Moglix raises $23M to digitize India’s manufacturing supply chain

We hear a lot about India’s e-commerce battle between Walmart, which bought Flipkart for $17 billion, and Amazon. But over in the B2B space, Moglix — an e-commerce service for buying manufacturing products that’s been making strides — today it announced a $23 million Series C round ahead of a bigger round and impending global […]

We hear a lot about India’s e-commerce battle between Walmart, which bought Flipkart for $17 billion, and Amazon. But over in the B2B space, Moglix — an e-commerce service for buying manufacturing products that’s been making strides — today it announced a $23 million Series C round ahead of a bigger round and impending global expansion.

This new round was led by some impressive names that Moglix counts as existing investors: Accel Partners, Jungle Ventures and World Bank-affiliated IFC. Other returning backers that partook include Venture Highway, ex-Twitter VP Shailesh Rao and InnoVen Capital, a venture debt fund affiliated with Singapore’s Temasek. The startup also counts Ratan Tata — the former chairman of manufacturing giant Tata Sons — Singapore’s SeedPlus and Rocketship on its cap table.

Founded in 2015 by former Googler Rahul Garg, Moglix connects manufacturing OEMs and their resellers with business buyers. Garg told TechCrunch last year that it is named after the main character in The Jungle Book series in order to “bring global standards to the Indian manufacturing sector.” The country accounts for 90 percent of its transactions, but the startup is also focused on global opportunities.

“The entire B2B commerce industry in India will move to a transactional model,” Garg told us in an interview this week. He sees a key role in bringing about the same impact Amazon had on consumer e-commerce.

“We think there’s an opportunity to start from a blank sheet and rewrite how B2B transactions should be done in the country,” he added. “The entire supply chain has been pretty much offline and fragmented.”

In a little over three years, Moglix has raced to its Series C round with rapid expansion that has seen it grow to 10 centers in India with a retail base that covers over 5,000 suppliers and supplying SMEs.

Yet, despite that, Garg has kept things lean as the company has raised just $41 million across those rounds, including a $12 million Series B last year, with under 500 staff. However, Moglix is laying the foundations for what he expects will be a much larger fundraising round next year that will see the company go after international opportunities.

“This [new] round is about doubling, tripling, down on India but also establishing a seed in a couple of countries we are looking at,” Garg said.

Moglix aims to make the B2B online buying experience as intuitive and user-friendly as e-commerce sites are for consumers

Adding further color, he explained that Moglix will expand its Saas procurement service, which helps digitize B2B purchasing, to 100 markets worldwide as part of its global vision. While that service does have tie-ins with the Moglix platform, it also allows any customer to bring their existing sales channels into a digital environment, therein preparing them to get their needs online, ideally with Moglix. That service is currently available in eight countries, Garg confirmed.

Beyond making connections on the buying side, Moglix also works with major OEM brands and their key resellers. The basic pitch is the benefits of digital commerce data — detailed information on what your target customers buy or browser — as well as the strength of Moglix’s distribution system, tighter fraud prevention and that aforementioned digital revolution.

“Brands have started to realize [that digital] will be a very important channel and that they need to use both [online and offline] for crafting their distribution,” explained Garg.

Indeed, a much-cited SPO India report forecasts that B2B in India is currently a $300 billion a year market that is poised to reach $700 billion by 2020. Garg estimates that his company has a 0.5 percent market share within its manufacturing niche. Over the coming five years, he said he believes that it can reach double-digit percent.

While it may not be as sexy as consumer commerce, stronger unit economics — thanks to a large part to different buying dynamics of business customers, who are less swayed by discounts — make the space something to keep an eye on as India’s digital development continues. Already, Garg paid credit to GST — the move to digitize taxation — as a key development that has aided his company.

“GST enabled good trust and accelerated everything by 2/3X,” he said.

There might yet be further boons as the Indian government chases its strategy of becoming a global manufacturing hub.

TNB Aura closes $22.7M fund to bring PE-style investing to Southeast Asia’s startups

TNB Aura, a recent arrival to Southeast Asia’s VC scene, announced today that it has closed a maiden fund at SG$31.1million, or around US$22.65 million, to bring a more private equity-like approach to investing in startups in the region. The fund was launched in 2016 and it is a joint effort between Australia-based venture fund Aura […]

TNB Aura, a recent arrival to Southeast Asia’s VC scene, announced today that it has closed a maiden fund at SG$31.1million, or around US$22.65 million, to bring a more private equity-like approach to investing in startups in the region.

