As entrepreneurs become investors, insights gained from running startups have proven valuable in identifying success factors – such as partnerships, innovative solutions and interoperability – on whether to invest.
In 2005, Min-Liang Tan and Robert Krakoff established Razer, a lifestyle brand for gamers. The company is known for its hardware, gaming credits and a massive network of online to offline points. These points led to building a fintech layer and Razer now processes billions of dollars in transactions annually. Its various entities have received payments licences or e-money licences in many markets.
Although Razer started out with a closed loop platform for the gaming industry, it now supports 80 million gamers globally on a multitude of games and has found that having an open ecosystem is very important.
Min-Liang Tan (left) and Robert Krakoff (right)
Tan shared that they are now looking at additional financial services they can provide and are exploring whether to apply for a banking licence in Singapore.
“While we’ve got one of the biggest brands, we see ourselves as a platform. We want to work with other companies, to have this open ecosystem, to look for the best technology, to interoperate. Being able to interoperate is incredibly important,” Tan shared.
In his key message to other investors, he noted that this can be summarised into “two tweets”. First, millennials are underserved. “There is huge innovation we can do.” Second, he is also very enthusiastic about what’s happening in entrepreneurship in Singapore.
Going beyond the business
Tallwood Venture Capital managing partner Dado Banatao said his path to becoming an entrepreneur started in the early 1990s, when IBM released its PC system. “I opened up the box. I thought it was designed by a poor technician. That challenged me. I read a manual and deduced how the whole system worked. I steered a company to reduce 300 chips to five. My first product worked.” From there, he went on to lead a series of successful startups, including the most recent, Tallwood Venture Capital.
Banatao said his approach to investing is based on his experience as an entrepreneur. He approaches opportunities as an engineer and looks at the potential returns from the investment, then funds them and tests them before opening them up to friends or colleagues.
Beyond investing, Banatao also wants to make a difference in his home country. “The Philippines is still a relatively poor country. I wanted to give back,” he said. Banatao shared that he spoke with leaders of the country to reinforce his message that innovation is the foundation of economic growth and the only path out of poverty. For Banatao, innovation also requires a lot of investment, and that the government has to believe in it. “We started some large programmes, sent a lot of money. I am happy that they are starting to launch programmes they never thought of.”
Today, he maintains residences in both the United States and the Philippines. “The learning process in Silicon Valley is enormous. I transported (it) to the Philippines,” he said.
When bank-led mobile financial service provider bKash started out, people in Bangladesh did not have smartphones, said bKash chief executive Kamal Quadir. Today, about 130 million people in the population of 171 million have mobile phones and bKash has 37 million customers who conduct 200 million transactions every month.
bKash offers basic services such as cash in or cash out and is focused on financial uplifting. It has been telco-agnostic and is working on interoperability amongst service providers. “If you can build the technology smartly, you can reach a lot. The most critical thing you need is the mindset,” Quadir said.
Quadir added that what bKash has done is to build a foundation. “A lot can be built on top.” The financial inclusion and economic deepening that bKash introduced is not just stored value accounts but also loans, insurance, and more, he noted. It is also important that financial inclusion has been on the mind of the country’s leaders and that the central bank has been very engaged.
Partners are key to growth
Skype co-founder Geoffrey Prentice established consumer finance company Oriente in 2017. It has had 11 million downloads and currently has 4 million users. Oriente has partnered with JG Summit in the Philippines, which owns Cebu Air Inc, and with Sinar Mas in Indonesia. “We use their traction, leverage their pieces. We are the enabler to leverage these assets,” Prentice revealed. He acknowledged that having large user bases has become quite helpful in their partnerships.
Prentice observed that the difficulty in growing a company is in unlocking its value. When he started Skype, the company could not find investors and was not able to raise money for 18 months. Whilst he assumed that everyone would have the same experience, he has since found that different companies pursue different paths. For example, Ping An Insurance spun off a number of groups, whilst Grab and Gojek have set up other companies that leverage their assets.
Prentice noted that the future of infrastructure is going to be digital and countries that want to take off have to prepare for the long growth curve.