Unicorns: Not quite mythical, but a rarity in South-East Asia
By Lum Ka Kay June 9, 2016
- Just be patient, more unicorns on the way, say Wild Digital panellists
- Think regional, but gear up for the differences in the region’s markets
UNICORNS – companies valued at over US$1 billion – are still extremely limited in South-East Asia because of the region’s various levels of complexity, according to a panel discussion at Wild Digital Conference 2016.
But there’s hope yet, said one panellist at the discussion titled Unicorn Hunting in Asean, at the conference organised by Catcha Group in Kuala Lumpur from June 8-9.
“Each market in South-East Asia is different, but we will definitely see more [unicorns] coming up in the near future,” said REA Group chief executive officer (CEO) Tracey Fellows.
The Australian digital advertising company, an affiliate of Rupert Murdoch’s News Corp, had recently acquired what remaining stakes it had in Catcha Group Sdn Bhd’s iProperty Group.
“It’s just a matter of time,” said Asia Pacific Internet Group (APACIG) CEO Hanno Stegmann.
“We’re seeing amazing development here in the region, just give it a bit more patience,” he added.
APACIG is an incubator backed by German Internet powerhouse Rocket Internet.
Roderick Purwana, managing partner at Indonesian venture capital firm Sinar Mas Digital Ventures (SMDV), concurred, saying that ride-hailing startup GoJek is “probably close to becoming a unicorn.”
But he also cautioned against the allure of hitting unicorn status.
“I don’t see becoming a unicorn as the goal. You should focus on your product, consumers, and services first – those are your priorities,” he added.
The session was moderated by executive director of TMT (telecommunications, media and technology) investment banking at JP Morgan & Co, Yaniv Ghitis.
The panellists were asked what they look for in a startup when it comes to their investments, and Roderick said market potential, people and execution matter a lot to him.
For Stegmann, scalability is an important factor. “Scalability – the ability to scale fast by leveraging on APACIG’s capability to do so is important,” he said.
“Also, the ability to replicate a business model and execute it well in the different markets of the region,” he added.
For Fellows, it is the startup’s understanding of the cultural factor, essential in order to match the needs of local consumers.
Be there early
Meanwhile, Stegmann said he doesn’t see APACIG as an investor but as a “company builder.”
“Our model is that we try to be there early, help the company set up a local team, and then launch the business as soon as possible.
“And I would say that’s our success factor: Try to be early because we see being early as an opportunity instead of a risk,” he said.
“Rocket Internet started Lazada in 2011, and people were saying then that e-commerce hadn’t taken off in the region, but look where it is right now.
“We believe being early is being able to add value to the company,” he declared.
When asked if businesses should go regional or stick to a single market, the panellists agreed that every startup should have a regional vision.
However, a regional perspective doesn’t mean a “same-same approach,” argued Stegmann.
“To go regional, you have to excel in the local market first by addressing local needs, and then replicate the model in other markets.
“In South-East Asia, each market has different needs, challenges and stages of development,” he added. “A one-size-fit-all strategy will fail.”
Other Wild Digital 2016 Stories:
We completely f**ked up in our first 8yrs: Catcha’s Patrick Grove
Startups, don’t knock the competition if you want Khazanah’s money
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