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Shipper, a platform for e-commerce logistics in Indonesia, raises $5 million

Indonesia has one of the fastest-growing e-commerce markets in the world, but the logistics industry there is still very fragmented, creating headaches for both vendors and customers. Shipper is a startup with the ambitious goal of giving online sellers access to “Amazon-level logistics.” The company has raised $5 million in seed funding from Lightspeed Ventures, Floodgate Ventures, Insignia Ventures Partners and Y Combinator (Shipper is part of the accelerator’s winter 2019 batch), which will be used for hiring and customer acquisition.

Shipper was launched in 2017 by co-founders Phil Opamuratawongse and Budi Handoko, and is now used by more than 25,000 online sellers. Indonesia’s e-commerce market is growing rapidly, but online sellers still face many logistical hurdles.

The country is large (Indonesia has more than 17,500 islands, of which 600 are inhabited) and unlike the United States, where Amazon dominates, e-commerce sellers often use multiple platforms, like Tokopedia, Shopee, Bukalapak and Lazada. Smaller vendors also sell through Facebook, Instagram, WhatsApp and other social media. Once an order has been placed, the challenge of making sure it gets to customers starts. There are more than 2,500 logistics providers in Indonesia, many of whom only cover a small area.

“It is really hard for any one provider to do nationwide themselves, so the big ones usually use local partners to fulfill locations where they don’t have infrastructure,” says Opamuratawongse.

The startup’s mission is to create a platform that makes the process of fulfilling and tracking orders much more efficient. In addition to a package pick-up service and fulfillment centers, Shipper also has a technology stack to help logistics providers manage shipments. It is used to predict the best shipping routes and consolidate packages headed in the same direction and also provides a multi-carrier API that allows sellers to manage orders, print shipping labels and get tracking information from multiple providers on their phones.

When it launched three years ago, Shipper began by focusing on the last-mile for smaller vendors, who Opamuratawongse says typically keep inventory in their homes and fulfill about five to 10 orders per day. Since many give customers a choice of several logistics providers, that meant they needed to visit multiple drop-off locations every morning.

Shipper offers pick-up service performed by couriers (who Opamuratawongse says are people like stay-at-home parents who want flexible, part-time work) who collect packages from several vendors in the same neighborhood and distribute them to different logistics providers, serving as micro-fulfillment hubs. Shipper signs up about 10 to 30 new couriers each week, keeping them at least 2.5 kilometers apart so they don’t compete against each other.

The company began setting up fulfillment centers to keep up with vendors whose businesses were growing and were turning to third-party warehouse services. Shipper has established 10 fulfillment centers so far across Indonesia, including Jakarta, with plans to open a new one about every two weeks until it covers all of Indonesia.

Opamuratawongse says he expects the logistics industry in Indonesia to remain fragmented for the next decade at least, and perhaps longer because of Indonesia’s size and geography. Shipper will focus on expanding in Indonesia first, with the goal of having 1,000 microhubs within the next year and 15 to 20 fulfillment centers. Then the company plans to tackle other Southeast Asian countries with rapidly-growing e-commerce markets, including Thailand, Vietnam and the Philippines.

Chat app Line is adding Snap-style disappearing stories

Facebook cloning Snap to death may be old news, but others are only just following suit. Line, the Japanese messaging app that’s popular in Asia, just became the latest to clone Snap’s ephemeral story concept.

The company announced today that it is adding stories that disappear after 24-hours to its timeline feature, a social network like feed that sits in its app, and user profiles. The update is rolling out to users now and the concept is very much identical to Snap, Instagram and others that have embraced time-limited content.

“As posts vanish after 24 hours, there is no need to worry about overposting or having posts remain in the feed,” Line, which is listed in the U.S. and Japan, wrote in an update. “Stories allows friends to discover real-time information on Timeline that is available only for that moment.”

Snap pioneered self-destructed content in its app, and the concept has now become present across most of the most popular internet services in the world.

In particular, Facebook added stories to across the board: to its core app, Messenger, Instagram and WhatsApp, the world’s most popular chat app with over 1.5 billion monthly users. Indeed, Facebook claims that WhatsApp stories are used by 500 million people, while the company has built Instagram into a service that has long had more users than Snap — currently over one billion.

The approach doesn’t always work, though — Facebook is shuttering its most brazen Snap copy, a camera app built around Instagram direct messages.

China’s top chat app WeChat added its own version earlier this year, and while it said in its earnings this week that users upload “hundreds of millions of videos each day” to its social platforms, it didn’t give numbers on its Snap-inspired feature.

Line doesn’t have anything like the reach of Facebook’s constellation of social apps or WeChat, but it is Japan’s dominant messaging platform and is popular in Thailand, Taiwan and Indonesia.

The Japanese company doesn’t give out global user numbers but it reported 164 million monthly users in its four key markets as of Q1 2019, that’s down one million year-on-year. Japan accounts for 80 million of that figure, ahead of Thailand (44 million), Taiwan (21 million) and Indonesia (19 million.)

While user growth has stagnated, Line has been able to extract increase revenue. In addition to a foray into services — in Japan its range covers ride-hailing, food delivery, music streaming and payments — it has increased advertising in the app’s timeline tab, and that is likely a big reason for the release of stories. The new feature may help timeline get more eyeballs, while the company could follow the lead of Snap and Instagram to monetize stories by allowing businesses in.

