(Bloomberg) -- As many as 800 million workers worldwide may lose their jobs to robots and automation by 2030, equivalent to more than a fifth of today’s global labor force. That’s according to a new report covering 46 nations and more than 800 occupations by the research arm of McKinsey & Co. The consulting company said Wednesday that both developed and emerging countries will be impacted. Machine operators, fast-food workers and back-office employees are among those who will be most affected if automation spreads quickly through the workplace. Even if the rise of robots is less rapid, some 400 million workers could still find themselves displaced by automation and would need to find new jobs over the next 13 years, the McKinsey Global Institute study found. The good news for those displaced is that there will be jobs for them to transition into, although in many cases they’re going to have to learn new skills to do the work. Those jobs will include health-care providers for aging populations, technology specialists and even gardeners, according to the report. “We’re all going to have to change and learn how to do new things over time,” Michael Chui, a San Francisco-based partner at the institute, said in an interview.
0 Comments
Singapore’s financial regulator would consider trialling some initial coin offerings in a regulatory sandbox, if such fundraising efforts are by companies focused on new technology that will improve the efficiency of capital markets.
The type of digital-token sale that the Monetary Authority of Singapore would consider is one underpinned by technology that improves capital markets, for example smart contracts or something that can build a “smarter” initial public offering, MAS Chief Fintech Officer Sopnendu Mohanty said Wednesday in an interview.
“If we get some use case which we have not seen, then they could come to a regulatory sandbox,” Mohanty said on the sidelines of the Singapore FinTech Festival. So-called sandboxes allow companies to test their innovations in a loosely regulated environment before releasing them publicly.
Regulators around the world are grappling with how to treat ICOs, which have raised more than $3.5 billion on promises to revolutionize everything from supply chains to the world of finance, but have also attracted its share of scammers. “There’s a bunch of ICOs which are selling the Taj Mahal, selling residences on Mars,” Mohanty said. “Be careful of these.”
Such attempts are not something the MAS would deem suitable for a sandbox, said Mohanty, who joined the MAS in 2015 when the regulator formed a new group to oversee its push into fintech. He was previously with Citigroup Inc.
China has banned ICOs, Hong Kong regulators are looking into ICOs to protect small investors and the U.S. Securities and Exchange Commission is monitoring digital coin sales after warning in July that ICOs and cryptocurrency exchanges are subject to U.S. law. Like most jurisdictions, the MAS doesn’t regulate cryptocurrencies directly, but rather the activities surrounding them. Singapore requires digital-currency intermediaries such as exchange operators to comply with requirements to combat money laundering and terrorism financing. Those that resemble a sale of securities are already regulated under the Securities and Futures Act in Singapore.
Later in the day, the MAS released a circular clarifying the application of those laws to ICOs. The guide included parameters when a token offering deemed to be a security might be exempt from certain prospectus requirements, and emphasized that such tokens may also be subject to legislation for combating money laundering and terrorism financing.
The coin offerings “which we believe we should support, is when the ICO is doing something technologically different to make the existing capital markets efficient,” Mohanty said, adding that the MAS hadn’t seen any such examples. “As a regulator, if I can send a signal that we are looking for this bucket, it is empty,” he said. “Drop an ICO there, we will help you to succeed.” Wealthy investors boosted bets on real estate and left hedge funds and equities as concern over high valuations and geopolitical risk push them back to basics. They had 33 percent of their portfolios on average in real estate at the end of the second quarter, according to a survey by Tiger 21 released Tuesday. That’s a record since the group of high net-worth investors started measuring aggregate allocations in 2007. The average allocation of members in hedge funds fell to an all-time low of 4 percent. That compares with about 5 percent in the fourth quarter of 2008 in the midst of the financial crisis. Hedge funds have been under pressure from investors troubled by their high fees and poor performance. Michael Sonnenfeldt, founder of Tiger 21, said in an interview that the increase in real estate exposure is an “extraordinary move” that’s taken place as investors have shifted out of hedge funds and stocks. Poor returns from fixed income and concern about geopolitical risk also contributed to the move, he said. "Our members are most comfortable with assets they can have direct ownership of. They can own a building or a part of a small company," Sonnenfeldt said, adding that many Tiger 21 members made their money in real estate and private equity. "When you have such a low ability to produce returns you go to income-producing assets." The Tiger 21 survey differs from a more optimistic report on hedge funds last week from Credit Suisse Group AG that showed allocators intended to increase investments in hedge funds over the next six months.
