2. 2
6XXXX
Douglas Abrams
About the facilitator
• Wharton MBA
• JP Morgan – Vice President
IB Technology, GM Internet Marketing
• Parallax Capital Mgmt – Co-founder and MD
Private Equity
• Extream Ventures – Co-founder and MD
S$20 million seed fund
• Expara – Founder and MD
IDM Ventures Incubator, advisory, training
• NUS – Adjunct Associate Professor, Business
School, Entrepreneurship, Sasin – Visiting
Professor, Venture Capital
3. 3
6XXXX
Douglas Abrams
Expara timeline 2000-2015
3Overview of Expara
2000 20152000 2002 2004 2006 2008 2010 2012 2014
NUS
Expara
EIDMV I
Extream EIDMV II EV III
Parallax
BANSEA
KIMBA
Sasin
Expara Thailand
Expara Malaysia
Expara
Vietnam
Expara
Japan
4. 4
6XXXX
Douglas Abrams
Sasin Masterclass - Venture Capital in SEA
• Venture Capital why and how?
• SEA VC at the inflection point
• Trends in SEA VC
• Trends in Thailand VC
5. 5
6XXXX
Douglas Abrams
VC mindset
• Risk and return are highly correlated
• You cannot increase return without taking more risk
Return
Risk
Potential outcomes
6. 6
6XXXX
Douglas Abrams
Why invest in venture capital?
As of 31-Dec 2014 The Cambridge Associates LLC U.S. Venture Capital Index® is an end-to-end calculation based on data compiled from 1,569 U.S. venture capital funds (1,002
early stage, 175 late & expansion stage, 386 multi-stage and 6 venture debt funds), including fully liquidated partnerships, formed between 1981 and 2014.
1Pooled end-to-end return, net of fees, expenses, and carried interest. Sources: Cambridge Associates LLC, Barclays, Dow Jones Indexes, Frank Russell Company, Standard &
Poor's, Thomson Reuters Datastream, and Wilshire Associates, Inc. *Capital change only
Case Shiller Real Estate Index 4.1
Expara IDM Ventures (2) 47.05
7. 7
6XXXX
Douglas Abrams
Impact of VC on a diversified portfolio
Private Equity and Strategic Asset Allocation. 2007 Ibbotson Associates
9. 9
6XXXX
Douglas Abrams
GVMs for all first-round investments
10 years after investment. Data from Sand Hill Road Econometrics. Companies received first financing before 1 January 1999. First non-seed
round investment. Returns are gross - before fees and carry
10. 10
6XXXX
Douglas Abrams
VC process - stages and sources of funds
Founder’s
Capital
Seed/
Angel
Series
A, B, C
Mezzanine Pre-Exit Exit
VC hurdle rates 60-100% 40-60% 20%
OM
F,F&F
Incubators
corporations
government
Customers, suppliers,
strategic partners
VCs, Banks for VC loans
R&D Establishment GTM/Rollout Accelerated Expansion Maturity
Enablement growth
11. 11
6XXXX
Douglas Abrams
How do VCs make money?
• Trade sale – sell to
another company
• IPO – sell to the
public through listing
on an exchange
13. 13
6XXXX
Douglas Abrams
Sasin Masterclass - Venture Capital in SEA
• Venture Capital why and how?
• SEA VC at the inflection point
• Trends in SEA VC
• Trends in Thailand VC
14. 14
6XXXX
Douglas Abrams
SEA exit markets at an inflection point
Exit activity in SEA, especially in Singapore, has exploded
• Increased investment in startups since 2007 is beginning to yield results
• Value of exits increased from 51 MM in 2010 to 1.2 B in 2014
15. 15
6XXXX
Douglas Abrams
Some recent SEA exits
Company Country Acquiror Price Year
ZopIM Singapore Zendesk US$29.8MM 2014
Non-Stop Games Singapore King US$ 100MM 2014
ERIIN Singapore Shopdeca Undisclosed 2014
Indiescapes Singapore BeMyGuest Undisclosed 2014
Webfluenz Singapore Mu Sigma Undisclosed 2014
Fimela Network Indonesia KapanLagi Group Undisclosed 2014
PriceArea Indonesia Yello Mobile Undisclosed 2014
DapurMasak Indonesia Cookpad US$0.6M 2014
Maxitech Indonesia Corous360 US$3.35 million 2014
JobStreet Malaysia Seek US$671.15 million 2014
Anino Games Philippines Pocket PlayLab Undisclosed 2014
Sulit.com.ph Philippines OLX undisclosed 2014
MOL Malaysia IPO US$169MM 2014
sgCarMart Singapore SPH S$60 MM 2013
DS3 Singapore Gemalto S$50 MM est. 2013
Asian Food Channel Singapore Scripps Networks Undisclosed 2013
I Love Discounts Malaysia Dealmates undisclosed 2013
Reebonz Singapore MediaCorp and Existing investors S$250MM 2013
Yfind Singapore Ruckus Wireless Undisclosed 2013
Techsailor Singapore TO THE NEW Undisclosed 2013
travelmob Singapore HomeAway Undisclosed 2013
Catcha Digital Media Singapore Opt Inc Undisclosed 2013
GridBlaze Singapore Undisclosed Silicon Valley Startup Undisclosed 2013
Viki Singapore Rakuten US$200MM 2013
SGE Singapore Tech In Asia Undisclosed 2013
AyoPay Indonesia MOL AccessPortal Undisclosed 2013
Eevent Indonesia EnvisionPoint Undisclosed 2013
EK Media Singapore SingPost US$1.2 million 2013
Tongue in Chic Malaysia PopDigital Undisclosed 2013
Ocision Malaysia Star Publication 13.5MM RMB 2013
PaymentLink Singapore Wirecard US$41.2MM 2013
Dealguru Singapore iBuy S$34.28 MM 2013
Dealmates Malaysia iBuy S$10 MM 2013
Fisheye Analytics Singapore Kantar Media US$0.622 2013
Says Malaysia Catcha Media Berhad 24MM RMB 2013
16. 16
6XXXX
Douglas Abrams
SEA seed stage dealflow pipeline is full
S$90MM invested in Singapore seed stage in 2013 alone
Deals Amt (USD MM) Population GDP (USD B)
Total SG 264 71.8 5.312 274
Total US 908 361.4 314 15000
SG / US 29% 20% 1.7% 1.8%
[1] Crunchbase Jan 2014, Wall Street Journal Feb 2014
17. 17
6XXXX
Douglas Abrams
Participants in enterprise ecosystems
Enterprise
ecosystem
RIs
IHLs
Entre
Govt
Accel
Incub
Angels
VCs
Mentors
Industry
Capital
markets
19. 19
6XXXX
Douglas Abrams
Sasin Masterclass - Venture Capital in SEA
• Venture Capital why and how?
