Ke Dezhuo Distrupting Entrepreneurial Production through Managing Platform Balance of Customers & Partners

That was the case for Chasen Holdings Limited, an SGX-listed firm that provides engineering, logistics and relocation services across Asia. “Prior to using Lark, we found it difficult to navigate the China firewall, leaving us with very limited solutions,” William Soo, the firm’s Group HR & Admin Manager, told us. English-Mandarin text chat translation is also a key feature, he added.

Everyone wants to be Zoom

Everyone wants to be Zoom

Zoom has become a household name worldwide and that has inspired Chinese companies to offer meeting services for free. Alibaba, ByteDance and Tencent have all released free video conferencing services both in China and for overseas audiences.

“Companies often try to implement services like Teams or Slack, but wonder how they can get the local Chinese team to use them,” he said. “Chinese colleagues will prefer tools for locals.”

WeChat—China’s most popular messaging service—often becomes the platform used, added Tay. This would leave sensitive company information exposed outside of their IT system, which makes services like Lark, DingTalk or Tencent’s WeChat Work appealing alternatives.

On the flip side, however, the China link could put off enterprise customers who are concerned about where data is stored and whether it can be accessed, Tay said. Two IT managers at regional technology firms based in Singapore told us that they opted for Western tools rather than Lark because of its links to China. Neither person would comment on the record as they are not allowed to discuss company IT strategies in public.

Tough battle

Messaging apps have become ecosystems, with WhatsApp looking to enter payments in India and WeChat pioneering the concept of ‘super apps’ in China. Productivity tools, too, can be valuable at scale.

In China, for example, it is common for merchants who sell on Alibaba services to use DingTalk to communicate with suppliers or even customers, said Leilei Wang, a China-based analyst with consultancy firm Kapronasia. Wide adoption of DingTalk has boosted Alibaba by driving traffic to its services, which range from business-to-business sourcing to social media and video streaming.

Alibaba could be hoping to do something similar with SMEs in Southeast Asia. Its affiliate, Ant Financial, is among the bidders for a licence that would allow it to offer digital banking services in Singapore.

But efforts to cross-promote Alibaba’s Southeast Asia services—Lazada and Alibaba—with DingTalk haven’t been fruitful. Two merchants told us that they prefer to use Western consumer messaging apps and have little need to contact merchants directly. Customers, they pointed out, can be reached through e-commerce app messaging features.

Online learning push

Built as management tools, the services have been adopted by schools, and not only in Covid-19 times. In one example, the Universitas Islam Negeri Sultan Syarif Kasim Riau—an Indonesia-based university—used Lark to onboard 30,000 students across nine faculties within three days after toxic haze in Indonesian province Riau made turning up to class hazardous.

The firm currently uses a free version of Lark, but Soo told us it plans to upgrade in the future.

Even without the internet restrictions, there are also local consumption habits to overcome, according to Gartner’s Tay, and that can favour tools with a Chinese footprint.

The problem with their domestic food supply chain is providing varied produce at competitive prices to out-of-reach markets

By mid-March, however, as more and more people in the Greater Jakarta area self-isolated at home, Sayurbox suddenly got more than 5X the usual number of orders. Fruits and vegetables were piling up at its Jakarta warehouse. Delivering the last of the day’s boxes would take till well after 10PM. Sayurbox was struggling to keep up.

On 2 April, it capitulated: “Sayurbox will rest for a moment and prepare a better service for you,” the company announced to its customers. The team desperately needed to clear the backlog and streamline operations so that it could tackle the 5X-higher order volumes without delays.

Indonesia’s Food Problem of Varying

Indonesia's Food Problem of Varying

In the few days after Sayurbox’s customer-facing app hit the pause button, work behind the scenes was frantic, says Oshin Hernis, the startup’s head of communications. Sayurbox opened and stocked a second warehouse, hired and trained 25 new people. By 10 April, it was ready to resume orders. Luck was on its side: the rapid scale-up was possible because Sayurbox was already eyeing a location for its second warehouse before the pandemic. Covid-19 just accelerated that process, says Hernis.

