avcj jakarta venture outlook : opportunities in sea · source : google-temasek e-conomy sea report...
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SEA VentureDiscovering the opportunity in a fragmented market
2@jungleventures
Jungle Ventures – Who We Are
Team
15 Investing & Operating professionals with
decades of experience at firms such as
Limited Partners
AUM of US$110m with top tier limited partners such as
Partners & Advisors
Stellar advisory board including Mr Ratan Tata, Chairman
Emeritus of the Tata Group, India
Track Record
Over 30 investments, 4 exits in 4 years at 3.64X & ~215% IRR, <1%
loss of capital
Singapore-based venture firm investing in consumer internet category leaders in
Southeast Asia and selective enterprise tech companies from Asia
3Source : Google-Temasek e-conomy SEA report & Wearesocial – 2017
Digital in Asia : SouthEast Asia
SEA is the Fastest Growing Internet Market In The
World
Projected to reach ½ billion internet users in 2020; +3.8m online users monthly
SEA countriesMedian age (yrs)
Internet users as % of population
Avg time spent on online daily
Thailand 37.2 67% 8 hr 49m
Indonesia 29.9 51% 8 hr 44m
Malaysia 28.2 71% 8 hr 31m
Singapore 34.3 82% 6 hr 41m
Vietnam 30.1 53% 6 hr 53m
Philippines 23.4 58% 9hrs
SEA social media is growing at rates 50% higher than global average Majority young internet population spending > 6 hours online, daily
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Source : Google-Temasek e-conomy SEA report
…With A Projected US$200bil Online Opportunity by
2025!
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Highly fragmented market
Collection of dissimilar “emerging” countries
Under developed tech and venture ecosystem
Not big enough to support large exit/ IPO outcomes
However, Despite Headline Numbers, General Perception
Remains That SEA is..
Looking closely at the Top 10 metros in SEA
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SEA Country ID TH MY SG VN PH
Population (mn) 262.0 68.2 30.9 5.7 94.9 103.0
Country nominal GDP (USD mn)
861.9 395.2 296.3 292.7 193.6 292.5
Average GDP / capita (USD)
3,290 5,792 9,570 51,000 2,039 2,840
Metro cities Jakarta Bangkok Kuala Lumpur Singapore Ho Chi Minh Manila
Population (mn) 32.2 15.6 6.1 5.7 8.2 12.9
% of total population 12% 23% 20% 100% 9% 13%
Nominal GDP (USD) 232.1 191.1 132.7 292.7 41.9 61.9
% to country GDP 27% 48% 45% 100% 22% 21%
GDP / capita (USD) 7,207 12,251 21,750 51,000 5,100 4,763
No of times average GDP/capita
2.19x 2.11x 2.61x 1.0x 2.50x 1.6x
Source : Brookings Institution; Worldbank; Wearesocial – 2017 Digital in Asia : SouthEast Asia; Wikpedia; NESDB Thailand; National Statistical
Coordination Board Philippines; Statistics Office of Vietnam; DOSM
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Respective SEA metro cities alone make up >20% of country
GDPs. GDP/capita are ~2x higher than country average
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Customers in metros demonstrate
homogenous consumer behaviour
Online media and Social networks
Ho Chi Minh$5,100
Delhi$3,580
Aspirational brands
Digital Products & Services
Bangkok$12,251
Jakarta$7,207
Manila$4,763
Spending Power (as represented by GDP
per capita)
Delivery and fulfilment options
Payment Networks
Digital Marketing & Advertising
Cloud / Computing / Platform
Infrastructure solutions are available today
via regional / global service providers
Takeaway #1
Combined, Top 10 Metros of SEA is a ~100mn, homogenous market with projected US$50+B potential for online consumption
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** Jungle Portfolio Company
**
**
Looking closely at Indonesia’s middle market
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6546 28
65
57
48
44
47
51
4255
68
23 36 49
7 12 173 5 7
0
50
100
150
200
250
300
2012 2016 2020
mil
Poor Aspirant Emerging Middle
Middle Upper middle Affluent
Elite
2012 : 74mil 2016 : 108mil 2020 : 141mil
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Source: BCG Population and Household Expenditure Report 2012
*MAC is defined as basic household monthly expenses (only includes expenses i.e. food, utilities, transport, communication, excludes discretionary spending) of
over >$150
Indonesian middle & affluent consumers (MAC) projected to be >50% of
population by 2020, with majority increase coming from outside Jakarta
Today, 50+mn MAC consumers are outside Jakarta, expected to double over this decade
Online shoppers as % of total
online population more than
doubled in just 2014-15
Implying ecommerce is growing
fast but still comprises ~30% of
online population
91%+ online users are active on
social networks and 50%+ use
IM apps
Implying substantial time spent
and comfort with usage
Source: Credit Suisse Indonesia Consumer Survey 2016
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Social network (90%+) and IM (50%+) usage is already high amongst both
urban and rural populations who are online
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Takeaway #2
Indonesia’s growing MAC is a large homogenous market with significant online potential over the next decade for start-ups to
dominate
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** Jungle Portfolio Company
**
Network-based
Target large populations/ user bases and go broad with what you can layer on as services
An ideal business at scale has user sets of 50m+ users spending 40$+ per year resulting in $2b+ in revenues/ GMV but with thinner gross margins
(net take rate) of ~3-5%
Consumption-based
Target the metro cities initially, build brand and go deeper with each customer’s spend
An ideal business at scale has presence in 5+ large metros and with 0.5m+ shoppers in each metro
spending 100$+ per year on the platform sees net revenues of $250m+ with high gross margins of
30%+
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Investors and startups need to deeply evaluate what they are building /
funding, and accordingly, plan to go wider and / or deeper in new markets
Thank you
@jungleventures 15
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