Tiger 21’s network includes members with assets of about $10 million to $1 billion, and represents a combined $51 billion. The survey represents responses from about a quarter of the group’s 520 members, Sonnenfeldt said.
Seven major global banks have partnered with financial technology (fintech) firms R3 and Finastra for the development of the Blockchain technology-based marketplace for syndicated loans, called Fusion LenderComm. Among the banks are BNP Paribas, BNY Mellon, State Street, and ING.
According to Finastra head of product management, corporate and syndicated lending, Ian Morris, they already successfully concluded the first set of pilot runs on the prototype system in August 2017, and plan to conduct more in the coming months. “More pilots are planned in the coming month. Development sprints continue towards the final objective of go-live next year.”
To improve data sharing between banks
The Fusion LenderComm platform is designed to improve the data sharing activities between agents and lenders, with the ultimate goal of bolstering efficiency and transparency in the syndicated loan market. The system will show real-time credit agreements, position information, accrual balances, and detailed transaction data directly to lenders from agent bank loan servicing platforms like Finastra’s Fusion Banking Loan IQ. The unalterable system will maintain all transaction history to provide each lender a personal view of deals participated in, and a time-stamped audit record. Among the benefits of the system are reduced operational cost and burden of agent-to-lender administration, and access to accurate information to lenders on demand, to maximize loan portfolios.
The platform will be underpinned by R3’s Blockchain-inspired Corda system and is scheduled to be commercially launched in 2018.
Finastra deputy chief executive officer (CEO), Simon Paris, said that the project has already attracted around 10 percent of the global syndicated lending market, with other players expected to join in the near future. “As more participants join, we will quickly gain the critical mass to develop this into the leading marketplace for syndicated lending and loan trading. No more will lenders find themselves an underserved part of the syndicated loan value chain. Where they have struggled with a lack of transparency and speed in accessing critical deal positions, Fusion LenderComm opens up new data plains beyond position reconciliation.” More Blockchain projects with banks Banks have been exploring the various use cases of Blockchain technology to improve their operations, especially in lending. For example, IBM has partnered up with banks in North America and Europe to digitize some of their crucial processes.
(Bloomberg) -- Bitcoin has picked up right where it left off, capping a resurgent week by climbing within a few dollars short of a record $8,000 just days after a plunge of as much as 29 percent from the previous high tested the confidence of advocates of the cryptocurrency.
Bitcoin has gained 17 percent this week, touching a high of $7,997.17 during Asia hours before moving lower in late trading. The rally through Friday came after bitcoin wiped out as much as $38 billion in market capitalization following the cancellation of a technology upgrade known as SegWit2x on Nov. 8.
While multiple reasons have been cited for the price volatility, one of the more viable is that some investors were switching to alternative coins. Bitcoin cash, an offshoot of bitcoin that includes many of the technical upgrades being debated by developers, had more than doubled in the same period. “My sense is that today’s rally is driven by a resurgence in interest and viability for the SegWit2x hard fork,” Spencer Bogart, head of research at Blockchain Capital, said in an email. “Despite the fact that it was called off, there is still some group of people that will follow through with the intended fork. As a result, I believe some capital is rotating out of other crypto-assets and into bitcoin to make sure they receive coins on both sides of the fork.” The main difference between bitcoin and bitcoin cash is the block size -- the fundamental units that make up the blockchain at the heart of the cryptocurrency. Bitcoin cash offers a larger block that holds more data, meaning faster and cheaper transactions according to supporters of the new rival.
Those supporters view the size increase as the update bitcoin needed to become a better means of exchange to compete with payment services such as Visa or Master Card. Bitcoin handles about seven transactions a second, compared with around 2,000 for Visa.
