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December 15, 2018
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Southeast Asia

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

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

Ex-Facebook exec Kirthiga Reddy becomes first female investor at SoftBank’s Vision Fund

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Following speculation that SoftBank is hiring a China-based team, so the Japanese investment giant has brought on a first venture partner (and first female) for its $100 billion Vision Fund.

Kirthiga Reddy, a former executive with Facebook, has taken the role and, in doing so, she becomes the first female member of SoftBank’s Vision Fund investment team. She will be based in San Carlos, Silicon Valley.

Reddy spent eight years at Facebook, mostly as managing director for its business in India and Southeast Asia before a two-year stint in the U.S. leading global partnerships.

In her new role, she will work closely with Deep Nishar, senior managing partner at SoftBank Investment Advisors who is located in the Bay Area and was previously an exec at Google and LinkedIn . Reddy said her focus will be frontier technologies such as AI, robotics, health, bio engineering, IoT and more. In a comment to Bloomberg, she revealed that she is “actively recruiting” for the firm, especially for female investors.

Kirthiga Reddy [right] is interviewed alongside India Today Group Chief Creative Officer Kalli Purie [left] in 2012 (Photo by Qamar Sibtain/India Today Group/Getty Images)

“I look forward to contributing to their mission to positively shape the future by seeking to back the boldest, most transformative optimistic, and ideas of today. Like in other investment firms, the Venture Partner role enables quick integration of new talent from non-investing backgrounds, which is a perfect fit for me. I look forward to bringing my technical and business expertise – from both enterprise and consumer technology, in developed and emerging markets – to the Vision Fund team,” Reddy wrote in a post on LinkedIn announcing the move.

The Vision Fund has been criticized for an all-male cast of 10 deal-makers. SoftBank founder Masayoshi Son said in September that he has “no prejudice of any kind,” and first-in-command Rajeev Misra has led an effort to hire women for the team.

News Source = techcrunch.com

Japan’s Sansan raises $26.5M to help Southeast Asia get more from business cards

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The humble business card is a target for disruption in Southeast Asia after Japanese contacts management startup Sansan raised JPY 3 billion ($26.5 million) to expand its business into the region.

Founded way back in 2007, Sansan helps bring business intelligence to companies through a system that helps build connections between users and both internal employees and external contacts using, among other things, business cards.

“Our purpose is to use tech to enhance the utility and value of business cards,” Sansan co-founder and CEO Chikahiro Terada told TechCrunch in an interview. “They are customary for business in most parts of the world, esJapanlly japan, but there’s no easy way to digitize them.”

This new round will bring that focus to Southeast Asia, where Sansan already has an office in Singapore. The capital — which is a Series E round — was provided Japan Post Capital, T. Rowe Price, SBI Investment and DCM Ventures, and it takes Sansan to around $100 million raised to date.

Sansan claims that 7,000 corporations use its core product — also called Sansan — which helps build and organize networks. At its core, users scan another person’s business card which is then digitized, uploaded to the cloud and made part of their database. The Sansan system then allows interactions, such as meetings, calls, notes and more to be added to the entry to help track interactions. The resources are held within companies, rather than employees themselves, which means strategies around sales, marketing and more can be kept organized and centralized.

In addition, Sansan operates a LinkedIn -like service called Eight which is available for free and is linked to the core product, allowing users to update their job, company, etc without having to provide a new business card. Eight has some two million users today, according to Sansan.

Unlike LinkedIn, however, which is commonly used for finding jobs, Terada suggested that Eight and Sansan help maintain networks and increase communication and engagement.

Sansan CEO Chikahiro Terada started the business in 2006 alongside fellow co-founders Kei Tomioka, Joraku Satoru, Kenji Shiomi and Motohisa Tsunokawa

Terada — who previously worked for Oracle in Thailand — said that he sees much potential for the services in Southeast Asia, where the region’s digital economy is expected to triple by 2025, albeit with a greater focus on SMEs rather than Japan-style mega corporations.

Already, Sansan has picked up some 100 or so clients in the region — mostly by targeting Japanese corporations in Singapore — while Eight has reached 100,000 registered users across Southeast Asia since a soft launch in October 2017.

“We want to expand to globally and Singapore is our first step,” said Terada, indicating that there are future plans to look at business in India, Europe and potentially the U.S. further down the line. Elsewhere, the firm is hiring data scientists as it aims to bring additional smarts to its services.