The behavioural shifts created by the crisis could be a catalyst that accelerates the adoption of online grocery services in Indonesia. With roughly 30% of Indonesia’s population working in agriculture—the vast majority in small, family-operated farms—an overhaul has been long due for the sector.

A farmer’s produce can go through up to eight or nine different intermediaries before it reaches the market. Farmers get paid little, while the end-price for customers can be high. The supply chain puzzle also means prices can fluctuate wildly. For example, the price of garlic increased by 35.6% to IDR 43,200 (US$2.9) per kg between December and mid-April.

If there’s anything positive to come out of this crisis, it’s that Indonesia has been forced to pay close attention to its inefficient food distribution system. Agritech startups like Sayurbox and Tanihub, which help farmers sell produce directly to customers, can play their part in bringing innovation and efficiency to the system.

The price rollercoaster

Price fluctuations for basic commodities are common in Indonesia, even without a crisis. They’re a recurring theme around the Ramadan fasting month, when demand is high.

Indonesia relies on a mix of domestically produced commodities and imports to keep its people fed. The country is almost self-reliant in rice and poultry. Beef, salt, and sugar are a mix of local and imported. It heavily depends on imports for onions and garlic.

The complicated supply chain means there’s always a hiccup. Factors such as a bad harvest, an outdated licence, stalled negotiations over import quota, or an unexpected port closure, can lead to delays, distribution hang-ups and, eventually, shortages. Usually, the turbulence is temporary and prices go back to normal.

However, experts fear that the pandemic, which happened to peak just as Indonesia entered Ramadan season, could keep things out of whack for months to come. It can potentially cause serious problems if people can’t afford basic staple foods.


How Udaan Found the Path Towards Success Despite Crushing it One Step at A Time: Innovation!

“If you have Rs 6 lakh (US$7,943) credit and Rs 3 lakh (US$3,971) is pending, Udaan can’t do anything,” one of the employees said.

As of August 2019, the company’s loan book was around Rs 200 crore-300 crore (US$26.3 million-$39.4 million). It’s target was Rs 800 crore-900 crore (~US$105 million-$119 million) by the end of 2019, which was not met, the former credit executive said.

Udaan is already working to shore up its lending business. It approached Redington India and Ingram Micro, India’s largest IT distributors, offering to provide loans to their thousands of distributors, according to one of the current executives mentioned earlier. This offers the company a steady base of borrowers, which are potentially more reliable as well due to their ties with big companies.

The issues with its core business

The issues with its core business

With most of its ground staff laid off and only operating in two categories, Udaan is back to the basics. It intends to build out both pharma as well as food and FMCG, said multiple employees, both current and former.

Fortuitously for Udaan, food and FMCG accounted for almost 40-50% of Udaan’s revenue last year, a former business analyst in the category said. The category also offers the highest order values—between Rs 3,000-5,000 (US$39.7-66), according to two current executives—and sees organic demand. This is unlike less popular categories like toys or stationery, which Udaan shut in February, cutting 200 jobs, said one of the executives.

The problem for Udaan, though, is that the food and FMCG space is rife with competition. India’s most valuable company, Reliance Industries, is one of the claimants to the grocery throne. Its JioMart grocery service has tapped into kiranas. Amazon is also ramping up its grocery play, while there is plenty of VC-funded competition through the likes of agritech startup Ninjacart and B2B groceries startup Jumbotail. Flipkart, too, is increasingly focussed on grocery, and even made an investment in Ninjacart alongside Walmart.

B2B2C focus

In Dec 2019, Udaan’s made its first investment of $2 million in restaurant billing platform PetPooja to expand its fresh business to supply to hotels, restaurants and cafes

Udaan, meanwhile, is bracing for impact. Having already cut back on its human resources, it is looking to get more efficient. Where it once relied on swarms of ground staff to visit stores, drum up demand and upsell banner ads and credit, one city manager will now handle an entire category horizontally, two former employees said. Without ground staff, Udaan is now asking its retailers and suppliers to place their own orders and manage inventory.

It’s also looking to reinforce its logistics operations by building more warehouses, according to three former and current employees.

