This article was originally published in Chinese by Vision Plus Capital, translated into English by the Momentum Works team. 

On September 22, 2021, Advance Intelligence Group, a Singapore-based technology company, announced the completion of Series D financing, which was jointly invested by SoftBank Vision Fund, Warburg Pincus and a number of strategic investors. 

The round, which exceeds US$400 million, values the company at more than US$2 billion. The company has become a new unicorn, and the size of the round broke the record in the related industry in the region. 

As an early investor in the company, Vision Plus Capital has supported the company’s development by investing in four consecutive rounds since 2018. Today, Advance Intelligence Group has grown into a leading technology company in Southeast Asia, and its subsidiary Advance.AI is also one of the few AI and big data technology companies in Asia to be included in the list of 2021 global top 50 financial technology companies. 

When the financing was completed, Yiran Liu, a partner of Vision Plus Capital, shared the journey, and also provided insights of cross-border investment in emerging markets.

  1. The vision and choice of cross-border entrepreneurship

Yiran Liu and Jefferson Chen, CEO of Advance Intelligence Group, met in Singapore 10 years ago and have kept in touch ever since. In 2017, they reunited in Beijing, and Yiran Liu learned that the company’s B2B business had achieved a strong position in Southeast Asia. 

Based on the insight into China’s development path and the understanding of the Southeast Asian market, he decisively suggested to Jefferson to enter the B2C market. “B2B is a starting point, you can get bigger and stronger by going into B2C,” he said, “do B2C, I’ll invest in you.”

In Jefferson’s view, Vision Plus’s suggestion coincides with the company’s development path. Two months later, Advance Intelligence’s B2C business was launched, and achieved remarkable performance very quickly. Yiran excitedly offered the company an investment opportunity as he believes that the company’s rapid advancement of a new business in such a short period of time reflects the strong execution capabilities of the team. 

As Advance Intelligence’s strategic approach highly resonates with Vision Plus’s keen insights, the two parties finalized their investment terms in Singapore in November 2017. What is not known is that there were many high-quality shareholders who were all friends of the founding team, while Vision Plus Capital was the first real external investment institution that entered the company’s board of directors. A few years later, Jefferson told Yiran that in fact, he had long been interested in expanding new business, but he did not dare to do so owing to financial limitations. It was Vision Plus’s firm support that made him determined to enter the new battlefield. Today when we look back, we conclude it as great minds think alike. 

Looking back at the four years that Vision Plus spent with Advance Intelligence, Yiran attributed part of the success to the vision and judgment of the founder, Jefferson himself.

Among all the emerging market entrepreneurs around the globe, there are many successful ones with professional financial or strategic consulting background, especially in the field of financial technology. For example, the CEO of NuBank, one of the largest digital banks in Latin America, was previously an investor of Sequoia Capital in charge of Latin America. 

In Yiran’s view, there are several reasons for this: First, the environment of emerging markets is full of dynamic changes, and startup leaders need to make timely adjustments and adaptations. Past professional training can make them more agile in thinking and judging business models and patterns. Secondly, their professional background allows them to have a more mature understanding of financial business models, and at the same time they are in awe of financial risks; finally, financial technology entrepreneurship cannot be separated from indepth collaborations with regulators and capital. These entrepreneurs from professional institutions are “resource integrators” who are good at cooperating with regulators and investors.

Back to Advance Intelligence, CEO Jefferson has many years of work experience in international organizations before starting his own business. On his entrepreneurial journey, he was able to capture advanced global models at different stages, and integrate outstanding engineering and technical resources and business partner resources in the region. 

At the same time, Advance Intelligence is headquartered in Singapore and recruited a large number of professional local talents in the region. Only by adapting to the right time, the right place and the right people can the company grow rapidly. In the past four years, the team has carried forward their adaptability and rapid learning skills to resolve all the challenges they faced one by one.

  1. Paths and boundaries of entrepreneurship in emerging markets

The path selection of start-up companies has been an eternal topic, and Advance Intelligence has also experienced explorations and attempts in the Southeast Asian market. At the founding stage, the company had an interdisciplinary team with a high understanding of finance, data and technology. Therefore, the startup business chose to provide business service of technical output, quickly opening the market with the first-mover advantage, and accumulating its own resources and data.