• SEA VC at the inflection point
• Trends in SEA VC
• Trends in Thailand VC
20. 20
6XXXX
Douglas Abrams
US VCs enter SEA
• Sequoia Capital (Southeast Asia) with $960M
for India & Southeast Asia
• 500 Startups – 500 Durians for Southeast Asia
(US$26M)
• 500 TukTuks for Thailand (US$12M)
• 500 Vietnam for Vietnam (US$10M)
21. 21
6XXXX
Douglas Abrams
Rise of Series A and B VC funds
• Golden Gate Ventures
• Jungle Ventures
• Rakuten Ventures
• Monk’s Hill Ventures
• Venturra Capital
• B Capital Group
22. 22
6XXXX
Douglas Abrams
SEA unicorns
• Garena (Singapore) – US$140MM at $4B
• Grab (Singapore) – US$ 750MM at $1.43B
• Lazada (Singapore) - US$1B – controlling
stake to Alibaba
• Razer (US/Singapore) – US$75MM at $1B
• Go-Jek (Indonesia) – US $550 MM at $1.3B
23. 23
6XXXX
Douglas Abrams
Sasin Masterclass - Venture Capital in SEA
• Venture Capital why and how?
• SEA VC at the inflection point
• Trends in SEA VC
• Trends in Thailand VC
24. 24
6XXXX
Douglas Abrams
Thailand public sector support
• Thai government announced major initiatives to fuel the growth of
the enterprise ecosystem in Thailand
• US$570 MM venture fund for start-ups and venture capital funds
• Regulatory reform for VC funds, including the waiting of dividend
and income tax on VC funds
• Industry sectors include: next-generation cars, smart-electronics;
affluent, medical and wellness tourism, agriculture and
biotechnology, food, industrial robotics, logistics and aviation,
biofuels and bio-chemicals, digital, and medical services
26. 26
6XXXX
Douglas Abrams
Growth of VC funds in Thailand
• Ardent Capital
• 500 Startups
• Inspire Ventures
• Galaxy Ventures
• Invent
• Expara Ventures
• DMP
• Red Dot
• Golden Gate
• East Ventures
• CyberAgent
27. 27
6XXXX
Douglas Abrams
Thai banks enter the VC space
• SCB – Digital Ventures
• SME Bank – VC fund
• Kbank – Corporate VC fund
• Bangkok Bank – Corporate VC fund
28. 28
6XXXX
Douglas Abrams
Crowdfunding VC – equity crowdfunding in SEA
• May 2015 - Equity crowdfunding launched in Thailand
• Restrictions: total amount raised up to US$600K; each
investment limited to US$1,500
• June 2015 - Malaysia SEC approved six equity
crowdfunding sites
• Singapore – equity crowdfunding regulatory review
underway
29. 29
6XXXX
Douglas Abrams
Is VC in SEA overly government driven?
• The US federal government alone invests as much in small
businesses as total VC investment through SBA/SBIR
• Federal contracts to small businesses dwarf total VC investment
• Start-ups are also funded at state and local levels
• Both US and Singapore invest about 1% of GDP into programs
supporting start-ups and small businesses
30. 30
6XXXX
Douglas Abrams
Why is VC in SEA at an inflection point now?
Historical challenges
• Exits
• Enterprise ecosystem
• Innovation
• Legal and corporate
governance
• Cultural attitudes
Mitigation
• Early stage valuations allow
profitable local exits; regional
focus allows larger exits
• Regional bridge and expertise
in building local network
• Focus on innovative segments
– new and traditional
• Changing environment
• Channeling entrepreneurial
energy to scalability
31. 31
6XXXX
Douglas Abrams
Contact us
• Douglas Abrams
• Expara
– dka@expara.com
– www.expara.com
• Block 71 Ayer Rajah Crescent
• #02-10/11 S139951
• 65-9780-5381
32. 32
6XXXX
Douglas Abrams
Key elements of a venture deal
• Board of directors
• Protective provisions
• Drag-along agreement
• Conversion
Control
• Price-per-share
• Valuation
• Amount of financing
• Liquidation preference
• Vesting
• Options pool
• Anti-dilution
• Pay-to-play
Economics