02 | A Moat, Not a Bridgehead - Grabjek or GroGrab?

Welcome to Growjek #2! There are now 121 of you signed up, so thanks for your interest.

Every other week we (this is the royal ‘we’ of course, as it’s only actually ‘me’!) cover ASEAN tech, digital, startups, VC, internet, fintech, gaming, e-commerce and lots of other stuff related to the ‘new economy’, with a focus on Indonesia.

If you have content or a story you think is a good fit for the newsletter, just let me know — I’m more than happy to help. You can email me on growjek@substack.com.

And on the subject of ‘stories’, I encountered a brilliant aphorism this week, which feels especially pertinent in the crazy world of 2020. ‘What is truer than truth? Stories.’

So let’s get straight into it — enjoy the stories. Tom

INDONESIA

Investor lore says you can’t win in ASEAN without winning Indonesia (and it’s definitely difficult to lose once you have it), but you also can’t win in ASEAN just by winning Indonesia. It’s more of a moat than a bridgehead. That’s the stalemate situation facing Grojek and Grab, leading to increasing talks of a merger. But even if Grab and Gojek decided to put rivalries aside and merge, could they? Softbank’s Son probably hopes so. link

Meanwhile, reports on Indonesian state-owned telco Telkom Group becoming an investor in Gojek continue to circulate. Allegedly, Telkomsel is set to invest US$150 million and the process is close to being finalised. link

Gojek owned OTT Goplay banks on external investors to make it big in Indonesia’s hotting up video streaming market. link

According to CB Insights, the five most valuable unicorns in Indonesia include Gojek, travel tech firm Traveloka, digital payment wallet Ovo, and e-commerce platforms Tokopedia and Bukalapak. link

Handily, Traveloka is looking to reach profitability soon amid signs of a pandemic bounceback recovery. link

And Bukalapak is aiming at Indonesia’s Tier 2 cities to drive growth. link

IMF data shows Indonesia is still the largest economy in ASEAN, as Vietnam moves from 6th to 4th spot, leapfrogging Malaysia and Singapore. link

However, absent improvements in regulation and licensing, the breakneck growth in Indonesia’s digital economy will soon reach its limits. link

Which is why some of the current economic and workplace reforms are worrying outside observers. President Joko Widodo is cutting red tape but also undermining institutions. link

More reports around Tesla’s plans to build a facility for making batteries in Indonesia. Indonesia has banned exporting Nickel which could be one of the reasons why Tesla is now keen to invest in the country. link

Gaming growth as Indonesia’s Evos Esports secures US$12 million in series B funding. link

In the US, only 20% of gamers have a subscription of some sort, while gamers in Indonesia are more than twice as likely to have one. link

Indonesia and France team up to develop the gaming industry. link

AC Ventures announces the first close of its US$80 million fund for Indonesian startups. link

iSeed SEA launches a micro-fund targeting Indonesia, Vietnam, Thailand. They plan 20-30 deals in total, with an average cheque size of US$100 thousand. link

Despite the above, it’s apparently the 'End of the Unicorn Era' as Indonesian start-ups struggle to secure growth funding. link

Indonesia and Japan have launched an e-commerce website in service of storing trade data and better supporting the two countries’ investors. link

Coca Cola Amatil has set up a corporate venture capital platform, Amatil X, to partner with Indonesian start-ups and foster business growth opportunities. link

Indian foodtech giant Zomato pulls the plug on its operations in Indonesia. link

Indonesia’s Social Bella expands to Vietnam — its first international market. link

OTHER ASEAN

Legendary boxer Manny Pacquiao is launching his own payments platform for social media influencers, brands and fans. Punchy. link

Positive to see overall the number of women in tech in Southeast Asia beats the global average. link

Meanwhile, in Vietnam as many as 1 in 3 businesses are managed by women. However, few women have successfully participated in establishing companies and raising capital in the start-up sector, especially with technology start-ups. link

Huge story with global relevance as Apple’s shifting supply chain creates boomtowns in rural Vietnam. link (Pertinent timing here to add that the US finally started getting serious on #bigtech with an antitrust lawsuit against Google.)

Today the internet consists of two dominant kingdoms: an American (OK, Californian) internet, and a Chinese one. And SEA sits somewhere in the middle. link

Southeast Asia is clearly China’s '+1' strategy these days, so this whole ‘multi-internet’ could get interesting. Chinese companies find the region an appealing alternative to compensate for their loss in market growth elsewhere. link

TikTok’s popularity in the region, coupled with bans in the US, India, HK means that Southeast Asia might be ByteDance’s focus for the foreseeable future. link

More views on this as Tech in Asia says China is reaping Southeast Asia’s internet harvest. link

Huawei cloud may just be the future of mobile gaming in Southeast Asia. link (And here’s one of the best articles you’ll read all year on why cloud gaming is still a LONG way away.)

Riot Games have announced their 2021 plans for Valorant in Southeast Asia. The company is partnering with seven different companies in an attempt to organise an official competitive structure across SEA, Hong Kong, and Taiwan. link

Alibaba formally enters the gaming business. They’ve been dabbling for a while. link

Singapore-based fintech startup Fincy is pulling out of a new Myanmar border city, amid allegations that it is being used to prevent law enforcement from tracking financial transactions in the city. link

Impossible Foods started selling their faux beef burgers in Hong Kong and Singapore grocery stores this week before entering the potentially lucrative mainland China market. link

Pandemic-driven changes are easy to see in recent Southeast Asia online-purchase data. link (Worth noting the 90s is back everywhere as stuff, not experiences, has been making a comeback during Covid.)

Earlier this month, Kickstart Ventures, one of the first venture capital firms to be founded in the Philippines, announced that the ACTIVE fund of its parent Ayala Corp closed at US$180 million. That was 20% more than the initially planned US$150 million and is said to be the largest VC fund to be raised in the Philippines. link

Taxmantra launched a US$100 million fund to invest in Southeast Asian tech startups. link

Blueprint Forest from Thailand is injecting US$120 million into a new fund, 9 Basil, that will invest in South-east Asian enterprises and distressed assets. link

Mediaload, a Cambodia-based digital media company, has secured an undisclosed sum in a Series A funding round from True Digital Group in Thailand. link