Indonesian ride-hailing unicorn Go-Jek. A selection of its other investments includes fintech startup FinAccel, e-commerce player Love Bonito, restaurant booking service Chope, health-focused insurance brokerage CXA Group, and bread maker Rotimatic.

Openspace specializes in Series A with a typical check size of $3 million to $5 million, and capital for follow-on deals. Goh told TechCrunch around the time of the first close that the plan is to expand the focus on startups operating marketplaces and/or the e-commerce space to cover emerging verticals such as fintech, health tech and education.

Chesson, his partner, said that in areas like healthcare, progress from startups has been “remarkable” while he sees “great opportunities” to develop new kinds of consumer-centric brands in e-commerce, both B2C and B2B.

Beyond vertical expansion, the firm may also seek opportunities in new geographies — it invested alongside Go-Jek in Bangladesh-based on-demand service Pathao, for example. It also plans to utilize local teams in Thailand, Indonesia and Vietnam and perhaps expand its network to more markets, too.

The target for the capital is Southeast Asia, a region of more than 650 million consumers where rising internet access is creating new opportunities for tech startups and internet-based businesses.

A report co-authored by Google last year forecast the region’s internet economy reaching $200 billion per year by 2025, up from $31 million in 2015. Already, Southeast Asia has more internet users than the U.S. population, and the total value of its digital economy was said to reach $50 million in 2017.

Between 2016 and 2017, investors pumped over $12 billion into Southeast Asia-based startups. It’s an impressive stat, but most of the capital was captured by the largest businesses and that’s why more seed and early-stage funds are needed — and are arriving — in the region.

The Openspace Ventures team

At investor level, there certainly seems to be a growing appetite among global LPs, the investors who fund the funds.

Openspace, for example, was originally targeting a $125 million raise, but the firm said it saw significant interest and so raised the additional figure to “embed deeper regional and operating capabilities” into its team.

Singapore sovereign fund Temasek and U.S. PE firm StepStone Group are among the named LPs. Openspace said others include pension funds, university endowments, insurance companies and family offices across the U.S., Europe, Japan, China and Australia.

“For most of these LPs, Openspace is their first and only investment in this region. For some, they have returned and increased their commitment since fund one,” Chesson told TechCrunch via email. “It has taken some time for LPs of this caliber to get comfortable with the region, but we are pleased that we now have the track record at the fund and the interest in the region to bring them on board.”

“This is a big change from a few years back and is a testament to all the entrepreneurs and ecosystem partners who have developed this market so rapidly. There is still much work to be done though in fulfilling the promise, realizing gains, filling in gaps in the regional capability set and we look forward to being part of this,” he added.

This second pot has already been open and, combined with a $90 million debut fund, the firm has backed 19 startups to date. That portfolio, it said, has raised over $2.6 billion in follow-on capital which, even without $2 billion from Go-Jek, is pretty impressive. Indeed, Openspace says its inaugural fund is ranked the third best performing VC fund in the 2003-2015 bracket, according to investment tracking service Preqin.

News Source = techcrunch.com

Three Indonesian tech unicorns unite to back digital insurance startup

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It’s almost unheard of to see three unicorns join forces to fund a startup, but that’s exactly what has happened in Indonesia.

Ride-hailing company Go-Jek, e-commerce firm Tokopedia and travel booking startup Traveloka — each of which is valued in the billions of U.S. dollars — have come together to provide a Series A funding round for PasarPolis, a digital insurance startup in Indonesia aiming to tap Southeast Asia’s growing internet economy.

PasarPolis started out as an insurance comparison site but today it offers micro- and modular-insurance online. Go-Jek, Tokopedia and Traveloka are three of its major clients through which it offers ‘click box’ policies that are bundled with ride-hailing trips, e-commerce sales and travel deals.

The round itself is undisclosed but TechCrunch understands that it is in range of $5-8 million, as was earlier reported by Deal Street Asia.

PasarPolis founder and CEO Cleosent Randing told TechCrunch in an interview that the deal was strategic and aimed at developing new products with the three companies, which he estimates provide “access to 100 million insurable hits per month.” He said that the startup could be picky because it is already cash flow positive.

“We were very very selective with this round, it’s something we are keeping quite low profile,” he explained. “It’s more of how we can be the provider of choice for the largest digital companies in Indonesia… we feel it’s a strategic investment and collaboration to advance micro insurance via the internet.

