Over this season, apart from our portfolio founders, we’ve been able to talk to a couple of really interesting venture capitalists from different parts of the world and have them share their thoughts about Southeast Asia. And in this episode, we’re back with another venture capitalist, and now doing this in conjunction with Insignia Ventures Academy, Asia’s first experiential VC accelerator. You can expect to have more episodes with mentors and alumni from the 12 week- program as well.
One of them is Mark Sng, Vice President of Gentree Fund, the venture capital fund of the Sy family office, the family behind one of the largest conglomerates in the Philippines. He talks about his career going from private equity to corporate development to venture capitalist as well as the evolution of the Philippines’ startup ecosystem and what’s exciting in the market these days.
Highlights and Timestamps
- 00:46 Paulo introduces Mark Sng, VP of Investments at Gentree;
- 01:44 Philippines’ Startup Ecosystem Rising; “It’s really exciting to have that front row seat to actually really see how the ecosystem is coming up.”
- 02:57 Mark’s Career Part 1: TAEL Partners (PE Fund); “It’s kind of a different investment style from VC in the sense that you’re not working in syndicates here. It’s a lot of internal operational value you bring to the table. You also work with the founders very closely because they are the ones that you have to exit with. There’s not gonna be that many voices on the board as well.”
- 04:58 Mark’s Career Part 2: Gojek Corporate Development; “Naturally fundraising never leaves your job in corp dev, as one of the main roles of corp dev is fundraising. But one of the other roles of corp dev is to make strategic acquisitions.”
- 06:34 Mark’s Career Part 3: Go-Ventures; “The idea here was that we wanted to invest financially, be able to exit with the founders to the market and create a financial return, but at the same time, give them the support of arms length partnerships of Gojek.”
- 08:24 Mark’s Career Part 4: Gentree Fund; “Does a CVC approach work better or does a financial VC under the family office work better?”
- 11:20 Impact of more family offices and corporates setting up funds in Southeast Asia; “If everyone’s money is as green as everyone else’s, really what value do you bring to the startup founder?”
- 14:30 Comparing PE, Corp Dev, and VC from skill sets POV; “Having been through that journey, joining PE, Corp Dev, then VCs, I guess I move at a faster and faster pace.”
- 17:04 Value of regulatory clarity in attracting investors; “The industry with the most clarity I think is the FinTech industry in the Philippines…the development there and the investor interest is because clarity has been provided and it’s because the regulatory framework is very clear.”
- 19:45 Thinking beyond the Philippines for market; “If the Philippines isn’t big enough, you don’t need to just stay in the Philippines. There are OFWs all over the world; you can sell to them.”
- 20:47 Rise of elephants and unicorns in the Philippines; “The effect of [building unicorns] as well is that the people that you bring into your organization would then spawn a thousand ships.”
- 22:41 Rapid Fire Round;
About our guest
Mark Sng is the Vice President of Gentree Fund, the venture capital fund of the Sy family office, the family behind one of the largest conglomerates in the Philippines. Mark previously spearheaded the Singapore office launch for Go-Ventures and supported the ventures team as Head of Singapore and Vietnam Coverage. Before Go-Ventures, he was with Gojek’s Corporate Development Team, where he was part of the team that led the acquisition of Coins.ph in the Philippines. He also supported growth equity transactions into family-run businesses at TAEL Partners: a SEA growth equity fund with a focus on the Philippines, Vietnam and Indonesia markets.
Paulo: Excited to have you on the show Mark, how are you doing?
Mark: Hi Paulo, thanks for the invite. Been good today. Thanks for bringing me onboard.
Paulo: It’s great to have you on and excited to hear about your story as well now that you’re focused a lot in the Philippines, excited to hear about your views vis-a-vis all these other markets that you’ve operated and worked in. But first things first I would love to know what excites you about your work right now with Gentree?
