What opportunities exist for SMEs in Southeast Asia in terms of raising capital?
SRIVORAKUL: With the current market opportunities there are not that many options for SMEs to raise capital. For instance, we had to go outside of Southeast Asia to raise our capital. The big investors are in China, India, Japan, and they are also looking to invest externally. In Thailand, where we are based, one of our challenges is that the local Angel community do not really understand the internet eco system. They will value an internet company similar to a typical off-line type of business. You do not receive the same level of enthusiasm, the same valuation, as you would as from other countries that understand the model.
What are the best investment opportunities within ICT in the region?
SRIVORAKUL: From my perspective, the investment opportunities in the region in the internet consumer space are in their infancy. Even online advertising, as well as social or even mobile, is untapped. We have been investing in advertising companies, but when you look at the market at its current stage, you are looking to 2 to 3% online advertising as a percentage of total advertising. Our neighboring countries have double digits. We see great opportunities in online advertising space in the media, given the time that people spend with online media versus traditional media. I call it the $5bn opportunity because the number of advertising spend matches the time people spent on internet space. In the internet space, advertising is a huge part of the monetization. Any time you are doing content or media or even mobile, advertizing is a big component of that monetization. That is one and the other one would also be e-commerce. Most recently Rocket Internet from Germany, the people behind Groupon International saw a lot of opportunities in these markets and they are now investing heavily. They invested recently in 6 different start ups, primarily focused on e-commerce. In my opinion the traditional retail markets are huge, with 5% growth, and the online retail market is barely explored. Investing in online retail versus offline retail is a big opportunity as well.
How developed is the ICT infrastructure in emerging markets?
SRIVORAKUL: There is a huge opportunity for the development of infrastructure. If you look at Indonesia, you will see that the credit card system is incredibly low. Companies like PayPal and other online players are trying to fix this problem.Â In my opinion there are a lot of opportunities in local online hosting and even in local online security because most of the companies are outsourcing these operations to the US, Singapore or Hong Kong.
What is your take on the Facebook IPO?
SRIVORAKUL: My take on the Facebook IPO is that things are becoming a reality. You can only go so far with hype. What was a surprise for me was the reaction of investors in Asia. Usually they look at the hard numbers to identify what is the real opportunity. It is very difficult to justify the valuation that they are getting based on comparison with other digital companies. We should also take into consideration that Facebook is coming after Google. The reason behind Googleâ€™s IPO success is the lack of options at that time. When Facebook decided to go public, there were already a lot of investment options such as Groupon, LinkedIn, and Google. Nowadays, investors are becoming more net savvy and they have their own theories of whether one billion users can be monetized somehow. People are becoming more realistic about the real monetization models out there. When you look at the average revenue per user that you can get from the Facebookâ€™s users, there is quite a discrepancy between the revenue opportunities of a user in Indonesia versus a user from the US or Europe.
From my perspective, the investment opportunities in the region in the internet consumer space are in their infancy. Even online advertising, as well as social or even mobile, is untapped. We have been investing in advertising companies, but when you look at the market at its current stage, you are looking to 2 to 3% online advertising as a percentage of total advertising.
What makes the Asian Business Angel Forum (ABAF) interesting?
SRIVORAKUL:Â The ABAF is interesting from the perspective of entrepreneur founders and also early stage investors. It is helping up to build the eco system in market where there is not enough early stage money that allows companies to kick-off a start of a great idea. Nowadays, there are huge challenges of finding capital to really create a solid runway for a start-up to prove a model. The ABAF overly opens up these opportunities by giving access to the kind of diversity of Angel investors. These Angles are from all over the world, coming to South-East Asia and finally acknowledging the community from the investorsâ€™ perspective.