As startup ecosystem matures, SE Asia is likely to see more super angels

Above: Weihan Liew, GGV Capital (left) and Darius Cheung, CEO, 99.co. Below: Edward Tirtanata, CEO and co-founder, Kopi Kenangan (left) and Rajive Keshup, Director, Cathay Innovation (Moderator).

With founders of mature startups doubling up as angel investors, Southeast Asia is likely to produce an increased number of ‘super angels’ over the next two to three years.

“We’ve seen some that are turning into super angels. The signs are pointing towards that as the ecosystem is maturing,” said Edward Tirtanata, CEO and co-founder of Kopi Kenangan, Indonesia’s largest venture-backed F&B chain.

Tirtana was speaking as one of the founder-turned-investors at DealStreetAsia’s recent Asia PE-VC Summit 2021, at the session titled “New angel tribe: Rise of the founder-investor”.

Tirtanata and his co-founders set up an angel investment vehicle Kenangan Fund in May 2020 to make selective bets on promising early-stage startups in Indonesia.

He, however, said he does not see himself investing as much as those who are becoming super angels because of financial and bandwidth limitations.

“I’m a little bit more picky and I don’t want to spend time talking to 50 founders a year. I cannot imagine doing that,” Tirtanata added.

Tirtanata has injected capital in as many as six tech startups including Indonesian B2B marketplace GudangAda, automotive startup Otoklik, healthtech company Klinik Pintar, and fintech platform BukuKas through the Kenangan Fund.

Angel investors are often the go-to source for capital for startups who are at their inception stage when risk capital from institutional investors is harder to come by.

Darius Cheung, founder and CEO of Singapore digital property firm 99.co, said it will take just two to three years for the region to see a super angel.

Cheung, who shared the panel with Tirtanata, has made over 10 investments and scored three exits as an angel investor.

Angel investors add value that is different from what venture capital firms offer. Being founders of successful startups, they tend to provide insights on how startup founders can handle VCs and negotiate on terms.

Additionally, angel investors can also provide founders with tips on operational matters such as how to handle HR issues, among others, that help startups navigate their growth path.

“The founder-to-founder relationship is very different from a VC to founder relationship,” Cheung said.

In Indonesia, SE Asia’s largest market, founders are increasingly backing their own tribe to give back to the ecosystem as they gear up to capitalise on the tremendous growth opportunity that the region offers.

Managing conflict of interest

The road to investment, however, is not devoid of challenges as startup founders have to juggle between managing their company and portfolio firms while ensuring that there is no conflict of interest with their own investors and funds.

Weihan Liew, a venture partner at GGV Capital and a serial technology entrepreneur in Southeast Asia, said angel investors need to provide full disclosure and transparency when they make investments that could potentially result in a conflict of interest.

“I typically don’t invest in areas that I am directly involved. It’s very rare. But I think, in the event that an angel does, I would highly recommend full disclosure as well as transparency,” Liew said.

Respect for the rule of the game is very important to angel investors considering that the ecosystem is a very small community where reputation matters a lot, he added.

“If there’s any conflict, just close it and then don’t make any positions that will put anyone in a difficult situation,” Liew stressed.

Cheung, however, stressed that when there is no conflict of interest, it could mean no one is interested. Conflict of interest happens because someone is interested to add value, he asserted.

“As long as you’ve got your principles and priorities right, then I think the rest can be navigated pretty good,” he said.

Meanwhile, Kopi Kenangan’s Tirtanata said he tries to avoid investing in the same space where the coffee chain operates to avoid conflict. In fact, he added that he has rejected every F&B-related deal that came to him.

“Along as you try to avoid those conflicts, I don’t think it would be a challenge,” he said.

The angel investment panel was moderated by Rajive Keshup, director at Cathay Innovation, a $1.5-billion global venture capital fund.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.