In Line’s case, that could work reasonably well — for advertising — since users can opt to follow business accounts already. It would make sense, then, to let companies push stories to users that opted in follow their account. But that’s a long way in the future and it will depend on how the new feature is received by users.

Go-Jek’s Get app officially launches in Thailand as Southeast Asia expansion continues

Go-Jek is extending its reach in Southeast Asia after its Thailand-based unit made its official launch, which included the addition of a new food delivery service.

Get, which is the name for Go-Jek business in Thailand, started out last year offering motorbike taxi on-demand services to a limited part of Thai capital city Bangkok, now the company said it has expanded the bikes across the city and added food and delivery options. Get’s management team is composed of former Uber staffers while CEO Pinya Nittayakasetwat was recruited from chat app Line’s food delivery business.

Over the last two months, Get claims to have completed two million trips in the past two months. There’s no word on when Get will add four-wheeled transport options, however. On the food side, Get is claiming to have 20,000 merchants on its platform but there are some issues. Rumming through the app, I found a number of listed restaurants that didn’t include menus. In those instances, customers have to input their dish and price which makes it pretty hard to use.

Go-Jek’s Get app in Thailand doesn’t include menus for a number of restaurants, making it nearly impossible to order

Grab is the dominant player in Thailand, where it offers taxis, private cars, motorbikes, delivery and food across eight markets in Southeast Asia. Go-Jek rose to success in its native Indonesia, where it began offering motorbikes on demand but has expanded to cover taxi, cars, food, general services on-demand and fintech. Its investors include Google, Tencent, Meituan and Sequoia India.

That’s the same playbook Grab is using, but Go-Jek is taking its time with its market expansions. Thailand represents its third new market beyond Indonesia, following launches in Vietnam and Singapore. The Philippines is another market where Go-Jek has voiced a desire to be present — it has even made an acquisition there — but regulatory issues are holding up a launch.

Regional expansion doesn’t come cheap and Go-Jek is in the midst of raising $2 billion to finance these moves. It recently closed $1 billion from existing investors, and Deal Street Asia reports that it could raise as much as $3 billion for the entire Series F round. That’s likely in response to Grab’s own fundraising plans. The Singapore-based company closed $2 billion last year, but it is looking to increase that total to $5 billion with a major injection from SoftBank’s Vision Fund a key piece of that puzzle.

Singapore’s Credit Culture raises $29.5M for its soon-to-launch digital loan business

Singapore’s digital fintech companies are attracting investor attention and dollars in 2019. Fresh from Singapore Life — a digital-only insurer — raising $33 million across two recently closed rounds, so Credit Culture, a digital loan specialist — has banked SG$40 million ($29.5 million) ahead of its imminent launch.

Credit Culture has raised its capital from Malaysia’s RCE Capital Berhad in a deal that allows the investor to potentially take a stake of up 30 percent in the startup. Its investment is via five-year bonds that are secured with the loan receivables from Credit Culture and include granted call options for taking that stake — in other words: this isn’t your regular startup deal.

RCE Capital Berhad said in a filing that Credit Culture has already raised SG$4 million ($2.9 million) via a seed investment, and it appears that it is financially set ahead of its launch.

“We are currently well-positioned with the recent injection of funds. That being said, we are always open to exploring various options to grow especially for regional expansion,” Credit Culture a representative told TechCrunch in an emailed response.

Founded by former bankers, Credit Culture is set to become one of Singapore’s first digital financial service startups after its parent company, DEY, secured approval to operate a moneylending business as part of a pilot to test online fintech services.

Since it hasn’t launched yet, there’s not a huge amount to say about the business, but its goal is to offer personal loans to Singapore-based customers using digital channels, so its website and mobile apps. The company plans to vet applicants using a mixture of existing platforms for data, including government initiative like MyInfo, and its own credit-scoring engine for creditworthiness assessment. It will also require face-to-face verification for loans to be granted, it confirmed.

Like Singapore Life and other digital-only ventures, including Hong Kong’s Bowtie, the objective is to pass on cost savings from being a purely online player — i.e. not operating branches and other physical consumer-facing outlets — and make prices fully transparent to applicants.

As you’d expect, Singapore is the initial focus for the company but it is already eying potential market expansions.

“We do have plans to expand to other Southeast Asian countries like the Philippines and Indonesia,” a spokesperson told TechCrunch. “There is a large potential given the need for personal financing and the large unbanked population segments.”

VCs give us their predictions for startups and tech in Southeast Asia in 2019

The new year is well underway and, before January is out, we polled VCs in Southeast Asia to get their thoughts on what to expect in 2019.

The number of VCs in the region has increased massively in recent years, in no small part due to forecasts of growth in the tech space as internet access continues to shoot up among Southeast Asia’s cumulative population of more than 600 million consumers.

There are other factors, including economic growth and emerging middle classes, but with more than 3.8 million people becoming first-time internet users each month — thanks to smartphones — Southeast Asia’s ‘digital economy’ is tipped to more than triple to reach $240 billion by 2025. That leaves plenty of opportunity for tech and online businesses and, by extension, venture capitalists.

With a VC corpus that now numbers dozens of investment firms, TechCrunch asked the people who write the checks what is on the horizon for 2019.

The only rule was no more than three predictions — below, in no particular order, is what they told us.