Mark: So I think it’s how fast the Philippines market is moving and developing. COVID has really accelerated the digital trend. This is not just a Philippine story. It’s more of a Southeast Asian story, right? You have greater internet penetration. Now people are using services which previously were mainly the alternative to offline.
So you get a very high online adoption rate. People are consuming a lot of media content [because] people are stuck at home. So you see the same characteristics in the Philippines as well and I think that’s what really excites me because the amount of opportunity [that] now creates for companies to [prop] up over that infrastructure base has been created — digital infrastructure that’s been developed through COVID in that sentence.
So it’s really exciting to have that front row seat to actually really see how the ecosystem is coming up. I mean, not from zero — we had some initial successes early on but in terms of the pace that the Philippines has grown, it’s not been as fast naturally as Indonesia and Vietnam, right? Because those are the two main markets that people really focus on in Southeast Asia. So it’s really exciting to see how the Philippines is catching up in that sense. I think that’s generally what most funds are starting to notice, at least those focused in this market.
“It’s really exciting to have that front row seat to actually really see how the ecosystem is coming up.”
Paulo: I share the same sentiment, prior to Insignia, I was also pretty active as well in the Philippines startup ecosystem and had the privilege of being able to see it grow. And now we have a lot bigger rounds as well happening in terms of venture-backed startups, so we’ll definitely talk about that.
But first things first, I want to dial back a little bit. You’ve had quite a storied career thus far, eventually leading up to Gentree, and in particular, I saw it as three transitions. And I think the first one was from the start of your career in PE and then transitioning to corporate development at Gojek. So maybe you can tell our audience a little bit more about that transition and why you made that jump.
Returning to Southeast Asia: TAEL Partners (PE Fund)
Mark: [From] my university in the UK, [I] came back after a short little one year of work there, in an M&A advisory fund. So when I joined the PE fund, I was actually posted straight to Jakarta. So that PE fund I joined, it’s actually called TAEL Partners, they have a bit more of a regional view towards their growth equity investments.
They mainly invest in family-owned businesses. So these are very traditional businesses. It can be a fertilizer plant. It can be a glove manufacturing factory. It can be a frozen food processing plant. So it was very physical, right? So the main reason they’re raising capital [from] us is to basically fund CAPEX, also working capital needs, but really very much we were the only investor in the company. You are the partner to the family business in that sense. It’s kind of a different investment style from VC in the sense that you’re not working in syndicates here. It’s a lot of internal operational value you bring to the table. You also work with the founders very closely because they are the ones that you have to exit with. There’s not gonna be that many voices on the board as well.
So I did deals in Indonesia with them and then I also had the opportunity to look a bit more regionally besides Indonesia, so [I spent] a year in Indonesia did a few deals there. When I moved to Malaysia, actually strangely enough Kuala Lumpur, because that’s where the PE fund had its biggest office, [and] the middle and back office was also there. So then I started looking from Malaysia outwards towards Vietnam and Philippines, and actually the market that I really focused on ended up being the Philippines. So I had a chance to really look at different family businesses in the Philippines market. I think what was interesting was that some of the businesses looked at [included] the SM group as well.
Paulo: So it comes full circle.
Mark: So that comes full circle. I remember looking at 2Go, for instance, back when this was before SM invested, right? So SMIC had not invested in them. This is before that. So I remember looking at them. [So I got] some contacts there, some friends in the industry already, which was very helpful when I [reached out to] him back in Gentree.
“It’s kind of a different investment style from VC in the sense that you’re not working in syndicates here. It’s a lot of internal operational value you bring to the table. You also work with the founders very closely because they are the ones that you have to exit with. There’s not gonna be that many voices on the board as well.”
From TAEL Partners to Gojek Corporate Development
Mark: Jumping a little bit back to the TAEL experience and Gojek. So in my third year of work with TAEL, at that point I had done three or four deals in different markets. It’s obviously a very regional focus, [that meant] flying to different countries every week, two countries in a week sometimes. There was an opportunity to join Gojek. This was back in their Series D days. This was three years after my career in TAEL when I first saw Gojek. Gojek, I think, was seven years old at the time. So Gojek started as a call center, and then developed from a call center into this app when Northstar invested, and thereafter it [became] a super app as you know it.
