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Southeast Asia’s East Ventures on female VCs, foreign investment, consolidation

Melisa Irene‘s path to becoming a partner at one of Southeast Asia’s most esteemed venture capital firms is an unconventional one.

“I always consider myself to be quite lucky,” said Irene, who was promoted to be a partner at East Ventures in January 2019. At 25 years old, she was the Jakarta-based investment firm’s first female partner.

During TechCrunch Disrupt’s first online conference, I spoke to Irene about what she humbly described as a “lucky” career, her experience as a young, female investor, the rush of American and Chinese VC money into Southeast Asia, and what the COVID-19 pandemic means to East Ventures . A video recording of the conversation is at the bottom of the article.

Partner at 25

Irene admitted that timing played a big part in her ascension in the VC world. The development of Indonesia’s internet infrastructure came around relatively late — around 2010 — compared to more developed markets, but growth happened rapidly. In 2015, five years after East Ventures backed the Series A of Tokopedia, now an e-commerce leader in Southeast Asia, Irene joined the firm.

In those days, “I didn’t compete with a lot of investment bankers,” said Irene, who majored in accounting in university and began as an intern at East Ventures. “The capability that they looked for was how fast you can immerse in the ecosystem.”

Contrary to popular belief, the Southeast Asian investment ecosystem is “quite friendly” towards women. “People rejoice the promotion of female professionals in this industry. It’s not a rare circumstance to see females becoming a vice principal or principle in Southeast Asia,” the investor said.

The support goes beyond simply checking the gender-diversity box and reflects a real demand for more empathetic investors in the tech industry.

“Sometimes people like to talk as a business partner and sometimes as a friend. [Empathy] is something that can be seen as natural coming from females,” she added.

However, the investor cautioned that “the number of [female] decision-makers definitely needs to improve,” though she foresees the local ecosystem “is supportive of that.”

SEA gold rush

In recent years tech giants from both the U.S. and China have been clamoring to get into Southeast Asia, a region home to about 670 million people and a fledgling internet market. They often begin by financing local upstarts, which, beholden to the investment, will provide directional advice to their foreign corporate investors.

Indeed, the familiar names have all bet on the region’s rising stars. Alibaba invested in Tokopedia and its rival JD.com backed travel portal Traveloka, which is also in the East Ventures portfolio. Tencent, Google, Facebook and Paypal are all investors of Gojek, the Indonesian ride-hailing titan going neck and neck with SoftBank-funded Grab.

When offered big checks, startups must stay level-headed and think what’s best for them, Irene advised. “The thing is everyone has money. Companies need to decide which side to be on, what companies they want on board, and what companies are able to give them strategic advice.”

It’s not uncommon to see investors and founders clash over priorities. Some investors want a quick exit, while the entrepreneurial mentality is to build a business in the long run. “That’s why alignment is important,” asserted the investor.

The future of tech in SEA

As unicorns and “super apps” like Grab and Gojek emerge in Southeast Asia, concerns that incumbents can kill off competition grow. East Ventures has a unique insight into the region’s competitive dynamics as an early-stage investor that has seen some of its startups like Tokopedia and Traveloa grow into behemoths.

Irene believed as Southeast Asia’s internet ecosystem matures, there are actually a lot of opportunities for startups in “upcoming sectors.”

“If you look at the unicorns, you see a lot of younger and smaller companies supporting them,” she said. The point is that giants can’t accomplish everything by themselves, and some of the more niche functions can best be tackled by smaller players with specialized focuses.

On the other hand, the investor believed consolidation is possible — and should happen — in areas that can benefit from scale and network effects.

“People think of Indonesia as one country. We are not. We are the largest archipelago, which means there are very different infrastructures within different provinces. For example, it’s expensive to set up a bank branch in a small island… That means a lot of things need to come into a collective effort and one big ecosystem to offer the consumers with different kinds of offerings.”

Lastly, there’s the inevitable question of COVID-19. Like many investors, Irene saw a silver lining during the dark times.

“Before COVID, it was very difficult to assess the quality of companies. They all had a lot of money and the infrastructure was actually good… Now we suddenly can tell who makes good decisions, who makes it at what speed, and what is the outcome of those decisions. The way entrepreneurs respond to COVID can tell us a lot about their enterprises.”

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Gojek appoints Amazon, Microsoft veteran as its new chief technology officer

Indonesia-based ride-hailing company and “super app” Gojek said today that it has named a new chief technology officer. Severan Rault, who previously held leadership positions at Amazon and Microsoft, takes over the role from Ajey Gore, who announced last month he was leaving for personal reasons.

In a statement, the company said Rault will oversee Gojek’s engineering teams in Southeast Asia and India and report to co-chief executive officer Kevin Aluwi.

Rault has a long history of leading engineering teams at large tech companies, as well as his own startups.