Quoine CEO Mike Kayamori discusses the roller coaster prices of bitcoin and the possibility of more cryptocurrencies. “I look at it as similar to software where there can be multiple versions,” said Mike Kayamori, chief executive of Quoine, in an interview with Bloomberg TV. “That said, having too many will confuse the general public so it’s not a good thing if there’s too many.” Kayamori said he could see a time when legacy bitcoin is treated more as a pure currency while bitcoin cash, with its higher block size, could be more useful for commercial operations. This year’s surge comes as the digital currency starts to gain mainstream acceptance as a financial instrument after CME Group Inc., the world’s biggest exchange, said it would start bitcoin futures next month. Swiss structured products houses Vontobel AG and Leonteq Securities AGwill said Thursday they’ll offer separate products that will allow investors to profit if the price of bitcoin tumbles. Article by Bloomberg L.P. It will allow cross-border referrals between the countries' fintech companies. The Monetary Authority of Singapore (MAS) and the Polish Financial Supervision Authority (KNF) signed a fintech cooperation agreement which lays out a framework for referrals between the two. According to a press release, the framework allows both regulators to refer fintech companies to their counterparts and outlines the support given to the companies to better understand the regulatory regime in each jurisdiction. The framework also sets out how MAS and KNF will explore joint innovation projects together and share information on emerging market trends and their impact on regulation. KNF chairman Marek Chrzanowski said, "This agreement between KNF and MAS will create opportunities for FinTech businesses from Poland and Singapore to expand their activities into Polish and Singaporean markets." The deal aims to promote cross-country cooperation in their respective fintech scenes. The Monetary Authority of Singapore (MAS) and Bangko Sentral ng Pilipinas (BSP) signed a FinTech Cooperation Agreement (CA) at the sidelines of Singapore's Fintech Festival currently being held on November 13 to 17. The deal was made in an effort to promote innovation in financial services for their respective markets. With the cooperation agreement, relevant authorities will be able to share information on fintech trends and developments from their respective countries and even work on projects together. These projects involve tapping on latest financialtechnologies like cross-border payments and know-your-client (KYC) processes. "MAS and the BSP are like-minded in their focus on harnessing financial technology to reduce inefficiency and benefit individuals and businesses. This Cooperation Agreement between our two agencies provides a framework for promoting financial innovation not only in our countries but can also potentially contribute to broader efforts in ASEAN," said MAS managing director Ravi Menon.
INDUSTRY players, venture capital firms (VCs) and angel investors have reacted positively to the measures announced in Budget 2018 by Prime Minister Datuk Seri Najib Razak to encourage investment in local digital start-ups and tech companies.
Many say the measures, especially the RM1 billion matching grant to be provided by major institutions, are just what they have been waiting for. Once the measures are in place, VCs will find it more attractive to invest in local digital start-ups and tech companies . “Exactly what I have been hoping for. We already have a working model via Cradle’s investment matching programme, which attracted all kinds of regional VCs, and this programme would do the same on a larger scale,” says TheLorry co-founder Nadhir Ashafiq.
He is referring to Cradle Fund Sdn Bhd’s co-investment programme, which was started in 2014. To date, the programme has produced cumulative investments of US$171.2 million in partnership with 28 co-investors.
Beyond creating more capital for the local tech entrepreneurial ecosystem, the RM1 billion matching grant will increase the exposure of the large local institutions to early-stage entrepreneurs at a reduced risk, says Anand Krishnan, managing director of Endeavor Malaysia. He says what is also important is to attract the right funds with a long-term commitment to the ecosystem, rather than an opportunistic view, as well as thinking about a path to transition out of dependence on the matching grant programme.
“Earmarking key areas or industries of focus where the capital should be deployed [is also important]. Prioritising which areas are most important to us will encourage entrepreneurs to pursue deeper tech ventures as well,” Anand says in an email reply to The Edge.