So there was an opportunity to join them in their Series D and this was exciting because at that point they had raised quite a bit of money. I think it was about 150 million or something around that, but they were going in a bit more international expansion mode.
Paulo: Yeah, I think they were making a couple of acquisitions as well.
Mark: Correct. And that was part of that. I was part of that. So I was headhunted, joined Gojek. One of the first things I did was Series F fundraising. Naturally fundraising never leaves your job in corp dev, as one of the main roles of corp dev is fundraising. But one of the other roles of corp dev is to make strategic acquisitions. And that was the bit that I really focused on as well. So we did Coins.ph. Me and my boss at the time Adi Kumar, the two of us actually did Coins.ph together. So that involved flying nonstop to Manila, two, three weeks [we were going back and forth] from [Manila to] Jakarta.
We forget that Southeast Asia is not that connected. Sometimes flying from Jakarta to Manila is not that easy because it’s only one flight a day or two flights a day. Apart from Singapore, not everywhere is actually that easy to fly. For example, if you want to fly from Jakarta to Bangalore, there’s no direct flights. You fly through Singapore, and at the time it was a bit mind boggling because you have so many talents flying through.
So I joined the Coins.ph [deal]. That deal took a bit of time. We worked very closely with [CEO] Ron Hose. That took about a year to close up, but once we did that and once we finished that, there was an opportunity for me to jump over to the Go-Ventures team.
“Naturally fundraising never leaves your job in corp dev, as one of the main roles of corp dev is fundraising. But one of the other roles of corp dev is to make strategic acquisitions.”
Gojek Corp Dev to Go-Ventures
Mark: The Go-Ventures is quite a unique setup. It’s not a corporate VC fund, despite what the media typically reports nowadays. It’s not the corporate venture vehicle of Gojek. So it’s a 175 million fund one that they raised, but Gojek was only one of 27 investors and not the majority — I mean, it was the largest investor or anchor LP.
The main objective of Go-Ventures is very much financial returns and that’s where it gets really, really interesting. Because Gojek knew that they didn’t want to just do a CVC. They wanted to do a fund that could actually make returns and actually justify its existence.
Paulo: It’s more like an institutional VC more than anything,
Mark: Correct. And that’s why they hired Aditya Kumar to join and do just that. So Aditya Kumar was me and Adi Kumar’s boss that they brought in, but we were part of the initial founding team. So this was us actually really developing a fund from scratch. I still remember the team having to work on the LPAs and the PPMs because this was an institutional fund that we created. So [it had] the typical structures that you would expect in an institutional fund. So we imposed that.
We have quite a full team then. It was really cool how we actually structured the team. Everyone got really close. We were doing very cool deals, some notable ones like Halodoc, for instance, and other big winners that we did. We did Mobile Premier League, which I’m happy to call my portfolio now and Gentree’s as well. So [I] managed to invest in [it] after I left Go-Ventures as well. We did interesting things like Rebel Foods. We really pioneered the corridor from India to Indonesia, where we brought in companies like Rebel Foods and MPL out into Indonesia to launch there with Gojek’s help.
The idea here was that we wanted to invest financially, be able to exit with the founders to the market and create a financial return, but at the same time, give them the support of arms-length partnerships of Gojek. We had a saying, if something depends on Gojek a bit too much, then it’s probably a corp dev deal, because it’s going to end up getting acquired. If something depends on Gojek for like, a hundred percent of its revenue, then it’s definitely not a venture deal then. The concentration risk there is a bit too high. That’s how we kind of looked at it. So I ended up being with Go-Ventures, I think for a year and a half to two years as part of the founding team. I really loved the team there, we are still very good friends. I catch up with Adi Kumar every other month. So it’s been really cool.
