Q&A: Openspace Ventures' Shane Chesson

Q: What was the strategy behind the rebrand?

A: It’s an extension of what we were doing with NSI Ventures and a product of our own evolution and growth. We were the first Series A fund focused on Southeast Asia in 2014 when we got started, so Openspace Ventures is a way to clarify the theme of finding open spaces. That means looking into a subsector or investment angle that is less popular with the mainstream as well as an internal culture of collaboration. It’s also a signal to entrepreneurs that we’re going to help them expand into new markets and address new segments.

Q: Where are you seeing growth opportunities in Southeast Asia?

A: We’re going to see more billion-dollar companies coming out of Southeast Asia in the next few years, but they’re not going to just be competing with the unicorns already created in the same e-commerce and transport verticals. We’ll see technology addressing larger pieces of the economy in finance, healthcare, education and logistics, supplementing existing services, disrupting services, and sometimes just filling a gap. Geographic diversity will be part of it. We’ll see more unicorns coming out of Indonesia, but we also think Vietnam, Thailand and the Philippines have the scale and quality entrepreneurs addressing large opportunities to produce sizable technology leaders in coming years.

Q: How is Openspace diversifying geographically?

A: Singapore and Indonesia will continue to be prominent for us, but we’ve also done deals in Vietnam, Myanmar and we’re currently looking at doing a deal in the Philippines. We’ve selectively added Bangladesh as a new market for Fund II with an investment alongside Go-Jek in Pathao, a ride-sharing business that will build into other segments. Bangladesh is a big population, fast growing, and with an aspirational middle class, but VCs are thin on the ground. It’s not part of ASEAN, but we find it similar to Myanmar in some ways. We’re not doing China or India, but incrementally, if a region has an adjacency to Southeast Asia, we’ll look at connecting it with our existing strategy. 

Q: What’s your approach to cross-border scaling?

A: Southeast Asia is complex but solvable. There is a perception that it’s more difficult than China or India, but we don’t mind that because it means the amount of capital chasing these opportunities is more limited. It gives us and our portfolio companies room to operate once they start to expand. Our team is based on the ground in-country and has experience building regionally. We continuously iterate our expansion playbook to help companies execute expansion such as with Topica, Chope and Love Bonito, which are in multiple markets, and now with Go-Jek, which is growing from its base in Indonesia into Vietnam, Thailand, and potentially other markets.

Q: What’s your view on competition in the region?

A: We’re seeing increased appreciation for the opportunity in Southeast Asia relative to a few years ago, with more corporates getting involved – some with their own VC wings. There’s been a burst of investment but mostly at the Series B level and above as the scale of companies becomes relevant to Asian or global investors. There’s been some increase at seed and Series A, but it’s far outweighed by growth in later-stage capital. We can take advantage of that interest by using it to make sure a large proportion of our portfolio companies get quality follow-on capital and realization opportunities.

Q: How has the talent pool evolved?

A: When we first started, we saw a smattering of pioneers. We had to hunt down the best of them and it took a lot of meetings before anyone would impress us with their idea, execution progress, and drive. Now the experience level has built up, and we’re starting to see some really good entrepreneurs that have made the shift from other careers or have just been focused on building tech companies for a longer time period. The one area that still needs work is tech development talent. Over half of our portfolio companies use offshore tech development resources – often in India or China – so we’d like to see the region develop more skills in that area.

Q: What’s your outlook for fundraising in Southeast Asia?

A: The Openspace LP base is mostly global institutions and we are very grateful to have repeat investors from both Fund I to Fund II. However, Southeast Asia is still a relatively emerging region with a shorter track record, so it will take more time for the typical institutional players to make allocations. Family offices have been scouting the region for the last few years and some of them have backed funds, but the tech strategics have been the most aggressive lately because they can see opportunities to buy in early as the market develops. LPs overall are more interested, but they do want to know that you have a record of creating value. We now have that track record, building start-ups from Series A to being billion-dollar companies, which is pretty rare in this market.  

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Southeast Asia
• Venture
• GPs
• Technology
• Openspace Ventures