“Do they believe in the vision and can they help make the vision a reality but giving customers much cheaper, more modular insurance which is more relevant in today’s digital economy?” he added.

[Left to right:] Tokopedia COO Melissa Siska Juminto, Go-Jek chief human resources officer Monica Oudang, PasarPolis founder & CEO Cleosent Randing, Minister of Communications and Informatics Rudiantara, and Traveloka SVP of business development Caesar Indra

Beyond obvious consumer-focused products, PasarPolis has developed programs such as life insurance for Go-Jek drivers, and health care initiatives for SMEs that sell product on Tokopedia. In the travel space, he pointed out that growth in insurance revenue for companies like Expedia is outstripping ticket sale growth which bodes well for Traveloka.

PasarPolis is currently waiting on the result of an application for an insurance license which will give it new options for products beyond its current setup of working with insurers on underwriting. That’ll take some time, however, and right now the focus is on developing new insurance products, cementing its position in the market and also expanding into new markets in Southeast Asia — which now has more internet users than the entire population of the U.S., according to a report co-authored by Google.

Its work with Go-Jek will take it into markets like Vietnam and Thailand — where Go-Jek is expanding its ride-hailing business — but Randing said he is also in talks with other companies and insurance providers to offer more modular options for consumers. That could take the form of usage-based car insurance, or cover for public transport-based delays, he explained.

“Our goal is to make insurance less expensive than half of cup of a Starbucks coffee,” Randing said. Adding that the company may look for new funding in early 2019 as it grows its regional footprint.

Interestingly, PasarPolis has already gone overseas by tapping India for talent — which is something Go-Jek and others have also done. Randing said the company has 15-20 engineers in Bangalore, while the core team, partner support and tech integration staff are housed in Indonesia.

News Source = techcrunch.com

Offering a white labeled lending service in emerging markets, Mines raises $13 million

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Emerging markets credit startup Mines.io has closed a $13 million Series A round led by The Rise Fund, the global impact fund formed by private equity giant TPG, and 10 others, including Velocity Capital.

Mines provides business to consumer (B2C) “credit-as-a-service” products to large firms.

“We’re a technology company that facilitates local institutions — banks, mobile operators, retailers — to offer credit to their customers,” Mines CEO and co-founder Ekechi Nwokah told TechCrunch.

Most of Mines’ partnerships entail white label lending products offered on mobile phones, including non-smart USSD devices.

With offices in San Mateo and Lagos, Mines uses big-data (extracted primarily from mobile users) and proprietary risk algorithms “to enable lending decisions,” Nwokah explained.

“We combine a strong AI technology with full…deployment services — disbursement…collections, payments, loan management, and regulatory — wrap it up in a box, give it to our partners, and then help them run it,” he said.

Mines’ typical client is a company “that has a large customer base and wants to avail credit to that customer base,” according to Nwokah. The startup generates revenue from fees and revenue share with partners.

Mines started operations in Nigeria and counts payment processor Interswitch and mobile operator Airtel as current partners. In addition to talent acquisition, the startup plans to use the Series A to expand its credit-as-a-service products into new markets in South America and Southeast Asia “in the next few months,” according to its CEO.

Mines sees itself as “hardcore technology company based in Silicon Valley with a global view,” according to Nwokah. “At the same time we’re very African,” he said.

The startup’s leadership team is led by three Nigerians — Nwokah, Chief Scientist Kunle Olukutun, and MD Adia Sowho. The company came together after Oluktun (then and still a Stanford professor) and Nwokah (a then AWS big data specialist) met in Palo Alto in 2014.

Looking through the lens of their home country Nigeria, the two identified two problems in emerging markets: low access to credit across large swaths of the population and insufficient tools for big institutions to put together viable consumer lending programs.

Due to a number of structural factors in these markets, such as low regulatory support, lack of credit data and tech support, “there’s no incentive for many banks and institutions to take risk on a retail lending business,” according to Nwokah.

Nwokah sees Mines’ end user market as “the more than 3 billion adults globally without access to credit,” and its direct client market as big “banks, retailers and mobile operators…who want to power digital credit tailored to these markets.”

Mines views itself as different from the U.S.’s controversial payday lenders by serving different consumer needs. “If you live in a country where your salary is not guaranteed every month, where you don’t have a credit card…where you have to pay upfront cash for almost everything you do, you need cash,” he said

The most common loan profile for one of Mines’ partners is $30 at 15 percent flat for a couple of weeks.