Albert Shyy, Burda

Funds will continue to invest aggressively in Southeast Asia in the first half of this year but capital will tighten up by Q4 as funds and companies prepare for a possible recession. I think we will see a lot of companies opportunistically go out to fundraise in Q1/Q2 to take advantage of a bull market.

We will see two to three newly-minted unicorns from the region this year, after a relative lull last year.

This will (finally) be the year that we start to see some consolidation in the e-commerce scene


Dmitry Levit, Cento

A significant portion of capital returned by upcoming U.S. IPOs to institutional investors will be directed to growth markets outside of China, with India and Southeast Asia being the likeliest beneficiaries. Alternative assets such as venture and subsets of private equity in emerging markets will enter their golden age.

The withdrawal of Chinese strategic players held back by weakened domestic economy, prudent M&A by local strategics and ongoing caution among Japanese, Korean and global corporates, combined with ongoing valuations exuberance by late-stage investors allocating funds to Southeast Asia, will continue holding back large liquidity events. Save perhaps for a roll-up of a local champion or two into a global IPO. Fundraising will get more troublesome for some of Southeast Asia’s larger unprofitable market leaders. Lack of marquee liquidity events and curtailed access to late-stage capital for some will lead to a few visible failures (our money is on the subsidy-heavy wallets!) and a temporary burst of short-term skepticism around Southeast Asia as an investment destination towards the end of 2019.

The trend towards the emergence of value-chain specific funds and fund managers will continue, as digitalization is reaching ever further into numerous industry sectors and as Southeast Asia hosts an increasing portion of global supply chains. We foresee at least dozen new venture firms and vehicles emerging in 2019 with clear sector-led investment thesis around the place of Southeast Asian economies in the global value chains of fashion industry, agriculture and food; labour, healthcare services; manufacturing, construction tech and so on, with investment teams that have the necessary expertise to unravel this increasing complexity.


Willson Cuaca, East Ventures

Jakarta becomes Southeast Asia’s startup capital surpassing Singapore in terms of the number of deals and investment amount.

As Indonesia’s startup scene heats up, regional seed and series A funds move away from Indonesia and target Vietnam, Malaysia, Thailand and the Philippines (in market priority order).

Southeast gets two new unicorns.


Rachel Lau, RHL Ventures

North Asian companies will provide well-needed liquidity as they withdraw capital from developed American and European markets due to the Federal Reserve’s actions. The FED raised interest rates and reduced the size of its balance sheet (by not replacing the bonds that were maturing at a rate of $50 billion a month). This has been seen in the recent fundraising exercise by Southeast Asian unicorns. Grab has recently seen an impressive list of North Asian investors such as Mirae, Toyota and Yamaha . A recent stat stated that 85 percent of the funding of Southeast Asia startups have gone to billion dollar unicorn such as Grab and Gojek, bypassing the early stage startups that are more in need for funding, this trend is expected to continue. Therefore, we will see early-stage companies and venture capitalists becoming more focused on generating cash flow from operating operations instead as fundraising activities become more difficult.

A growth in urbanization in Southeast will create new job opportunities in small/medium businesses, as evident in China. Currently, only 12 percent of Asia’s urban population live in megacities, while four percent live in towns of fewer than 300,000 inhabitants. New companies will see the blurred lines between brick and mortar businesses vs pure online businesses. In the past year or so, we have seen more and more offline businesses going online and more online businesses going offline.

Fertility rates in the Philippines, Laos, Cambodia, Indonesia and Vietnam exceed 2.1 births per woman — the level that sustains a population — but rates below 1.5 in Singapore and Thailand mean their populations will decline without immigration. As we see more startup activities coming to Southeast Asian countries, we expect to see more qualified foreign talent moving to the region vs staying in low growth American and European countries.


Kay-Mok Ku, Gobi Ventures

First Chinese “Seaward” Unicorn in Southeast Asia. In recent years, a growing number of Chinese startups are targeting overseas markets from the get go (known as Chuhai 出海 or “Seaward”). These Chinese entrepreneurs typically bring with them best practices in consumer marketing and product development honed by a hyper-competitive home market, supported by strong, dedicated technical team based out of China and increasingly capitalized by Chinese VCs which have raised billion-dollar funds.

Consolidation among ASEAN Unicorns. While ASEAN now boasts 10 unicorns, they are duplicative in the sense that more than one exists in a particular category, which is unsustainable for winner-takes-all markets. For example, in the ASEAN ride-hailing space, while one unicorn is busy with regional geographic expansion, the other simply co-exists by staying focused on scope expansion within its home market. This will never happen in a single country market like China but now that the ASEAN ride hailing unicorns are finally locking horns, the stage may be set for a Didi-Kuadi like scenario to unfold.

ASEAN jumps on Chinese 5G bandwagon. The tech world in the future will likely bifurcate into American and Chinese-led platforms. As it is, emerging markets are adopting Chinese business models based on bite-sized payment and have embraced Chinese mobile apps often bundled with cheap Chinese smartphones. Looking ahead, 5G will be a game changer as its impact goes beyond smartphones to generic IoT devices, having strategic implications for industries such as autonomous driving. As a result, the US-China Trade War will likely evolve into a Tech War and ASEAN will be forced to choose side.


