AccelerAsia is a unique accelerator that has its roots in Singapore, but has expanded to cover the region with offices in Jakarta and Manila.
Launched in 2010 by three European expatriates — Arnout Mostert, Joeri Gianotten and Frank Bomers — Accelerasia helps firms from the US, Canada and EU that are entering Southeast Asia, with business development, sales and go-to-market activities in the region.
Recently, the Singapore startup ecosystem has seen entry of other specialist accelerators and incubators from Russia (InspirAsia) and Australia (muru-D), DEALSTREETASIA caught up with Joeri Gianotten, one of the partners and co-founders of Accelerasia, to find out more about the changing business ecosystem, Accelerasia’s operations in the region and his views on the ASEAN.
Excerpts from the interaction:
What led you to form Accelerasia?
I knew Arnout and Frank socially. My wife was working for their previous startup, Conference Bay. At the time, I was looking for new opportunities. We actually had lunch at Warung M Nasir at Killiney Road and basically discussed what to do next. That’s how Accelerasia started.
We all have a common passion for technology companies and entering new markets; and had been in Asia for 10+ years, so we’d built a strong network. We thought that most companies – European or US at that time – were thinking about China and India and were missing out on the opportunities that the ASEAN presented. So we set up Accelerasia to help these companies with sales and business development services.
With the recent entry of a host of incubators and accelerators (e.g. Muru-D), what is the competitive advantage that Accelerasia has relative to these new entrants in the regions?
They’re not necessarily competitors. They invest in companies and focus on growing the technology, as well as local companies. We focus on the Europe and US clients, and our main focus is business development. Some of our clients pay us on a service model and with others we take an equity stake.
We’re really hands-on, with 15 people focused on closing deals for clients and portfolio companies. Most of the accelerators do competitions and invest capital in a certain number of companies. Our main focus is making companies commercially viable in Southeast Asia
How do you see the startup ecosystem evolving in the 2015-2020 period, in Singapore and ASEAN?
A couple of things will happen. A great thing that will start to happen are the emergence of second-time and third-time entrepreneurs – serial entrepreneurs. You’ll see local companies being acquired. Young entrepreneurs will finally have local heroes, helping to draw talent into the tech ecosystem. When we first started, it was extremely hard to attract talent into the space
The investment community will also become more mature. There’s currently a big gap between Series A and Series B. With a lots of accelerators, you can raise 100k and some that raise 5-10 million in Series B. But a significant gap exists between seed funding and the Series B stage still. Thats why I think Infocomm Investments was formed – as an IDA fund for follow-on investments.
How did you come to choose Amoy Street and not the Block 71 cluster?
Five years ago, Block 71 wasn’t here. The Block 71 ecosystem is geared for local startups and investors, whereas, we’re the sales office of a lot of European and US clients. For the fintech and market-tech agencies, it’s much better to be close to the commercial centre. We started our first office in a serviced office in Amoy Street before coming to our current office, also on Amoy Street. It’s central, has a great character and a good vibe. It’s got the charm of old Singapore and where the first migrant entrepreneurs had their start.
How do you see the venture capital landscape evolving in Singapore and the region?
Firstly, I’m not a VC expert. But I see a lot of accelerators coming into the market – a lot of foreign accelerators. And I think there’s too many, so I think there’ll be a shift and consolidation at some point. We’ll probably start see more US and EU firms focusing on Southeast Asia. What should happen is that there’ll be some regional or local VC firms popping up as well.
A lot of times, the investments are family offices or by wealthy angel investors. I’d like to see the emergence of VC companies from within the region, especially given the niches that have emerged in the last couple of years.
Would you say that Europeans have an advantage over North Americans when doing business in foreign markets, and particularly the Asia Pacific? If so, why?
I think that European companies would make the first step and sooner go to Southeast Asia than US companies. They’d find it relatively easier, as they’re used to doing business on a contintent with different countries and languages (i.e. Europe). That’s their home market. Europe and ASEAN are very similar in that way
I actually see a lot of US companies who don’t really look at ASEAN. Their focus is on larger markets like China and India. A lot of European tech firms are actually focusing on Asia sooner now in their business cycle, as all their competitors are in the US. Rather than go to the US, they go to Southeast Asia, where there’s less competition.
At what point should entrepreneurs or investors exit a business? At what point does Accelerasia exit a business?
About 70 per cent of the companies we work with operate on a service basis, as they pay us to do business development. After 1.5 -2 years, we assist clients with finding a local team, building a local team and then exiting the business. As an individual, I would exit when I have a solid team in place that can run the business without me – when I make myself obsolete, that’s when I leave.
I enjoy being in the action, rather being involved with all the processes and bureaucracy. But it’s necessary to become successful and go to the next phase in an organisations’ growth.
What are the greatest challenges that European firms face when conducting go-to-market activities in ASEAN markets?
For both the US and EU firms, there’s a couple of things. They’re selling in a market where they’ve never sold before. So they have no track record, even though they have a lot of good reference customers in the US. Southeast Asian customers want to see examples of their product being deployed in Southeast Asian markets.
The most important things is to secure local reference customers and build trust. What we often see is that those who’ve never done business in different time zones overlook the fact that speed in following up is crucial to building trust with customers. When you promise to follow up on Friday, you need to follow up on Friday and deliver on your promises.
They know that the developers and the software sits on the other side of the world. Every client communication and touch point should be used to build trust with your customers in a new market. And a lot of these companies, are also busy in their home markets. ASEAN is not really big focus of many companies, but the most successful companies have people in their home market dedicated to the Asian operations, doing either operational or technical support.
Beyond e-commerce and telecom-related sectors, what are the other verticals that you foresee as having significant growth in 2015-2020?
We see a lot of finance technologies and advertising technologies. We have had a lot of requests from firms in this field as the ASEAN market matures. Opportunities in the market are improving and mobile networks are being upgraded to enhance their service offerings and bandwidth. Tech adoption is growing and a lot of the banks are modernising and adopting new technologies.
For example, the insurance market in Southeast Asia is a massive growth market for a lot of insurance providers. Recently, MedLife set up their innovation centre in Singapore, which says a lot about how they view prospects in the market. Two of our clients – Kiosked & Idomoo – have played a big part and see their products being used by financial and insurance institutions for customer engagement in the region.
Whats your opinion on the difficulties companies face in hiring foreign talent?
That’s a major issue that will reduce Singapore’s attraction as a business base. Companies shift to Malaysia or establish regional offices in Jakarta that cover Singapore as well as there’s insufficient local talent to fulfill all the roles and I think they should relax the rules. We as a company are an international organisation and the people we are seeking are worldly and have different touch points
Most of the people that we had in our team have done a stint overseas during their studies. I think that as a country, to ready the workforce for international exposure and expansion, the polytechnics and universities should stimulate their students by facilitating their pursuit of academic exchanges and internships abroad.
That would benefit me as a company, as Accelerasia. That’s how we hire. For instance, NUS has a really good programme and I think that’s a great initiative that benefits startups. It’s an awesome programme and for us as a company, we usually look there [the NUS programme] because it shows that they’re entrepreneurial risk-takers, have experience overseas and all those are elements we seek when hiring.
That’s hard to find in the workforce, since it’s uncommon.