VENTURE CAPITALIST VIEW: STARTUPS WINNING IN SOUTHEAST ASIA with michael lints - Sarah Chen
Impact Investing, Impact Washing, Investment, Philanthropy
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VENTURE CAPITALIST VIEW: STARTUPS WINNING IN SOUTHEAST ASIA WITH MICHEAL LINTS

Southeast Asia’s ride hailing giant, Grab is set to go public through the world’s largest SPAC merger, valuing the company at close to $40Bn. Fresh off the announcement, in this episode,  we talk about the rise of startups in Southeast Asia, with over 650 million internet users, more than America and Europe combined. Southeast Asia is arguably the most exciting region in the world right now to create disruptive tech companies with more dry powder, higher valuations, the rise of unicorns and imminent exits fueled further by large corporates.

Southeast Asia is definitely now on the map if it wasn’t already before. In comes my next guest, Michael Lints. Michael is a partner at Singaporean venture capital firm, Golden Gate Ventures, currently leading the growth venture fund. Since joining the firm in 2013, Dutch-born and raised, Michael has helped to raise over $60 million for Golden Gate Ventures and its portfolio companies raising later stage rounds from external investors as well as leading early strategic acquisitions. We begin to unpack the growth story that is Southeast Asia and why LPs and other investors are rushing to invest.


👊🏻 5 THINGS YOU’LL LEARN:
1) How Southeast Asia’s startup scene came to be
2) How venture capitalists are viewing Southeast Asia right now
3) The unique challenges of building & investing in Southeast Asia
4) The impact post-pandemic on markets, and how startups are innovating
5) How the racial reckoning is affecting others around the globe

 

OUR TRANSCRIPT

 

SC

And today with me, we have the amazing Michael Lints who, for the first time, I’ve heard it’s not waking up at 4am in the morning, Michael, how are you doing today?

 

ML

I’m good. I’m good. I had a bit of a rest today. So I didn’t wake up as early as I usually do!

 

SC

Good. So Michael, you know, you’ve really had a fascinating journey. I mean, I’ve known you for a couple of years now. Dutch-born and raised but really with a interesting background of being an engineer and then moving  all the way to Singapore, with your family to work in a venture capital firm Golden Gate Ventures that we’re proud to partner with at The Billion Dollar Fund for Women. But really, I think beyond that, I’ve also heard some interesting personal stories, from the fact that you actually broke your sternum at the age of five. So tell us all about that. because I know that’s an important part of your lifeline and how Michael Lints has come to be today!

 

ML

Sure. Jeez, that’s that’s a long time ago. Exactly. 40 years ago. Yeah, it’s funny, I got into a cycling accident, because I was cycling with a few buddies when I was five, six years old. And the moment we I passed a car, the car opened his door, I slammed into the car, which actually is not that bad. I mean, you’ll survive it. But I had some bad luck. Because I fell onto a pole. So literally into my chest.  And that’s when I cracked my sternum. So I’ve always had issues, issues breathing since.

Yeah, but it’s fine I suppose.

 

SC

Yikes! And now, you are an athlete, beyond being a venture capitalist as well. And this really speaks to your spirit of just resilience and just, moving forward no matter what and making some of the hard choices and I want to talk a little bit about that before we go on to the exciting topic of the day, which is the hot week that is Southeast Asia, but really want to, dive deeper into the person that you are and, what really got you excited about venture capital and particularly in Southeast Asia.

 

ML 

So I think for for my background, I’ve always been in technology. I got my first computer from my dad. I think it was an MSx and I was like seven or eight years old. And the first the first thing I did was I took it apart because I wanted to understand how the inside of the computer worked to, of course, the dismay of my dad, but he was like, okay, might as might as well go ahead. So we took it apart, I tried to understand, the kind of inner workings. So we were kind of working on the motherboard and getting an understanding of how the chips work. So I’ve always had a fascination for technology, since kind of following in my dad’s footsteps. So I studied computer science and engineering. it’ll show my age, but I, learned how to code in assembly very early on.  Really old school. But technology kind of stuck with me. And it’s always been part of my part of my career. 

