4. Attractiveness
⢠Young, mobile-savvy population
⢠GDP per capita increasing rapidly
⢠Relative political stability
⢠Several markets with more than 60m people
⢠Investor attention is increasing, especially
amongst Japanese, Korean, Chinese investors
⢠Deals are ârelativelyâ cheap compared to other
overheated markets such as US, China, India
5. Source: World Bank; screenshot from Jungle Ventures slide deck on SEA funding;
valuations from public sources
SEA Addressable market = bigger than
India, but lower valuations
$15b
$4b
<$2b
$5b
<$2b
6. Challenges
⢠Not many technology entrepreneurs with scaling
experience
⢠Not many regional companies so far which are
large enough for worthwhile exits
⢠Fragmented market with each major country
having its own language
⢠Logistics, infrastructure and regulatory
developments are not homogenous nor
harmonised
⢠No customs union nor full mobility of labour
10. Observations
⢠âLargeâ companies emerging along 2 themes: 1) Indonesia and 2) regional
⢠Multi-usage local platforms are taking shape (e.g. Grab and Go-Jek) which
are built around high frequency use cases (instead of just chat)
⢠Series B is where the opportunity lies; Current Series B gap is covered by
sovereign wealth funds, Japanese investors and Rocket Internet. Some US
private equity presence are surfacing (Coatue, Warburg Pincus, KKR)
⢠Unlike other markets, SEA family offices and conglomerates can and are
writing massive cheques (e.g. $500m for Matahari Mall)
⢠Governments trying to play a larger role (e.g. Temasek, Khazanah)
⢠Emergence of some companies with no need to exit: Tokopedia,
Bukalapak, Traveloka, Grab, Go-Jek, Fusionex
⢠>$500m exits (Jobstreet, iProperty) will accelerate over the next 3-5 years
with more having a path towards being acquired (e.g. iFlix, aCommerce)
⢠Very limited IPO market. Some successes on Australian Stock Exchange.
Hence, IPO arbitrage is also possible. SEA needs a MOTHERS index.
11. Opportunity sets
⢠Exploit arbitrage and competitive advantage
between US/Europe, JKTC and SEA, especially
in terms of technical talent
⢠Key globalisation success is to find route to
market partners to roll-out quickly before the
US startups saturate SEA
⢠Choose 10 ideas and back each one with $10-
25m to scale
⢠Work on exit paths with 5 year horizons