News from around the world – June 5

Finance is a major concern for startups.

A compilation of important news from the startup world: 

Southeast Asia Startup Scene Is Sunny, Investors Say
Venture capitalists and investors attending the Converge technology conference in Hong Kong on Friday expressed optimism about the future of startups in Southeast Asia, despite significant challenges. In Indonesia, the region’s largest country by population, investments more than doubled to $18.9 million in the first quarter from $8 million a year earlier. Funding was also up in Malaysia, Vietnam and Thailand, though it fell in the Philippines. In April, China’s Alibaba Group Holding Ltd. said it was paying about $1 billion for a controlling stake in Singapore e-commerce startup Lazada Group, which operates throughout Southeast Asia. Sequoia Capital, a prominent Silicon Valley venture-capital firm known for its early bets on Apple Inc., Google Inc. and Cisco Systems Inc., has also been putting funds on the line in Southeast Asia.

Taiwanese startups seek their fortune at IT expo
One of Asia’s largest information technology trade shows has put Taiwan’s burgeoning startup ecosystem on display as the island tries to revitalize a flagging technology sector, catching the eye of venture capital firms searching for the next big thing. The 36th edition of Computex Taipei kicked off here in late May. The event marked the debut of Innovex, an exhibition area just for startups, featuring 217 businesses. MoBagel, one of the eight remaining competitors at the time, uses cloud technology to collect and analyze such data as usage information from sensors in home appliances. Computex, which began in 1981, is a computer festival where such companies as Microsoft and Taiwanese personal computer makers show off new wares.

After “conquering the world” Australian startup success story Culture Amp is returning home
Globally successful Australian startup Culture Amp has announced a big expansion in Melbourne and the relocation of its headquarters back to its hometown to anchor its international expansion. The workplace analytics platform recently closed a $US10 million Series B round, has established its offices in the US and is on the verge of breaking into the European market, but the new location in Melbourne will serve as the company’s global headquarters and Asia-Pacific engineering hub. The Victorian government has made a big push over the last year to encourage global startups to establish Asia-Pacific headquarters in Melbourne and ensure local startups maintain a presence in the city.

Boston Tech Watch: Stumbling Startups, China VC, Acquisitions & More
Boston-based Fiksu, once a high-flying mobile marketing startup considered an IPO candidate, was acquired for an undisclosed sum by ClickDealer, a marketing agency owned by Menlo Park, CA-based Noosphere. Fiksu had raised at least $17 million from investors, generated more than $100 million in annual revenue in 2014, and employed more than 300 people at its peak. But last year it went through layoffs, and it’s currently down to 120 employees, the Boston Globe reported. Boston-based Neurala announced the investors in its recently disclosed $1.2 million debt funding round: Haiyin Capital, a China-based firm and new backer of the company, and return investor Tim Draper and his Draper Associates. Neurala has raised over $2 million from investors to date. The company makes deep learning, artificial intelligence, and computer vision software for robots, drones, toys, and smart devices.

The Real Fintech Threat Isn’t from Startups
For all of the talk about startup fintech companies threatening banks’ business, there is a much bigger challenge looming for financial institutions from the well-established tech giants. Banks can ward off the threat from newer fintech players by partnering with and acquiring disruptors — and many of them have. However, many of the biggest technology companies are also actively pursuing fintech acquisitions and partnerships. Among these tech giants, two companies stand out as the biggest threat to the financial services sector: Amazon for a mobile wallet, and Google for any number of products. Already, these two companies hold solid beachheads in financial services, offer topnotch digital services and experiences, and are far ahead of banks in using analytics and artificial intelligence to understand customer preferences and behavior. Google, Amazon and the other tech giants have plenty of time to make their moves in financial services. Unlike banks, they don’t have the burdensome concerns of regulatory pressures, resources tied up in legacy infrastructure and low trust among the emerging millennial generation. Freedoms from these concerns allow these companies to experiment, iterate and gradually find their best play in the industry.

10 Awesome College Startups Taking A “Field Trip” To Los Angeles
As its silicon neighbor to the north begins to risk over-saturation, the City of Angels’ Silicon Beach has become an oasis for young tech entrepreneurs looking to establish and grow their businesses. This nurturing startup environment is what motivated RECESS, a company focused on empowering millennial entrepreneurs and creating memorable moments for college students, to welcome 10 of the top college startups out to Los Angeles for its 4th annual “Field Trip.” As part of the RECESS Music + Ideas Festival, RECESS traveled around the U.S. to bring its national startup pitch competition to 18 college campuses across the U.S.

The most interesting tech IPO of the year
All of the information in this piece is derived from Twilio’s IPO prospectus and other public sources. The startup, privately valued at $1 billion last year, intends to raise up to $100 million by going public on the New York Stock Exchange in June under the ticker symbol TWLO. Twilio, launched in 2008, has never turned a profit. But its losses have narrowed, and revenue grew to $166.9 million in 2015. Revenue last quarter was up 78% from a year ago, while the net loss shrank by 25%. Twilio calls itself a “cloud communications platform,” but remove a layer of jargon, and what Twilio does is send text messages on behalf of other services. When you receive an SMS to confirm your phone number, remind you of an appointment, or generate a password, there’s a good chance it was sent by Twilio, which has 28,648 paying clients. SMS may have peaked in most of the world, usurped by messaging apps, but it’s still the backbone of so many mobile internet services. These apps generally rely on phone numbers, instead of email addresses, to identify users, and only the ability to text unites them all. Twilio customers, in other words, are outsourcing messaging to Twilio, which in turn outsources to Amazon.

From Silicon Valley: Expat CEO puts Philly’s small tech scene in context
Paul Melchiorre, the SAP veteran turned tech start-up CEO (iPipeline of Exton, and now business-planning software maker Anaplan of San Francisco), sat down over eggs and coffee at 1818 Marathon this morning to put his industry and Philly tech in perspective. Everyone (business software start-ups and suppliers) is up against IBM, SAP, Oracle, Microsoft. For 20 years all the big corporations are either getting legacy IBM updates, or they’ve gone to SAP or Oracle and bought those big systems and those expensive upgrades. Consolidation and contraction will continue where the total area [potential] market is small or companies are only providing point solutions.

Are buyouts the new IPOs?
Buyouts may replace IPOs as the exit of choice for tech companies in the coming months. This comes as the number of startups unable to exit into a frozen market continues to grow. With only two tech IPOs so far in 2016, and poor market returns for the majority of those already public, companies are turning elsewhere to cash in on their efforts. Another private equity firm, Vista Equity Partners, has gobbled up three tech companies in the last six weeks. First, SaaS events management platform Cvent sold for $1.35 billion, followed by marketing automation platform Marketo for $1.79 billion and identity management firm Ping Identity for a sum that has yet to be announced. In 2005, Canaccord Genuity began tracking business software companies that had undergone an IPO. Within 10 years, 78 percent of the 95 software companies they were tracking had been acquired. Despite such staggering numbers, some tech unicorns are more ripe for buyout than others.

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