Investors in Singapore-based e27, a startup media portal founded by Thaddeus Koh and Mohan Belani, have been seeking an exit, implying that the tech blog and startup events organizer is on the block, three different executives aware of the development, told DEALSTREETASIA.
Operating under the trade name e27 but formally registered as Optimatic Pte Ltd, the founders of e27 say they were inspired by an essay of Paul Graham, a venture capitalist and co-founder of Y Combinator, titled “Why to not not start a startup”, where Graham mentioned 27 as the median age of entrepreneurs. Koh is the portal’s chief operating officer, while Belani is the chief executive.
An email sent to Thaddeus Koh did not elicit a response till the time of going to print. One of the executives quoted above, said that e27 had recently approached Tech in Asia Pte Ltd, the holding company of startup media platform Tech in Asia, to discuss a possible merger. This was also independently confirmed by an industry source aware of the development, as well as another executive linked to a firm that has invested in Tech in Asia. Terence Lee, the managing editor of Tech in Asia, declined to comment.
B Dash Ventures in Japan, Pinehurst Advisors from Taiwan, Thailand’s Ardent Capital & Dan Neary, all of whom are investors in e27, were approached for comment, but emails sent to them did not elicit a response till the time of going to print.
Founded in 2006, e27 received two rounds of funding so far, the last being the $613K in February 2013 from B Dash Ventures in Japan, Pinehurst Advisors, Ardent Capital, Dan Neary from Singapore, and other angel investors, whose names it had not revealed. It had used its second round of funding to broaden operations and also enhance the Echelon brand to be its main revenue driver. Prior to that it had raised an undisclosed round of funding in a round that was led by 8Capita
One of the executives quoted above pointed out that e27 makes a compelling acquisition, with a strong event brands in the form of its Echelon conference brand. Their flagship event, Echelon Asia Summit, is organised annually in Singapore every June. e27 also organises various satellite conferences in cities around the region, covering the Asia Pacific (APAC). They also recently launched Venturecon, a conference for regional investors.
“The company (e27) also has its own startup database, but a merger with Tech in Asia was not possible due to clash of cultures. There was also this element that Tech in Asia already had strong offerings in the spaces that e27 operates,” this executive, who declined to be named added.
In addition, e27 also organises monthly events in the form of Founder’s Drink in the cities where they have a presence. These events act as a community aggregator and networking session for various angel investors, venture capitalists and entrepreneurs.
By comparison, the Tech in Asia conferences (formerly Startup Asia), focuses on hosting them in economic hubs like Singapore, Jakarta and Tokyo, compared to the satellite conference approach taken by e27, which has a far broader spread.
However, Tech in Asia maintains a far stronger web presence; its site sees more traffic than e27. The Alexa ranking of Tech in Asia is significantly higher than e27’s Alexa rank. Findings by SimilarWeb also corroborated this, with the dip in traffic in April due to Similarweb altering its algorithms.
Acquisition possibilities
It is learnt that in addition to Tech in Asia, e27 had also held met other media firms for a potential sale. While the industry is abuzz with names, DEALSTREETASIA was not independently able to verify these rumours.
The addition of an analytics/intelligence component to e27 would add a business intelligence angle that would make it an even more compelling acquisition, similar to intelligence firms like CB Insights, Preqin and Venture Intelligence.
e27 has significant social capital through its events brand, as well as a large database of information that can be monetised and used to determine the competitive landscape of the Asia Pacific.
News and analytics help to drive each other, and e27 as a ‘events & editorial’ platform would make for a robust bolt-on acquisition or tuck-in acquisition for a larger corporate entity, such as a telecommunications conglomerate or private equity firm. Local firms for whom it would make a good asset are Singtel and Temasek Holdings, who operate venture capital arms in the form of Singtel Innov8 and Vertex Ventures.
Both have engaged in a series of acquisitions in the first half of 2015. e27 presents an attracting offering with the strength of its conference brand alone, as well as community of readers.
MediaCorp may be another possible candidate, given its large commercial media holdings and status as a Temasek portfolio firm. Singapore Press Holdings (SPH) presents another possibility, with its foray into the startup space through its SPH Plug & Play accelerator.
Both MediaCorp and SPH recently launched media accelerators to tap into the next generation of media businesses that will eventually replace newspapers.
Alternatively, a foreign media venture seeking to expand its footprint in the Asia Pacific may see e27 as a viable acquisition target. Firms like Mansueto Ventures, the publishers of Inc and Fast Company, or Entrepreneur Media Inc, which publishes Entrepreneur, may be possible acquirers.
Apart from traditional media and online platforms such as Tech in Asia, e27 also competes with TechCrunch, TheNextWeb, PandoDaily, Digital News Asia, Yourstory.in, Next Up Asia and several others.
But with internet advertising rates being unable to sustain online media portals, all players are looking at other business offerings, from events to conference brands, to matchmaking investors and startups, to online classes, offering analytics and data bases, as well as sponsored content and even backing by large corporates to sustain operations.
A former e27 executive who was approached for comment on the possibility of such an acquisition, as well as any possible leadership changes that may occur stated: “It was clear from 2011 that they wanted to exit as they thought there was no scalability in the events they were doing. They then experimented with trying to find revenue from job classifieds, and bundling services and products to sell to both investors and startups.”
The executive added, “They made it clear they wanted to exit within two years from 2011 if possible. But after the investment they received, it seems like they made a 180 degree change. There was an exodus of employees that were previously part of the core team, as well as a re-focusing on the events aspect. Bottom line: they want an exit. I think Mohan knows TIA is gonna win this battle.”
However, the recent closing of a Series C round by Tech in Asia involving several major investors, amongst them Facebook co-founder Eduardo Saverin, may alter investor attitudes in Southeast Asia regarding the digital media publications as viable ventures.
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