Daren Tan, Golden Equator Capital

We are excited by growth in the AI and deep tech sectors. The focus has generally been on consumer-focused tech in Southeast Asia as an emerging market, but we are starting to see proprietary solutions emerge for industries such as medtech and fintech. AI also has great applicability across a wide range of consumer sectors in reducing reliance on manpower and creating cost savings.

Data analytics to uncover organizational efficiencies and customer trends will continue to be even more widely used, but there will also be greater emphasis on securing such data especially confidential information in light of multiple high-profile data breaches in 2018. Tools enabling the collection, storage, safe-keeping and analysis of data will be essential.

We are seeing the emergence of more institutional funds from North Asia. So far it has predominantly been Chinese tech giants like Tencent and Alibaba, now we are starting to see Korean and Japanese institutions placing greater emphasis on investment in the Southeast Asian region.


Vinnie Lauria, Golden Gate Ventures

Even more capital flowing from U.S. and China into Southeast Asia, with VCs from both locations soon to open offices in the region

A fresh wave of Series A investments into Vietnam.

Ten exits over $100 million.

 


Amit Anand, Jungle Ventures

The emergence of a financial services super app, think the Meituan or WeChat but only for financial services: The Southeast Asian millennial is one of the most underserved customer from a financial services perspective whether it is payments, consumer goods loans, personal loans, personal finance management, investments or other financial services. We will see the emergence of digital platforms that will aggregate all these related services and provide a one stop financial services shop for this digitally native consumer.

Digitisation of SMEs will be new fintech: Southeast Asia is home to over 100 million SMEs that are at the cusp of digital transformation. Generational change in ownership, local governments push for digitization and increased globalization have created a perfect storm for these SMEs to adopt cloud and other digital technologies at neck-breaking pace. Startups focussing on this segment will get mainstream attention from the venture community over the next few years as they look for new industries that are getting enabled or disrupted by technology.


Kuo-Yi Lim and Peng Ong, Monk’s Hill Ventures

Lyft and Uber go public and show the path to profitability for other rideshare businesses. This has positive effect for the regional rideshare players but also puts pressure on them to demonstrate the same economics in ridesharing. Regional rideshare players double down on super-app positioning instead, to demonstrate value in other ways as rideshare business alone may not reach profitability — ever.

The trade war between China and the US reaches a truce, but a general sense of uncertainty lingers. This is now the new norm — things are less certain and companies have to plan for more adverse scenarios. In the short term, Southeast Asia benefits. Companies — Chinese, American etc — see Southeast Asia as the neutral ground. Investment pours in, creating jobs across industries. Acquisition of local champions intensifies as foreign players jostle for the lead positions.

“Solve the problem” – tech companies will become more prominent… tech companies that are real-estate brokers, recruiters, healthcare providers, food suppliers, logistics… why: many industries are very inefficient.


Hian Goh, Openspace Ventures

Fight to quality will happen. Fundraising across all stages from seed to Series C and beyond will be challenging if you don’t have the metrics. Investors will want to see a path to profitability, or an ability to turn profitable if the environment becomes worse. This will mean Saas companies with stable cash flows, vertical e-commerce with strong metrics will be attractive investment opportunities.

Investor selection will become critical, as investors take a wait and see approach. Existing or new investors into companies will be judged upon their dry powder in their funds and their ability to fund further rounds

The regulatory risk for fintech lenders will be higher this year, rising compliance cost and uncertainty on licensing, which would lead to consolidation in the market.


Heang Chhor, Qualgro

Southeast Asia: an intensifying battlefield for tech investments

There has never been so much VC money in Southeast Asia chasing interesting startups, at all life cycle stages. The 10 most active local and regional VCs have raised their second or third funds recently, amassing at least two times more money than a few years ago, probably reaching a total amount close to $1 billion. In addition, international VCs have also doubled down on their allocation into the region, while top Chinese VCs have visibly stated their intent not to miss the dynamic momentum. Several growth funds have recently built a local presence in order to target Southeast Asia tech companies at Series C and beyond. Not counting the amount going to the unicorns, there might be now more than $3-4 billion available for seed to growth stages, which may be 3-4 times the amount of three years ago. There are, of course, many more good startups coming up to invest into. But the most promising startups will be in a very favorable position to negotiate higher valuation and better terms. However, they should not forget that, eventually, what creates value is how they make a difference with their tech capabilities or their business model, how they acquire and retain the best talent, with the funds raised, not only how much money they will be able to raise. Most local and regional corporate VCs are likely to lose in this more intense investment game.

Significant VC money investing into so-called ‘AI-based startups’, but are there really much (deep) Artificial Intelligence capabilities around?

A good portion of the SEA startups claim they have ‘something-AI’. Investors are overwhelmed, if not confused, by the ‘AI claim’ that they find in most startup pitches. While there is no doubt that Southeast Asia will grow its own strong AI-competence pool in the future, unfortunately today most ‘AI-based’ business models from the region would still be just ‘good algorithms or machine learning’ that can process some amount of data to come up with good-enough outcomes, that do not always generate substantial business value to users/customers. The significant budget that some of the very-well-funded Southeast Asia unicorns are putting into their ‘AI-based apps’ or ‘AI platform’ is unlikely to make a real difference for the consumers, for lack of deep AI competences in the region. 2019 may be another year of AI-promise, not realized. Hopefully, public and private research labs, universities and startups will continue to be (much more) strongly supported (especially by governments) to significantly build bigger AI talent pool, which means growing and attracting AI talent into the region.

