We were having lunch with a group of VC friends and discussing about the opportunities in Southeast Asia – of course, they have seen far more fundraising decks and evaluated far more startups than we have. 

But there is one spot where most do not have any visibility – the companies which are not raising money. They are either funded completely by the founders, or generating handsome profits. 

Selling the shovel

Take the example of the P2P mobile loan craze in Indonesia. Do you know that the most profitable company is probably a Shanghai-based SaaS provider giving a whole suite of mobile loan tools to anyone who has the cash (and operating team)? 

Their product is simple and standardised, giving them a comfortable surf to ride the wave – they just need to invest in enough BD, tech and customer service capacity to make sure that the business does not implode amid high growth. 

A good problem to have. 

This is an example of someone selling shovel during the gold rush – reaping the benefits without taking much risk, or so to say. 

Many mobile advertising agents/exchanges from China did the same back in early 2010s, when gaming, utilities and social apps from China went global en masse – and I know that many of these advertising companies never raised any external money. 

Similarly, a Chinese ecommerce company made a lot of money in Southeast Asia in the beginning of 2018 without anyone mainstream even noticing it. Some crypto exchanges at the right timing made more money than any of the traders on them.

Of course, there are ways to find out about these companies – as they could potentially be enabler or competitor of VC-funded companies. A typical way is to go to their service providers – logistic companies for ecommerce models, and payment companies for any mobile services involving transactions. 

Long term?

However, some of these businesses are not exactly risk free. For the SaaS company mentioned above, a major incident broke out a couple of weeks ago, causing many of the lenders to stop issuing loans. 

As a result, some lenders switched to their own systems, and a few other SaaS players seized the opportunity to grab some customers – market is fragmented and for sure profitability is impacted. 

That is expected – unless you are protected by artificial or regulatory barriers of entry, eventually profitability will erode and you will need to diversity. You can also safely argue that many of these business opportunities during the gold rush do not last for long.

The smarter ones will diversify before that moment happens – just the same for any traditional or tech companies, right? 

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 [email protected].


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Jianggan Li is the Founder & CEO of Momentum Works. Prior to founding Momentum Works, he co-founded Easy Taxi in Asia, and served as Managing Director of Foodpanda. The two years running Rocket Internet companies has given him a lifetime experience on supersonic implementation, and good camaraderie with entrepreneurs across the developing world. He holds a MBA from INSEAD (GMAT 770) and a degree in Computer Engineering from Nanyang Technological University. Unfortunately he never wrote a single line of code professionally - but in his first job he was in media, travelling extensively across Asia & Europe, speaking with Ministers & (occasionally) Prime Ministers. Apart from English and his native Mandarin, he is also fluent in French and conversational in Cantonese & Spanish. He tried to learn Latin (for three years) and Sanskrit (for six months) as well. In his (scarce) free time, he reads, travels, hikes and dives. Pyongyang, Tehran & Chisinau are among the interesting cities he has been to.


  1. Similarly, a Chinese ecommerce company made a lot of money in Southeast Asia in the beginning of 2018 without anyone mainstream even noticing it. => Which Chinese ecommerce company?

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