Myths about startups & venture capital in asia

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Overview of the most common misconceptions about investing and operating in Asia.

Transcript of Myths about startups & venture capital in asia

  • ! Amit Anand - Founding Partner (@amivedand) Alexander Jarvis- Partner (@adjblog)! Singapore - 15th July, 2014
  • What Jungle Does
  • Investing and building companies in APAC since 2011 Marketing & Analytics / Big Data Marketplaces FinTech Cloud / SAAS
  • 7 Myths about Asian startups and Venture Capital
  • You need to be in the Valley to build a big consumer company #1
  • China has already created a company of scale (Sorry America) Alibabas sales for 2014 are forecasted at $420BN, 2.5x over 2012. Amazon reported sales of $74.4BN for fiscal 2013 and EBay fiscal 2013 of $16 Billion, less than one-tenth Alibabas 2012 sales
  • India has 4+ consumer unicorns
  • 1m active customers 79m monthly visits Millions of Euro per month in revenue ! 1.6m customers served 27m monthly visits Millions of Euro per month in revenue Rocket are building companies of scale across SEA, achieving a lot in just 2 years Source: http://www.kinnevik.se/en/Investor/Kinnevik-Rocket-capital-markeys-day-2014/
  • APAC is set dominate ecommerce, 41% larger than America in 2016 2.2%! Asia-Pacic! North America! Western Europe! Eastern Europe! Latin America! Middle East & Africa! 2.1%! 27.9%! 35.9%! 28%! 3.6%! 3.1%! 1.6%! 2011! 30.5%! 33.5%! 26.9%! 3.8%! 3.4%! 1.9%! 2012! 33.4%! 31.5%! 25.7%! 3.9%! 3.5%!2013! 36.2%! 29.7%! 24.3%! 3.9%! 3.6%!2014! 2015! 2016! 2.3%! 38.2%! 28.8%! 23.4%! 3.8%! 3.6%! 2.3%! 39.7%! 28.2%! 22.6%!3.7%! 3.5%! Source: eMarketer, 2013 B2C Ecommerce Sales Share Worldwide, by Region, 2011-2016 - % of total 2013: Sales is expected to grow 18.3% to $1.298 trillion with Asia-Pacific surpassing North America to become the world's #1 market for B2C ecommerce sales. Despite strong growth, North Americas share of global sales will drop from 33.5% in 2012 to 31.5% in 2013 as Asia-Pacific surges ahead. Asia-Pacific in 2013 will see sales increase by more than 30% to over $433 billion or more than one-third of all global B2C ecommerce sales. Three Asia-Pacific markets China, India and Indonesia will see faster B2C ecommerce sales growth than all other markets worldwide in 2013.
  • There already are big consumer companies
  • Definitely need to be in the Valley for ENTERPRISE startups! #2
  • Heard of these guys in India and Australia?
  • You will hear of these ones soon
  • There are already APAC unicorns in enterprise
  • Internet penetration in Asia is too low #3
  • Almost 200m users online in SEA already Source: UBS
  • How does Asia stack up globally? Source: US census bureau, InternetWorldStats, CNNIC, Tencent, Facebook, Vkontakte, ITU, CIA
  • APAC has almost half of global users, simply put Source: US census bureau, InternetWorldStats, CNNIC, Tencent, Facebook, Vkontakte, GSMA Intelligence
  • Internet traffic will be double the US in 2015 2012 2013 2014 2015 2016 2017 CAGR 12-17 By Geography (PB per Month) Asia Pacic 310 614 1,168 2,053 3,377 5,257 76% North America 222 380 632 993 1,466 2,087 56% Western Europe 181 276 426 655 976 1,384 50% Middle East and Africa 50 96 182 333 559 861 77% CEE 66 116 211 365 577 845 66% Latin America 55 97 179 304 481 723 67% Total (PB per Month) Mobile data and internet 884 1,579 2,798 4,703 7,436 11,157 65% Source: CISCO VNI, 2013
  • Social media penetration in APAC is the global average Source: US Census Bureau, CNNIC, Tencent, Facebook
  • Internet penetration may be comparatively low right now, but thats still a LOT of people online
  • There is no innovation in Asia #4