“The idea here was that we wanted to invest financially, be able to exit with the founders to the market and create a financial return, but at the same time, give them the support of arms-length partnerships of Gojek.”
Go-Ventures to Gentree Fund
Mark: But over COVID, there was an opportunity to launch Gentree, and this is really interesting. So I got introduced to Jean Coson, one of the Sy family members. From there I was brought onboard as part of the team.
Paulo: What sold you on the idea of setting up Gentree? I mean, did Jean pitch to you, or did you come in with the idea or…?
Mark: So not many people in Singapore know that much about the Philippines in the sense of actually having been to the market quite a bit. I think anyone who has been to the Philippines even once, you know how big the SM group is. The moment you land you know, so when I heard that there’s a chance with the family office of the SM group to launch this venture strategy. I was like, “Oh, wow. I mean you can’t really say no to that.” I mean, this is such a big group. They were at that point starting to really think digitally in a bit of a bigger way. This was pre-COVID that I was starting to talk to them. I think this was February or March when you started hearing China was starting to lock down a little bit, [and] people were getting a little bit worried, but no one thought that it would last as long as [it has]. I think everyone thought it would be like SARS. I think that’s what the assumption was.
I think that was when people started to really think about digitalization and at that point Philippines venture [capital]-wise, Foxmont was already there. Foxmont has been there for some time. I love the guys there. Franco’s really great there. [And] you had the CVCs, you had the Kickstart guys, the JGDev guys. So I knew that the SM side of things will kind of look into doing something in the venture space as well. It kind of makes sense. This is a natural extension of the strategy as well, but I guess it’s [also] how we have really shaped that sort of strategy, right? Does a CVC approach work better or does a financial VC under the family office work better? And I guess it also goes into the family’s plans as well for the fund itself.
So the way we structured it, and I guess why I was brought in try and replicate a very similar sort of — I wouldn’t say completely, but they are very different markets. [They have] very different linked affiliates in that sense. Gojek is quite a different sort of animal in a very digital format. That’s why I was brought in, to launch this new strategy, which kind of mirrors it because we wanted to have a financial mandate that allows us to make financial returns.
And that’s the key goal for Gentree right. It’s to really work with the founders to maximize portfolio value. So we are always sitting on the side of the founders. We want to really maximize portfolio value here. We don’t want to control any startup because that’s not the way to allow a founder to really grow. We never ever go above 20% of any cap table, but tend to stay within the 5% to 10% range typically. In terms of the fund itself, the way we provide value is through very arm’s length support from SM. So we wouldn’t be offering any preferential terms because that is typically limited to affiliates of SM itself.
Paulo: I mean, they would have their own separate dealflow or pipeline for that.
Mark: Correct. But for us, what we are doing is really giving them that opportunity to meet the right team and the right team can say, “Yeah, I want to work with this. You guys invested in it as well. Let me work with them.” But we don’t influence their buy-in from the operation side of things, because we don’t have that purview there. That’s where we draw the line quite clearly. That way we can actually make financial investments as well. When we set up Gentree then, it was along those sort of parameters, because we wanted to make the fund actually sustainable. And the goal here is very much to develop an institutional fund under the Sy family office. It’s very much to bring the sort of best practices that I learned at Gojek, even at Go-Ventures into the setup here. So that’s how we have kind of started.
“Does a CVC approach work better or does a financial VC under the family office work better?”
Paulo: Thanks for really going through all your transitions and that whole story from PE all the way through to Gentree. And as I said earlier, it seems like [it has] really [come] full circle.
One thing that I noticed is that your career also [reflects] some shifts in how VC or investing in startups has been done in Southeast Asia. I want to piece apart some of those trends and get your thoughts on that. What are your thoughts on more organizations trying to get into the space, not necessarily doing CVCs for example, but more institutional VC funds and how would that impact fund managers or investors like yourself as well as the overall ecosystem?