Endeavor is a global not-for-profit organization that selects, mentors and accelerates high-impact entrepreneurs. Endeavor helps these entrepreneurs through access to top mentors, capital and talent. Currently, many digital start-ups go to Singapore to find investors as most of the regional headquarters of VCs are there. CatchThatBus, TribeHired, iMoney and Nexx Studio — just to name a few — all received funding from VCs in Singapore. TheLorry received RM600,000 seed funding from KK Fund and raised US$1.5 million in Series A funding with investments from SPH Media Fund. Elixir Capital, which is based in Silicon Valley in the US, is also one of TheLorry’s early investors. “For seed rounds, there is a good ecosystem — such as Cyberview and angel investors — and a lot of people want to play in the private equity space, right before an initial public offering. In the middle, there is nothing. We have to go to Singapore to get funding,” he says. TheLorry is a graduate of Cyberview Living Lab Accelerator (CLLA), a four-month programme set up to guide digital start-ups in growing their businesses by matching them with mentors. TheLorry was awarded RM50,000 in pre-seed funding by CLLA. Besides the RM1 billion matching grant, the government will enhance tax incentives for venture capital management corporations (VCMC) and VCs. These measures are expected to increase private investment by VCMC and VCs in local start-ups and digital companies. Currently, VCMCs are exempt from income tax on statutory income derived from the share of profits received on investments made by VCs. This exemption will be expanded to include income received from management fees and performance fees from managing VC funds. Investing has been made more flexible for VCs as they do not have to invest 70% of their funds in seed, start-up and early-stage digital companies to enjoy a 10-year income tax exemption. Now, VCs only have to invest 50% of their funds in seed, start-up and early-stage digital companies to qualify for the tax exemption. The rest of the fund can be invested in other assets, or at a higher level of fundraising rounds. Budget 2018 also encourages companies and entrepreneurs to invest in VC funds with a tax deduction equivalent to the amount of investment made, restricted to a maximum of RM20 million per year for each company or individual. Tax exemptions given to angel investors, which were scheduled to end by the end of this year, have been extended for another three years. Angel investors are entitled to tax exemption equivalent to the amount of their investment in a company. “Moves to incentivise angel investors, together with VCs, opens up new opportunities, and extending the angel tax incentive to 2020 could not have come at a better time as interest in this space has been rising, due in part to interest in equity crowdfunding. “These are calculated moves designed to increase private-sector participation in this space and drive the growth of tech start-ups in Malaysia,” says Cradle Fund’s chief operations officer Razif Abdul Aziz in an email response to The Edge. For angel investors, a tax break of up to RM500,000 per annum (minimum RM5,000) is available for investment in a tech start-up. The investment must be held for two years and the tax deduction is applicable in the third year of shareholding.
Malaysian Business Angel Network (MBAN), the official trade association and governing body for angel investors in Malaysia, says tax deductions have worked very well in a variety of applications in the country.
“We believe the incentives will open up options and appeal to a wider cross-section of angel investors who have different risk appetites, resources and strategies,” says Razif, who is also executive director of MBAN. However, he hopes the government will reduce, or even remove, the holding period of two years and allow the use of “investment vehicles” for the investment to qualify for the incentive. “These enhancements could have an immediate impact on this space and could serve to attract more private investors,” he says. Anand of Endeavor Malaysia says that apart from providing fiscal incentives to investors, there should be a significant increase in collaboration between research organisations and academia with the local entrepreneurial ecosystem to spur more homegrown innovation. “This is something Singapore does really well, and is evident in a lot of other great entrepreneurial ecosystems as well. We need to develop this much further if we want a truly robust entrepreneurial ecosystem,” he says. The measures are expected to attract VCs to set up shop in Malaysia. Among them, Catcha Group founder Patrick Grove says he is considering basing the group’s VC, Catcha Ventures, in Malaysia, following Najib’s announcement on Budget Day. “For sure, it is making us [invest in digital start-ups in Malaysia] and consider basing our VC arm in Malaysia,” says Grove. He is a prolific investor in the internet and tech scene in Asia-Pacific, having spawned various businesses such as iProperty Group, iCar Asia, Bursa Malaysia-listed Rev Asia Bhd, iflix and Frontier Digital Ventures. Over the last 15 years, since VCs started playing a big role in funding tech start-ups, the level of private sector participation in VC funding has been very low. The latest measures show the government’s commitment to develop the ecosystem to be more dynamic, says Malaysia Venture Capital Management Bhd CEO Jamaludin Bujang. “After 15 years, the local VC and PE [private equity] industry has matured and has generated many investable young companies with [the right size] revenue and profit for the private sector to invest in. “Large Malaysian companies must tap this opportunity to invest in these technology companies as a way for them to expand and complement their own existing businesses,” he says. Report by The Edge
If you haven’t yet heard of venture-builders — also called tech studios, startup factories, or venture production studios — let me introduce them to you: They’re organizations that build companies using their own ideas and resources.