Bigger Series A and Series B rounds to fuel more convincing growth trajectory, towards growth-stage fundraising.

Although situations vary a lot: typical Series A in Southeast Asia used to be around $5 million, and Series B around $10-15 million. Investors tended to accept that normally companies would raise money after 18 months or so, between A and B, and between B and C. There has been an increasing number of larger raises at A and B recently, and very likely this trend will accelerate. The fact that VCs now have much more money to deploy into each investment will contribute to this trend. However, the required milestones for raising Series C have become much more around: minimum scale and very solid growth (and profit) drivers. Therefore, entrepreneurs will have to look for getting as much funding reserve as possible, irrespective of time between raises, to build growth engines that take their companies past the milestones of the next Series, be it B or C. In the future, we will see more Series A of $10 million and more Series B of well-above $20 million. Compelling businesses will not have too much difficulties for doing so, but most Southeast Asia entrepreneurs would be wise to learn to more effectively master fundraising skills for capturing much bigger amounts than in the past. Of course, this assumes that their businesses are compelling enough in the eyes of investors.


Vicknesh R Pillay, TNB Aura

Out-sized valuations will be less commonplace in 2019 as Southeast Asian investors learn from experience and become more sophisticated. Therefore, we do see opportunities at Series A/B for undervalued deals due to lack of early-stage funding while we expect to continue to see the trend of the majority of venture capital investments going into later stage companies (Series C and beyond) due to lower risk appetite and ‘herd’ mentality.

2018 has also seen the rapid emergence of many corporate venture capital funds and innovation programs. But, 2019 will see large corporations cutting back on their allocation towards startup investing which would be the easiest option for them in case of adverse news to the jittery public markets in 2019.

With the growth of AI, the need for API connections and increased thought leadership to embrace tech, Southeast Asia is going to see an upsurge in SaaS startups and existing startups moving to a Saas business model. Hence, we expect increased investments into Saas companies focused on IoT and cybersecurity as hardware data and software are moved onto the cloud.


Chua Kee Lock, Vertex Ventures

Southeast Asia VC investment pace has grown steadily and significantly since 2010 where it started from less than $100 million in VC investment in the region. For the first eight months of 2018, the region’s VC investment was over $5.4 billion. For the whole of 2018, it will likely end around $8 billion. For 2019, we expect the VC investment pace to surpass 2018 level and record between $9-10 billion. Southeast Asia will continue to attract more VC investments because:

(1) Governments in Southeast Asia, especially ASEAN, continue their support policy to encourage startups.

(2) young demographics and the fast technology adoption in Southeast Asia give rise to more innovative and disruptive ideas.

(3) global investors looking for a better return and will naturally focus on growing emerging market like Southeast Asia.

The trend towards gig economy will begin to have an impact in the region. In developed economies like the U.S, gig economy is expected to reach over 40 percent by 2020. The young population will look for more freelance opportunities as a way to increase income levels while still maintaining flexibility. This will include white-collar work like computer programming, accounting, customer service, etc. and also blue-collar work like delivery services, ride-sharing, home services, etc. We believe that the gig economy will grow to over 15 percent in Southeast Asia by 2019.

AI-heavy or -driven startups will begin to make inroads into Southeast Asia.


Victor Chua, Vynn Capital

The BIG convergence — there will more integration between industries and sectors. Traveloka went into car rental, Blibli went into travel business and these are only some examples. There is a lot of synergistic value between travel startups and food startups or between property startups and automotive startups. Imagine a future where you travel to a city where you stay in an apartment you rented through a marketplace (like Travelio, my portfolio company), and when you need to book a restaurant you can make the reservation through a platform that is integrated with the property manager, and when you need to move around you go down to the car park to drive a car you rent from an automotive marketplace. There is clear synergy between selective industries and this leads to an overall convergence between companies, between industries.

More channels to raise Series B/C, early-stage companies find fundraising more challenging — We have seen a number of VC funds raising or already raised growth funds, this means that there are now more channels for Series A or B companies to raise growth rounds. As the market matures, there will be more competition for investments amongst growth funds as there is considerably more growth in the number of growth funds than companies that are raising at growth-stage. On the flip side, the feel is that there is a consistent growth in the number of early-stage companies, yet the amount of capital in early-stage funds is not growing as much as more VCs prefer bigger and later stages, due to the maturity of their existing portfolio companies.

Newcomers gaining weight — there will be at least 10 companies that will hit a valuation of at least $100 million. These valuations will not be based on a single market exposure. Companies that raise larger rounds will need to show that they are regional.


Thanks to all the VCs who took part, I certainly felt like the class teacher collecting assignments.

Grab moves to offer digital insurance services in Southeast Asia

Grab is Southeast Asia’s top ride-hailing firm, thanks in no small part to its acquisition of Uber’s local business last year, but the company also houses an ambitious fintech arm, too. That just added another vertical to its business after Grab announced it is teaming up with China’s ZhongAn to introduce insurance.

Grab and ZhongAn International, the international arm of the Chinese insurance giant, said today they will create a joint venture that will provide digital insurance services across Southeast Asia. Grab said the new business will partner with insurance companies to offer the services via its mobile app. Chubb — a company that already works with Grab to offer micro-loans to its drivers — is the first partner to commit, it’ll offer insurance for Grab drivers starting in Singapore.

