There’s some good news despite the slowing global economy as Google, Temasek, and Bain & Company has recently released its “e-Conomy SEA 2019” report that now values Southeast Asia internet economy at US$100 billion.
The 65-page report is the fourth in a series of annual reports published by internet giant Google and Singapore’s sovereign wealth fund Temasek since 2016 where the region has well over double its initial US$32 billion value.
For one reason, there are currently 360 million internet users across the Southeast Asia region who are taking up online shopping or banking and embracing ride-sharing and food delivery services – presenting a huge opportunity with the SEA internet economy.
According to the e-Conomy SEA 2019 report, “this pace of growth has exceeded expectations. Internet access is now affordable for large segments of the population and consumer trust in digital services has improved significantly.”
It is even noted that the region’s internet users display the world’s highest mobile engagement rates, with users from Malaysia, Indonesia and the Philippines leading the pack with four hours of daily usage (The global average is 3 hours and 13 minutes).
On the other hand, this valuation is also a result of the region’s increasing funding, especially for ride-hailing unicorns Grab and Go-Jek which have raised more than US$2 billion each in their effort to build a super app and dominate the ride-hailing market.
At the same time, Southeast Asia’s aspiring unicorns, which refers to startups with a valuation close to US$1 billion, have also been rounding up funds as much as US$1.1 billion within the first half of 2019.
In fact, more than US$37 billion has been invested in Southeast Asian online companies over the past four years make it home to 11 unicorns and a growing portfolio of aspiring unicorns.
Among them, the report has identified 70 aspiring startups in the region that are earmarked as a potential unicorn. The list includes Malaysia’s iFlix, Indonesia’s Halodoc, Vietnam’s Tiki, and Carousell from Singapore, among some.
Most of the startups identified were from the ecommerce industry that was valued at US$38 billion, growing seven times from the US$5.5 billion valuations in 2015. It covers online retail, digital marketplaces, and online groceries which has so far recorded on average five million orders submission daily.
Meanwhile, substantial growth is also seen in ride-hailing over the course of four years as there are also five times more people who use ride-hailing services now, up from eight million in 2015 to 40 million this year.
“In these few years, e-commerce and ride-hailing have become an integral part of daily life for millions of Southeast Asians, especially those living in big cities. They offer convenience, value, and access to services and products that were previously difficult to obtain,” the report noted.
With this, it seems that investor confidence in the region and startups remains healthy and strong. To this end, we may see more potential unicorns manifest soon.
Singapore TOP100 winners were recently revealed and we took a chance to see who are these startups and which next big idea turns out to be the most promising.
On March 7th, 110 startups attended WeWork to join in the Echelon Asia Summit Singapore TOP100 competition where each startup had only three minutes to pitch their startup idea.
Judges who evaluated the startups included:
These panel of judges were tasked with selecting two winners who would be presented with a free booth at e27’s Echelon Asia Summit from May 23 to 24, 2019, as well as a chance to pitch for over S$100,000 worth of prizes.
As it turns out, Wika Media and StaffAny emerged victorious as the 2019 TOP100 winners for Singapore. So let’s dive and learn more about these two startups who’ve won the judges heart.
Wika Media is a startup that enables media companies to extend their reach by making their content understandable in more languages.
Roland Benzon and Vic Icasas, a studio owner and a software developer, are the two founders of Wika Media who built the startup to aid media companies in gaining and retaining viewers through destroying the language barrier.
The startup created hardwares that allows spoken, written, ane even signed communication to be calibrated according to user’s language preference.
For example, if you’re from Thailand and doesn’t understand English, you can still watch episodes of English shows and movies with synchronised Thai subtitles or dubbing.
Traditionally, these subtitles would have to be done manually and require a laborious amount of work and time. Now this is solved by three Wika Media products engineered to help fracture the language barrier:
A startup that integrates HR and ops management software, StaffAny provides a solution that oversees hourly workers.
It offers an app that guarantees both employee and employer increased accountability, control of the team on-the-go, and easy integration of schedules.
Since its inception in January 2018, StaffAny has experienced exponential growth in its deployment with a 25 percent growth every month. As of February 2019, the app has been deployed in 51 companies and has a projected 6x LTV:CAC ratio.
Moving forward, the company also sees itself as the future of work. The startup looks to provide solutions to problems like payday loans, shift-based hiring, performance-based resumes, part-timer insurance, and blockchain.
But aside from these two startups, there were three other startups from TOP100 Echelon that have caught our eye and they are:
Teaching coding knowledge through piracy and potatoes, Codomo is a creative startup that makes learning how to code interesting and exciting.
Their brainchild Potato Pirates is a strategic battle of potatoes and piracy game, which according to the startup could transform 10 hours of class time into 30 minutes of fun.