Unlike incubators and accelerators, venture builders don’t take any applications, nor do they run any sort of competitive program that culminates in a Demo Day. Instead, they pull business ideas from within their own network of resources and assign internal teams to develop them (engineers, advisors, business developers, sales managers, etc.).
You’ll want to get used to the idea because we’re going to see a lot more venture-building organizations emerging.
Venture builders develop many systems, models, or projects at once and then build separate companies around the most promising ones by assigning operational resources and capital to those portfolio companies. In its most basic form, the venture-building company is a holding company that owns equity in the various corporate entities it helped created. The most successful venture builders are, however, much more operational and hands-on than holding companies: They raise capital, staff resources, host internal coding sessions, design business models, work with legal teams, build MVPs (minimum viable products), hire business development managers, and run very effective marketing campaigns during their ventures’ pre- and post-launch phases. Technology futurist, serial entrepreneur, and angel investor Nova Spivack is part of the early technologists who pioneered the venture production studio model. He wrote about the model in 2011 at a time when most of the elements that make it up were still in gestation. Nova actually invented the Venture Production Studio term, calling it a “new approach to building startups.” This new approach certainly paid off, as his own venture production studio enjoyed multiple exits three years later.
A Rising Movement
The venture-building philosophy is a rising movement in the tech and startup industries. The most notable venture builders include Obvious Corp, which spun off Twitter and Medium; Mark Levin’s HVF (Hard Valuable Fun), which produced Affirm.com and Glow.com; Betaworks, whose portfolio includes Instapaper and Blend, and Germany’s Rocket Internet (PayMill, Jumia, FoodPanda, etc.). Although these highly successful companies have obvious differences in their business models, they also have significant characteristics in common. They use shared resources (capital, teams, connections, etc.) to launch solutions that then operate as fully-operational companies. The venture-building movement is starting to become more popular outside of the United States as well: The Netherlands gave us StarterSquad, the self-proclaimed “European version of Betaworks”; and the South African team at Springlab had made the entire African continent proud with their innovative joint-venture business model. The Curious Case of the Samwer Brothers We can thank the highly successful and equally controversial Samwer brothers at Rocket Internet for leading the way and showing what the rest of the world has to offer in terms of venture-building capabilities. A lot of U.S. entrepreneurs and venture capitalists see the Samwer brothers (who are known for copying every successful American Internet startup idea under the sun and importing it to Europe and the EMEA) as unscrupulous copycats. I beg to differ. While there is no denying that they reproduce existing business models, they also have an uncanny ability to execute in unknown markets in the most perfect way. Every good entrepreneur will tell you that ideas are worthless and execution is everything. It certainly holds true for venture builders, and the Samwer brothers are the undisputed kings in that category at the global level. The Sharing Economy Creates Venture Builders The uberification of society, on-demand services, and the new sharing nature of the American economy have all contributed to the creation of the venture building ecosystem. The term uberification, which is derived from the popular on-demand taxi service Uber, refers to vertical integration of the customer experience within a specific industry. The uberification effect creates on-demand services that in turn create a new sharing economy that redefines the way society accesses resources. Venture builders help enhance this access by building powerful networks and ecosystems from which resources can be instantly pulled. Thus, they are the shapers of the sharing economy. Analysts and thought leaders define the sharing economy as a socio-economic ecosystem built around the sharing of resources. It includes the shared creation, production, distribution, trade, and consumption of goods and services by different people and organizations. According to Steve Schlafman, a Principal at RRE Ventures, the uberification of our economy signals a fundamental shift in the way local services are discovered and fulfilled. Entrepreneurs should take this concept to the next level by not only enhancing a specific industry but also by radically transforming the startup business model and, ultimately, the way society generates income.