  • CAGR of tech patents in SEA is 7x USA Growth of tech patents in SEA VS USA -45% 0% 45% 90% 135% 180% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 SEA USA Source: Patents by technology, OECD. SEA consists of ID, MY, PH, SG and TH CAGR SEA 14% USA 2%
  • Asias share of global tech patents is converging % of global tech patents in Asia VS USA 0% 10% 20% 30% 40% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Asia USA Source: Patents by technology, OECD. Asia consists of ID, MY, PH, SG, TH, CN, HK, IN, AU & NZ
  • 2 of Fastcompanys most innovate companies are Asian
  • India - Zipdial: Missed call innovation led to one of its kind partnership with FaceBook
  • Singapore - Rotimatic: Will lead to female empowerment
  • There is no innovation in Asia X
  • You cant get an exit in Asia #5
  • Australia Freelancer iSelect Xero 3P Learning OZForex SEEK Carsales We have already had IPOs Malaysia Jobstreet iProperty MyEg iCar iBuy ! Singapore AsiaTravel PropertyGuru (Coming) India Justdial MakeMyTrip InfoEdge
  • JobStreet / Seek - A$545 Viki / Rakuten - $200m Travelmob / HomeAway - $22 Zopim / ZenDesk - ~$30m SGCarMart / SPH - $48m TransferTo / Ingenico - $38m JobCentral / CareerBuilder - N/A SoundBuzz / Motorola - $27.65m Detik / Para Group - $60m Tarad / Rakuten - N/A ! Reebonz and RedMart worth $100m+ already And solid acquisitions
  • You can get an exit, they just arent as big as the US (yet)
  • Theres no entrepreneurial talent (in Asia) #6
  • Twice as many Philippinos than Israelis recon they have the skills to startup! Source: Global Entrepreneurship Research Association, Jungle analysis through Google Explorer Perceived Capabilities! Percentage of 18-64 population who believe to have the required skills and knowledge to start a business
  • Indonesians are twice more likely to be founders than in America Source: Global Entrepreneurship Research Association, Jungle analysis through Google Explorer Total early-stage Entrepreneurial Activity (TEA)! Percentage of 18-64 population who are either a nascent entrepreneur or owner-manager of a new business
  • They arent as afraid of failing as you think Source: Global Entrepreneurship Research Association, Jungle analysis through Google Explorer Fear of Failure Rate! Percentage of 18-64 population with positive perceived opportunities who indicate that fear of failure would prevent them from setting up a business
  • Asians are representing abroad how much?
  • half the US startup jobs
  • AND Asian founders in America raise more money Founding team racial composition vs. median funding received ($m) $0.00 $1.00 $2.00 $3.00 $4.00 All Asian Pacic All white Mixed All Black $1.3 $2.2$2.3 $4.0 Source: CBInsights, 2010. National seed and Series-A - Jan to June 2010
  • They see good opportunities locally (As much as the US Source: Global Entrepreneurship Research Association, Jungle analysis through Google Explorer Perceived Opportunities! Percentage of 18-64 who see good opportunities to start a rm in the area where they live
  • More of their friends have set up companies Source: Global Entrepreneurship Research Association, Jungle analysis through Google Explorer Know Startup Entrepreneur Rate! Percentage of 18-64 population who personally know someone who started a business in the past two years
  • More media attention than developed markets Source: Global Entrepreneurship Research Association, Jungle analysis through Google Explorer Media Attention for Entrepreneurship! Percentage of 18-64 population who agree with the statement that in their country, you will often see stories in the public media about successful new businesses
  • Far more intend starting up in next 3 years