The good news for Udaan is that it has time. Its last big funding round in October, and a US$30 million infusion from its parent entity Trustroot Internet in March have given it a 24-48-month runway, the core member said. Now, it needs to use both, the time and money, to fix the cracks in its business.

REDDOORZ and Building A Local Simple But Powerful Brand of Their Own

Rippel also served as Nasper’s representative on the board of Indian e-commerce Flipkart before it was sold to Walmart in an historic $17 billion deal.

It is early days for the firm, but its involvement–which includes a seat on the board—could give RedDoorz some crucial experience as it moves towards a potential IPO, which Saberwal said could happen as soon as 2022.

Those three letters weren’t commonly uttered alongside startups in Southeast Asia. Sea’s listing on the New York Stock Exchange—under Nash’s leadership—is very much the exception to the rule. Today, though, the region’s other billion-dollar companies like Indonesian duo Gojek (ride-hailing) and Tokopedia (e-commerce) are also eyeing public listings.

It may seem premature for RedDoorz to harbour such lofty goals, but Saberwal is typically matter-of-fact with his response. “I’m not here to build a $100 billion business,” he said. “I want to build a $2-3 billion company with decent returns for our investors that’s known across its region and is the biggest in Southeast Asia.

“We 49-year-olds make companies with good returns, but maybe we won’t change the world,” he added with a laugh.

RedDoorz hopes to draw inspiration from Sea’s 2017 IPO

It’s tough to predict startups reaching the IPO stage—just ask SoftBank, which has bet billions on WeWork and other similarly controversial companies. RedDoorz and others in Southeast Asia, however, have prevailing winds in their favour.

“For the first time, companies in Southeast Asia are able to focus on everything the region can offer,” Asia Partners’ Rippel told us. “A decade ago, it was ‘This company is interesting but it is only the market leader in, for example, the Philippines or Thailand.’”

“Founders also didn’t have the ambition or perhaps skills to go regional. But that playbook has been written and now we see more entrepreneurs executing this playbook,” Rippel added. “Today, it’s common to see a company successfully penetrate at least 3-4 countries across the region. That’s exactly what RedDoorz has done.”

The RedDoorz-OYO clash might be a notable parallel to the Uber-Grab battle.

Uber’s retreat from Southeast Asia is widely acknowledged to be down to cutting losses ahead of its IPO this year, while Grab had just one focus—Southeast Asia.

Hitching a lift

Hitching a lift

OYO is yet to tap its relationship with Grab, the $14 billion company that is Southeast Asia’s top ride-railing service and an investor in OYO. Grab has steadily added travel options within its app as it evolves from transport app to super app. Adding OYO bookings to that selection would make sense for both companies.

OYO, meanwhile, has many distractions. Not only is it going after expansion in every continent bar Africa (at least for now) but its core vision of budget hotels is being stretched to cover businesses as diverse as cloud kitchens, coffee chains, event management, co-working and more. RedDoorz, however, is laser-focused on cracking Southeast Asia. According to Saberwal, Qiming, which has seen OYO’s entry and alleged stumbles in the Chinese market up close, is confident that OYO isn’t something to worry about.

We believe that community building is the most critical aspect of RedDoorz because it replicates what we have learnt at OYO to

There’s little doubt that the company can afford to pay these vendors back—aside from the aforementioned regional investment pledges, OYO is in talks to raise $1.5 billion, which would take its total funds raised past $3 billion.

With its expansion in the region hitting hurdles, OYO announced in August that Mandar Vaidya, a 15-year veteran of McKinsey, would head its Southeast Asia and Middle East operations. The firm is keen to dismiss any suggestion that there could be a repeat of China, where OYO is reported to have made layoffs due to “unethical practices” despite initial claims of rapid success. OYO has denied the allegations of layoffs in China.

While OYO’s issues in the region are cause for hope for RedDoorz, investors are still treading with caution. “We thought they were the best performing in that sector, particularly in terms of reducing dependence on OTAs (online travel agencies) for customers. But there was still a lot of noise and competition in the region, most notably from OYO,” a prominent investor who passed on investing in RedDoorz told us on condition of anonymity.