ZhongAn is widely-lauded for being China’s first digital-only insurance platform. It’s backed by traditional insurance giant PingAn and Chinese internet giants Tencent and Alibaba.

Grab’s move into digital insurance comes a day after Singapore Life, an online insurer in Singapore, closed the second part of a $33 million funding round aimed at expanding its business in Southeast Asia.

This ZhongAn partnership adds another layer to Grab’s services and fintech business, which already includes payments — both offline and online — and is scheduled to move into cross-border remittance and online healthcare, the latter being a deal with ZhongAn sibling PingAn Good Doctor.

The push is also part of a wider strategy from Grab, which was last valued at over $11 billion and is aiming to turn its app from merely ride-hailing to an everyday needs app, in the style of Chinese ‘super apps’ like Meituan and WeChat.

Indeed, Grab President Ming Ma referenced that very ambitious calling the insurance products “part of our commitment to becoming the leading everyday super app in the region.”

Last summer, Grab opened its platform to third-parties which can lean on its considerable userbase — currently at 130 million downloads — to reach consumers in Southeast Asia, where the fast-growing ‘digital economy’ is tipped to triple to reach $240 billion by 2025. Grab’s platform has welcomed services like e-grocer HappyFresh, deals from travel giant Booking and more.

Grab has also made efforts to develop the local ecosystem with its own accelerator program — called ‘Velocity’ — which, rather than providing equity, helps young companies to leverage its platform. It has also made investments, including a deal with budget hotel brand OYO in India, a fellow SoftBank portfolio company that has designs on expansion in Southeast Asia.

Grab itself operates across eight markets in Southeast Asia, where it claims to have completed more than two billion rides to date. The company is currently raising a massive Series H fund which has already passed $3 billion in capital raised but has a loftier goal of reaching $5 billion, as we reported recently.

Go-Jek, Grab’s chief rival, is expanding its business outside of Indonesia after launching in Vietnam, Thailand and Vietnam. Like Grab, it, too, offers services beyond ride-hailing and the company — which is backed by the likes of Meituan, Google and Tencent — is close to finalizing a new $2 billion funding round for its battle with Grab.

Indonesia unblocks Tumblr following its ban on adult content

Indonesia, the world’s fourth largest country by population, has unblocked Tumblr nine months after it blocked the social networking site over pornographic content.

Tumblr — which, disclaimer, is owned by Oath Verizon Media Group just like TechCrunch — announced earlier this month that it would remove all “adult content” from its platform. That decision, which angered many in the adult entertainment industry who valued the platform as an increasingly rare outlet that supported erotica, was a response to Apple removing Tumblr’s app from the iOS Store after child pornography was found within the service.

This impact of this new policy has made its way to Indonesia where KrAsia reports that the service was unblocked earlier this week. The service had been blocked in March after falling foul of the country’s anti-pornography laws.

“Tumblr sent an official statement regarding the commitment to clean the platform from pornographic content,” Ferdinandus Setu, Acting Head of the Ministry of Communication and Informatics Bureau, is reported to have said in a press statement.

Messaging apps WhatsApp and Line are among the other services that have been forced to comply with the government’s ban on ‘unsuitable’ content in order to keep their services open in the country. Telegram, meanwhile, removed suspected terrorist content last year after its service was partially blocked.

While perhaps not widely acknowledged in the West, Indonesia is a huge market with a population of over 260 million people. The world’s largest Muslim country, it is the largest economy in Southeast Asia and its growth is tipped to help tripled the region’s digital economy to $240 billion by 2025.

In other words, Indonesia is a huge market for internet companies.

The country’s anti-porn laws have been used to block as many as 800,000 websites as of 2017so potentially over a million by now — but they have also been used to take aim at gay dating apps, some of which have been removed from the Google Play Store. As Vice notes, “while homosexuality is not illegal in Indonesia, it’s no secret that the country has become a hostile place for the LGBTQ community.”

Golden Gate Ventures closes new $100M fund for Southeast Asia

Singapore’s Golden Gate Ventures has announced the close of its newest (and third) fund for Southeast Asia at a total of $100 million.

The fund hit a first close in the summer, as TechCrunch reported at the time, and now it has reached full capacity. Seven-year-old Golden Gate said its LPs include existing backers Singapore sovereign fund Temasek, Korea’s Hanwha, Naver — the owner of messaging app Line — and EE Capital. Investors backing the firm for the first time through this fund include Mistletoe — the fund from Taizo Son, brother of SoftBank founder Masayoshi Son — Mitsui Fudosan, IDO Investments, CTBC Group, Korea Venture Investment Corporation (KVIC), and Ion Pacific.

Golden Gate was founded by former Silicon Valley-based trio Vinnie Lauria, Jeffrey Paine and Paul Bragiel . It has investments across five markets in Southeast Asia — with a particular focus on Indonesia and Singapore — and that portfolio includes Singapore’s Carousell, automotive marketplace Carro, P2P lending startup Funding Societies, payment enabler Omise and health tech startup AlodokterGolden Gate’s previous fund was $60 million and it closed in 2016.