A Startup That Builds Startups
There is a deep correlation between the startup ecosystem and the venture-building universe: The venture-building company is similar to a high-paced tech startup, where the product is the venture, the prototype is the business model, and ‘shipping code’ means perfect and timely execution. In this regard, the venture builder is essentially a startup that builds startups. This is a model that deeply resonates with my own venture-building team. Our company sees itself as a bootstrapped startup that applies Lean Startup principles such as process management, validated learning, iteration, and innovation accounting to the venture building process. We act as a collective that allows seasoned entrepreneurs from within our network to share resources (capital, skills, and market expertise). Those resources then power equity joint-ventures that operate in areas where the venture partners have a significant competitive advantage (an existing business, traction, superior market knowledge, dedicated operational resources, etc.). It’s a win-win business model that emulates the philosophy of the PayPal Mafia as we greatly benefit from the sharing nature of our growing network to seize opportunities. PayPal Mafia Principles The PayPal Mafia is a collective of Silicon Valley entrepreneurs who founded PayPal and who went on to build the most defining technology companies of the world. The collective includes Elon Musk (Tesla, SpaceX), Peter Thiel (Clarium Capital and Facebook’s original angel investor), Steve Chen (YouTube), Reid Hoffman (LinkedIn), Dave McClure (500 Startups), Russel Simmons (Yelp), Yishan Wong (Reddit), David Sacks (Yammer), and many more. John Greathouse, a VC at Rincon Venture Partners who teaches at the University of California, lists the key elements of a PayPal Mafia-style network on Quora:
The Venture Building Ecosystem: An On-Demand NetworkAnother important characteristic of a venture-building company is the presence of a strong sharing network capable of unifying a vast array of resources in the most effective way. Venture builders rely heavily on the quality and the dynamics of their networks and thus need to figure out which combination of resources will produce the most explosive results in order to capture market share quicker than its competitors. The challenge lies in the managing partners’ ability to federate all these resources under one governing body that can build ventures in a very focused and dedicated way. The Venture Builder’s network must act as a pool of instantly available resources that create an internal culture of trust, deal flow, attentiveness, and determination. This network-first model is certainly different from the standard startup business model, and there is a good reason for it: As the entrepreneurial world adapts to the ever-changing needs of consumers and corporate clients, startups and organizations will need to evolve and share resources under a unified business model in order to remain competitive and to respond to their clients’ needs faster.
As you probably noticed, the venture builder model is close to that of the venture capital firm: It funds ventures, builds a portfolio, and looks for successful exits. However, it is also much more involved in the operational aspect of its ventures than a traditional VC. In some cases, it goes as far as pulling all the necessary resources from its vast connection network to crush its competition and scale extremely fast. This “Damn the torpedoes, full speed ahead” operational technique, which is highly reminiscent of Uber’s business strategy, proves that venture builders are first and foremost gifted entrepreneurs and savvy business developers who don’t simply pour money into ventures and watch them grow. They implement aggressive business management techniques that benefit all the ventures that are part of their network.
