Highlights from 2019 The technology deal landscape
Deal flows in the technology space, where investors should be putting their money, and where the deal areas are, were the hot topics for discussion during the forum’s second and last panel session, also moderated by Lito Camacho.
Speaking about the potential for growth regionally, Kong Wan Sing, Founder and CEO of JustCo, noted that unlike many businesses that have seen a lot of disruption, real estate has not really been changing in the last 100 years. In the last few years, however, technology has changed the way people are working, with people seeking more collaboration and connection. That presents a huge growth potential for the co-working space, which currently makes up only 1-2% of the entire Asian real estate market.
Technology similarly underpins the growth opportunities for Hendrick Susanto, Chief Strategy and Investment Officer for Traveloka. Beyond being a pure online travel agent in Indonesia, Traveloka has its sights set on completing the value chain for consumers, and becoming a one-stop shop that is accessible from the convenience of a smartphone. Hendrick shared four pillars that are being built—transport, accommodation, experiences, and financial products—in order to achieve this vision.
Chiming in on the topic from the other side of the fence were the panel’s other two speakers. Dave Ng, Head of Southeast Asia of Eight Roads Ventures, spoke about the “Southeast Asian story” and the opportunities in the internet economy, consumer technology, and financial technology. Specifically, their interest lies in finding entrepreneurs who can solve large market problems of scale and then backing them. Indeed, the quality of the founder has been, and continues to be, one of the strongest single qualities that determine how successful a start-up can be.
Agreeing with Dave, Abheek Anand, Managing Director of Sequoia Capital Singapore, shared that the largest lens they use is the “notion of market size” and how large a business can be within the category that they are investing in. While the types of businesses tend to be primarily technology-based or early-stage investors, Sequoia also tries to keep an open mind.
“Broadly speaking, our thesis is that if you’re backing an ambitious team, and they are in the right market, they will by and large figure out a way to build a sustainable business”, said Abheek.
People, similarly, are key for start-ups, both in terms of hiring the right people and finding the right seed investor. “Chemistry with that seed investor” is the most important criteria, according to Hendrick. Given the length of the journey, start-ups ideally want a seed investor with the right network and credibility to connect them to potential partners, customers, and other investors.
When investing in the technology space, the panelists agreed that there are several metrics that can be applied, and multiple ways to measure value. At the end of the day, different companies and portfolios will have different paths, and their ideal outcomes will eventually depend on what is the best path for both the companies and their founders. Given the massive opportunity set in technology, the speakers encouraged guests to invest in what they like, and at the level of risk they are comfortable with, while looking at the market problem that the entrepreneur is trying to solve.