1Mby1M Virtual Accelerator Investor Forum: With Francis Simisim of Original Pitch Ventures (Part 2)

Sramana Mitra: What is an example of a local problem that is non-copycat? We have a term for that. We use a more elegant term for that. We call it concept arbitrage.

I’ve been extensively involved in the Indian startup ecosystem. I always encourage concept arbitrage because it’s a very good way for entrepreneurs to learn how to be entrepreneurs and get things going.

The ecosystem develops well when you have a good critical mass of serial entrepreneurs who are learning by doing. The concept arbitrage businesses have a really important role to play in the development of an ecosystem, so I wouldn’t dismiss those.

Francis Simisim: I totally agree with you. That’s how we grew up. We learned that just copying doesn’t always work. That’s how we figured it out. One of our partners in the firm started a company called Acudeen. Acudeen is a receivable financing company.

There’re a lot of issues on the SMEs here. We have a lot of receivables that are never paid. That is a big issue for SMEs. They have to find a way to get financing, and usually, they end up taking loans. That’s one of the local problems we have.

I started a company called Social Light. We put up WiFi in low-income areas. These are not common in developed countries where you guys have the best infrastructure. Down here, there is a lack of infrastructure. We’re trying to solve things that wouldn’t normally seem to be a business.

Sramana Mitra: Give us a few more examples of companies that you see in the pool that look really promising, that hopefully are going to break out and turn into a larger company.

Francis Simisim: There are quite a few companies to mention. One of our companies is ServeHappy. This has been started by an entrepreneur who owned a restaurant and had always an issue of where to source blue-collar workers.

She started ServeHappy to find ways to help the restaurant industry to source talent. There’s also others like MooMoo. It’s a live streaming, social networking app. That’s growing. It’s becoming more localized. It’s not just pure copy.

Sramana Mitra: Has any company in the ecosystem broken out a little bit further than others? Maybe a company that has achieved $5 million annual revenue?

Francis Simisim: There have been a few. We have had some exits. We had an exit of Coin.ph. It’s an e-wallet app. They were acquired by Go-Jek from Indonesia for $75 million. We did have some success.

Sramana Mitra: Can you talk a bit more about that? What is the business? Who acquired the company? What was the rationale for the acquisition? How long was the company around before the acquisition?

For a nascent ecosystem, exit is a huge issue. Starting to get exits is going to make a big difference in the maturity of the ecosystem.

Francis Simisim: Coins.ph is an e-wallet app. It’s solving the unbanked problem. Especially in the Philippines, most of the population have no bank accounts. One of the key solutions was an e-wallet app that enable people to open an account easily without the hassle of documentation and all.

These guys grew to five million users before they were acquired. They were bought by Go-Jek. Go-Jek is a ride-hailing app in Indonesia that has expanded to be one of the key tech players in the region. These guys are neck-to-neck with Grab, which is like Uber. They’re partners here in Asia.

This segment is part 2 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Francis Simisim of Original Pitch Ventures
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