Nkowah wouldn’t name specific countries for the startup’s pending South America and Southeast Asia expansion, but believes “this technology is scalable across geographies.”

As part of the Series A, Yemi Lalude from TPG Growth (founder of The Rise Fund) will join Mines’ board of directors.

On a call with TechCrunch Lalude named the company’s ability to “drive financial inclusion within a matter of seconds from mobiles devices” their “local execution on the ground” and model of “partnering with many large organizations with their own balance sheets” as reasons for the investment commitment.

With Mines’ pending Asia and South America move they join Nigerian tech companies MallforAfrica.com and data analytics firm Terragon Group, who have expanded or stated plans to expand internationally this year.

 

News Source = techcrunch.com

Singapore’s Golden Gate Ventures announces a $10M fund for crypto deals

in Bitcoin/blockchain/cryptocurrencies/cryptocurrency/Delhi/Finance/Fundings & Exits/golden gate ventures/India/Kenrick Drijkoningen/lunex/money/Politics/Singapore/Southeast Asia/tim draper/Tushar Aggarwal/wavemaker partners by

VCs around the world are trying to wrap their head around crypto, and the new investment paradigm it brings. Some have made one-off deals but a few have jumped in off the deep end with dedicated crypto funds, with A16z in the U.S. the most prominent example. Now Singapore has its first from the traditional world after prominent firm Golden Gate Ventures announced a spinoff fund called LuneX Ventures.

The fund is focused on crypto and it is targeting a $10 million raise. Its announcement comes weeks after we reported the first close for Golden Gate’s new $100 million fund, its third to date, which is backed by Naver, Mistletoe and others.

Golden Gate already has some exposure to ICOs, having backed the company behind OMG, and plenty of rumors have done the rounds about its plans for a standalone fund considering the surge in ICOs, which have scooped up over $10 billion in investment this year so far.

Notably, LuneX will be the first crypto fund from a traditional investor in Southeast Asia, although Wavemaker Partners — which is backed by early Bitcoin proponent Tim Draper — does have a U.S.-based fund.

LuneX will be run by founding partner Kenrick Drijkoningen, who was previously head of growth for Golden Gate, with associate Tushar Aggarwal, who hosts the Decrypt Asia podcast. The two are assembling a small support team which will also be assisted by Golden Gate’s back office team.

Drijkoningen told TechCrunch in an interview that he believes the time is right for the fund, even though the price of Bitcoin, Ether and other major tokens is way below the peaks seen in January.

“Despite the fact that public markets are down, the amount of talent that’s moving into this space is exciting. There are young entrepreneurs who are passionate about this space and want to build an ecosystem,” he said, adding that stability on price is a good thing.

“There’s a lot of crypto funds but most of them are hedge funds,” Drijkoningen added. He explained that LuneX intends to take a longer-term approach to investments by helping its portfolio and generally doing more than shorting and quick trades.

Kenrick Drijkoningen, Founding Partner, LuneX Ventures

Drijkoningen explained the capital will be divided equally for token sales, purchasing existing tokens and equity-based investments in crypto projects. That means getting into private sales and pre-sales for ICOs, and seeing what tokens already on the market have long-term return potential. On the equity investment side, Drijkoningen is looking for what he calls “infrastructure” businesses, such as solutions for token custody, banking and more. The fund’s capital is being raised in fiat, but it is considering allowing Bitcoin, Ether and other tokens.

Although Singapore is seen by many as a ‘crypto haven’ the legal status of crypto and tokens is unclear since the Monetary Authority of Singapore (MAS) has deferred on making these decisions. That’s in contrast to places like Malta, Gibraltar and Bermuda, which are actively wooing crypto companies with incentives and legalization frameworks, but Singapore’s status as a global financial hub and a destination for Southeast Asia’s investor capital has helped make it a destination for crypto companies all the same.

MAS is known for engaging with crypto stakeholders, and Drijkoningen said there had been discussions although he did not elaborate further other than to say that the regulator is “quite well informed.” He clarified that the new fund is structured so that it is legally compliant while it is banking with a “crypto-friendly” bank in the U.S. since Singaporean banks to do provide services to crypto companies.

Drijkoningen said the fund’s LP base is comprised of high net worth individuals who understand crypto or are crypto-curious, as well as hedge fund managers and family offices. He said there’s been interest from projects that raised significant capital from ICOs and want to invest in the ecosystem and grow networks, as well as some long-time Golden Gate LPs.