Before joining Gojek, Rault worked at Betawave, a virtual reality studio he founded in 2016. During his stint at Amazon, Rault was one of the founders of Prime Air, the company’s drone delivery program. At Microsoft, he was the principal architect of Bing, the company’s search engine. Rault’s other experience include founding Kikker Interactive, a wireless solutions provider that was acquired by Microsoft in 2008.

Rault’s appointment comes at a critical time for Gojek as it faces competition from rival Grab and deals with the fallout of the COVID-19 pandemic. Last month, Gojek said it was laying off 430 employees, or about 9% of its workforce, and closing GoLife, its lifestyle services division, to focus on its core payments, transportation and food delivery businesses as part of its long-term response to the pandemic.

Founded in 2010 as a motorcycle ride-hailing company, Gojek has since transformed itself into a “super app” that offers online payments and a roster of on-demand services, including transportation, ecommerce deliveries and logistics. Gojek recently added Facebook and PayPal to a list of high-profile investors, including Google and Tencent.

Gojek disclosed in March that it is valued at $10 billion and now has over 170 million users, but it faces fierce rivalry from Grab, another Southeast Asian on-demand ride-hailing and logistics platform that is also building an online financial services business. With a valuation of $14 billion, Grab is the larger company. Earlier this year, reports emerged that the two were discussing a merger, which Gojek denied and Grab declined to comment on.

In statement, Rault said, “It is a time like no other to be at Gojek. The company is entering a critical phase as it moves from startup to maturation and it’s special to be a part of that. Building systems and processes for a business of Gojek’s scale and complexity is a challenge one rarely enjoys in their career and I’m grateful for the opportunity.”

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Facebook and PayPal invest in Southeast Asian ride-hailing giant GoJek

Facebook and PayPal have made investments in GoJek, joining Google and Tencent among other high-profile technology firms that have backed the five-year-old Southeast Asian ride-hailing startup that also offers food delivery and mobile payments.

Facebook, for which it is the first investment in an Indonesia-based firm, and PayPal did not disclose the size of their checks. GoJek told TechCrunch that Facebook and PayPal were participating in its ongoing Series F financing round, which brings it total raise-to-date to over $3 billion.

For Facebook, which in April invested in India’s top telecom operator Reliance Jio Platforms, backing GoJek unlocks a similar opportunity: Helping millions of small businesses — while finding a business model for WhatsApp, an advertisement-free instant messaging service it owns that is used by more than 2 billion users.

Matt Idema, chief operating officer at WhatsApp, said the company will work with “indispensable” GoJek to “bring millions of small businesses and the customers they serve into the largest digital economy in Southeast Asia.”

“The majority of small businesses in Indonesia rely on cash to operate due to the country’s large unbanked population. Digital payments are safer than cash, both for businesses and customers. And digital payments help more people participate in the economy and give businesses access to credit which is crucial for business growth,” he wrote in a blog post.

Indonesia is one of the biggest Asian markets for Facebook. In April, Reuters reported that the social juggernaut was in talks with local fintech firms to launch a mobile payments service in the country. Facebook said today the investment will “support Facebook and Gojek’s shared goal of empowering businesses and driving financial inclusion across the archipelago.”

PayPal, which last year invested in money lender Tala ahead of the startup’s launch in India, said Wednesday’s commercial partnership will enable the global payments giant to “significantly grow” its scope and scale in Southeast Asia.

“This new relationship is another positive step in our journey towards becoming the worldwide payments partner of choice, and helping to fuel global commerce by connecting the world’s leading marketplaces and payment networks,” PayPal said in a statement.

GoJek, which disclosed it had raised $1.2 billion in March to employees and was valued at about $10 billion, said it has amassed over 170 million users in Southeast Asia. The company, which competes with heavily-backed Singapore-headquartered Grab, said at the time that it had raised nearly $3 billion over the years.

“We have the opportunity to achieve something truly unique as we aim to help more businesses to digitise and ensure that many millions more consumers are enjoying the benefits that the digital economy can bring,” said Andre Soelistyo, who was appointed as co-chief executive of GoJek last year, in a statement. Gojek founder Nadiem Makarim resigns his top job at the firm to join Indonesian cabinet in October last year.

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Massive Slowdown In 2020 VC Funding Hasn’t Happened … Yet





When crashes happen, inevitably the startup space gets hit, too. Funding slows, the IPO window closes and investors say no to bankrolling huge losses in the name of growth.
Now that stocks are officially in bear market territory, and measures to curb coronavirus have turned the biggest tech hubs into …

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Indonesia’s Gojek Reportedly Lands $1.2B For Expansion





Ride-hailing startup Gojek raised $1.2 billion, bringing total funding for its Series F round to nearly $3 billion, according to a new report from Bloomberg.
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The company, which is based in Indonesia, provides a wide range of services, from rides to payments to food delivery.
Gojek’s …

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