(By Shagun Karki)
The VC firm’s Principal Jeff Lin advises companies looking to expand to different markets to first establish themselves in their local markets.
In a recent webinar with e27, Jeff Lin, Principal at iGlobe Partners, spoke about the VC firm’s investment philosophy and the challenges faced by the industry due to the COVID-19 pandemic. He also shared some tips to help entrepreneurs/startups tide over the crisis.
In a follow-up interview, Lin also shared some insights on things to consider to become successful in local markets.
Founded more than 20 years ago by Soo Boon, iGlobe is run by a team of tech and financial veterans with cross-border regional experience. The VC firm invests in a number of regions, including Silicon Valley, Southeast Asia and Japan.
Some of its portfolio companies include Unity, Nerdwallet, ACSL, Hoolah and SWAT. The VC firm is currently focused on investing in three high-growth industry clusters — smart cities, fintech, and synthetic biology.
Entering unknown territories
According to Lin, for a cross-border VC firm, it is necessary to work closely with local VC firms in each country market. iGlobe’s strategy is to syndicate deals with strong local business assets to gain deeper insights on the complexities of each region.
Over the years, iGlobe has been helping Singapore start-up companies scale out to other markets in the region, and has also been helping a lot of western portfolio companies scale-out to Southeast Asia, with Unity being one such example.
But what are some aspects that are crucial for the success of a startup that wants to enter a new region, say, Southeast Asia?
“As a company, it is important for founders to have a regional or global ambition. For example, a Singapore based startup from inception shall think about eventually setting up a regional presence in countries such as Vietnam or Indonesia,” according to Lin.
“First of all, startups need to be solving a problem not just for a single country; exceptions can be made for large enough single market such as Indonesia,” Lin added.
Lin suggests that western startups which intend to expand to Southeast Asia must first establish themselves in their own markets first. Entering a new market prematurely may lead to unnecessary hardships.
Matterport, another portfolio company of iGlobe, is a leading spatial data company focusing on digitizing and indexing the built world. Founded in silicon valley in 2011, Matterport only recently set up its regional headquarters in Singapore last year when it became a well-recognised brand globally.
“For those startups outside of our region, it may not be ideal to come to Southeast Asia too early without building a strong customer base and certain revenue traction first. For those portfolio companies which are already well established in their home markets, iGlobe can assist them in their global expansion by identifying the right local talents and setting up operations, making the process much easier,” he shared.
A good understanding of the market is a necessity, he argues. Someone in the management team, who has a good exposure with the local market dynamics, will be helpful. If that’s not possible, the founder should be good at hiring someone who knows the ins and outs of the specific country.
Surviving the new normal
As startups move from the first phase of the pandemic to the reopening phase, VCs will have to decide what tech investments are worth funding and what will provide them with the most value in the new normal.
Asked what advice would he give to his portfolio companies and founders in general to survive the pandemic, Lin said under the new normal, founders will figure out how to let teams perform and collaborate without sitting in the same office.
“Most of your team members including yourself will need to continue to work remotely in the next half of the year or even longer. You have to continue to engage your employees to keep their morale high and make sure everyone continues to work towards a common goal,” he explained.
Citing the example of one of iGlobe’s portfolio companies, Lin said that the founder spends extra efforts to maintain team spirit through virtual team building activities like quizzes, coffee morning sessions, etc. As soon as the management figured out that the whole organisation can operate without an office, this firm terminated the lease contract with its co-working office to cut loss and conserve cash.
Another advice that he is giving to the founders is to quickly raise funding from different sources to extend the runway, especially from the government’s funding schemes.
“Valuation doesn’t matter that much as survival is the top priority. Keep the runway, retain your employees and you still have a chance for tomorrow,” he concluded.