Southeast Asia is the next growth market. As China’s economy begins to slow, more and more investors, from Silicon Valley to Beijing and everywhere in between, are eyeing Southeast Asia. To better facilitate investment, Parkpine Capital is organizing the first annual Global Ventures Summit in Bali from April 19-20, 2017.
To learn more about the Summit as well as why Southeast Asia is becoming more of a focus, we caught up with Ahmed Shabana, Managing Partner at Parkpine Capital.
What is the purpose of the summit?
The Global Ventures Summit is connecting high growth technology-based startups in SE Asia with innovation and capital from Silicon Valley. It is about time to increase the size of tickets of venture capital deals in SE Asia.
Parkpine Capital aims to raise funds to help connect the SE ecosystem with the valley and invest at the same ticket size in seed and pre-seed as silicon valley. Over US$ 3 billion in represented funds from 25 Silicon Valley VC’s, 50 International angel investors, 100 companies, and LP’s, 4000 attendees will make it to the Global Ventures Summit.
Why now? What is it about SEA that has attracted your attention?
SE Asia has the highest growing markets in the world and not just for startups. For example. A decent number of established companies are fleeing China to Indonesia for manufacturing. SE Asia has attracted 60% more funding than last year almost closing $3B. Honestly, the user acquisition cost has never been that attractive anywhere, it’s like the early days of Facebook ads. When you can spend 20K a month and generate 100+K worth of business. It’s not the case anymore in the US or Asia for new businesses.
SE Asian governments are laser focused now and they are willing to make themselves next rising start at any cost. On a work ethics or cultural level, I admire how fast they are willing to learn and work. If you visit Banding University you’ll understand where I’m coming from. India and China will remain to offer great opportunities, it’s just that SE Asia is having a higher growth at the moment.
What do you think are the biggest opportunities in SEA?
Payments, Social innovations, and data related companies. Localized clones of Silicon Valley’s success companies will continue to shine. I am fascinated by the blend of AI and localization. For example, we’re very excited for one of the participating startups that are close to launching an Alexa version in Bahasa, not too late after Eva in China!
It’s the natural pattern following the US market. You need payments to scale, brands to empower social influencers, data with a cultural understanding, same as what kata.ai, for example, is doing with AI. You need to overcome the cash on delivery and bank transfer problems asap and a lot of great companies are almost there. I was having a conversation with Chance of Crowdfunder on how payments need to quickly be made digitally easier to help everyone raise more money to build great companies there.
What are some roadblocks you see in investing in SEA? What should investors and VCs be aware of when coming to this market?
It might take longer to exit, it might not be the most revolutionary technology but it’s a great chance to build high growing businesses. You won’t see a Snapchat IPO like happening through a breakthrough technology but you might see the same valuation coming up from SE in the next 5 years. Clones with localization are still huge opportunities. Go-Jek will still be everybody’s favorite just because how clever they blended a Silicon Valley business model with a cultural phenomenon.