Investor Spotlight: Arya Masagung of Gobi Partners

Empowering Future Disruptors of the SEA Region

By Michaela Villaroman

The boom of the SEA startup ecosystem can be observed over the past years. According to KrAsia’s 2018 report, the region currently has “600 million people, eight unicorns, and 66 exits with an additional 121 forecasted to happen.” From these numbers alone, it is apparent that the ecosystem will only continue to shape up even better in the near future. And for both entrepreneurs and investors, this means the region will keep brimming with numerous possibilities.

China in particular has been leading the startup industry of SEA. Home to numerous tech giants like Alibaba and Tencent, China is a major source of capital flowing into the region. Back when it was just getting started though, it took a number of visionaries to get the ball rolling. And among the few pioneer venture capitalists to enter the Chinese market was Gobi Partners.

Pioneers of the Chinese startup ecosystem

Gobi Partners Venture Partner Arya Masagung shared more about the VC’s history, “15 years ago, there wasn’t much activity in China. There was no VC - in fact, the term VC itself was still brand new at the time. It had to take a visionary to see that the next emerging market would be China. And that’s why Gobi Partners started in China years ago”

Taking from their success in China, Gobi Partners eventually recognized that venturing into the SEA region should be their next priority. As one of the trailblazers of the Chinese startup ecosystem, Gobi Partners hopes to contribute to the next emerging markets as well.

Gobi Partners currently manages a number of funds across Asia. With nine offices set up across the region, the firm is able to keep an eye out for promising ventures in China, Hong Kong, Indonesia, Malaysia, the Philippines, Singapore and Thailand. Their current portfolio covers over 200 companies in all stages around the region with investment sizes ranging from 100,000 - 20M USD.

“The conditions now are a bit different. The capital is getting bigger and the deals are getting bigger especially around SEA,” Arya said.

Banking on the SEA region

“In SEA, every single country is a unique market, and although a lot of people tend to think of SEA as a region sharing common trends, it is not exactly the case,” Arya explained, “In a way, it is true, but not entirely.”

Gobi Partners recognizes that though the promise of opportunities in the region is predicted to pan out well, there remains the importance of understanding the industries and markets that they enter.

“For example, the Philippines is completely different from Indonesia,” Arya said, “In the Philippines, remittance and FinTech are big businesses. While in Indonesia, the biggest industry would be e-commerce. I think in different markets we actually have different industry focus areas.”

With that, Gobi Partners understands the importance of being industry agnostic as they navigate through the different markets. In terms of funding, Gobi Partners is expected to focus on both growth funds and seed deals. Arya tells us that we can potentially expect them to open up more funds in Thailand, Vietnam, and the Middle East.

The Philippine potential

As the Philippine startup ecosystem is still relatively young not only in terms of the number of deals but also the general interest of starting entrepreneurial ventures, there is still a lot of room for growth potential and development over the coming years.

Arya weighs in on the situation in the Philippines, “Currently, there's so little capital going in and there’s a lot of risk involved. The choice to start ventures is simply out of the question since there’s no capital in the game. But I believe that the moment capital starts to flow in - the moment that you give the Philippines the chance to prove itself - that’s when you start seeing traction.”

By becoming part of the Philippine ecosystem, Gobi Partners looks forward to the increase of deal flow in the country, coming even from those who previously wouldn’t give startups a second thought. Arya hopes that through their efforts, more people will want to contribute to the country’s startup scene, which in turn, would open a lot of interesting new innovation.

For their plan of action, Gobi Partners teamed up with local partner, Core Capital, to provide them with the ins and outs of the Philippine market. “We want to work together with Core Capital in this endeavor. They can assure the growth in the local market side, and we can assure that these guys can connect to the other markets. So there’s synergy between us,” Arya said.

Working with future market leaders

Always being ahead of the curve is required for a VC to keep finding the next great innovators. And for Gobi Partners, they ensure that they are always one of the first movers into the market. “We entered China and SEA when nobody was there, and if you noticed in the Philippines, we’re one of the first few international VCs to take the risk of going in. This is simply because we believe that, as a VC, you always have to spot trends before they happen and get there early to build a strong foundation,” Arya explained.

According to Arya, as much as banking on the next billion dollar company is their goal, they also put a premium on identifying future market leaders. “At the end of the day, we really want to work with potential movers and shakers - the people who will change the landscape as we know it today. That’s why corporations and funds invest in us. It’s because they want to see what's coming next, and they want to help these guys or at least have a share in the market in the future.”

For more information about Gobi Partners, you may visit their website here.