 

SC

And how did it lead you? Yeah, all the way to Singapore. 

 

ML 
Yeah. So even even my first job at IMG was was literally being in technology. My first business was a data center which we build ourselves. The company got acquired. I think after the acquisition, I I was really thinking of what what could be the next step in my life. And the one thing I learned was, I had a lot of mentors and friends, they really helped me when we were building our business. And I thought the one thing I can do, after the company got acquired is, is give back.

So I started advising a lot of founders and and helping them in some case, even investing. And that’s that stuck with me over the years. And I said, we’ll be great to do this, like, in a more structural structural way. So what ended up happening was, I wanted to learn more about investing and how to invest. So I did a few executive courses at Harvard in  Boston, and one of my classmates, he actually lives in Singapore. And he was telling me about this really cool to new fund. Singapore is like an upcoming hotbed for startups. This is back in 2012. So I was like sounds amazing. I bought a plane ticket to Singapore, just to kind of get an understanding of the ecosystem, met Vinnie Lauria and Jeffrey Paine of Golden Gate Ventures. And yeah, almost the rest is history. So I stayed in Singapore since then.

 


SC

And what was it that, I think it’s interesting that you had a quick sense to pick up that Singapore was the hub back then, when even venture capital was relatively new, and was just picking up right, what sort of struck you then when you were learning about the ecosystem and made you take that big, big leap and, and big jump?

 

ML 

I mean, to be fair I’m not that big of a visionary. So I didn’t know this was going to happen after 10 years, but it was about the people. And, again, the moment I had these conversations with, you know, my only friend from from Harvard that lives in Singapore, with Vinnie with Jeff, with the founders, the early founders that we invested in MoneySmart, Siu Riu of Carousel, meeting all these kind of young founders, and they were so invested in not only building the company, but building the company for Southeast Asia. That passion and that drive. I honestly have to say it was really the people that I met back in those back in those days.

 

SC

Yeah. And I think that speaks volumes, right, in terms of what investors really look for. I mean, it’s the people. So definitely something that I see a lot of investors look to and in fact, I was just tuning into Patrick Grove, a big internet entrepreneur as well. And, back when I think he was reflecting on his time, his first exit, he was thinking what’s going to happen next. And for him, it was about proving that Southeast Asia, and that the power of technology and internet as possible, and that’s what keeps him going to serve, like you said, the people of Southeast Asia. So turning now then, to Southeast Asia. It is a very hot week!

And I am so glad that timing worked out for you because we’re in the heat of the action. Right. So Grab just made a huge announcement of going public via the largest SPAC merger with Altimeter growth. So that’s a big one valuing it at $40 billion. A ride hailing app that has become essentially a super app with embedded finance. Beyond that Bukalapak just had another fundraise with Microsoft and Fave as well in in Malaysia, just had an exit to Pine Labs in India. So really, really exciting week. What What are your thoughts here on everything that’s happening? What’s going on in Southeast Asia paint a bit of a landscape for us?

 