The proposition is interesting — personally speaking I have multiple stacks of business cards sitting idle — but it remains to be seen how open businesses in Southeast Asia will be to paying for the service, even with clear benefits. Saas as a model is still establishing its roots among SMEs while there are already popular options. LinkedIn is, of course, the de facto professional social network while Facebook, which has been ramping up its efforts in that space lately, is also a popular option.

News Source = techcrunch.com

Neuron Mobility raises $3.7M to bring e-scooters to Southeast Asia’s cities

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Despite the rise in electric scooters in the U.S., you’d be forgiven for thinking that Asia — the region where bike-sharing foreshadowed the rise of e-scooters — has been left off the party. But e-scooters have quietly been in the region for some time and now they are beginning to ramp up.

Singapore-based Neuron Mobility is one such riser, and the company announced today that it has raised a SG$5 million ($3.7 million) seed round to explore overseas growth opportunities. The money comes from a collection of investors that include SeedPlus, 500 Startups, SEEDS Capital, ACE Capital, undisclosed angels and family offices.

Founded in 2016, Neuron has offered electric scooters in Singapore since last year. That fleet is currently downsized, CEO Zachary Wang told TechCrunch in an interview, because the startup is awaiting new regulation from the Singapore government. He expects that to take another one or two months. At its peak, Wang said, Neuron was Singapore’s latest provider with around 1,000 e-scooters on the island nation, although the number is down to “a few hundred” right now.

Scooters from Neuron and other rivals have been impounded in Singapore in recent times because they have been parked in illegal areas. Singapore currently prohibits scooters from being left in public places, such as subway stations, but pre-defined adjacent spaces are OK. As such, Neuron charges users a $5 fee when they leave their ride in the wrong place. That’s detected by geo-fencing tech and the charge covers the cost of sending a staffer to move it, Wang explained.

Despite it forcing the startup to slim down its operations, Wang is supportive of the Singapore government’s moves. Admitting that on-demand bikes and scooters can pile up “like rubbish on the streets in many cities,” the Neuron CEO said that “multi-use of sidewalk pavements [from scooters and other services] is here to stay and regulation brings rights to operate, which is a good thing.”

[Left to right] Neuron Mobility founders Harry Yu and Zachary Wang started the Singapore-based company in 2016

While it is liaising with the Singapore government, Neuron is also taking its first steps overseas. That’s seen it deploy scooters in Thailand — capital Bangkok and northern city Chiang Mai — with an expansion to Malaysia set to happen before the end of this year.

It has trodden carefully, however. In Bangkok, Neuron is working with real estate giant Sansiri to offer last mile options around one of the developer’s main sites that includes retail, residential and education facilities in close proximity. In Chiang Mai, it is offering transportation in the old part of the city, which is popular with Chinese tourists and where bike-sharing services like Mobike are popular.

When pressed on safety, Wang said that keeping the focus on specific parts of the city is important. Indeed, Asia’s mega cities are frankly dangerous for even seasoned motorcycle or bike drivers, let alone part-time electric scooter riders, while a number of people in the U.S. have died following collisions with e-scooters. With that in mind, Neuron said it is also planning a “ride responsibility” campaign.

Looking beyond Malaysia, Wang said that Neuron aspires to be in other parts of Southeast Asia — which houses more than 650 million people — as well as cities that are comparable to Singapore, such as those in Australia. Those expansions, however, won’t happen until the startup raises another round of funding; that’s something that he anticipates could come in the first half of 2019, although Wang is coy on details at this point.

Speaking more broadly about the expansion of e-scooter startups like Bird and Lime, which have moved into Europe and most recently Asia, Wang — the Neuron CEO — stressed the importance of local players.

“The Southeast Asia game must be played by Southeast Asia players because the region is so fragmented,” he said. “Traditionally, it is very difficult to penetrate markets, so the hyper-local approach becomes all important.”

Beyond working with regulators, Wang said another example of its local approach is that it is developing its own bespoke scooters, rather than going with off-the-shelf products from the likes of Xiaomi -owned Ninebot, which is outfitting most U.S. startups. Neuron’s “next-gen” scooter will “come to market pretty soon,” he said.

Neuron has occupied a unique position since it has been around since before bike-sharing startups flooded Southeast Asia last year following the trend in China. Unlike Ofo, oBike and countless others who expanded and then fled Southeast Asian markets, Wang believes that e-scooters are more sustainable as a business because the unit economics are healthier.

“Our rides can be benchmarked against taxi rides,” he explained. While, more generally, e-scooters are “priced between public transportation and taxis” rather than being cheaper than both, as is the case for dockless cycles.

News Source = techcrunch.com

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