Some of the firm’s exits so far include the sale of Redmart to Lazada (although not a blockbuster), Priceline’s acquisition of WoomooLine’s acquisition of Temanjalan and the sale of Mapan (formerly Ruma) to Go-Jek. It claims that its first two funds have had distributions of cash (DPI) of 1.56x and 0.13x, and IRRs of 48 percent and 29 percent, respectively.

“When I compare the tech ecosystem of Southeast Asia (SEA) to other markets, it’s really hit an inflection point — annual investment is now measured in the billions. That puts SEA on a global stage with the US, China, and India. Yet there is a youthfulness that reminds me of Silicon Valley circa 2005, shortly before social media and the iPhone took off,” Lauria said in a statement.

A report from Google and Temasek forecasts that Southeast Asia’s digital economy will grow from $50 billion in 2017 to over $200 billion by 2025 as internet penetration continues to grow across the region thanks to increased ownership of smartphones. That opportunity to reach a cumulative population of over 600 million consumers — more of whom are online today than the entire U.S. population — is feeding optimism around startups and tech companies.

Golden Gate isn’t alone in developing a fund to explore those possibilities, there’s plenty of VC activity in the region.

Some of those include Openspace, which was formerly known as NSI Ventures and just closed a $135 million fund, Qualgro, which is raising a $100 million vehicle and Golden Equator, which paired up with Korea Investment Partners on a joint $88 million fund. Temasek-affiliated Vertex closed a $210 million fund last year and that remains a record for Southeast Asia.

Golden Gate also has a dedicated crypto fund, LuneX, which is in the process of raising $10 million.

Alibaba’s Ant Financial fintech affiliate raises $14 billion to continue its global expansion

Ant Financial, the financial services affiliate connected to Alibaba which operates the Alipay mobile payment service, has confirmed that it has closed a Series C funding round that totals an enormous $14 billion.

The rumors have been flying about this huge financing deal for the past month or so, with multiple publications reporting that Ant — which has been strongly linked with an IPO — was in the market to raise at least $9 billion at a valuation of upwards of $100 billion. That turned out to be just the tip of the iceberg here.

The money comes via a tranche of U.S. dollar financing and Chinese RMB from local investors. Those names include Singapore-based sovereign funds GIC and Temasek, Malaysian sovereign fund Khazanah Nasional Berhad, Warburg Pincus, Canada Pension Plan Investment Board, Silver Lake and General Atlantic.

Ant said that the money will go towards extending its global expansion (and deepening its presence in non-China markets it has already entered), developing technology and hiring.

“We are pleased to welcome these investors as partners, who share our vision and mission, to embark on our journey to further promote inclusive finance globally and bring equal opportunities to the world. We are proud of, and inspired by, the transformation we have affected in the lives of ordinary people and small businesses over the past 14 years,” Ant Financial CEO and executive chairman Eric Jing said in a statement.

Alibaba itself doesn’t invest in Ant, which it span off shortly before its mega-IPO in the U.S. in 2014, but the company did recently take up an option to own 33 percent of Ant’s shares.

Ant has long been tipped to go public. Back in 2016 when it raised a then blockbuster $4.5 billionlittle did we know it would pull in many multiples more — the company has been reportedly considering a public listing, but it instead opted to raise new capital at a valuation of $60 billion.

It looks like the same again, but with higher stakes. This new Series C round pushes that valuation up to $100 billion, according to Bloomberg. (Ant didn’t comment on its valuation.) So what has Ant done over the past two years to justify that jump?

It has long been a key fintech company in China, where it claims to serve offer 500 million consumers and offers Alipay, digital banking and investment services, but it has begun to replicate that business overseas in recent years. In particular, it has made investments and set up joint-ventures and new businesses in a slew of Asian countries that include India, Thailand, Korea, Indonesia, Hong Kong, Malaysia, the Philippines, Pakistan and Bangladesh.

The company was, however, unsuccessful in its effort to buy MoneyGram after the U.S. government blocked the $1.2 billion deal.

On the business-side, Ant is said to have posted a $1.4 billion profit over the last year, suggesting it is more than ready to make the leap to being a public firm.

Despite that U.S. deal setback, Ant said today that its global footprint extends to 870 million consumers. I’d take that with a pinch of salt at this point since its business outside of China is in its early stages, but there seems little doubt that it is on the road to replicating its scale in its homeland in many parts of Asia. Raising this huge round only solidifies those plans by providing the kind of capital infusion that tops most of the world’s IPOs in one fell swoop.

Google confirms investment in Indonesia’s ride-hailing leader Go-Jek

 Google has confirmed its investment in Go-Jek, the hail-railing service that rivals Uber and Grab in Indonesia. TechCrunch reported the investment last week, which was made alongside China’s Meituan-Dianping and Singaporean sovereign fund Temasek. The trio were part of a final tranche of a $1.2 billion round that Go-Jek began negotiating on last April, with commitments from the likes… Read More

Go-Jek buys three startups to advance its mobile payment business

 Go-Jek, the company leading Uber and Grab in Southeast Asia’s largest market, has bagged a hattrick of deals to advance its mobile payment strategy. Indonesia-based Go-Jek revealed it has acquired offline payment firm Kartuku, payment gateway Midtrans and payment and lending network Mapan for undisclosed sums. The company started out in 2015 offering a ride-hailing service for… Read More

Indonesia wanted to block WhatsApp because people are sending ‘obscene GIFs’

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WhatsApp appears to be the latest social media platform to run afoul of Indonesia’s censorship rules.

