The news of a recent investment in Southeast Asia is promising – Ninja Van, a Singapore-based logistics startup company secured its C series funding of over $85 million USD from multiple investors. After the IPO of SEA (formerly Garena), this so-called “next big thing in Southeast Asia” seems to be ready to take the spotlight – at least until the next round of funding by another local startup.

Reading Ninja Van’s company profile, you will find notable names sitting on the board – including Eduardo Saverin, the co-founder of Facebook now residing in Singapore. Founded in 2014, Ninja Van is among the new breed of technology-enabled, delivery solution providers aiming to solve last-mile logistics issues. They now operate in Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam.

According to our friends, Ninja Van is doing fairly well in the Philippines and Thailand. They also have a strong offering in Indonesia, which is a challenging market in term of logistics.

How well positioned is Ninja Van to combat the established multinationals?

Diluted ownership

With successes across the region, the investors are willing to help them expand. According to Tech in Asia, the latest round of funding was joined by DPDgroup, the second largest international parcel delivery network in Europe, taking up 32% of the company’s share. The Group is making its first foray into Southeast Asia after investing in other international partners in Africa, Turkey, Russia, Brazil and India.

A point for us to highlight is that three the founders’ shares in the company have now been reduced to 3% each – which means Ninja Van is now mostly owned by investment companies and other outside investors. This situation reminds us of some past cases we have all seen where diluted ownership has decreased the performance simply due to lowered motivation, or because the company is not heading the way the founders initially envisaged.

As for the reasons behind their agreement to reduce their shares, when talking about the logistics industry, heavy investment in infrastructure such as trucks and warehousing is required – and very expensive. Furthermore, some traditional logistics constraints will apply; such as thin profit margin and low scalability. Combined, these factors may explain why the founders have been willing (or required) to reduce their shareholding.

Of course, we there are also some hugely successful examples of where the founders carry on with the drive and vision of the company – most notably Alibaba, with Jack Ma having 7% of Alibaba (compared to 30% held by its biggest shareholder Softbank), and Chinese Giant Huawei’s CEO Ren Zhengfei holding a mere 1.42% of his company shares.

However, from all we’ve seen and heard, we hope that Ninja Van will continue to grow and become another one of the Southeast Asia’s success stories.

Ninja Van is facing multiple competitors in the logistics market. For example in Indonesia, ride hailing giant Go-Jek has also joined the delivery market.

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