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  • 1. ! Alexander Jarvis, Operating Partner, Jungle Ventures
  • 2. 8 Myths about Asia
  • 3. Today we call it
  • 4. #1 You need to be in the Valley to build a big consumer company
  • 5. China has already created a company of scale (Sorry America…) • Alibaba’s 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 Alibaba’s 2012 sales
  • 6. Rocket are building companies of scale across SEA, achieving a lot in just 2 years • 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 Source: http://www.kinnevik.se/en/Investor/Kinnevik-Rocket-capital-markeys-day-2014/
  • 7. APAC is set dominate ecommerce, 41% larger than America in 2016 B2C Ecommerce Sales Share Worldwide, by Region, 2011-2016 - % of total 1.6%! 1.9%! 2.1%! 2.2%! 3.1%! 27.9%! 35.9%! 28%! 3.6%! 2011! 3.4%! 30.5%! 33.5%! 26.9%! 3.8%! 2012! 2013! 3.5%! 33.4%! 31.5%! 25.7%! 3.9%! 2014! 3.6%! 36.2%! 29.7%! 24.3%! 3.9%! 2015! 2016! 3.6%! 38.2%! 28.8%! 23.4%! 3.8%! 3.5%! 39.7%! 28.2%! 22.6%!3.7%! Asia-Pacific! North America! Western Europe! 2.3%! 2.3%! Eastern Europe! Latin America! Middle East & Africa! Source: eMarketer, 2013 • 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 America’s 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.
  • 8. There already are ‘big’ consumer companies
  • 9. #2 Definitely need to be in the Valley for ENTERPRISE startups!
  • 10. Heard of these guys?
  • 11. There are already APAC unicorns in enterprise
  • 12. Internet penetration in Asia is too low #3
  • 13. Almost 200m users online in SEA already Source: UBS
  • 14. How does Asia stack up globally? Source: US census bureau, InternetWorldStats, CNNIC, Tencent, Facebook, Vkontakte, ITU, CIA
  • 15. APAC has almost half of global users, simply put Source: US census bureau, InternetWorldStats, CNNIC, Tencent, Facebook, Vkontakte, GSMA Intelligence
  • 16. Internet traffic will be double the US in 2015 2012 2013 2014 2015 2016 2017 CAGR ’12-17 By Geography (PB per Month) Asia Pacific 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
  • 17. Social media penetration in APAC is the global average Source: US Census Bureau, CNNIC, Tencent, Facebook
  • 18. Internet penetration may be comparatively low, but there’s still a LOT of people online
  • 19. Asians just copy, they don’t innovate #4
  • 20. CAGR of tech patents in SEA is 7x USA Growth of tech patents in SEA VS USA 180% 135% 90% 45% 0% -45% SEA USA 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: Patents by technology, OECD. SEA consists of ID, MY, PH, SG and TH CAGR SEA 14% USA 2%
  • 21. Asia’s share of global tech patents is converging % of global tech patents in Asia VS USA 40% 30% 20% 10% 0% Asia USA 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: Patents by technology, OECD. Asia consists of ID, MY, PH, SG, TH, CN, HK, IN, AU & NZ
  • 22. 2 of Fastcompany’s most innovate companies are Asian
  • 23. India - Zipdial: Missed call innovation led to one of its kind partnership with FaceBook
  • 24. Singapore - Rotimatic: Will lead to female empowerment
  • 25. Have you tried executing in Asia? • Remember.. you keep saying you don’t invest in an ‘idea’ • Asia has barriers (AKA problems): • Payments • Logistics • Market fragmentation • etc… • In America you can effectively outsource every aspect of your business • In Asia you have to figure out a creative solution to make every aspect of your business work • Why have business model risk when you have execution risk?
