Expect an even more bitter fight for GrabTaxi to emerge as top taxi app in SEA
Execution key to winning, with Softbank, Peng T.Ooi confident in Tan
‘HOLY Shit!’ That phrase just kept going through my mind yesterday when I first heard that the Malaysian-founded, Malaysian-led but Singapore-based GrabTaxi had raised US$250 million (RM864 million) in its latest (and last?) round of funding.
Having recently heard from some venture capitalists and top entrepreneurs themselves about a bubble forming in terms of startup valuations in South-East Asia, my instinctive thought was that this deal would probably confirm belief that there is a bubble.
But then leading Japanese business daily, Nikkei Shimbun, reported that SoftBank Corp apparently received a 40% stake for its investment. And I thought, that’s not so crazy then, but do read the article by A. Asohan and Gabey Goh for a deeper drill down on this.
Even though GrabTaxi executives tell us that the reported figure by leading Japanese business daily, Nikkei Shimbun, of Softbank apparently taking a 40% stake in them is not true, and we assume they took a slightly lesser stake, the valuation is still not inflated.
If you want inflated, try to swallow the news that Uber just raised US$1.2 billion with a reported valuation of US$40 billion. What portion of that will be pumped into South-East Asia, remains to be seen, but if Uber fancies its chances in the region, we are going to witness one almighty fight to the death between these two Internet companies.
Irrespective of Uber’s valuation, GrabTaxi’s seems reasonable (within the context of the startup ecosystem not the brick and mortar world). For instance, a prominent investor in Singapore, Peng T. Ooi, founder and partner of Monks Hill Ventures shed some perspective on the deal telling me that they did an ‘e-hailing’ company at Series A in Beijing last year, and its current valuation is “north of US$1 billion”.
Peng, a former entrepreneur of note himself, being co-founder of Match.com among others, notes that e-hailing companies are exponential in nature. “They are very execution- and capital-dependent,” he added.
There is that execution word again which I have stressed on in the past. It seems to play a prominent role in this deal too with both Softbank and Peng highlighting their confidence in Anthony Tan, the founder and group chief executive officer (CEO) of GrabTaxi.
Peng even said: “Anthony Tan is one of the best startup CEOs I’ve met in South-East Asia. I fully expect him to perform very well.”
I don’t know enough about Tan so have an opinion on this but I know he is not a micromanager. My most recent interaction with him was when he was to receive an award from the National ICT Association of Malaysia (Pikom) and Tan was happy to introduce me to his new country head for Malaysia proudly describing him as being an internal hire. I got the sense from that conversation that Tan empowers his leaders.
That is a good thing as in a recent interview I had with Andrew Bassat, co-founder and CEO of SEEK, which recently bought all the Internet assets of Jobstreet.com, he pointed to trusting his people and empowering them as the biggest change he had to make when moving from a small company to a large one.
Tan seems to be on the right path here but much more will be demanded and expected of him, both as a leader and a manager, to ensure his company emerges the winner in what will be a very aggressive fight between GrabTaxi and Uber in particular.
Meanwhile, asked for his thoughts on the impact of the deal, Bassat had this to say: “Startups like GrabTaxi reflect the expertise and innovation of a new round of innovators and entrepreneurs that we are seeing in South-East Asia.
“The calibre of investors keen to support these new digital opportunities clearly demonstrates the growth potential anticipated in online offerings in the region.”
He then drew parallels to his own investments in the region. “We are obviously excited through Jobstreet and JobsDB to be strong participants in what we see as a very exciting period.”
It surely is a very exciting period for the region and I can’t wait to see the developments next year!
Finally, this week’s most popular story was: MOL Global continues to face investor backlash.
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Week in Review: Is Malaysia ready to welcome them?
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