ML

Sure. It’s It’s funny, though, so because all the news happened in almost almost the same week, literally. Yeah, I’ve been getting calls like, hey, congrats, and it’s an amazing week for you, because it definitely is. But we’ve know we’ve been there for such a long time. We’ve kind of seen these developments over over the past years. And I wouldn’t say we knew this was coming Exactly. But we saw the interest for the region grow over time. And I think there’s a few things that that have been very important that that have led up to this up to this week. Or 10 years ago, you mentioned it yourself, Sarah, the ecosystem was very nascent, and very young and very early. There weren’t that many funds, there weren’t that many, that many founders actually building companies. And it was very concentrated to like a few, a few countries and a few founders. What happened over the years was founders got more resilient, just in general. So people were people looked at the early founders and said, Hey, this is actually an amazing journey, I have a passion about a certain industry or certain topic, I can build this business as well. So people left  left their their, their their jobs and decided I’m just going to go out and I think they were comforted by the fact that there were more and more investors coming to the region over the over the past years, I think what was a big spurt, or a big ignition for ecosystem was 2015 2016 when a handful of series A friends of mine, whether or not backed by by Singapore, Temasek, but a lot of these funds kind of helped get some of these first stage of entrepreneurs to the second stage. Now, in 2017 2018, we saw the first signs of exits and exits were around actually 200 to $200 million range. But the fact that they were they were they weren’t actual exits show there was there was life into this ecosystem. So you saw go jack, and so grab, make make it a number of acquisitions. A lot of the acquisition, were actually from the local of the regional, the regional unicorns. But it also kind of helped showcase that there is something happening in the region. And then if I fast forward to 2020, where, see, formerly Greta had a stellar year on the New York Stock Exchange, I think it really opened up a lot of eyes for institutional capital. So investors from the US were looking to invest in companies here, Y Combinator SS is seeing more and more Southeast Asian founders,we didn’t bring the demo day. So in terms of exposure, Southeast Asia is just getting more and more exposure to a global investor arguments, but that obviously will lead to more capital coming to the region, that will lead to more companies getting acquired. And then I think, with with the the rise of stacks in 2020, and 2021, it was sort of the final, the final push that the ecosystem needed. And now with, with Grab, it shows that Oh, man, it is possible to generate, a multi billion dollar company to literally compete with the likes of with the likes of Uber in a sense. And to be this the super app for a reason. So I think this was sort of the final push that the pieces needed to showcase the world. And it’s one, it’s matured, there are amazing founders. And three, it is possible to actually generate exits from this from this ecosystem.

 

SC

Yeah, and I love everything that you picked up upon that and I think funding, flushing cash into the ecosystem, especially when it’s nice and is necessary. In fact, that last week’s episode, we had Chris Schroeder, an American ambassador, who isn’t, investing in emerging markets. And I’ve heard you speak about investing in emerging markets as long before we talk about the exits, which is exciting and love to, go deep on that one to hear a little bit about you, what, what you’ve learned over the years in investing in emerging markets, right, Southeast Asia, despite all of this great news, just this week, compressed into one, as you said, it was a journey. I remember, grab knocking door to door, you know, infrastructure is not fully built up. There’s a lot of challenge, actually, and even just building a startup in Southeast Asia, where it’s very different from country to country. So even the fact that we have 650 million internet users, right from from Vietnam to Singapore, it’s a totally different landscape. So talk to us a little bit about what you’ve learned in investing in these different markets here and what’s changed over the years.

 

ML

Yes, I’ll give I’ll give two perspectives, I would say, one is our perspective of investing in the region itself. I’ll give a perspective as you know, a venture capital firm who is who has been fundraising over the last 10 years as well. What is interesting, in the first three years, we really had to explain and almost markets, the region, we weren’t even, we weren’t even marketing our fund, because we didn’t, we didn’t get the chance, we always had to convince investors to even look at Southeast Asia. You know, if you look at investors looking at the Asian market, they would typically look at India and China first, which makes sense, huge markets, huge potential. You can say, those are homogeneous markets. And they felt that  Southeast Asia was still, it was difficult, because there’s so many different countries, it was very young, very early, sort of the landscape wasn’t fully mature yet. So in our initial years, we really had sort of fight for attention from large institutional investors, and that definitely took up took a bit of time, I think at the moment, it’s in slightly easier journey, because you don’t have to explain why we are investing in Southeast Asia, every kind of Finance. And it’s more about, you know, the strategy and, and, and how you are picking your targets. When it comes to investing in companies, we’ve learned we’ve learned a bunch. I think the initial initial perception was, you can actually build a company, which is almost siloed. And I think more and more we’re realizing, whether it’s across our portfolio or of our peers, a lot of companies end up working with each other. And you’ll see this within the e commerce and the and the FinTech space. And a lot of the large, sort of e-commerce platforms work very closely with a lot of the FinTech players that are in Indonesia, and Singapore, Malaysia. And it kind of goes, it kind of goes hand in hand. So this is a very collaborative in that sense, a very collaborative ecosystem. So we want to get up there. And the second thing is the importance of scaling across multiple countries. And it’s, it’s not to be underestimated. I think,what we’ve seen over the years is for any founder, that that becomes a number one or number two within the whole market, the need for them to expand to a second country and become the number one and number two in that specific country is extremely important in terms of getting the company to scale, and finding latest age investors as well. So that’s actually important. But here comes the tricky part. If you are in Malaysia, or you are in Vietnam, it is not a natural thing to expand to Indonesia, is unnatural to expand to the Philippines, it kind of takes you to building almost the same company over again, in a new in a new country. That’s that’s pretty difficult. So we’ve learned that, giving support, whilst companies are expanding is extremely important.