There’s no doubt LuneX is an early mover in Southeast Asia — well, the world — but Drijkoningen believes it won’t be long before others in the traditional VC space follow suit. He revealed that already a number of other funds are “looking into” the opportunities, and expects that some will make a move “this year or next.”

As for LuneX, the plan is very much to scale this initial fund in the same way that Golden Gate has gone from a small seed fund to a $100 million vehicle in less than eight years.

“We want to get up and running, get a good return and raise a larger fund,” Drijkoningen said. He added that the fund is currently looking over half a dozen or so deals that it hopes to wrap up soon as its first investments.

Note: The author owns a small amount of cryptocurrency. Enough to gain an understanding, not enough to change a life.

News Source = techcrunch.com

Musical.ly investor bets on internet radio with $17M deal for Korea’s Spoon Radio

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One of the early backers of Musical.ly, the short video app that was acquired for $1 billion, is making a major bet that internet radio is one of the next big trends in media.

Goodwater Capital, one of a number of backers that won big when ByteDance acquired Musical.ly last year, has joined forces with Korean duo Softbank Ventures and KB Investment to invest $17 million into Korea’s Spoon Radio. The deal is a Series B for parent company Mykoon, which operates Spoon Radio and previously developed an unsuccessful smartphone battery sharing service.

That’s much like Musical.ly, which famously pivoted to a karaoke app after failing to build an education service.

“We decided to create a service, now known as Spoon Radio, that was inspired by what gave us hope when [previous venture] ‘Plugger’ failed to take off. We wanted to create a service that allowed people to truly connect and share their thoughts with others on everyday, real-life issues like the ups and downs of personal relationships, money, and work.

“Unlike Facebook and Instagram where people pretend to have perfect lives, we wanted to create an accessible space for people to find and interact with influencers that they could relate with on a real and personal level through an audio and pseudo-anonymous format,” Mykoon CEO Neil Choi told TechCrunch via email.

Choi started the company in 2013 with fellow co-founders Choi Hyuk jun and Hee-jae Lee, and today Spoon Radio operates much like an internet radio station.

Users can tune in to talk show or music DJs, and leave comments and make requests in real-time. The service also allows users to broadcast themselves and, like live-streaming, broadcasters — or DJs, as they are called — can monetize by receiving stickers and other virtual gifts from their audience.

Spoon Radio claims 2.5 million downloads and “tens of millions” of audio broadcasts uploaded each day. Most of that userbase is in Korea, but the company said it is seeing growth in markets like Japan, Indonesia and Vietnam. In response to that growth — which Choi said is over 1,000 percent year-on-year — this funding will be used to invest in expanding the service in Southeast Asia, the rest of Asia and beyond.

Audio social media isn’t a new concept.

Singapore’s Bubble Motion raised close to $40 million from investors but it was sold in an underwhelming and undisclosed deal in 2014. Reportedly that was after the firm had failed to find a buyer and been ready to liquidate its assets. Altruist, the India-based mobile services company that bought Bubble Motion has done little to the service. Most changes have been bug fixes and the iOS app, for example, has not been updated for nearly a year.

Things have changed in the last four years, with smartphone growth surging across Asia and worldwide. That could mean different fortunes but there are also differences between the two in terms of strategy.

Bubbly was run like a social network — a ‘Twitter for voice’ — whereas Spoon Radio is focused on a consumption-based model that, as the name suggests, mirrors traditional radio.

“This is mobile consumer internet at its best,” Eric Kim, one of Goodwater Capital’s two founding partners, told TechCrunch in an interview. “Spoon Radio is taking an offline experience that exists in classic radio and making it even better.”

Kim admitted that when he first used the service he didn’t see the appeal — he claimed the same was true for Musical.ly — but he said he changed his tune after talking to listeners and using Spoon Radio. He said it reminded him of being a kid growing up in the U.S. and listening to radio shows avidly.

“It’s a really interesting phenomenon taking off in Asia because of smartphone growth and people being keen for content, but not always able to get video content. It was a net new behavior that we’d never seen before… Musical.ly was in the same bracket as net new content for the new generation, we’ve been paying attention to this category broadly,” Kim — whose firm’s other Korean investments include chat app giant Kakao and fintech startup Toss — explained.

News Source = techcrunch.com

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