If you are one of my followers at Twitter, you should note I’m a big believer of the Southeast region. I’m always reading and looking for interesting news from this group of countries. One of the numbers that have impressed me is the accelerated growth of Mobile subscriptions. This area has an amazing potential to grow almost every industry which could take advantage from Mobile devices, apps and its related ecosystem. All these trends are being heard and used by entrepreneurs and investors, and everyday we hear a new Venture Capital deal from well known investments firms. So, I want to start a new section in the blog called: SEA Thoughts, where I will expose interesting news related to Mobile, Cloud and Big Data Analytics sectors in Southeast Asia, and this is my first post focusing in one of my favorite sectors: Mobile.
Mobile is exploding in SEA
For more than 3 years right now, I’ve studied, researched and seen the impact of Mobile in several industries like Retail, e-commerce, Telecoms, Social Media, Advertising; and every time I read an article, a paper related to this topic, I’m particular excited for the bright future of Southeast Asia.
In March 30th, I was reading an article at TechCrunch, written by Kevin Spain (@kevinspain), who is a General Partner at Emergence Capital Partners. The post is called “The Next Billion-Dollar Market Opportunity Is Mobile Enterprise”, and two sentences could highlight what I’m thinking about the region:
There are more than 3 billion people globally who work in some capacity. Yet only 20 percent of them have ever had access to technology to help them perform their jobs more effectively. That leaves 2.5 billion workers not being supported by technology today. Some of them are in industries like construction, an $8 trillion a year space that spends less than 1 percent of its revenue on IT. Others are in manufacturing, the world’s fourth-largest industry with 40 million workers globally — it spends less than 2 percent of revenue on IT.A significant portion of those 2 billion-plus workers without technology are in the developing world, with 50 percent in Asia-Pacific, 10 percent in Latin America and another 10 percent in the Middle East and Africa. This global opportunity is enormous, and mobile technology is uniquely poised to capitalize on this market as the heavy infrastructure improvements necessary for hard-wired solutions are expensive and time consuming to deploy.
Read it again my friend: 50 percent in Asia Pacific. This is a huge opportunity there. But, there is more. Kevin put a simple formula to understand why this could be huge:
2.5 Billion workers X 40 USD per year = 100+ Billion of revenue
Like Kevin; there are a lot of interested people to invest in Mobile-First companies, because they understand the potential it represents. Even, he gave some ideas how to create more opportunities in industries like construction, surveying, delivery, transportation, healthcare, etc. Particularly, in healthcare, it could come a revolutionary shift with the announcement in March of ResearchKit by Apple. The company is working very hard to grow its services in APAC, and particularly China; and with the size of the Chinese population; ResearchKit could bring a lot of opportunities to this space.
I will give just three examples:
- Imagine the impact could bring an iOS based app optimized for iPad to measure the pollution of certain region, and create a straight correlation with respiratory deceases. But there’s more, using geolocalization technologies, could create accurate maps with the most critical areas where the goverbment could use them for medical resources optimization
- Or in developing countries like Philipinas and Thailand, where there are a lot of zones with contanimnated water; think in a iOS app that could measure the grade of this contamination and using mapping technologies and predictive analytics could create accurate predictions about how this could expand to other areas. The same app could be used for educational purposes to teach to people from these areas to identify this kind of water and make a strong community work with it
- Or imagine a company like Theranos taking advantage of this to expand its singular business. They developed a method to draw and test a small amount of blood through a single pinprick to a finger instead of filling vials of blood from a more invasive needle stick in the arm.
Mobile facts and stats
But you should be wondering why I’m interested in APAC and Southeast Asia region. If you read my article about Mobile Advertising in APAC, you will understand this. But, to support my thoughts; I will put some facts here related to Mobile tech in this region:
Mobile subscribers in Southeast Asia has 11 percentInternet penetration in Southeast Asia is 25 percent
Mobile penetration in Southeast Asia is 109 percent
Mobile broadband in Southeast Asia is 18 percent
Mobile broadband subscriptions in Southeast Asia is 112 M percent
Mobile penetration by country: Singapore (148 percent), Thailand (125 percent), Japan (109 percent), Indonesia (112 percent), India (73 percent), UAE (252 percent), China (89 percent), Australia (110 percent)
So, you can see why more and more companies are embracing Mobile technologies and want to test it in the region, for the large quantity of Mobile subscribers. But if we analyze deeply certain countries, the results are more shocking. For example, I was reading a report from OnDevice Research called “The Philippines mobile internet crowd: young, affluent, and growing fast” where they described how the country is growing to an accelerated rate in Mobile Internet penetration. Two of the most surprising stats are:
- Very young internet users: 88% of the total mobile internet population is 34 or younger
- Facebook Messenger dominates the chat app market with 82% using it
The report was released in July 2014, saying that Samsung was the dominant brand there, but right now Cherry Mobile is the leader in the country. Judith Balea, a writer from Tech in Asia, wrote a post describing how Philipinas is now the 3rd largest smartphone market in Southeast Asia, just behind Indonesia and Thailand. And with the good news from Facebook’s F8, to become Messenger in a platform for third parties, Philipinas could play a key role here, because 94 percent of Internet users use Facebook in the country, 82 percent use Messenger for chat and Filipino social media users spend 4 hours a day in all social media channels making them the most engaged in the APAC region.
