Eye of An Asian Tiger: Investing in SE Asia with Jie Lun Ong, Head of Plug and Play APAC Ventures
I’ve always been interested in the Southeast Asian investing landscape. You've probably noticed by reading news or hearing anecdotally that deal activity is exploding in that part of the world. Data shows that the number of SE Asian VC deals quadrupled from 2012 to 2017. I wanted to gain a deeper perspective, so I decided to chat with Jie Lun Ong, Head of Plug and Play APAC Ventures. He is originally from Singapore and is a real wealth of knowledge about SE Asian tech markets. We caught up recently to chat about his background, Plug and Play APAC, and of course, delicious Singaporean food. Below is a summary of our discussion.
How did you come to work in VC?
I stumbled upon the VC industry by chance. Before VC, I worked in bank operations, startup sales, and a technology federation managing a startup program. From working in the last role, I became involved in the VC ecosystem, and that put me in touch with many startups, investors, and mentors. Through networking, I got to know Plug and Play Singapore and became excited about what the company was building. I joined Plug and Play in 2016 and have enjoyed working here ever since.
Can you walk me through Plug and Play Singapore’s overall structure?
Plug and Play Singapore is divided into two main groups: Ventures and Corporate Innovation. I lead the Ventures Team, and we are responsible for making primary investments. We are not structured as a fund, but instead are a single family office investing out of the same pool of capital as Plug and Play Sunnyvale. We do weekly Investment Committee calls with Sunnyvale to discuss new opportunities. Deal flow varies, but on average, we discuss 1-3 deals per week.
The Corporate Innovation Platform is our business development function. We partner with over 400 corporate partners across 20 countries to match interested Corporate Partners with emerging tech companies. This service is tailored to each Corporate Partner’s needs. Corporate Partners usually want to pilot products from startups that could be useful to the organization. As the Plug and Play program has evolved, we are now fairly stage-agnostic, so we show many different types of startups to our Partners.
One program that has proved very fruitful is our traditional Accelerator. This is a 3 month corporate business development program that connects startups with partners to drive POCs and pilots. Another popular program we organize is the Corporate Deal Flow Session in which a single Corporate Partner meets 4-6 startups in a day, hearing 30 minute pitches from each. It’s a very efficient use of time.
How do you think about industry verticals across the 2 groups?
Plug and Play Singapore identifies 5 relevant focus areas: Fintech, Insurtech, Travel, Sustainability, and Health. We also run a Facebook Accelerator program for relevant companies in Facebook's ecosystem. For us, some internal functions are horizontal and some are vertical. HR and Marketing are horizontal, so we split those between Ventures vs Corporate Innovation. We are also able to double up on resources for a strong vertical. In Fintech for example, we have a Fintech Analyst fulfilling both Ventures and Corporate Innovation functions.
Do you invest in other parts of Southeast Asia besides Singapore?
Yes, the Singapore office covers all of APAC excluding Japan and China, so we regularly look at deals all across Asia. Our check sizes are usually flexible ranging between $100-200k USD depending on what is appropriate for each company. However, we sometimes utilize a fixed check size model in certain geographies like Indonesia. For example, this year, we have made 6 investments in Indonesia with fixed check sizes of $50k USD. These investments were made through our joint venture with a local Indonesian partner who helps with sourcing and diligence.
Can you describe local VCs’ relationships with Singaporean government entities in receiving co-investment?
Yes. To give a bit of history on Singapore’s various Investment Schemes, there used to be multiple government agencies doing the same type of grants within the private sector. In 2017, they all became consolidated and branded under the name “Startup SG”. The goal of Startup SG is to promote growth in the entire tech ecosystem. The criteria has evolved over the years, but it is now focused on investing in R&D for local deeptech companies. Another change that Startup SG recently made was to broaden the eligibility of companies it will invest in, making it more inclusive of foreign-owned startups. The Government previously only looked at companies with 50% or more stake held by Singaporean permanent residents, but has since reduced that number to 30%.
How difficult is it to get allocation from the government schemes and what are the final deal terms?
The government investment entity (now Startup SG) identifies and partners with established institutional investors like Plug and Play. Some schemes will co-fund a VC’s entire fund 30-70. As for the deal terms, Startup SG co-invests alongside the VCs, so shares both the upside and the risk. As a result, Startup SG has the same liquidation preferences and other terms as the VCs upon exit.
I am bilingual in English and Chinese, so I’m always curious what languages are spoken in international workplaces. Do you speak Chinese or English at work?
My colleagues and I speak English when we are in the office. We have a very diverse team with professionals from Singapore, China, India, Indonesia and the USA, so the common language is still English. However, most of us know second, third or fourth languages on top of English and can use these in professional settings when needed.
I have family in Malaysia and Singapore, so I’m pretty familiar with Singapore’s bilingual education system. What was your educational experience like growing up?
I received all of my education in English and studied Mandarin as a second language. Most of the schools I attended growing up were public and/or subsidized by the Government.
Primary School: Jurong Primary School
Secondary School: The Chinese High School
Junior College: National Junior College
University: National University of Singapore
Bonnie's Author Note: Singapore is very ethnically diverse. For the entire school system, English is the official language of the curriculum, meaning all classes are taught in English. In addition to English, students need to study a second language, so they usually choose to study their mother tongue. For example, ethnically Chinese students usually study Chinese, ethnically Malay students study Malay, etc. One thing that I love about Singapore is that when you walk around the streets, you will hear a healthy mix of English, Mandarin, Hokkien, Malay, Tamil, and many other languages.
Fun Investor Facts, Singapore Edition
Jie Lun’s Surname “Ong” is of Chinese Hokkien origin and is the same surname as Wang (王) in Mandarin.
Chili Crab is his favorite Singaporean hawker stall food to eat every once in a while.
Chicken Rice is Jie Lun’s favorite “everyday” hawker stall food. He recommends the store Boon Tong Kee. Boon Tong Kee first opened in 1979 and served Cantonese style Chicken Rice. Today, most Chicken Rice stalls in Singapore serve a hybrid of the Cantonese and Hainanese styles of the dish. This hybrid cooking method involves blanching the chicken, then soaking it in cold water to lock in its tenderness.
About the Author
Bonnie Young runs the Amplified blog. She shares her insights on market trends from US to Asia and interviews founders shaking up the tech scene. If you want new articles directly in your inbox, subscribe to the Amplified newsletter. Bonnie is currently looking for a growth equity or VC role in the Bay Area. Please reach out to her at email@example.com