The fund was launched in 2016 and it is a joint effort between Australia-based venture fund Aura and Singapore’s TNB Ventures, which has a history of corporate innovation work. It reached a final close today, having hit an early close in January. It is a part of the Enterprise Singapore ‘Advanced Manufacturing and Engineering’ scheme which, as you’d expect, means there is a focus on hardware, IO, AI and other future-looking tech like ‘industry 4.0.’

The fund is targeting Series A and B deals and it has the firepower to do 15-20 deals over likely the next two to three years, co-founder and managing partner Vicknesh R Pillay told TechCrunch in an interview. There’s around $500,000-$4 million per company, with the ideal scenario being an initial $1 million check with more saved for follow-on rounds. Already it has backed four companies including TradeGecko, which raised $10 million in a round that saw TNB Aura invest alongside Aura, and AI marketing platform Ematic.

The fund has a team of 10, including six partners and an operating staff of four. It pitches itself a little differently to most other VCs in the region given that manufacturing and engineering bent. That, Pillay said, means it is focused on “hardware plus software” startups.

“We are very strong fundamentals guys,” Pillay added. We ask what is the valuation and decide what we can get from a deal. It’s almost like PE-style investing in the VC world.”

A selection of the TNB Aura team [left to right]: Samuel Chong (investment manager), Calvin Ng, Vicknesh R Pillay, Charles Wong (partners), Liu Zhihao (investment manager)

Another differentiator, Pillay believes, is the firm’s history in the corporate innovation space. That leads it to be pretty well suited to working in the B2B and enterprise spaces thanks to its existing networks, he said.

“We particularly like B2B saas companies and we believe we can assist them through of our innovation platforms,” Pillay explained.

Outside of Singapore — which is a heavy focus thanks to the relationship with Enterprise Singapore — TNB Aura is focused on Indonesia, the Philippines, Thailand and Vietnam, four of the largest markets that form a large chunk of Southeast Asia’s cumulative 650 million population. With an internet population of over 330 million — higher than the entire U.S. population — the region is set to grow strongly as internet access increases. A recent report from Google and Temasek tipped the region’s digital economy will triple to reach $240 billion by 20205.

The report also found that VC funding in Southeast Asia is developing at a fast clip. Excluding unicorns, which distort the data somewhat, startups raised $2.6 billion in the first half of this year, beating the $2.4 billion tally for the whole of 2017.

There are plenty of other Series A-B funds in the region, including Jungle Ventures, Golden Gate Ventures, Openspace Ventures, Monks Hill Ventures, Qualgro and more.

India’s Livspace raises $70M for its one-stop-shop for interior design

Livspace, an India-based startup that helps consumers manage home renovations and interior design, has pulled in a $70 million Series C deal that’s led by Goldman Sachs and TPG Growth. Existing investors Jungle Ventures, Bessemer Venture Partners, and Helion Ventures also took part in the round, which takes Livspace total funding to date to around $97 million. […]

Livspace, an India-based startup that helps consumers manage home renovations and interior design, has pulled in a $70 million Series C deal that’s led by Goldman Sachs and TPG Growth.

Existing investors Jungle Ventures, Bessemer Venture Partners, and Helion Ventures also took part in the round, which takes Livspace total funding to date to around $97 million. The deal follows Goldman’s involvement in fintech startup Jumo’s recent $52 million round, while TPG Growth recently hired former Twitter Asia head Shailesh Rao to lead its business in India and Southeast Asia.

Livspace was founded by former Googler Anuj Srivastava and Ramakant Sharma, who has spent time with Myntra and Jungle Ventures among others, in 2015. The business aims to be a one-stop-shop for home interior design — whether that be renovations or new home design. That makes it an e-commerce business that integrates multiple pieces of the interior ecosystem: consumers, designers and the supply chain.

For that reason, Livspace is an inherently local business. Interior designers need to be local to customers and supply chain partners need to have the capacity to ship to a location, too, but Livspace actually goes beyond that by mapping buildings in a city to enable virtual mockups and 3D models to be rendered to help show a consumer a compelling preview of what their home could look like. The company also operates brick and mortar ‘Design Centers’ where consumers can touch and see materials and furniture, while the centers also operate as a location for designers and consumers to meet up if needed.