Mark: One of the things I realized is that [when] you start investing earlier like seed stage Series A, you have to help the founder a little bit. You’re not running the company, but you’re bringing in support. I know Yinglan does it very well. I know Yinglan connects his founders with great people, but I think that ability to provide support, really comes from either two things.
You develop an operational support team. I know Insignia has a development team in-house, which is really helpful for a lot of startups, especially for extra capacity that they need. That’s one form of support that I think that’s great. You either connect founders with people within your network because you have that founder background. You have a solid technical background as well, so you can connect them to the right people instantaneously.
Another thing as well is that as your portfolio develops, you can connect them quite usefully to other people in your portfolio, which then creates even more value for both you as well as everyone else that you have invested in. I think that’s interesting, but that all comes as you develop as a team, as an institution.
So I think when you start a new fund it’s really important to understand that you’re not going to have all these pieces straight away from day one. You’re going to take time to build out a team. You’re going to take time to build our ethos for the team as well, to make sure that people are advising your startup founders the right way. It takes time to grow your portfolio as well. It takes time for your portfolio companies to get big enough to support other people as well, not just to drive [growth] single-handedly themselves. So it takes time.
And I think one of the shortcuts that something like a Gojek gives Go-Ventures is that arm’s length ability to say, “Hey, do you want to work with Gojek on this arm’s length basis? Do you want to provide support on that arm’s length basis, right? I would think about it from [the perspective of] lowering customer acquisition costs, because you’re working with a behemoth in both cases, that has a very strong, captive, downstream consumer base. So for a lot of consumer startups, you are short cutting the high acquisition costs you typically need to spend on your own digital marketing, because you’re getting a channel partnership here to supercharge your growth. So we look at that format, and I think that allows Go-Ventures and Gentree both to hyperscale as a fund, in some senses, because we are able to provide the additional value that founders are looking for. So we were able to also then get into the more interesting deals because you’re providing not just the financial value.
That format and that thinking has to come hand in hand as you start to launch a new fund. What really is your value-add here to the founder? If you’re just providing money, you’re not talking about a lot of money here. Series A fundraising in Southeast Asia typically ranges from five to 20 million. I mean, obviously there are outliers but five to 20 million fundraising size is not a lot of money given the amount of capital that’s flowing into our market right now. So if everyone’s money is as green as everyone else’s, really what value do you bring to the startup founder? And I think that’s what differentiates funds, deal making is obviously just incredibly, incredibly competitive now, especially at the early stages, because you have a lot of new family offices popping up in Singapore. You have a lot of new funds as well, first time funds, popping up. It’s really thinking about [your] value add here. That’s how I view the way forward in terms of the way we develop Gentree and Go-Ventures. And I think having this clear understanding on your value add is quite important.
“If everyone’s money is as green as everyone else’s, really what value do you bring to the startup founder?”
Paulo: I wanted to zoom out a little bit and then look back at your career and ask you, given the different roles that you’ve taken PE versus Corp Dev versus VC, how would you compare [these roles] in terms of work life balance from a professional standpoint?
Mark: [They’re] very different. VCs is more of a flow-based business. So it’s all about your deal flows, about meeting companies, meeting new founders everyday. And you’ve got to do four or five new calls every day,
PE is very much you get on the deal and that lasts us for like six to seven months. Most of the time it’s four months and things [can sometimes] go six or seven months, because it’s more complex. There’s a lot more due diligence and a larger ticket size as well. So you want to do your checks. In this DD process, you sometimes engage with third-party advisors as well.
So the process takes some time, because you’re very much covering your bases, but at the same time, you’re really getting to know the company quite deeply. That’s one of the main differences here is that the volume of deals you see in PE is a lot less. And you go very much more in-depth because there’s more data to actually dig in.
These are companies that have operated for like 10, 20 years. Your projections are annual because it’s about production capacity. Whereas in VC your projection is always monthly, because the company grows super fast. [Companies] grow like double-digit growth every month. You get a hundred percent growth in a year. That’s one of the key differences between VC and PE.