 

SC

In just on that last point, Michael, if you may, because we have American listeners tuning in as well. What Why is that? Why is expanding into a different country that so close to each other in Southeast Asia, dramatically different?

 

ML 
Yeah, almost think of it as if you, let’s say that you’re based out of the US and you’re building, you’re building a company there, and you decide to expand to Germany. And you actually got to understand how German culture works, the German language, the narrative, the look and feel, it’s the same size as Asia, although Southeast Asia is one region. Indonesia is vastly different from Vietnam, language wise, culture wise, demographics wise, because even our technology is built is different. So So think of it as literally expanding to an entirely new country where everything is different from your home country. That’s that’s what it is. And the only the only commonality is, it’s in close proximity. That’s that’s one. And and there are some similarities. But But those are relatively small. So again, yeah, it feels like like building a new company in new country.

 

SC 

Right. And going into exits. I know you did a report with NCI a couple years ago, where you said it was what 700 startup exits projected between 2023 to 2025. What do you think? Is this going to continue to hold up? Or how is it changing since the last time that you did the study with India? 

 

ML

Yeah, so we’re actually releasing a new report pretty soon. So excited, excited about that, I can see that 2020 has had some, some impact on the exit landscape in general. So we’ve seen in terms of projection, we’ve seen less exits in 2020. But the funny thing is, it’s actually picking up again, so if you look at the first quarter of this year, and extrapolate that to the next to the next three quarters of this year, it looks like we’re back on track. I’m actually thinking that the number that we had is one, two 100 h exits a year, actually going to pan out. What is now interesting is, is the influence of, of sparks coming to market and spec sponsors looking for targets in the region, that means that’s going to accelerate it over it over the longer term, or just like a short, short bump in, in the number of exits. So yeah, we’re still very bullish on that the number still holds ground. I think what the one thing that I would add here is that we’re seeing more and more secondary buyers coming to market, something that didn’t happen over the last few years, but it’s it has accelerated in the last six to nine months, right? Because there are more latest companies in the market, there are more secondary buyers looking to looking to buy a stake into these companies, because they foresee a good exit trajectory. So that’s kind of a new, a new development as well.

 

SC

Right? And what else are you I mean, the pandemic? I feel like we’ve talked about the pandemic again and again, and we’re probably fatigued by it by all of this, but how has that changed? Your view in terms of what you’re seeing in in the startup space? Are? Is there a bigger push towards, edtech, healthcare? What what are you seeing right now? And is this also being driven by certain things? Like I know, you spoke about the role of corporates in Asia playing a big role in driving some of the growth? What are you seeing here? 

 

