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Rise of Enterprise SaaS startups in South / Southeast Asia

December 3, 2020
Jungle Insights

Following the roaring success of Snowflake, Zoom, Slack, MongoDB, and many more, all eyes are on Enterprise B2B tech businesses. There is an unusual enigma around this sector because of their ever increasing valuations, high growth potential, and an unmissable US base. This begs the question of why most Enterprise businesses are headquartered in the US, and can Enterprise tech startups originating in other parts of the world make it as big? Compared to the many examples in the West, South & Southeast Asia has produced only a handful of success stories in this sector, for example, Zoho, Freshworks, or Druva. While the dollars invested in South & Southeast Asia have increased 7x over the last 5 years, it still remains far below its western counterparts.

In our view, we would see huge growths in the coming years in this sector from this region owing to two key reasons.

1. Access to high-quality affordable talent

First, the region has top quality software & engineering talent in hubs like Vietnam, India, and Singapore. This talent comes at a fraction of the cost businesses pay in western countries meaning technology & sales teams can be set up at a relatively low cost. With relatively little money businesses can get to market fast in a highly connected region.

Hence, even in today’s uncertain times, investors in Southeast Asia can routinely access quality Series A/B deals that are almost 1.5x less expensive than their western counterparts & expect the businesses to trade at US multiples as they scale globally and raise subsequent rounds.

2. Regional base for large MNCs

South & Southeast Asia is home to large regional organizations as well as countries like Singapore and India form the regional headquarters of many global organisations like Microsoft, Facebook, Darktrace, and more. This provides a good, easy, and accessible testbed for startups to prove their GTM, technology, and models before they approach the larger accounts in US & Europe. Moreover, COVID has had a rather positive impact where more and more Founders are securing global customers using digital channels today since customers have finally gotten over the need to see a local person to buy software.

Jungle’s investment approach in this sector

Our belief is that Enterprise tech businesses succeed when they are able to express a clear, long-term value proposition to customers & build a focused, repeatable sales model that takes it to market at scale.

Invest in business-critical ideas: We have built our investment portfolio around “must-haves” rather than “nice to have”.

Or to put it another way, we are backing founders having big ideas that solve business critical issues & create long term value for customers. This is key to ensure that the market opportunity is not just theoretical and that economic buyers do have a budget and urgency to buy. In addition to business-critical ideas, we are looking at avenues for profitable upsell opportunities.

Founder first approach: More than anything else we look first to the founder. Collaborative, resilient & tenacious are some of the attributes we hunt for. Given the global nature of enterprise software, founders in South and Southeast Asia must not only have deep subject matter expertise but also demonstrate ambition to disrupt markets & create new categories.

Proven GTM strategy: Finally, we assume nothing. Game-changing ideas, robust business models & exciting founders are not enough. In a region where change in so fast & innovation is every day, we need a proven go to market strategy with repeatability and structure. This means the business needs to have proven itself beyond the initial 5–10 buyers who typically come from existing proprietary networks.

Experts with proven expertise

No doubt building an Enterprise tech business is an arduous task, with its long sales cycles, customers constantly evaluating between ‘build Vs buy’, high burn rates, and unpredictable sales cycles. We know this and understand this business like no one else.

At Jungle we are experts in scaling enterprise B2B tech firms globally. Two of our Founding Partners have made their careers in building and scaling large tech businesses globally. Our full-time Operating Partner Chris Reisig, based in the US, has spent over 20 years leading the Go-To-Market function for 6 different venture backed technology companies, leading 4 exits to date totaling $3B+ in value created for employees and shareholders. Chris has already helped several of our portfolio companies to expand to the US and other global markets, build their sales teams, get customers in the US successfully scale & also exit portfolio companies such as Tradegecko.

For example, Jungle has worked very closely with Saltmine to establish their business in the US, growing their client base from 0 to 20 in just under 2 years, while helping them secure VC funding from US investors. We have also worked very closely with Builder.ai, a company that has democratised app building for millions through its no code, human-assisted AI platform, with building the right team for growth in the US. But these are only a couple of examples of the Jungle impact. Our Enterprise portfolio is extensive with companies like Tookitaki, Dathena, Kyklo, Tradegecko (recently exited to Intuit) and many more.

Every year we choose the most disruptive, differentiated companies that demonstrate every success factor & commit ourselves to working side by side with the founders to give them the best chance of success. We are proud to have handpicked some of the best enterprise tech companies in the region in the past 4–5 years & helped their founders build borderless business.

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