Corp Dev is a completely different beast altogether. Corp Dev is the other side of the table. I would say it’s still the buy side, but you’re kind of on the other side of the table, because in some senses I was doing two roles, strategic acquisitions, which is very much M&A banking but you’re pretty much serving as an M&A advisor to Gojek to make acquisitions in a sense. You’re typically negotiating SPAs (Share Purchase Agreements). In terms of the documents that you produce, it’s not an IC paper, but it’s more of a smaller board document. It’s a little bit different.
And then on the fundraising side, which is the other Corp Dev job, you are pretty much pitching to PE funds and to VC funds. It’s fun because you’re meeting a lot of new investors. Gojek’s cap table is very big, so there’s a lot of queries you get every day. It’s just eye-opening because Gojek has a very strong data setup. We used Tableau; we used Metabase. You’re able to query the BI quite easily. That teaches you what it should be at a startup as they start to really institutionalize in that sense.
So having been through that journey, joining PE, Corp Dev, then VCs, I guess I move at a faster and faster pace. In PE, things took a little bit longer to gestate. In Gojek, things change every month. There’s a new service launched every month. How fast-paced that was really teaches you very fast. Then after Go-Ventures, VC works even faster-paced because you are looking at different deals. You want to make decisions at a faster pace, so you can actually get through to really strong founders, but at the same time, you’re trying to go in-depth into the ones that you really like. So it’s a very different skill set altogether, but at the same time, the common theme and the common track there is you’re using your financial knowledge, your three statements accounting knowledge, your understanding of how to value things, making the assessments, [and] making recommendations to IC. Those are skills that I think are the common thread among all these jobs.
“Having been through that journey, joining PE, Corp Dev, then VCs, I guess I move at a faster and faster pace.”
Paulo: I wanted to shift gears a bit and we’ve talked a little bit about the Philippines already, but I just wanted to zoom in a little bit more and talk about, for example, in the book that Yinglan and I co-authored last year, Navigating ASEANnovation, we used the Philippines to talk about the different elements [that] create a startup ecosystem, from regulations to the founder pool to the capital pool.
Having seen the Philippines, even when you were in Gojek with the acquisition of Coins.ph, and even before that talking to family offices here, how have you seen the gaps being closed in the Philippines and what are the biggest gaps now in the ecosystem?
Mark: I think for any market to develop, it comes hand in hand with regulation, right? For very supportive governments, the ecosystem is very important. The industry with the most clarity I think is the FinTech industry in the Philippines. From very early on, even in 2005, the OPS (Operators of Payment Systems) licenses started being produced [and] developed as a policy framework. You have the FX (Foreign Exchange) license, [and] now the EMI (Electronic Money Issuer) license. Those are the three main licenses of FinTech.
And then now you have the digital banking license that’s been launched that allows you to not even have to open the branch and be able to launch a bank. I think the clarity there that the BSP has been providing is actually very significant and that has actually led to very strong investor interest in FinTech in the Philippines. You have guys like tonik. You have First Circle, and I was speaking to Patrick the other day, he’s also doing very interesting things in the banking space, tonik as well. I think it’s really exciting. Greg has done great, great work. [Tonik] has grown so fast.
So it’s really exciting to see how that develops. And I think that the development there and the investor interest is because clarity has been provided and it’s because the regulatory framework is very clear. Not every industry obviously needs regulation; you’re not gonna evaluate every single industry. For those that need, I think like insurtech, for instance, there’s a sandbox right now, which is really helpful for HMOs to develop out of or TPAs to develop. I think the insurtech industry has gone through that improvement in terms of clarity. There’ll be more industries that have impediments that get lifted in that sense. In terms of the development of the ecosystem, that’s what I kind of see.
Now a lot of the investor interest is in FinTech actually, [because] you’re tapping into the entire GDP growth of the country. It’s so wide-ranging. It touches every part [and] every facet of your life, because you’re transacting and making transactions. Even in lending, lending is levied back on the economy, because you’re actually lending to provide growth to the economy. So it’s levied back in the economy.