The company is currently present in seven cities in India. With this money in the bank, the plan is to expand to reach 13 cities in India by the end of next year but it’s ambitions go beyond its founders’ home country.

In an interview with TechCrunch, Srivastava said that he sees an opportunity to grow the business not just in Asia but also western markets where, to date, there are no integrated solutions such as Livspace.

“The industry has suffered from chaos,” he said. “There’s little to no aggregation on supply and demand, and there is significant opportunity for tech-based platform to unite consumers, agents and the supply chain market.

“We have focused so far on doing one market really, really, well,” he added. “We wanted to make sure you can knock it out of the park first.”

So far so good. Livspace says it is on track to reach $100 million in annualized gross revenue by March 2019. Srivastava said it has outfitted 5,000-6,000 houses so far with 1,200-1,500 projects in its system at any one time.

Consumers, of course, shop around for deals and the completion rate of projects is at around one-third, Srivastava said, with an average of about $15,000 per consumer. Of that, the take rate for Livspace is around 40 percent with seven percent for the designer. The company claims to have around 25,000 designers on the platform but less than 10 percent of all applicants are approved to ensure quality and expertise.

Through Livspace, Srivastava claims designers can massively boost their income, typically by around 2X. He argues that is not only because the rates earned are higher, but also because average project time is reduced from multiple-months to just 12-14 weeks. That means designers can also operate more efficiently.

Financially, Srivastava said he believes the business model itself can scale and that there is clear “path to profitability” particularly if the company can expand internationally.

“We started monetizing in India but we have our eyes set on every single other similar market in the planet. We’ll get there in time,” he said.

Golden Gate Ventures hits first close on new $100M fund for Southeast Asia

One of the fascinating things about watching an emerging startup ecosystem is that it isn’t just companies that are scaling, the very VC firms that feed them are growing themselves, too. That’s perhaps best embodied by Golden Gate Ventures, a Singapore-based firm founded by three Silicon Valley entrepreneurs in 2011 which is about to close a […]

One of the fascinating things about watching an emerging startup ecosystem is that it isn’t just companies that are scaling, the very VC firms that feed them are growing themselves, too. That’s perhaps best embodied by Golden Gate Ventures, a Singapore-based firm founded by three Silicon Valley entrepreneurs in 2011 which is about to close a huge new fund for Southeast Asia.

Golden Gate started out with a small seed investment fund before raising a second worth $60 million in 2015. Now it is in the closes stages of finalizing a new $100 million fund, which has completed a first close of over $65 million in commitments, a source with knowledge of discussions told TechCrunch.

A filing lodged with the SEC in June first showed the firm’s intent to raise $100 million. The source told TechCrunch that a number of LPs from Golden Gate’s previous funds have already signed up, including Naver, while Mistletoe, the firm run by SoftBank Chairman Masayoshi Son’s brother Taizo, is among the new backers joining.

Golden Gate’s existing LP base also includes Singapore sovereign fund Temasek, Facebook co-founder Eduardo Saverin, and South Korea’s Hanwha.

A full close for the fund is expected before the end of the year.

The firm has made over 40 investments to date and its portfolio includes mobile classifieds service Carousell, automotive sales startup Carro, real estate site 99.co, and payment gateway Omise. TechCrunch understands that the firm’s investment thesis will remain the same with this new fund. When it raised its second fund, founding partner Vinnie Lauria told us that Golden Gate had found its match at early-stage investing and it will remain lean and nimble like the companies it backs.

One significant change internally, however, sees Justin Hall promoted to partner at the fund. He joins Lauria, fellow founding partner Jeffrey Paine, and Michael Lints at partner level.

Hall first joined Golden Gate in 2012 as an intern while still a student, before signing on full-time in 2013. His rise through the ranks exemplifies the growth and development within Southeast Asia’s startup scene over that period — it isn’t just limited to startups themselves.

The Golden Gate Ventures team circa 2016 — it has since added new members

With the advent of unicorns such as ride-sharing firms Grab and Go-Jek, travel startup Traveloka, and e-commerce companies like Tokopedia, Southeast Asia has begun to show potential for homegrown tech companies in a market that includes over 650 million consumers and more than 300 million internet users. The emergence of these companies has spiked investor interest, which provides the capital that is the lifeblood for VCs and their funds.