With the rapid development of the Southeast Asian market, the team keenly understood that there is a broader consumer market behind the B2B market. In such a situation, the team can completely redefine its own boundaries, conquering both markets. 

Yiran recalled that Advance Intelligence was not an early starter to enter the consumer market. At that time, many local startups had already started to experiment. After investigating the market, Vision Plus believes that the overall strength of the Advance Intelligence team can allow the company to go further. Facts have proved that Vision Plus is right. As soon as the consumer business was launched, Advance Intelligence rose rapidly. The huge success is attributed to the great power of strategic choice.

In 2019, after successfully completing the C round of financing, Advance Intelligence’s consumer business has occupied the top position in Southeast Asia. The company still maintains a high sense of crisis, and has begun to explore breakthroughs in new boundaries. Advance Intelligence has tried a variety of business models such as traffic, data, and commerce to expand its boundaries, and finally determined the prototype of the new business-Atome (Buy Now Pay Later)

This business model, known as the new generation of “Huabei” (Ant Group’s virtual credit card product), has inspired many super unicorns around the world (Klarna in Europe, Affirm in the United States, AfterPay in Australia, etc.). Atome has set its sights on the Southeast Asian market with a population of more than 600 million.  At the same time, the e-commerce SaaS business serving many sellers also emerged and developed rapidly. The company’s growth momentum has passed onto the next business model.

 

Looking back, in the process of exploring the entrepreneurial path, Advance Intelligence has gradually gone through three stages and experienced different dimensions: from 2B to 2C, from finance to trading. In this regard, Yiran commented that such a path seemed reasonable in retrospect, but neither the management team nor the investors could clearly foresee every step of the change. Such a path is ultimately the result of mutual choice between the market and the team.

  1. Based on the Chinese perspective, Vision Plus is looking for international teams and structural opportunities

It is worth mentioning that after investing in Advance Intelligence at the end of 2017, Vision Plus capital has made systematic investments in emerging markets. The 20 companies the Vision Plus invested in are across most parts of the world such as Asia, Africa, Latin America, the Middle East and Europe. 

The investment portfolio spans multiple sectors including consumer, finance, logistics, and technology. Vision Plus truly practices the concept of “looking for global structural investment opportunities based on Chinese perspective.”

As a long-term investor in the science and technology field, Yiran has witnessed the rise of many domestic emerging industries and the path choices of leading companies.He constantly reflects on his investment experiences, and published the “Methodology of Global Fintech” in early 2020. 

He believes that structural investment opportunities are emerging in the global market. At the same time, in many emerging markets, the evolution sequence and experience of leading markets such as the United States and China are not necessarily applicable. It is possible to become a “Superhero” across multiple sectors in emerging markets. As a clear business model, Fintech will also serve as a starting point like mature Internet monetization models such as games or advertisements, inspiring new changes and models.

In Yiran’s view, from an international perspective, there are huge opportunities for cross-border entrepreneurship, but also challenges across various dimensions. Teams who have access to Chinese experiences have unique advantages in product development, technical talents, supply chain, and model innovation. But at the same time, they face localization challenges. 

It is necessary to form an international + local team to better leverage Asian experience and find global opportunities. In this regard, some local Chinese entrepreneurial teams who are long-term based in the countries and fully understand local market trends often have unique advantages- Advance Intelligence is an excellent representative.

In addition, the entrepreneurial path that Advance Intelligence pioneered in emerging markets also gave Yiran a new insight: cross-border entrepreneurship often faces competition from different dimensions. 

Facing an unfamiliar and complex market environment, it is difficult to get things right in one step. What an excellent entrepreneurial team needs to do is to make a series of high-quality decisions continuously and steadily, without making fatal mistakes, and finally to walk their own path. 

Also, the era we live in gives us the greatest opportunity: With today’s globalized talents and resources, a team that can draw on the help of the Chinese market will surely gain greater advantages and accelerate its development. Vision Plus Capital is also ready to support such a team at any time, and looks forward to more teams with the same philosophy and abilities joining the Vision Plus family.

 

Thanks for reading The Low Down (TLD), the blog by the team at Momentum Works. Got a different perspective or have a burning opinion to share? Let us know at hello@mworks.asia.