Two Singapore-based companies announced this week that they have raised nearly US$20 million (S$28.03 million) in Series A funding, a sign that investors are reverting to making huge bets on early-stage startups.
The first is property search portal 99.co. The Business Times has learnt that the three-year-old startup has secured US$7.9 million in a round led by existing investors Sequoia Capital India and Eduardo Saverin, taking total funding to over US$10 million.
99.co will use the money to expand to two new South-east Asian countries, improve its tech offerings and grow the team.
Today, it operates in Singapore and Indonesia, and has a team of about 60. It has since 2014 amassed some 150,000 residential listings, and is said to have served over 2.5 million users last year.
Acknowledging the crowded online property search space, 99.co chief Darius Cheung said that a key differentiator is technology.
While his company – best known for its proprietary map-based search engine – is not looking to offer virtual or augmented reality solutions yet, it is exploring 3D visualisation.
When asked about long-term plans, Mr Cheung said that 99.co is open to the idea of an initial public offering, which he sees as a financing channel.
“We will go there if there is no more private money (we can tap).”
The serial entrepreneur, whose first venture, mobile security startup tenCube, was acquired by McAfee for reportedly S$25 million in 2010, added: “99.co started monetising in 2016. We are not profitable, and are not going to be in the next three years. But we believe that the market size is in the billions.
In five years’ time, we hope to be a unicorn.”
Last year, the company launched its first revenue model: subscription plans which start from S$388 a year, that offer features such as an interactive map search, unlimited floor-plan access across all residential units, historical property transaction data, and a real-time chat function for real estate agents and homeseekers.
Mr Saverin, an early investor in 99.co, said: “There is no question that real estate is one of the largest markets that has remained antiquated and inefficient. This is an opportunity to build a unicorn-level company many times over.”
Meanwhile, advertising technology (adtech) firm AdAsia Holdings has snagged US$12 million in Series A funding from Singapore-based venture capital firm JAFCO Asia.
This is believed to be the largest such financing round for an adtech company in South-east Asia, and the largest investment made in a company by JAFCO in a single investment round.
AdAsia will use the funds to expand to new markets including China, Hong Kong, Japan, the Philippines and Malaysia in 2017; more than quadruple its team to 400 by 2018; and accelerate the integration of artificial intelligence (AI) and machine learning in its offerings.
Co-founder Kosuke Sogo said: “AI and machine learning will provide an added layer on top of our current product lineup. It will also be a big part of future innovations, addressing the needs of modern marketers, advertisers and publishers.”
Founded in 2016, AdAsia has created a flagship product, the AdAsia Digital Platform, which provides solutions that enable programmatic buying and reporting across display, video and native ads on both desktop and mobile – through a single, transparent dashboard,
The startup also has digital marketing consultants and in-house creative teams to support marketers and advertisers in their activities, providing end-to-end solutions across online advertising and influencer marketing. It has 90 employees and 300 clients.
Commenting on the deals, Eugene Wong, managing director of Sirius Venture Capital, told BT: “We’re beginning to see some signs that venture capitalists are putting larger amounts into startups – based on a plan to gain speed – and subsidising the costs to acquire users and gain market share.”
But he cautioned that as more large funds targeting the South-east Asian tech startup space are being established, fund managers could be pressured to invest their money.
“Of course, the quality of startups here have improved compared to the dotcom era, but the basic rule still applies. When there is too much money chasing startups, valuations will go up, and the danger of not meeting expectations may occur in future.”
This article was first published on April 7, 2017.
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