When we think about other industries that have gotten a lot of regional global investor interests, the other one is the creator economy. Kumu actually has really taken advantage of that. That’s very much driven by the nature of Filipino consumption. Digital consumption has picked up over COVID as well. Everyone’s on lockdown. [Those] macro trends, investors are going to pick up on that, [but] it just helps to have regulatory frameworks tied in to make sure that it can happen. I think the guys at DTI and DOST are doing great jobs, launching the Philippine Startup Fund as well. I’m very excited about that. That would really provide a lot of impetus towards the growth for the ecosystem as well.
“The industry with the most clarity I think is the FinTech industry in the Philippines…the development there and the investor interest is because clarity has been provided and it’s because the regulatory framework is very clear.”
Paulo: Really interesting points that you brought up. It’s quite interesting that the Philippines has a different trajectory than most of Southeast Asia, where even in Indonesia, it was more e-commerce driven, while the Philippines has been mostly FinTech driven, at least in terms of gaining investor interest.
So how should a founder think about pitching the Philippines, right, to regional investors, or say, if they’re not in one of these hot sectors?
Mark: Then you should think more remotely, right? If the Philippines isn’t big enough, you don’t need to just stay in the Philippines. There are OFWs all over the world; you can sell to them. You see great companies like 1Export trying to do that, really trying to take advantage, with some of their products in the US. I think the great founders here are guys that [know the answer to] — “If the market that you’re targeting here has only a serviceable obtainable market of 50 million. What do you do?” — You need to kind of have that view towards a more global approach. “It’s not big enough for me [to be] in one market. I think three. I think five. How do I enter the market easily that way?”
I think one of the great things that COVID has done is that everything has been [made] remote. People are building remote organizations. People are building startups having not been to the country they’re in. This is quite enlightening. The fact I’m talking to you and I have not met you in person as well. And people have not met their team members in person because it has been so restrictive. Naturally we lose a very big part of human interaction from that. We lose a very big part of being able to directly connect you to people emotionally as well. But at the same time, you gain a lot of efficiency gains.
“If the Philippines isn’t big enough, you don’t need to just stay in the Philippines. There are OFWs all over the world; you can sell to them.”
Paulo: Now that we’ve thought about the Philippines, I also wanted to ask, do you see the ecosystem going in the next five years and how do you see your own personal role as an investor play out in the ecosystem?
Mark: So I’m very excited for the next generation of, as a16z calls it, “elephants” to come up in the Philippines. The kind of way Indonesia developed was that you had the first wave of unicorns like Gojek, Tokopedia, Bukalapak. All these players came up, and then they spawned other players after them because it showed an example that you can actually come back and do this.
You can do this exciting thing in the Philippines. People like examples, and we are about to see our first company that could be used as a strong example for people to rally around and say, “Look, this is doable in the Philippines. We can actually create a unicorn company in the Philippines and create life-changing value for everyone in the economy that consumes our product, but at the same time as well, really make strong returns as founders as well.” So this is actually worth doing because it’s life-changing money that you make as a founder. It’s a life-changing experience that you have.
But the effect of that as well is that the people that you bring into your organization would then spawn a thousand ships. And they’re doing their own things because they learn the best practices. You are able to then convey that into the next startup. And the hyper-growth experience of double digit growth every single month that is always expected from you carries through into your new startup as well, because you have that same sort of expectation that “I need to do this.” Product managers who come up from that sort of hyper-growth organization behave in a very different way because they expect and they know how to scale the product in the hyper-growth format as well. That’s where the unique nature of having the first generation to build around after that becomes very important, and I think we are just about to see that in the Philippines slowly developed. So that’s why it’s so exciting for the next five years.
“The effect of [building unicorns] as well is that the people that you bring into your organization would then spawn a thousand ships.”
Rapid Fire Round
Top 3 Skills of a VC?