The team conducted coding quizzes pre- and post-game. Within 1 hour of the game, 92 percent of participants could understand and apply loops, while 74% could explain the concept of if-else and nested loops. Overall 9 in 10 players show improvement in their understanding of their fundamental coding concepts.
Looking at the industry, this fits into the trend whereby computer programming is becoming an essential skill as parents are jumping out of the curriculum and looking into fostering creative thinking and innovation for their children.
A startup that Shell selected as one of its top 5 IdeaRefinery Companies, Nodis is the creator of the world’s most advanced smart glass.
The startup develops a TruTint smart glass technology that allows users to instantly switch color, tint, and temperature.
By doing so, occupants can control how much sunlight or heat they want to let into their office or room making living environments more suitable.
At the same time, users are also saving the world as the startup claims that it is able to reduce building CO2 and energy consumption by an average of 20 percent with sustainable design.
Deep learning is quickly becoming the standard in every industry, and Untangle questions why do models make a decision?
A deep learning platform to analyze other deep learning models, Untangle is solving the problems of understanding why AI models think the way they do.
The startup built a comprehensive platform and developer tools to allow companies to understand, modify, compress and explain their deep learning models.
This adds both transparency and alleviates huge problems for companies that limit wider adoption and trust of AI solutions, which is why we think it is imperative as AI is planting its root in every figment of the market.
The fight for domination in the ride-hailing market is heating up as ride-hailing giants Singapore’s Grab and Indonesia’s Go-Jek are forging new financial services alliance.
With Go-Jek’s Singapore entry closing in, the Indonesian ride-hailing giant announced a tie-up with DBS Bank for regional payment.
Shortly later, Grab revealed a strategic alliance with United Overseas Bank (UOB) Ltd to become its strategic credit card partner across five Southeast Asian countries.
It’s a battle to control user’s wallets.
For Go-Jek, whose backers include Tencent Holdings, Temasek, and Google, the deal came at a time ahead of its expansion into Singapore.
Under the partnership, Go-Jek will work with Singapore-headquartered DBS Bank on payment service offerings in the city-state, which will also be later extended to other markets in Southeast Asia.
The ride-hailing startup is set to launch its beta ride-hailing app in Singapore in the coming weeks where DBS customers in Singapore will get to enjoy certain privileges upon launch.
However, both DBS and Go-Jek did not elaborate when such services will be rolled out.
“We are very much looking forward to the launch of our beta ride-hailing service within the coming weeks,” said Go-Jek president Andre Soelistyo.
“We know that people are desperate for more choice in the sector and we believe we can satisfy this demand. The response from the driver community since we opened pre-registration has been overwhelming and we are confident that by working with DBS, we will see the same level of excitement from consumers too,” added Soelistyo.
In October, Go-Jek launched a Singapore pre-registration portal for drivers in the city-state.
“As Singapore’s leader in payments with over four million debit/credit cards in circulation and DBS PayLah! being the nation’s most popular mobile wallet, we are committed to making payments simple, seamless and invisible for our customers,” said Tan Su Shan, the group head of consumer banking and wealth management at DBS.
“In doing so we are stepping up to partner with like-minded companies like Go-Jek, one of Southeast Asia’s most iconic technology companies, to build inclusive digital ecosystems for our customers,” Tan added.
In a similar move, United Overseas Bank (UOB) is also working with Grab to deliver financial services to the ride-hailing startup’s growing digital user base in Southeast Asia.
The partnership will allow Grab to offer a number of the bank’s payment solutions directly from its app, accelerating the bank’s efforts to meet the region’s fast-growing customer need for mobile-first and mobile-only.
The bank is working with Grab to embed features of its upcoming digital bank within Grab’s mobile app, so users can access banking services quickly and conveniently. Customers will also enjoy privileges when paying for Grab services using UOB cards.
Besides, both firms will explore launching co-brand credit cards in the region, as well as introducing a new way to allow users to top up their GrabPay e-wallets directly from their UOB accounts.
UOB will also explore support for Grab in a number of other areas, including fleet financing, regional and centralized treasury management solutions and workplace banking services.
But above the deal, the partnership also entails an undisclosed investment from UOB into the ride-hailing unicorn.
“Yes, UOB has made a strategic investment into Grab as part of the deal, cementing Grab’s position as the go-to partner for leading organizations to collaborate with as they serve ASEAN’s growing number of consumers and small businesses. We plan to roll out the features with UOB in 2019. Specific details will be shared at a later stage,” said a Grab spokesperson.
Prior to this investment, Grab had raised a total of US$2.75 billion in an ongoing $3-billion Series H round.
On October 29, Go-Jek fired the first shot in the battle when it opened a portal for drivers in Singapore to pre-register on its platform.
The company also announced six months ago that S$671 million would be invested in its bid to expand into markets in Southeast Asia, namely Vietnam, Singapore, Thailand, and the Philippines within 2018.