  • 26. Innovation is overrated. Think about ‘copying’ differently, you have to hustle in Asia
  • 27. You can’t get an exit in Asia #5
  • 28. Let’s look at Singapore, last year • Approximately 1,000 startups in the preceding 3 years ! • 12 successful exits worth S$600 million in 2013 ! • 1.2% exit rate is not too shabby ! • 2x more exits in 2013 than 2011 ! • We are just getting started
  • 29. No Unicorns in SEA, but solid acquisitions • JobStreet / Seek - A$545 • Viki / Rakuten - $200m • Travelmob / HomeAway - N/A • 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
  • 30. We have already had IPOs • Australia • Atlassian • Freelancer • iSelect • Xero • 3P Learning • OZForex • SEEK • Carsales • Malaysia • Jobstreet • iProperty • MyEg • iCar • iBuy • Singapore • AsiaTravel ! ! • Property Guru coming - ~$500m+
  • 31. You can get an exit, they just aren’t as big as the US (yet)
  • 32. Asians aren’t entrepreneurs #6
  • 33. There are still big cultural issues • A lot of people still want to work for ‘Samsung’ • But saying you are a founder is now an acceptable response at a dinner table when asked “What do you do”
  • 34. But twice as many Philippinos than Israeli’s recon they have the skills to startup! Perceived Capabilities! Percentage of 18-64 population who believe to have the required skills and knowledge to start a business Source: Global Entrepreneurship Research Association, Jungle analysis through Google Explorer
  • 35. Indonesian’s are twice more likely to be founders than in America Total early-stage Entrepreneurial Activity (TEA)! Percentage of 18-64 population who are either a nascent entrepreneur or owner-manager of a new business Source: Global Entrepreneurship Research Association, Jungle analysis through Google Explorer
  • 36. They aren’t as afraid of failing as you think Fear of Failure Rate! Percentage of 18-64 population with positive perceived opportunities who indicate that fear of failure would prevent them from setting up a business Source: Global Entrepreneurship Research Association, Jungle analysis through Google Explorer
  • 37. Asians are representing abroad… how much?
  • 38. …half the US startup jobs
  • 39. AND… Asian founders in America raise more money than white founders, by the way Founding team racial composition vs. median funding received ($m) $4.00 $3.00 $2.00 $1.00 $0.00 $1.3 $2.3 $2.2 $4.0 All Asian Pacific All white Mixed All Black Source: CBInsights, 2010. National seed and Series-A - Jan to June 2010
  • 40. They see good opportunities locally (As much as the US Perceived Opportunities! Percentage of 18-64 who see good opportunities to start a firm in the area where they live Source: Global Entrepreneurship Research Association, Jungle analysis through Google Explorer
  • 41. More of their friends have set up companies Know Startup Entrepreneur Rate! Percentage of 18-64 population who personally know someone who started a business in the past two years Source: Global Entrepreneurship Research Association, Jungle analysis through Google Explorer
  • 42. More media attention than developed markets 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 Source: Global Entrepreneurship Research Association, Jungle analysis through Google Explorer
  • 43. Far more intend starting up in next 3 years than in US and UK Entrepreneurial Intention! Percentage of 18-64 population (individuals involved in any stage of entrepreneurial activity excluded) who intend to start a business within three years Source: Global Entrepreneurship Research Association, Jungle analysis through Google Explorer
  • 44. Asians are entrepreneurs, they are half of the US ecosystem!
  • 45. There’s too much seed funding in Asia #7
  • 46. Sure, ‘more’ money has come in • In 2006, $48 million seed went into 116 deals ! • In 2013, $83 million was deployed across 257 transactions ! • Average seed rounds have decreased from $413k to $323k ! • In 2012 in America, there were 1,749 seed deals ! • There are 133 accelerators globally, SEA has 1-2 per country Source: Asia Venture Capital Journal Research. Seed defined as deals under $1 million in size
  • 47. “FFF” investments still half of that in America Informal Investors Rate! Percentage of 18-64 population who have personally provided funds for a new business, started by someone else, in the past three years Source: Global Entrepreneurship Research Association, Jungle analysis through Google Explorer
  • 48. There isn’t that much seed money
  • 49. There is no smart money in Asia #8
  • 50. Look around the room!