Mark: I think it’s always being eager to learn because honestly you’re only as good as the founders you meet. Being in VCs [involves] a lot of pattern matching, especially for someone like me with more of a finance background. I don’t claim to be a founder. I co-founded the one startup with my friend, it was more of a passion project. It was more of a fun thing we wanted to do; we hired devs for that and stuff. So that was really fun. But I’m not a founder. I think that’s one thing.
So I think the most key skill for me as a VC is having the ability to really have a good rapport with founders, because these are the guys that provide your returns to the fund. They’re the ones who are teaching you as well. They teach me a lot about the complexities of [running a] business as well, from their experience. And I want to be as supportive as possible, at least on the fundraising side, [and] really connect them to the right people to talk to. If I have networks through Gojek, say they need some product management support, [if I would] be able to connect them to the right people who could provide advice, I try to do that. For me, it’s all about being helpful. It’s all about being available to your founders, and it’s all about being eager to learn from them as well.
What is the most definitive trait of a founder you would invest in?
Mark: I think that the most definitive trait you look at is really vision and the ability to see ahead and say, “My company is going to be worth this in the future.” You then bring people around you who can support you to get to that vision and that goal.
That becomes more of a role of a team leader, someone who is galvanizing the troops as a general. That’s really what we look for from founders — founders who can grow zero to 10 and 10 to 50. All these are different phases in the company, 50 to a hundred is a different phase and different skill sets are required for each phase.
I think founders who can see that sort of goal and also recognize their need to hire around them. I think one of the key things founders also do is be able to hire the right people at the right time to really help them to grow because you can’t do everything. If you’re doing everything, you’re probably gonna get maxed out and tapped out. They need that sort of support base of co-founders. That’s the key thing that we’re really looking for: people with clear vision and a roadmap.
If you were a founder in the Philippines today, what kind of company/product would you be building?
Mark: I always have ideas. I did mention that I co-founded that startup with my best friend. It was more of a donations crowdfunding platform to get students funded, so I’m very close to the idea about access to education.
I really like what Erudifi is doing in the space. I don’t believe in student debt too much. I think that’s very restrictive for a lot of people. So I think it would be something around that space. It will be around the educational financing problem. I’ve seen interesting movements recently from AkadArena who’s recently launched a play-to-grad sort of model around Axie Infinity. That’s interesting. So I’ve seen interesting things around that. If I do something as a founder, I’ll probably do something in that space.
What do you do to de-stress?
Mark: I run a lot and I cycle a lot, so I road bike. I’m one of those kids, I’m not going to say picked up road biking over COVID, but I was cycling before, but then got really back into it because the last time I cycled was probably back in my JC triathlon days, so it’s been awhile, but I cycle a lot. I run a lot, so I do a lot of endurance sports. I find that it allows me to really de-stress and clear my mind. I know even Yinglan likes to go for walks. I think having these physical exercises is quite important, at least it keeps you healthy, right?
Advice for aspiring VCs?
Mark: I guess there are two routes here, right? There’s the financial route, which is a bit harder these days. That means you join a VC firm as an analyst or intern analyst, and as you go up to associate, then VP thereafter. That’s one route, the other route is obviously to start a startup yourself. Get the experience. You can do VC at the start, do a start up, and then come back in because then you get the operational [experience] and ability to understand how a company hyper-scales or how a company fails. You can provide that advice to founders as well. Those are the two typical routes that I typically see and actually, there are more. There are mid-career switches and stuff like that.
The easiest way obviously is, if you’re a fresh grad, is to naturally first get an internship or an analyst role in a VC fund. I think that’s super important, because it keeps your leg in, right. And then after, whether or not you stay all the way and grow within the organization or you go out and do a startup and then come back in, the path is up to you. You learn different things in different ways, but I think the startup route becomes one that allows you to provide additional insight, right? If you join a Corp Dev team of a very fast-growing startup or you join the product management team of a fast-growing startup, you learn a lot. That experience, when you make the jump out and come back in, probably helps a lot.