ML

I’d say that for, let’s call it slowly getting towards post pandemic, let me let me put it this way. We’ve seen that in 2020 technology in terms of a sector. And I know, I’m not talking about us, but specifically in Southeast Asia has been extremely robust. companies that were in e commerce, in payments, in insure tech, in logistics, they’ve all gone up in terms of that growth, in terms of their revenue, the ability to fundraise, they’ve all going up to the rates within the healthcare space, similar, although healthcare is still relatively new to the region, I feel that, what you’re seeing in the portfolio is gone up as well. So I think as people were forced to stay at home, they were also forced to use different types of services. You know, so it was it was a, it was a big push for, for technology in general. What is interesting now is kind of what’s going to happen sort of post pandemic, and I think a big portion of the growth will stay, because we’re not going to all of a sudden change our bat from 2020, you know, people are still on half the time, people are still kind of rethinking the way they do their do their shopping, they’re going to rethink the way to travel. So, you know, we think that a big portion of that growth will stay just because people have changed their behavior since since 2020. I think on the education side, what is interesting there is a lot of the companies that have worked with the actual education institutes, and whether it is with 12, or, or education. I think there’s a closer relationship between technology, and these Institute’s and we’re going to see some interesting developments there as well, in terms of homeschooling, K, 12, education, tutoring, the way we’re going to do exams, so I’m pretty excited.

 

SC

Right now, and which I think is super interesting, right? Because I, as you know, being transplanted from from, different places and seeing the different environments, and now raising children in Singapore, the fact of using technology and really integrating, working remotely, even that thought of not coming into the office and seeing your customer or your stakeholders is very different for an Asian person and the culture. So I think definitely a big shift there, which is going to be exciting. So now I want to turn to a more personal side of your story. I know you have been thinking very deeply about your role in your voice and against the backdrop of what’s happening in in America right now. You know, that the racial reckoning of the last year, and you know, the current trial that’s happening and just the reckoning that’s happening all over the globe, you’ve been asked also to participate in a documentary, broken chains. Can you talk to us a little bit about that and what sort of prompted you to take this step forward here?

 

ML

Sure. Yeah, that’s definitely very personal, I think. Myself and a lot of my friends either back in Europe or in US Funny, I think everyone is using the word exhausted, it was very, very tiring to even, turn on the TV and watch the news. Because it felt like everyday something else was going on. And yeah, seeing a lot of black men being killed by the police, at some point, just enough, enough is enough. And, you know, to an extent where everyone sort of accounted racism in, sort of in a different way, whatever it’s a very unfortunate police brutality, whether it’s the way you’re treated within a corporation, whether you have, sort of access to capital or access to education. SoI, as many others, I kind of wrote down my feelings in a, in a medium post, and I didn’t expect so many people to respond to it.

I literally had, I think, over 50 phone calls, from the article itself, a lot of messages I responded to, and, and eventually, one of my friends that I’ve been working with on some, some business TV project said, we should make a documentary about this. And I, the first thing I said was, well, it shouldn’t be about me, because that makes no sense. But for a documentary to be about, the topic of racial wealth, and then sort of your access to wealth for, for the college community. I think that is interesting, because it’s, it’s often overlooked. And it’s something that as a VC I’m super passionate about as well. So yeah, before we knew it, we, we decided to make a documentary. And we called a lot of our friends in us and said, Hey, we’re thinking about making a documentary about, sort of the racial wealth gap. And literally, everyone said, Yes, we’ll help out, we’ll work with you on this. And we have 16 amazing people, that you if you are interviewing, and we’re putting together an amazing story about how this has evolved over the years. And hopefully, well, hopefully, not hopefully, we’re going to launch in the summer. But I’m saying hopefully, because I wanted it to be done in June. So we are, we’re excited about the next few next few months.

 

SC
And congratulations, I think such an important  production and but to see some familiar names, from our friends in DC, Shelly Bell and I know Mariah is part of as well, so proud of what you’re doing. Really important. And finally to take us home here, this is a really short show, and then we’re going to jump on clubhouse for,  the post show discussion and dive a little bit deeper. But, you’ve said, on the pandemic, and I just want to, yreally dive deeper in terms of your approach here in some of the life lessons that we can pick up from you. And you’ve said that as months passed by during the pandemic, they start to feel like it’s Groundhog Day. Right? So beyond everything else that’s going going on in the world, we are feeling exhausted. What What is your advice to founders, who, by the nature of their business itself? It’s exhausting, right? entrepreneurship, people don’t talk about the bad side of the hustle enough what what are what would your advice be for founders and funders tuning in that working hard here?

