With Michael Dempsey from CB Insights, we decipher the trends that are shaping venture capital investments across Asia for 2014 and look at the current movement this year. We also discussed the verticals: ecommerce and on demand mobile apps; the major players: Tiger Global, Sequoia and Softbank and the impact of Rocket Internet in the Asia market. Last but not least, Michael provided the perspective of how the investors in US are viewing Asia as an opportunity.
Episode Update: You can read the entire transcript of this episode (and credits to CB Insights) for providing the resources.
Here are the interesting notes and links to the discussion:
- The story of Michael Dempsey @mhdempsey (Research & Data Analytics, CB Insights)
- Venture Capital in Asia
- Given the Asia’s ecommerce industry exploded in 2014, with a total of US$11.5B raised across 367 equity financings last year, what are the trends leading to in 2015 for Asia?
- The total investments for Asia ECommerce by country indicate: China and India (which are large markets with economies of scale), while Singapore, South Korea and Japan are more developed but significantly smaller markets, will these cascade to other markets such as Indonesia or other potential developing markets in Asia (Vietnam, Myanmar, Philippines, Thailand)?
- Which are the top firms dominating the deals (Tiger Global, Sequoia and Softbank) and what are the essential differences that set them apart, probably the kind of rounds they are engaged in, the deal size or type of companies which they invest in?
- Will more private equity firms, investment banks (Goldman Sachs) or institutional investors coming in to the market?
- Is Rocket Internet a house of cards? Will they lead to a market correction if investors start losing confidence?
- As you look at this data, do you notice that the companies are beginning to be over-valued? Is one reason for the overload of venture capital comes from Rocket Internet’s attack on all these markets (excluding China)?
- With so much unicorns coming out in Asia, the probability for exit via M&A will be far lesser, will we see a lot more companies going IPO in the next few years, which is similar to what happened in 1999 or the risks are mitigated by private exchanges such as SecondMarket, where the companies can be kept private for a while with liquidity for founders and employees from investors wanting to buy in?
- What are the most interesting observations in this year 2015 for the first half of the year?
- Does it foreshadow any new trends entering the Asia market?
- What is the most exciting thing about the Asia market that US based investors most look out for?
- References (from CB Insights):
- Why Asian ECommerce is the hottest industry in the world.
- Asian eCommerce Startups are hot – 10 $100M rounds in 2015 already.
- The Number of VCs investing in India hits 4 year high
- Asia’s hottest series A & B tech startups
- India Tech Startups Attracting More than VCs. Hedge Funds, Mutual Funds & Other Crossover Investors Jumping In.
- Delivering India by Michael Dempsey on Slideshare