Go-Jek was able to raise funds amounting to S$2.074 billion from investors such as China’s Tencent and Meituan Dianping, as well as Google, Temasek, and others.
With this recent collaboration, clients of DBS will have privileges in payment services, not only in Singapore but throughout Southeast Asia.
In the same way, Grab users who pay for services with their UOB cards will also enjoy special perks.
While the battle between the two ride-hailing giants is heating up, it’s still too early to say who will end up victorious in the end.
But if there’s any conclusion to draw, that is the winners through these initiatives are none other than the consumers of both Grab and Go-Jek as they are able to enjoy a fully digital and seamless banking and payments experience.
China’s Luckin Coffee, a coffee franchise rivaling Starbucks had just closed a US$200 million Series A round from Singapore’s sovereign wealth fund GIC, China’s Legend Capital, Joy Capital, and Centurium Capital.
The funding round values Luckin at US$1 billion which makes it the newest Unicorn in China.
However, the scale of the capital and the fact that the round is labeled a Series A has been confusing because the company basically expanded overnight.
Founded by Jenny Qian, the former chief operating officer in Car Inc, Luckin Coffee started late last year.
Luckin Coffee has rapidly grown using a mass-store model and the company was soon found everywhere in China. It entered the market vigorously and expanded across China’s first and second-tier cities.
But in less than nine months after its launch, Luckin Coffee has opened 525 outlets across China’s major cities, in addition to offering on-demand delivery services in partnership with S.F. Express. Luckin Coffee will deliver for orders over RMB35 (US$5.30) within 30 minutes.
Besides, the coffee franchise selling point was clear, it positioned itself similarly to Starbucks. Both highlighting their freshly brewed coffee to be of high Arabica standards and made with professional blending.
Pricing-wise, Luckin Coffee is reasonably set between 20 to 30 yuan (about US$3 to US$5) which separates it from fast food coffees at McCafe or KFC that is 10 to 20 yuan (about US$2 or US$3), while being more attractive than Starbucks which sells at 30 to 40 yuan (about US$5 to US$6).
If that’s not enough to prove that it is a rival of Starbucks, the Chinese coffee chain has also opened fire on Starbucks, accusing the American coffee giant of engaging in monopolistic behavior and creating an unfair domestic trade market.
An act that Starbuck has called out as a publicity stunt.
Then again, Luckin is not a Starbucks copycat. The startup adds a technological touch making its coffee-shop model revolving around an app.
Luckin customers have to download the app to order and pay for their coffee. They do not accept cash and payments can only be made using WeChat or Luckin’s own coffee wallet. This breaks it out of the traditional retail mold, fitting it in with new retail trends like Alibaba and Tencent which partners with supermarket and convenience stores on mobile payments.
Similar to many other Chinese Internet-based startups, the startup has also been spending massively on cash discounts and promotions to gain market share. First-time customers can get a free cup of coffee, while their referrals can also get another free cup of coffee.
Despite the low prices and rising expansion project, the question is – how does the company justify its valuation and can it take on the coffee giant Starbucks?
Jeff Towson, an investment lecturer at Peking University in Beijing told Quartz, “Luckin Coffee can easily worth US$1 billion if it can execute on the business — but that’s a big if.”
He explains that a large part of Starbucks’ success is not just personalize marketing and coffee. China is Starbucks second largest market after the United States with more than 3300 stores in operation.
The coffee tycoon’s real leverage is with real estates whereby many of its stores are located strategically in expensive, high traffic locations that rivals cannot afford.
However, the startup uses app to draw people to less bustling locations that are cheaper to rent. This may be the solution to overcome the real estate power of the coffee tycoon.
Moving forward, Luckin Coffee plans to use the newly raised funds for product research, IT platform development, and business expansion.
Global startup competition G-Startup Worldwide recently announced GrowPal, an aquaculture investment platform as the winner of G-Startup Indonesia 2017.
Foreign language e-learning platform Squline and logistics aggregator platform Shipper has won the second and third place respectively.
GrowPal is a P2P lending platform that helps freshwater fishermen to raise funding for their businesses, in addition to shipping these products to countries like the United States, France, and Russia through partnerships with export companies.
Founded by Paundra, the startup is currently working with fishermen in Pacitan, Situbondo, Karimun Jawa Island, and Makassar. It monetizes through taking 15 percent of every investment, claiming to be profitable with US$1.5 million of Gross Merchandise Volume (GMV).
As the winner, GrowPal has won an investment cheque worth US$150,000 from GWC Innovator Fund and Kejora Ventures, as well as represent Indonesia at the G-Startup Worldwide final round in Silicon Valley.
GrowPal will go up against representatives from other countries, including Tel Aviv winner Donde Fashion, an AI-powered visual search for eCommerce and Beijing winner Zion China, a startup researching the kinetics of glucose metabolic.