But there is even more things. Steven Millward, from Tech in Asia, talked with Oliver Lo, EVP of Marketing at App Annie, about the new office that they opened in Singapore, after their Series D founding, and this was his response:
“India is now, according to our data, the fifth largest country by downloads across iOS and Google Play. Southeast Asia — they’re growing fast; their app revenues year-over-year grew 77 percent from January 2014 to 2015. Indonesia and Vietnam are now the fastest-growing nations in Asia in terms of how much app developers can make from smartphone users.
All this is in synergy with the last research paper from Juniper Research, where they said that App Revenues from apps accessed via mobile handsets and tablets are expected to reach $99 Billion by 2019. If you want to read more facts, I shared some stats in my post about DataStax.
Venture Capital for Mobile-First companies is growing every day
Like I said, Kevin Spain from Emergence Capital is just one of the interested people to invest in companies focused on Mobile technologies: Accel Partners just dedicated an amount of $305 Million to the Indian startup ecosystem; 500 Startups created 500 Mobile Collective, a $10 Million USD micro-fund focused on Mobile, and with the crew called 500 Durians, which is the Asian arm of 500 Startups, managed by Khailee Ng (Managing Partner at 500 Startups for APAC region), they are very interested in investing in this kind of companies; GGV Capital and Softbank were just two of the backers of Anthony Tan’s GrabTaxi, the Malaysia-based company, part of the Billion Dollar Startup Club, which is a direct competitor to Uber. But there is an organization doing something different: Catcha Group and I will tell you why.
This group, managed by Patrick Grove, is well known in the entire APAC region for their calculated bets with huge dividends; and I think they are in an unique position to dominate the investments in this sector. But, there is more: they sponsor a tech event called WILD DIGITAL, to be celebrated in July 1st and 2nd in Kuala Lumpur. The description of the event is:
WILD DIGITAL is Southeast Asia’s premier digital conference. Focusing on established regional online and mobile businesses, WILD DIGITAL’s fast-paced format is the ideal environment to learn about the region’s digital landscape and network with key players.
The theme of the conference is: “Building Billion Dollar Digital Companies in Southeast Asia”
Catcha Group has its roots in Malaysia, so this is a strong starting point to launch a global focused Mobile venture; and with the resources and connections of the group, every entrepreneur working with them could see a lot of benefits. So, if you have a killer idea for a Mobile app, you should consider to take a pitch with them, precisely right now they created Catcha Ventures, a new division ready to invest US$50–100 Million in high growth new media, technology and Mobile companies in the region. Like the press release said, they are interested to help to companies in “growth phase”:
The challenges faced by companies in their growth phase are inherently different from those encountered by start-ups. These new issues often include rapid revenue and customer growth, establishing and scaling management and technology systems, dealing with competition and regional expansion. Catcha Ventures will deploy a unique mentorship program, underpinned by Catcha Group’s network of seasoned digital CEOs and executives, allowing entrepreneurs to leverage off and learn from Catcha Group’s management leaders.
Catcha Group is not the only one interested to invest in Mobile-First companies
There are a lot of good investment firms interested to put money in this kind of companies. I will let you a completed list of the VC firms and related partners which have a marked interest in Mobile:
- Emergence Capital Partners: Kevin Spain and Gordon Ritter.They are in a very good moment right now, because recently, they raised their fourth found of $335 Million, and they are very interested in this sector.
- Accel Partners: Sameer Gandhi
- GGV Capital: Hans Tung and Jenny Lee
- Sequoia Capital: Steven Ji, Alfred Lin and Anandamoy Roychowdhary
So, Mobile tech is exploding in the APAC region, particularly in Southeast Asia; so Venture Capital deals are becoming hot in these countries. You can read all the examples in several portal news like e27 and Tech in Asia, so, again, if you are an entrepreneur with an interesting idea using Mobile technologies, consider to plant your roots in the SEA region, and try to discuss your business plan with investments firms like Softbank, Sequoia Capital and the interesting Catcha Group, which, from my perspective, is in an enviable position in the region for their expertise creating successful companies there. Thanks for reading and I’m finishing with
“In Mobile, We Trust”