SEA Venture Discovering the opportunity in a fragmented market @jungleventures 1
Jungle Ventures Who We Are Singapore-based venture firm investing in consumer internet category leaders in Southeast Asia and selective enterprise tech companies from Asia 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 @jungleventures 2
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 social media is growing at rates 50% higher than global average Majority young internet population spending > 6 hours online, daily SEA countries Median 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 Source : Google-Temasek e-conomy SEA report & Wearesocial 2017 Digital in Asia : SouthEast Asia @jungleventures 3
With A Projected US$200bil Online Opportunity by 2025! Source : Google-Temasek e-conomy SEA report @jungleventures 4
However, Despite Headline Numbers, General Perception Remains That SEA is.. Highly fragmented market Collection of dissimilar emerging countries Under developed tech and venture ecosystem Not big enough to support large exit/ IPO outcomes @jungleventures 5
Looking closely at the Top 10 metros in SEA @jungleventures 6
Respective SEA metro cities alone make up >20% of country GDPs. GDP/capita are ~2x higher than country average 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) Average GDP / capita (USD) 861.9 395.2 296.3 292.7 193.6 292.5 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 @jungleventures 7
Customers in metros demonstrate homogenous consumer behaviour Infrastructure solutions are available today via regional / global service providers Online media and Social networks Digital Products & Services Delivery and fulfilment options Digital Marketing & Advertising Aspirational brands Spending Power (as represented by GDP per capita) Bangkok $12,251 Jakarta $7,207 Delhi $3,580 Manila $4,763 Ho Chi Minh $5,100 Payment Networks Cloud / Computing / Platform @jungleventures 8
Takeaway #1 Combined, Top 10 Metros of SEA is a ~100mn, homogenous market with projected US$50+B potential for online consumption ** ** ** Jungle Portfolio Company @jungleventures 9
Looking closely at Indonesia s middle market @jungleventures 10
mil Indonesian middle & affluent consumers (MAC) projected to be >50% of population by 2020, with majority increase coming from outside Jakarta 300 2012 : 74mil 2016 : 108mil 2020 : 141mil 250 200 150 100 50 0 3 5 7 7 12 17 23 36 49 42 44 65 65 55 47 57 46 68 51 48 28 2012 2016 2020 Today, 50+mn MAC consumers are outside Jakarta, expected to double over this decade Poor Aspirant Emerging Middle Middle Upper middle Affluent Elite 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 >$150 @jungleventures 11
Social network (90%+) and IM (50%+) usage is already high amongst both urban and rural populations who are online 91%+ online users are active on social networks and 50%+ use IM apps Implying substantial time spent and comfort with usage Online shoppers as % of total online population more than doubled in just 2014-15 Implying ecommerce is growing fast but still comprises ~30% of online population Source: Credit Suisse Indonesia Consumer Survey 2016 @jungleventures 12
Takeaway #2 Indonesia s growing MAC is a large homogenous market with significant online potential over the next decade for start-ups to dominate ** ** ** Jungle Portfolio Company @jungleventures 13
Investors and startups need to deeply evaluate what they are building / funding, and accordingly, plan to go wider and / or deeper in new markets Consumption-based Target the metro cities initially, build brand and go deeper with each customer s spend An ideal business at scale has presence in 5+ large metros and with 0.5m+ shoppers in each metro spending 100$+ per year on the platform sees net revenues of $250m+ with high gross margins of 30%+ Network-based Target large populations/ user bases and go broad with what you can layer on as services An ideal business at scale has user sets of 50m+ users spending 40$+ per year resulting in $2b+ in revenues/ GMV but with thinner gross margins (net take rate) of ~3-5% @jungleventures 14
Thank you @jungleventures 15
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