According to one VC professional, uncertainty around the viability of RedDoorz business model put their firm off a potential deal. Despite that, the person said that RedDoorz now “has a good window of opportunity” given OYO’s broad focus on global markets.

But there’s also a wider concern around the more fundamentals elements of the business.

By the wayside

By the wayside

Tinggal, a rival in Indonesia that previously raised $1 million from one-time OYO India competitor Wudstay, is no longer around. Nida Rooms is another that was forced to make cutbacks after struggling with financial problems. Founded by ex-SpiceJet executive Kaneswaran Avili, it downed shutters despite raising some $12.2 million, according to data from company tracker Crunchbase. (Image via Mike Rasching/Unsplash)

“By combining single hotels under one brand and using one technology stack, the budget hotel network definitely creates synergies of scale. These are hotels that would no way have mobile solution or new types of POS individually,” said Bart Bellers, CEO of Singapore-based travel, tourism and hospitality fund Xpdite Capital Partners.

“But basically they are building their own hotel, and ultimately they are stuck with long term leases. What if there is a downturn in the tourism industry? That’s a big big risk.

“Sometimes it has me wondering if this has similar high risks as the WeWork model,” Bellers said in an interview. “Scalable? Yes. Sustainable? To be seen.”

An IPO for RedDoorz

Those concerns didn’t weigh down Asia Partners, a new growth stage fund that announced a $70 million first close of its maiden fund in June. The firm led the RedDoorz Series C deal in what was the first public investment for its fund, which is believed to be targeting a final close of up to $300 million.

Growth funds are a new trend in Southeast Asia venture capital, and this new kid on the block has serious credibility. Asia Partners is founded by ex-Sea President Nick Nash, the man widely credited for taking the Singapore-based gaming and e-commerce company public in 2017, and Oliver Rippel, whose past includes leading Nasper’s business-to-consumer and online services businesses.

The Hotels of the Future Today: Unraveling the Future of Travel with RedDoorz

While the battle may not centre around taxis, the budget hotel opportunity is no less impressive. Still in its infancy, revenue from online hotel bookings in Southeast Asia is tipped to grow to $38 billion per year by 2025, according to a report jointly produced by Google, Singapore sovereign fund Temasek and Bain & Company. This is up from an estimated $13.6 billion in 2019. RedDoorz wants to ride this wave to every founder’s ultimate dream—an initial public offering (IPO).

Starting up

Starting up

Saberwal is nearly old enough to be 25-year-old Agarwal’s father—his undergraduate daughter is just a few years younger than the OYO CEO. In fact, when OYO was officially founded in 2013 (a pivot from Agarwal’s original startup, Oravel), Saberwal was still employed by online travel platform MakeMyTrip (MMT), which had gone public that January.

Based out of Singapore, Saberwal headed the company’s Southeast Asia operations, successfully building out the supply side of MMT’s business in the region. Saberwal, though, couldn’t shake the urge to build something new in a region that he believed had vast potential.

At the end of 2013, on a business trip to Phuket, Saberwal bit the bullet and ended his nine-year stint at MMT. “I’m a builder by nature, MakeMyTrip was a great story and I loved every minute,” Saberwal told us in an interview. “I enjoyed being at a public limited company and expat life for the first year or two, but then began to feel I wasn’t doing enough with my time.”

Saberwal’s next move was to call his friend and former colleague Kunwar Asheesh Saxena, who had left MMT nearly a year earlier. Alongside Saxena, now the CTO of RedDoorz, he brainstormed ideas in the travel sector. Seven months later, the duo launched Commeasure in July 2014. A business-to-business service, the company allowed hotels to take online bookings in July 2014. But while the business raised a $1 million seed round led by Singapore’s Jungle Ventures and grew to 450 hotels, Saberwal felt the growth “wasn’t exciting”.

Battlelines drawn

Unlike its Indian rival, however, it took a more conservative approach to growth, focused instead on understanding the space. “Our investor Jungle had done studies on Southeast Asia, showing it was better to focus on city-by-city rather than a six-country focus. So, we went hotel by hotel in [Indonesia’s capital] Jakarta, and built our technology around the problems,” Saberwal recalls.