 

ML
Yeah, I’ll add one thing and the 2019 for a lot of people, myself included, was about, working hard, being on the go all the time. I’m at an airport, I’m in another country. Look at me doing amazing. And I think sort of that cadence became normal. And you didn’t have time to sort of stop and think about life, family, work, your colleagues, your own goals.

And then  2020 hit, like, just like, like a brick wall. And we had this we had to stop and think there was there was no other choice. And the one thing I didn’t realize was this feeling of this, this this Groundhog Day feeling, it doesn’t happen all of a sudden, it happens like very slowly over time. Like, why do I feel different than I did last year? So I think for me, my biggest lesson was to kind of stop and standstill more often. And I wouldn’t say reset, because you don’t always want to reset, but at least think about, you know, what if what if what have I achieved? What is the impact that I’ve created? Am I feeling happy? Am I feeling unhappy? And why is that?


So just being more self aware and spending time so one of the things that were important for me is it’s just, break the day and a half, like small things that I didn’t do in 2019 is just just go for a short walk and Create and do nothing. Or I write I love seems that I love writing. So I started writing more and more. Oh, one thing I do is just, just like for like 15 to 20 minutes beside nothing. You like, sit down, lay on the floor, close your eyes does really matter, but just for a few minutes just doing nothing at all. have time in your schedule, like an hour, like an hour per day where there’s nothing, no phone calls, no zoom calls, no meetings, no coffee. ketchups literally nothing. I think that is that has been helping me a lot. I have I have too many notebooks for a second. So these are. This is like the last.

 

I love it. 

 

ML

Yeah. 

 

SC 

Yeah. No, there’s a difference in writing, physically writing thab typing things out. And so I love that. Yeah. And I want to, yeah, I’m getting that process together. And I want to also get, you know, quick fire round here on advice to founders that are building hard. And you know, it’s easy. And I think you’ve said this before, which I really appreciate, which is focus on your own grass. You’re sitting there with a little bit more color than that. But you know, it’s easy as a founder to feel and look around. You’re like, oh, gosh, everyone’s you know, doing us back. There’s so much happening right now that I’m feeling pressured to to scale quickly, what would you advise to be two founders that are thinking about the post pandemic world.

 

ML

So I’ll take an example of a founders that I really respect and that I’ve seen grow over over the past few years, they have, they seem to have two traits that I see interesting. So the first thing is, they have the ability to not get distracted. And I know how difficult it is, you know, if you might open you know, whether it’s the elephant, the tech blogs, and you see your competitor has raised a lot of money, get all excited and anxious, like, Okay, I need to raise money and something needs to happen. I think the founders that get less distracted by all the noise around them. And you know, they’re like, Okay, so my competitor has raised kudos to them, I’ll be focusing on building my product, building my team, think about my strategy for the next year, I think that is extremely important. Again, it’s very, very difficult. I think the one thing you can do in terms of getting that noise, the noise out of your head is is just literally okay to essentially find someone in your environment to coach you on this. So the moment you feel anxious, don’t try to solve it on your own. But find someone who can be a coach for you. That’s going to help you sort of keep you on the straight path in terms of your focus. So don’t be afraid to talk about it to someone. So find someone that you trust winning, winning, you’re winning, you’re winning, you’re just winning your network. And yeah, I love that. This this, the second thing would be and this this is interesting, is really think about your business in terms of where do you and the business person you want to where do you personally want to be and where stability over in the next five years. And the reason I’m saying this is if you have that horizon, you’re more focused on what are my next steps to get to that next five years, and I know you know, everything changes within the next five years, we don’t know if there’s gonna be a pandemic so everything changes but having that horizon is going to be super helpful and just keeping you focused so find a coach and find sort of your friends sort of your your your North Star, I think is very helpful keeping you focused.


SC 

Yeah, love it. Well, Michael, this has been such a treat I mean, you know, we’ve had to really jam in a lot here from the power that is Southeast Asia right now the exciting time that we’re going through and, and also some of your personal nuggets here that we still appreciate and, you know, really have a lot to learn from you as a leader.


ML

Thanks for having me!