Golden Gate is the only one raising big. Openspace, formerly NSI Ventures, is raising $125 million for its second fund, Jungle Ventures is said to be planning a $150 million fund, and Singapore’s Golden Equator and Korea Investment Partners have a joint $88 million fund, while Temasek-linked Vertex closed a record $210 million fund last year.

Growth potential is leading the charge but at the same time funds are beginning to focus on realizing returns for LPs through exits, which is challenging since there have been few acquisitions of meaningful size or public listings out of Southeast Asia so far. But, for smaller funds, the results are already promising.

Data from Prequin, which tracks investment money worldwide, shows that Golden Gate’s first fund has already returned a multiple of over 4X, while its second is at 1.3 despite a final close in 2016.

Beyond any secondary sales — it is not uncommon for early-stage backers to sell a minority portion of equity as more investment capital pours in — Golden Gate’s exits have included the sale of Redmart to Lazada (although not a blockbuster), Priceline’s acquisition of Woomoo, Line’s acquisition of Temanjalan and the sale of Mapan (formerly Ruma) to Go-Jek.

FinAccel raises $30M to build a digital credit card for Southeast Asia

FinAccel, a Southeast Asia-based startup that offers a digital credit card service in Indonesia, has closed a $30 million Series B round as it begins to consider overseas expansion. The company launched its ‘Kredivo’ service two years ago to help consumers pay online in Southeast Asia, where credit card penetration is typically low, and it is essentially […]

FinAccel, a Southeast Asia-based startup that offers a digital credit card service in Indonesia, has closed a $30 million Series B round as it begins to consider overseas expansion.

The company launched its ‘Kredivo’ service two years ago to help consumers pay online in Southeast Asia, where credit card penetration is typically low, and it is essentially the combination of a digital credit card and PayPal. The service is available in Indonesia, Southeast Asia’s largest economy, where it uses a customer’s registered phone number — there is no physical credit card — and a dedicated checkout on online retail websites.

For consumers, the service offers a 30-day payback option and then more longer-term options of three, six and 12-month payback windows. The 30-day option is interest-free, but other plans come with a 2.95 percent per month charge on the reducing principle, which effectively makes it 25 percent flat.

FinAccel says it has credit scored close to two million consumers in Indonesia, while on the retail side it has partnered with 200 online sales platforms including large names such as Alibaba’s Lazada, Shopee (which is owned by U.S.-listed Garena), and unicorn Tokopedia, which counts SoftBank and Alibaba among its investors.

This new investment, by the way, is a notable one for Southeast Asia, which has generally been considered to have a gap in Series B funding, so $30 million for a two-year-old business is quite something.

The round itself is led by Australia’s Square Peg Capital — in what is one of its highest-profile overseas deals to date — alongside new investors MDI Ventures, which is affiliated with Telkom Indonesia, and UK-based Atami Capital. Existing investors Jungle Ventures, Openspace Ventures, GMO Venture
Partners, Alpha JWC Ventures and 500 Startups also took part in the round.

FinAccel founders (left to right) Umang Rustagi (COO), Akshay Garg (CEO) and Alie Tan (head of product engineering)

The startup raised a seed round of over $1 million in 2016, before quietly raising a $5 million Series A last year, FinAccel co-founder CEO Akshay Garg revealed in an interview with TechCrunch.

Garg, who founded ad tech firm Komli, said the company is processing “hundreds of millions” in U.S. dollars per year and the immediate plan is to keep growing in Indonesia. Already, however, it is eyeing up potential expansions with its first move overseas is likely to be in Southeast Asia in early 2018, although he declined to provide more details.

“Our goal is to become the preferred digital credit card for millennials in Southeast Asia,” he told TechCrunch. “Those are consumers who are mobile-first and already bankable. The credit gap in this market is huge, there’s no electronic verification and other things that we take for granted in the West just don’t work here.”

FinAccel isn’t going after the unbanked in the region, but it also isn’t going after banks either. Garg said that it is possible that the company might try to work with banks in the future in order to grow its market share and offer new products.

One area it is looking at is financial products — such as loans for personal, educational and emergency purposes — but there could be ways to leverage its online presence and adoption among young people and work with existing financial institutions, which he believes simply aren’t equipped to reach out in the same way.

“We don’t see ourselves disrupting the banks, we are more partners,” he explained. “We could partner on balance sheet and on issuing credit cards to offer more efficient and seamless financial inclusion at best possible rates.”