The populous Southeast Asian nation on Monday vowed to block WhatsApp within 48 hours, if it did not ensure that “obscene” GIFs were removed from the platform.

Indonesia later dropped its threat after Tenor, WhatsApp’s third party GIF provider, appeared to have fixed the issue.

“We see now that they have done what we asked. Therefore we won’t block them,” the director general from Indonesia’s communication and informatics ministry, Semuel Pangerapan told Reuters on Tuesday. Read more…

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Chatbot startup founder sees Southeast Asia potential despite slow start worldwide

 Chatbots may have underwhelmed thus far, but the impact of the technology still has bags of potential in international markets where mobile messaging has been mainstream for years. That’s the view of one startup that’s working to bring the benefit of bots to the mainstream in Indonesia, the world’s fourth most populous country and the largest economy in the growing region… Read More

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Uber’s Asian rival Grab loses its head of engineering

 Grab may be in the process of raising a huge $2.5 billion investment round, with SoftBank, Didi and Toyota confirmed as participants, but Uber’s Southeast Asia-based rival has lost its head of engineering.
Arul Kumaravel, VP of engineering at Grab, has left the company for person reasons, according to a source. It’s not yet clear what his next plan is. Grab confirmed the… Read More

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Chrissy Teigen and John Legend had the ultimate summer getaway in Bali

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Can you say vacation goals?

Chrissy Teigen, John Legend and little Luna had the ultimate family getaway last week on the island of Bali in Indonesia.

Much of this was documented on the couple’s well-followed Instagram accounts, showing them enjoying the lush scenery: 

Bali

A post shared by John Legend (@johnlegend) on

A post shared by John Legend (@johnlegend) on

Eating tropical fruit:

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Tourist-friendly Indonesian city bans all ride-sharing services, including Uber

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Ride-hailing services might soon be a thing of the past in one Indonesian city.

Tourist-friendly Yogyakarta said all ride-hailing services including Uber, Grab, Go-Jek and Go-Car would soon be banned across the city.

The ban is expected to kick in as soon as this week.

“The regulation is being processed and will be done within a week. We will take action in accordance with the regulation,” Yogyakarta Transportation Agency (Kopetayo) Head Gatot Saptadi told the Jakarta Globe on Friday.

The announcement comes following a riot in Yogyakarta earlier last month, with some 300 taxi drivers calling for the ride-sharing apps to be banned. Read more…

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Police decide man touching woman's thigh on a bus wasn't harassment, for a ridiculous reason

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Seriously?

A man accused of harassing a young woman after touching her thigh on a bus, was eventually released from custody after police decided that he wasn’t guilty — because she was wearing long pants.

The incident occurred in Jatinegara, a suburb in Jakarta, Indonesia. The bus officer confirmed that the man even owned up to what he did, according to Coconuts Jakarta.  

But police don’t see it that way.

Bambang Edi, the head of criminal investigations for the Jatinegara police division, told Vivanews: “She was wearing long pants, and he happened to touch her thigh since they were sitting next to each other.” Read more…

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No, Samsung isn't launching a refurbished Galaxy Note7

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No, Samsung isn’t bringing the Galaxy Note7 from the dead. 

The South Korean smartphone company has refuted a widely circulated report that claimed that Samsung plans to sell refurbished units of the Galaxy Note7 in Indonesia and India later this year. 

“The report on Samsung planning to sell refurbished Galaxy Note 7 smartphone in India is incorrect.” a Samsung India spokesperson told Mashable India

The report from Korean outlet Hankyung had noted that the company has slightly redesigned the smartphone, and is now placing a smaller battery to circumvent the high-pressure issue that caused the Galaxy Note7 smartphones to catch fireReuters had a similar report last month. Read more…

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Google is bringing a rainforest right to your smartphone

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Most of us have never stepped anywhere near a rainforest, much less had a chance to explore it — something Google hopes to change with its new augmented reality experience.

The “Into the Wild” exhibit sees some 1,000 square meters turned into a virtual rainforest, home to orangutans, Malayan tapirs and tiny mouse deer. 

In order to view the sights, visitors pick up a Lenovo smartphone enabled with Tango, an augmented reality platform developed by Google.

The exhibition, the first of its kind to launch in Asia, is held at Singapore’s ArtScience Museum. Read more…

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Grab is investing $100M in startups to help it battle Uber in Southeast Asia

grab2 Grab is upping its battle against Uber in Southeast Asia by announcing a flurry of new initiatives in Indonesia, the region’s largest economy and world’s fourth most populous country, which include setting aside $100 million to invest in startups. Today the Singapore-based company, which is valued at $3 billion and claims 33 million downloads, announced what it is dubbing… Read More

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Governor orders subway train redesign, because he thought it looked like a cricket

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Jakarta’s 9.6 million people will soon welcome the city’s first subway train system — but not before the trains get a design overhaul.

The reason? Governors thought the train looked “too much like a cricket.”

The city’s acting governor Sumarsono was reportedly dissatisfied with the insect-like face of the train. 

“When the contractors presented the design, around 90 percent of the people in the meeting said, ‘How did we end up with this design?’ No one remembered approving it,” he was quoted as saying by the Jakarta Globe. Read more…

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