The Monopoly Effect You may wonder what an ever-growing venture building ecosystem will lead to. I believe the ultimate goal of the venture builder is to exhibit characteristics of a monopoly. This is a natural evolution of any organization that combines unlimited capital, ever-expanding clusters of ecosystems and an eternal pursuit of happiness, which I defined earlier as the constant need to innovate, enhance, and build better solutions. In fact, a monopoly strategy should be part of the vision of every venture-building company. This controversial sentiment is shared by venture capitalist and visionary PayPal founder Peter Thiel, who argues in his groundbreaking book Zero to One that a business should thrive to become a monopoly. He defines a monopoly as “a kind of company that is so good at what it does that no other firm can offer a close substitute.” A Bright FutureDespite threats of monopoly, Mafia-inspired networks and conspiracy theories, the venture-building production model has a bright future ahead of it. I foresee an increasing number of startups and organizations applying this business model in the years ahead. By combining their resources, they will develop dynamic ecosystems that will birth amazing products, solutions, and ventures. The Marvel universe-inspired network my team is currently building is already 15 companies strong after a mere seven months of activity, with sequential company launches in four countries. Despite many challenges, we successfully built a powerful resource pool of more than 20 venture partners that are financial experts, digital media entrepreneurs, mobile money specialists, technologists, economists, and even economic operators. Yet, we are just getting started. And the list of new business entities with venture-building characteristics keeps growing around the world. All these initiatives will radically transform industries by creating new avenues and opportunities for society to generate income and access more capital. Let a thousand flowers blossom. Article by Ali Diallo is an American entrepreneur
Looking at the tech scene here in Berlin, it is clear that a new trend is emerging: venture builder, startup studio, startup factory or whichever other synonym you choose to use to describe it. The concept is in essence a startup which creates other startups, by functioning almost as a holding company, which builds other companies rather than simply owning them.
Venture builders have received significant criticism in the past for being copycat machines which take innovative business models and recreate them to dominate other geographical markets, all before the original startup can. One famous venture builder is Rocket Internet, with its prime example being Foodora. Deliveroo, founded in 2013, is an online food delivery company that brings food from restaurants directly to homes or offices, thereby giving customers a huge variety of high quality dishes to choose from. Rocket Internet saw this idea and set up Foodora, essentially the same concept, in other markets, all at lightning speed and before Deliveroo.
In the startup arena, it is commonly said that 5% of a startup is the idea, whilst 95% lies in the execution. Startups push the boundary of innovative new business models underpinned by technological development in order to disrupt markets. Key examples are Uber and the taxi industry, Skype and the telecom industry and Airbnb and the hospitality industry. However, it is the execution of this innovative business model that presents the difficulty. Maybe per this definition, venture builders can be seen as a new innovation in business execution and thereby rightfully can also call themselves startups.
Venture capitalists provide capital to risky young startups in return for equity, to allow the latter to grow. When looking at the VC industry, the returns can be astronomical. However, the power law seems to dictate two aspects of the industry; only a few of the companies a VC firm invests in return the fund and only a few VC firms provide astronomical returns. It is well-known that entrepreneurs try to get funding from the top VC firms, because this greatly increases their chances of commercial success. This is due to the network effect of these firms, exemplified by the ‘Paypal Mafia’, by which the provision of capital is supplemented by a network of useful people to tap into. This ranges from developers and salespeople to legal and business development, in addition to knowledge from industry experts and leaders.
In theory, these venture builders provide the infrastructure for a startup to succeed. Just like a VC, they provide developers, salespeople, legal and business development. If these venture builders don’t simply copy innovative business models, but also get budding entrepreneurs to pitch and execute their ideas with them, then essentially they provide the same service as a VC. This therefore begs the question of whether venture builders deserve their rep as copycats, or if they’re simply resource providers of their own. I guess only time will tell as to whether venture builders will be able to create truly innovative unicorn such as Google, Facebook and Intel.
Article by Chris Knaup, Engineer
MALAYSIA reaffirmed its position as a regional hub for tech startups with the announcement of leading global venture builders setting presence in Malaysia to help accelerate the growth of startups in Malaysia and Southeast Asia.
Mountain Partners, a Swiss-headquartered company builder, will set-up their Southeast Asia operations hub in Malaysia. The set-up will see Mountain Partners helping more than 15 of their global portfolio companies expand into Malaysia by creating their presence here, and creating more than 400 job opportunities, including more than 50 top C-suite talent roles. Mountain Partners will also set-up a US$100 million (RM422 million) fund to invest in Malaysia and Southeast Asia tech startups.
