A brief overview on current status of the Southeast Asian landscape

1. Southeast Asia-
Some perspectives
Warren Leow
Sept 2016

2. Hello. My name is Warren
and I wore many hats
I’m still an economist/trader at heart.
Hence, I chose marketplaces as a topic.

3. 650 million people across 10 countries

4. Attractiveness
• Young, mobile-savvy population
• GDP per capita increasing rapidly
• Relative political stability
• Several markets with more than 60m people
• Investor attention is increasing, especially
amongst Japanese, Korean, Chinese investors
• Deals are ‘relatively’ cheap compared to other
overheated markets such as US, China, India

5. Source: World Bank; screenshot from Jungle Ventures slide deck on SEA funding;
valuations from public sources
SEA Addressable market = bigger than
India, but lower valuations
$15b
$4b
<$2b
$5b
<$2b

6. Challenges
• Not many technology entrepreneurs with scaling
experience
• Not many regional companies so far which are
large enough for worthwhile exits
• Fragmented market with each major country
having its own language
• Logistics, infrastructure and regulatory
developments are not homogenous nor
harmonised
• No customs union nor full mobility of labour

7. Examples of SEA startups
Ecommerce Classifieds Marketplaces

8. Examples of SEA startups
On-demand Media Games

9. Examples of SEA startups
Enablers Payment
Gateways
Fintech

10. Observations
• ’Large’ companies emerging along 2 themes: 1) Indonesia and 2) regional
• Multi-usage local platforms are taking shape (e.g. Grab and Go-Jek) which
are built around high frequency use cases (instead of just chat)
• Series B is where the opportunity lies; Current Series B gap is covered by
sovereign wealth funds, Japanese investors and Rocket Internet. Some US
private equity presence are surfacing (Coatue, Warburg Pincus, KKR)
• Unlike other markets, SEA family offices and conglomerates can and are
writing massive cheques (e.g. $500m for Matahari Mall)
• Governments trying to play a larger role (e.g. Temasek, Khazanah)
• Emergence of some companies with no need to exit: Tokopedia,
Bukalapak, Traveloka, Grab, Go-Jek, Fusionex
• >$500m exits (Jobstreet, iProperty) will accelerate over the next 3-5 years
with more having a path towards being acquired (e.g. iFlix, aCommerce)
• Very limited IPO market. Some successes on Australian Stock Exchange.
Hence, IPO arbitrage is also possible. SEA needs a MOTHERS index.

11. Opportunity sets
• Exploit arbitrage and competitive advantage
between US/Europe, JKTC and SEA, especially
in terms of technical talent
• Key globalisation success is to find route to
market partners to roll-out quickly before the
US startups saturate SEA
• Choose 10 ideas and back each one with $10-
25m to scale
• Work on exit paths with 5 year horizons