US$150m over the next 5yrs targeted at e-commerce, media, smartphone apps and marketplace companies
Three key factors: Strong macro picture; abundance of ideas and entrepreneurs; and proof that excellent exits possible
CATCHA Group said it will be investing up to US$150 million in online businesses in the Asean region over the next five years, with announcements expected to be made over the coming weeks.
The funds will be deployed directly and through its subsidiaries and associated companies for mergers, acquisitions, seed and development investments in start-up and small businesses, and as venture capital in the online sector, the company said in a statement.
“We are looking at e-commerce, media, smartphone apps and any sort of marketplace, whether horizontal or vertical,” Patrick Grove (pic), group chief executive officer of Catcha Group, told Digital News Asia (DNA) via email.
Grove said Catcha’s focus would be twofold: It will be looking at “opportunities that build on our existing assets (such as Dealmates, the iProperty Group and iCar Asia) and opportunities that are new.”
Catcha Group claimed that its current portfolio of online assets is worth in excess of US$300 million, including three public companies and numerous private investments.
When asked which particular markets in Asean – where it has been operating since 1999 – Catcha Group is focusing on, Grove said all of them. “Our focus will be more skewed towards those markets with a large Internet user base like Indonesia and the Philippines, and less on those with a small Internet user base such as Singapore.”
The group has been making investment in the region for a couple of years now at least. Why the loud announcement now?
“On many levels, this commitment is important to us,” said Grove. “On a basic level, our commitment to entrepreneurs is that there is someone serious about focusing on Asean and working with them to build great companies.”
“On another level, it is our commitment to our companies and teams that we intend to remain a leader in the space and we are in it for the long term,” he added.
When asked if the ‘loud announcement’ was because Catcha Group was worried about competition from established global and Asian venture funds coming into Asean, Grove said that on the contrary, he wants more funds coming into the region.
“More funds mean a greater and bigger ecosystem for all, and also more partners to co-invest with – and more exit possibilities, in time,” he said.
Macro picture and other factors
In its statement, Catcha Group said three factors played a key part in its investments ‘power-up’ – the strong macro picture; an abundance of ideas and entrepreneurs; and proof that excellent exits are possible.
In terms of the macro picture, Asean economies are strong, while broadband and smartphone penetrations are at an all-time high.
“In 2000, the Asean region had only 11.5 million Internet users; by 2012 this number had grown to 163.5 million,” Grove said in the Catcha statement, citing statistics from Internet World Stats (click table to enlarge).
“With the population of this region set to grow to 660 million by 2020, the potential for further growth is phenomenal,” he added. “We plan to remain at the forefront through that growth.”
As for the abundance of deals and growing number of entrepreneurs, Catcha Group said it has invested in or acquired over 50 online and technology companies over the last 13 years, and sees that activity ramping up considerably.
“A result of the growth of these businesses is that a large pool of experienced, exceptional online talent has been created,” said Grove. “What’s more, there is an abundance of proven business models all over Australia, Europe and the United States that are still not being executed in Asean.”
“We have the ideas, the proven models and the talent to now pair with these ideas,” he added.
Most importantly for its investment partners, the Asean region has begun to show demonstrable exits and strong returns, Catcha Group said.
“The region now boasts seven publicly listed companies focusing on the online sector,” said Grove (click table to enlarge). “Almost half of this list comprises companies founded and controlled by Catcha Group.”
One of its most successful investments to date was a US$300,000 investment into iProperty Group in 2007, which is today one of the region’s largest Internet companies and is worth just over US$170 million, Catcha Group said.
Grove said Catcha Group’s target was simple: “We want to be the best investment partner in this region, for both entrepreneurs and our co-investors.”
When asked what challenges he foresees, he said raising the global awareness of Asean as a viable proposition was one.
“Building a great team at Catcha Group to support and mentor the companies we invest in” was another, said Grove. “Finally, staying relevant – things change so fast in this space.”
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