Interview with Kyle Lee, VP of Corporate Development @ Gojek
We speak with Kyle Lee, Vice President of Corporate Development at Gojek, the Indonesian ride-hailing platform-turned-superapp that supports services from digital payments to food delivery. Prior to Gojek, Kyle worked in private equity, focusing on the APAC region, at Abu Dhabi Investment Authority and McKinsey & Company. Kyle is also an INSEAD MBA alumnus, Class of 2018.
Kyle shares his two cents on his role at Gojek, the overall SEA tech landscape and his takeaways from 2020.
How would you briefly describe your role within corporate development at Gojek?
As the VP of Corporate Development at Gojek, I’m in charge of three pillars: 1) strategic investments and M&A, 2) investors relations & capital raising and 3) JVs and strategic partnerships. My job focuses on everything from acquisitions (i.e. Moka) to pitching to investors for fundraising to striking alliances with strategic partners (i.e. Telkomsel, Google).
Mergers have formed a number of China’s emerging digital giants we see today. Do you see digital tech giants in SEA mimicking this behavior?
As demonstrated by Meituan and Didi, mergers have created a competitive advantage for China’s tech conglomerates and, in the process, created value to their shareholders. However, M&A is just one value-creation tool, and majority of companies in Southeast Asia are still seeking private market funding. We haven’t seen many IPOs in Southeast Asia yet, but we’re nearing an inflection point where there’s a need for exits or a need to access public markets. Some will come in a form of a public debut or trade sale, while others, especially those with tight runways, failing to find an exit may unfortunately close shop.
As a sign of affirmation of SEA’s tech ecosystem, we can always look back to the success of Sea Group’s IPO back in 2017, but we’ll see more similar success stories in the near future. The region is lagging by a half a decade or so in market depth and startup development in comparison to China. It is only a matter of time until we see an acceleration in growth.
Do you see SPAC as a viable vehicle option for startups in SEA?
For a long time, a true-blue IPO has been more favored as a dominant choice amongst exit opportunities. SPACs have garnered more attention from the West and investors could see it being a viable product due to timing (a quicker time-to-public process). How a de-SPAC would work with local SEAsian companies’ corporate structures needs to be figured out and hence, it remains to be seen as a clear and viable alternative exit vehicle. Few SPACs have been raised targeting South and Southeast Asia. We will just have to wait and see.
Which sectors are you most excited about personally within the SEA tech ecosystem?
From an investment perspective, I’m most excited about B2B enterprises in our region, anything merchant-facing — typically low margin, partly subscription-based, yet highly sticky. Data is the new oil, so understanding data on merchants and SMEs will help drive insights and decision-making processes.
From a product point-of-view, fintech is a booming sector amongst consumers. We saw robo-advisers and peer-to-peer lending making headways in SEA even before the issuance of digital banking licenses in Singapore, and that’s just the tip of the iceberg. There are tons of innovation left to go around in this space, with many startups looking to emulate what China has successfully done. Yet, complete replication of China’s innovation won’t lead to success in SEA, as this region boasts a diverse consumer base across countries. Key to that will be product localization to cater to SEA’s fragmented market as language, culture, user behavior and regulation vary.
How do you see on-demand tech companies in SEA, faring in 2021, hopefully within a post-pandemic world?
Like any other country in the world affected by COVID-19, digital adoption has been accelerated by a few years, especially in Indonesia. The Bain/Facebook report is worth reading since it covers the trends we’re seeing in Southeast Asia quite nicely.
While it may take some time before consumers in emerging markets fully adopt and adjust to new behavioral norms, it’s safe to say that there won’t be a world without COVID-adopted habits. There has been a meaningful swap of consumers who are getting used to digitally-enabled tendencies, from food & grocery delivery to online payments, and we’ll see some emerging and existing tech companies riding on these tailwinds.
That being said, we should be conscious and practical since we’re still in the middle of a pandemic. Some trends that are seeing massive growth today won’t persist in a post-COVID world and it’s important to articulate which will wither away and by how much.
What are some of your key takeaways or learnings of working at Gojek?
It is pertinent to invest in our ecosystem’s stakeholders. We invest in establishing trust and reliability with consumers and drivers through our tech-enabled platform, and it’s shown through investments in fraud detection and monitoring systems to vehicle hygiene and driver temperature checks. These stakeholders will continue to demand safety protocols even after the pandemic, so we need to fluidly adjust our processes and operations according to what consumers want. The same could be said for any other on-demand, gig services such as food delivery companies whose businesses are built upon their customers and employees.
If there’s anything that I learned from in times of volatility, it’s that we must be transparent and empathetic to all our stakeholders. How we deal with and communicate what we’re doing to address the needs of our drivers/customers while looking after employee welfare and morale has to be crisp and swift. It’s not a time to be mechanical since lots of emotions are involved and lives are at stake. 2020 was also a fantastic time to understand how to operate under crisis management — I can’t imagine another scenario like this that would be just as challenging to overcome as what we’re facing right now.