More fundamentally, there was a lot of hand-holding required. Hotels simply weren’t comfortable using the system despite its considerable benefits. This sowed the seeds of what would eventually become RedDoorz, a business that goes well beyond aggregating bookings to offer standardised features and a common brand for smaller hotels. A la its Indian rival OYO.

Vickers Venture’s Deep Expertise in Emerging Trends: Our Goal is To Give Back & Own the World of 20 and 30-Somethings

Tan, though, remains unfazed. He says the firm’s first three funds are seed-stage funds, which take a longer period of time—about 15 years—to mature. The underperforming Fund III, says Tan, still has another four years before it will be closed. Vickers has already signed to partially exit two companies which will return 20% to the fund, bringing the DPI up to 37%, he adds.

“We have also received interest, including one term sheet that could see another 60% returned to investors, which we are still considering. We still have some time so we will weigh the DPIs versus overall return from an IRR perspective,” explains Tan.

Investments Recently Made by Vickers Venture Capital Partners

Investments Recently Made by Vickers Venture Capital Partners

Vickers does have some exit prospects on the horizon. Several companies in its portfolio are looking to go public in the next few years. One of them is US-headquartered analytics company KPISOFT, which Vickers first invested in via its Fund V in September 2016. “They originally wanted to go public last year using the JOBS Act in the US, but we looked at the companies that went public—they didn’t perform very well and the liquidity was low,” says Tan.

These are the three companies that I’ve bet on using 15% of a fund. So far, two (Samumed and Baidu) have paid off handsomely, and RWDC is on track to do the same as well. I think it will be a unicorn by the end of 2020 or early 2021.


Instead, the company has now decided to go public via the conventional route. This means it will take a few more years to build up its revenue and size. “We’re targeting to go public in 2022, and hopefully it will be a unicorn by then,” says Tan.

Big bets
As it looks to raise a further US$300 million for Fund VI, though, Vickers is banking heavily on Samumed’s prospects to attract LPs.

Vickers has a rule when it comes to betting heavily on a single company—it is only allowed to invest up to 20% of the fund on one company. Vickers invested 15% of its US$81.1 million Fund IV into Samumed.

Tan was introduced to Samumed by his San Diego-based co-founder Khalil Binebine, who was a practicing medical doctor in New York. “The first call [Binebine] gave me [after meeting Samumed] was, ‘Finian, I’ve found god’s bill’,” he recalls. “That was the beginning. The rest, as they say, is history. We’re very, very excited about Samumed and it’s the largest company in our portfolio at the moment.”

In documents accessed by us, Samumed is Vickers’ “best-performing” deal so far. The firm expects it to deliver between 10-83X returns, although there is yet no exit on the horizon so far.

Samumed is attempting to develop drugs that could repair or regenerate human tissues by targeting the Wnt signaling pathway, a regulator for cellular processes. The company’s lead project, lorecivivint, is a drug meant to treat knee osteoarthritis.

Their success depends too much on funding and not enough on self-generated cash flow

Narayanan declined to comment when approached for this story. A Zilingo spokesperson said the nCinga team now manages Zilingo’s Saas business.

Like other Zilingo strategies, a core issue was inconsistent decision making. Despite significant hiring, many of the key leadership came from consulting or finance backgrounds and were early in their careers, the former employees said. High management churn in the US, too, made Zilingo prone to changing course, which was exacerbated by a disconnect between management and staff, another person said.

With a refocus on Southeast Asia, many of the octopus tentacles will be severed. But that may not be a bad thing in the short time, some company insiders believe.



B2B fashion sourcing for SMEs, small brands and manufacturers accounts for around 95% of Zilingo’s revenue, according to a senior executive at the startup. We previously reported that Zilingo’s take-home revenue is around $200 million per year.

One of the former employees, who was involved in the US operations, told us that building out Zilingo’s base could give it a foundation for a renewed pitch to brands and influencers, starting in Southeast Asia. “Combining technology and the B2B supply chain is still a billion-dollar idea,” they said.

Investors, too, have pared down expectations in the short term.