Additionally, the partnership between the private equity firm Leonie Hill Capital and Japan-based IP Bridge will see Malaysia as the home ground for their venture-building initiative that will invest and nurture Malaysian and Southeast Asian innovative Intellectual Property-based tech startups, particularly in IoT, sensor and wearable technology, agri-tech and food-tech.
The partnership, through IP Bridge’s global expansion initiative, ManGO Factory, will also relocate more than 10 Southeast Asian and Japanese startups in Malaysia, providing them with facilities, access and market opportunities in Malaysia and Japan. Leonie Hill Capital will provide expertise in commercialisation, while IP Bridge will provide expertise on Intellectual Property strategy and advisory. Malaysian Prime Minister Najib Razak noted: “Malaysia has the right ecosystem for global tech start-ups to set-up and grow in this region. Located at the heart of Asean, Malaysia is the gateway for tech start-ups to expand their reach to the Southeast Asia market. On top of that, our strong infrastructure and reduced cost of doing business are conducive to support and encourage the growth of start-ups. “While Malaysia is set to become a regional hub for tech start-ups, what this really means is more high-skilled jobs will be created through this initiative, thus giving Malaysians more opportunities - economically and socially,” “The strategic efforts placed by Mountain Partners, Leonie Hill Capital and IP Bridge will complement Malaysia’s initiatives in building a robust start-up ecosystem as Malaysia continues to provide regional and global start-ups the platform to scale in Southeast Asia,” said Malaysia Digital Economy Corporation (MDEC) chief executive officer Yasmin Mahmood.
Providing start-ups and entrepreneurs a conducive ecosystem
MDEC launched the Malaysia Digital Hub initiative in April this year to further enrich Malaysia’s start-up ecosystem. It is a place where start-ups and scale-ups co-exist with growth ecosystem players such as venture capitals, accelerators, anchor internet companies, talent builders and mentors. Equipped with high-speed broadband and lifestyle amenities, the digital hubs are owned and operated by the industry where MDEC will certify them with Digital Hub status. Today, there are four locations certified under this initiative, namely APW, The Co., Common Ground and WORQ. In further enriching the ecosystem in these hubs, strategic partners like Microsoft, Axiata, Alibaba, Maybank, and Y Academy with Kejora, among others were brought in to run programmes that would help the start-ups grow. As part of the efforts to push forward Malaysia’s plan to become a hub for tech start-ups, MDEC also introduced Malaysia Tech Entrepreneur Programme (MTEP), an initiative by the Malaysian government that aims to attract gifted and ambitious individuals from all around the world, and help them to kick-start their start-ups in Malaysia. Entrepreneur passes of one or five years are given to qualified new and established entrepreneurs. |
CORWIN GROUPLatest News Archives
October 2021
CategoriesBy submitting this form, you provide consent for Corwin Group to email you occasionally with industry news and promotions. You may unsubscribe from these emails at any time.Testimonials & Disclaimer
Important Disclosure: By visiting this site, you agree to be bound by CorwinGroup’s Terms of Use and Privacy Policy. CorwinGroup.com is intended for accredited investors and otherwise qualified investors who understand and accept the risk associated with private investments. Investing in private investments on CorwinGroup involves risks, including, but not limited to market and industry risks, risks related to a specific property, currency fluctuation risk and liquidity constraints. Investments are not bank deposits and are not guaranteed. There is a potential for loss of part or ALL of the investment capital. CorwinGroup does not endorse any of the opportunities that appear on the site, nor does it make any recommendations regarding the appropriateness of particular opportunities for any investor. No correspondence or information provided on CorwinGroup.com or by any representative of CorwinGroup should be construed as a recommendation of a security. Each investor is advised to conduct his/her own due diligence as CorwinGroup does not provide any investment advice, business advice, or tax or legal advice. CorwinGroup is not registered under the Securities & Futures Act or the Financial Advisor’s Act. Neither the Securities and Exchange Commission in the country nor any federal or state securities commission or any other regulatory authority has recommended or approved of the investment or the accuracy or inaccuracy of any of the information or materials provided by or through the website. Please read Corwin’s Terms of Use for more detailed terms and conditions to which users of CorwinGroup are subject. |