Hi there, it’s Robin.
The less obvious value of rising to become a tech unicorn is getting clearer in China today. That status brought about by how these entrepreneurs build their startups from zero into a more than US$1 billion company does have its perks.
Tech unicorns’ enjoy a status like no other – media attention, greater publicity, greater access to fundings, just to name a few. But more importantly, they have the buffer to tide over difficult and challenging times; they are given the opportunity to move with times and are not written off immediately.
Meituan’s Illustration of changing with times
HK-listed Meituan Dianping saw its stocks tumbled after announcing widening losses for Q3 2018. This might not be surprising given the slew of negative news before it went public. There were already many doubters who question Meituan’s profit viability back then. Maybe taking on other tech giants across different verticals all at the same time is not that easy after all.
Interestingly, things seemed to take another turn. Meituan Senior Vice President Wang Huiwen shared some interesting perspective at a recent tech conference (WISE) in Beijing earlier this week. He addressed the concerns with this: there is no correct answer whether one is an aggressive or reserved investor. It is all about timing.
Over the past decade, the entire market is largely bullish and funds can be raised relatively easily. Good business opportunities seemed to be abounding. And all Meituan was doing then, was simply to stay curious to explore other verticals to seek growth.
Now that China’s internet age today has moved to the ‘second half’, where lack of good opportunities has become the new normal, more thinking and less hasty actions should be done for future investment opportunities. Before a business should consider investing in other verticals, its core business must first be solid. A good organizational structure is important.
All in all, Meituan is going to be more selective in its investments from now, and the focus will be on improving its own organizational structure. This shift is about adapting to the changing landscape, being agile to stay in the game.
This could be an important lesson, and it might be needful to take a page from Meituan to remember the need to understand the times and make the right decision, whether it be to pursue aggressive growth or to stay passive, especially for the bigger tech players in Southeast Asia. The journey of the rise of super apps over there has only just begun.
One noteworthy news in the region this week is the kicking off of Go-Jek’s next move as it expands beyond the shores of Indonesia. After months of enduring expensive rides since Uber’s exit, Singapore consumers finally got their wish. DBS cardholders can enjoy some rebates for their first 2 Go-Jek rides.
Read on to find out more interesting stories from last week, and feel free to tip us if you have news clue or you just want to talk with us, email us at [email protected] and we are looking forward to hearing from you.
Here are some stories you shouldn’t miss.
China
BabyTree’s $217m stock sale saw 18% over-subscription
Alibaba announces first major restructure after Jack Ma’s retirement plan
Nobel laureate Thomas Sargent: China might have a tech bubble, but not necessarily a bad thing
Rest of Asia
Tokopedia is becoming a super app in its own right
UK cross-border payment startup has a plan for APAC
Grab reportedly to add PayPal to its shining strategic investor roster
Online lending platform Oriente announces $105m initial funding for Southeast Asia
Cocoon Capital announces $20 million Southeast Asia fund for enterprise tech startups
Phase three in Indonesia’s ‘wallet wars’: pairing with e-commerce platforms
Singaporean InstaRem raises Series C with a big plan for Indonesia
Go-Jek begins roll out in Singapore
Lazada partners Korean IP protection body as Korean products gaining popularity on its platform
The Philippines’ Voyager Innovations raises $175m from KKR and Tencent