“The main focus now is B2B sourcing,” a Zilingo investor told us anonymously as they are not permitted to speak to the media. “It is still very valid and what we are excited about.”

The investor said the closure of retail stores, supply chain uncertainties and more still give Zilingo a chance to make “significant impact.” But they did concede that the business will be less aggressive with its private label product and fintech services. Zilingo’s loan business, for example, has been frozen given the impact the Covid-19 outbreak has had on SMEs (small and medium enterprises) and small seller cash flow.

Zilingo is also attempting a Covid-suited strategy. One global brands such as Gucci, Armani and Bulgari have tried—by switching their production output to masks and equipment in response to a shortfall in protective gear for healthcare workers. Zilingo is using its manufacturing connections to build a capacity of “up to one million units per day of near-ready stocks of N95 and surgical masks and gowns,” according to a LinkedIn post from Bose. The difference is that it doesn’t directly own the supply; there is plenty of competition in this market and Covid-19 lockdowns make logistics a challenge.

Cleaning up

Half of Zilingo’s manufacturing partners are currently lying idle due to the impact of the coronavirus. The company hopes to encourage them to manufacture PPE and products like perfumed sanitisers.

A sales sheet obtained by us shows the company is offering products that include FDA-certified masks from around US$0.10 per piece, gloves from US$0.46 per piece and protective suits from US$10.64. One businessman selling masks from China called the project “ballsy” given the price volatility. They requested anonymity because they did not want to be seen discussing a competitor in the media.

Creating an Amicable Attitude to Difficult Customers

“A delivery person could do four food orders in the time taken for delivering one Genie item,” Sunder says, adding that compensation has been designed to nudge delivery executives to put the customer first.

Dunzo’s mission now is not to win over every neighbourhood, but win in neighbourhoods that make the most economic sense on its path to finding 25 million transacting customers. These 25 million represent the lowest hanging fruit—digitally-savvy users with significant disposable income. The number isn’t plucked out of thin air either—India is estimated to have around 25 million credit cards.

Different strokes

In foodtech, even competitors revere Swiggy’s preparation. “They go step by step—first pilot something for a long time, and only then roll it out. Measure the data in one or two locations. Swiggy is very systematic,” says an angel investor in a competing cloud kitchen company. Swiggy is hoping this strategy will let it pip rivals who’ve spent years mastering the areas it is only now entering.

But while Swiggy can tap into the large customer base from its food business, it needs to convince people to think Swiggy when they think of essentials. That means competing for mindshare with the likes of Bigbasket and Dunzo.

This will not prove easy. Because in much the same way Swiggy has become a verb for ordering food, Dunzo has done the same with concierge services. In that sense, Genie marks a clash of two verbs: Swiggy and Dunzo.

Building a Positive Company that Gives

Building a Positive Company that Gives

And even as Swiggy has moved to realise the hyperlocal opportunity during the lockdown, Dunzo has seen a surge in both users and usage. Its organic app downloads have shot up 4X since the lockdown, claims Kabeer Biswas, CEO of Dunzo. Order volumes up until 20 April, he says, have organically surpassed the volumes for all of March.

Swiggy, though, would do well to look at Dunzo not just as its competition but, more importantly, as a cautionary tale. Over the past year, rather than trying to maximise its early-mover advantage, Dunzo has been scaling back. While it previously hoped to be in as many as 16-18 cities by 2020, it is currently only in nine. And even in those nine, it has withdrawn from many neighbourhoods as it looks to reduce its cash burn and sort out its unit economics.

Dunzo’s loss per order fluctuates between Rs 18-22 ($0.25-0.31), Biswas had told us in January. To improve this, Dunzo is withdrawing from neighbourhoods where it doesn’t see high order volumes. In Bengaluru and Pune, for example, this helped the company lower its loss per order significantly—to around Rs 10-12 ($0.13-0.16).

“If we don’t get enough orders, that geography is not going to turn profitable unless we charge customers a high delivery fee,” says Biswas. “So, the only way to make money in this business is by driving density. That’s why we don’t want to be in non-dense geographies that are not going to turn profitable.”