The Economist Magazine highlighted the impact of the digital revolution on the global economy when it compared data to digital oil. “Data are to this century what oil was to the last one: a driver of growth and change,” it wrote in its 6 May 2017 edition. The Economist added that firms which create and control it, like Google, Amazon, Apple and Facebook, build not just new businesses, infrastructure, and monopolies—but entire new economies.
Teruhide Sato might well agree. The 42-year-old entrepreneur and venture capitalist is hoping to cash in on the information revolution now rippling across the globe through BEENEXT, the Singapore based VC firm he founded in 2015. BEENEXT invests regionally in early stage startups fueled by the new digital oil.
Sato missed earlier opportunities to invest in China. Softbank’s CEO Masayoshi Son beat other investors to that prize, through his company’s initial $20 million investment into fledgling e-commerce startup Alibaba, in 2000. By 2014, Alibaba had become king of China’s online marketplace, with reported sales surpassing those of Amazon and eBay combined. Having missed “the China bus”, Sato turned his attention to other highly populated and emergent markets, especially in India and Southeast Asia. “The only way to capture the big bang information revolution is to invest before the sunrise,” he says.
BEENEXT targets early stage startups which can create, gather, leverage, and most importantly—monetize data. His VC firm invests across a wide range of sectors, including fintech, healthcare and agritech. “The more data gathered, the better a firm can understand and serve its customers in a more useful, cheaper and efficient way,” he argues.
The firm only invests in tech startups with potential to become market leaders within their industry sector. Within the e-commerce domain, Rakuten, Amazon, Alibaba and eBay are online marketplace “kings”. “There is always also a queen,” like e-payment companies PayPal and Alipay. “My investment strategy is to assume the king and queen positions across a wide range of sectors,” he explains.
Recent BEENEXT investments include Bangladesh mobile wallet startup, SureCash, now with 12 million users. SureCash generates and collects user data, including information about goods that users buy, the payments they make and the people they send money to. “That data offers SureCash the next level of product development and monetization,” says Sato. He hopes SureCash’s mobile wallet will find its way into the pockets of all 160 million Bangladeshis.
Another BEENEXT investment is Bangalore based agritech startup, Stellapps Technologies. Stellapps collects information from sensors individually monitoring roughly two million dairy cows for India’s largest milk producers. Data concerning milk temperature, fat, calcium and protein levels are collected and sent direct to the cloud, helping India’s major milk brands to optimize the nation’s milk production.
Sato thinks Stellapps’s technology can also benefit small and independent farmers. Dairy farming in India is a highly fragmented business, with the average farmer owning just two or three milch cows. Mom and pop dairy farmers don’t have sufficient capital to grow their businesses, because banks are reluctant to loan them money. Sato hopes banks will open their wallets once farmers are able to present them with credible cash-flow projections. “Collection and provision of standardized data has the potential to extend financial inclusion to small independent farmers,” he says, adding, “At the same time we make money.”
Before founding BEENEXT in 2015, Sato was CEO of BEENOS (formerly Netprice.com), the Tokyo Stock Exchange listed e-commerce firm he founded in 1999. He began investing in startups through BEENOS in 2011. BEENOS’s two earlier startup investments in Indonesia based Tokopedia and in India based ShopClues have become ‘unicorns’—firms valued at over $1bn.
The entrepreneurial investor resigned his BEENOS management and directorship roles in late 2014 to focus on early stage investing through BEENEXT. The VC firm is funded by Sato as lead investor and several other large investors, including Digital Garage. BEENEXT has investments in over 100 startups, typically ranging from $300k to $1m each. About 10% are Japan startups.
Japan has a growing number of talented and aggressive entrepreneurs, but the nation is held back by poor demographics and a nascent new venture ecosystem. “It’s not that Japan is low on our investment list, it is just that India is so high.”
Sato enjoys helping founders overcome their most difficult challenges during the early startup period, when they must take their firms “from zero to one” (that is, from nothing to something). “Our mission is to form partnerships with the founder, by the founder and for the founder.” In a very real way, Sato considers himself to be a cofounder. “Occasionally I find myself saying, ‘Let’s do it’ or ‘It’s not you… It’s we’,” he says.
In 2014, Sato launched BEE Global Camp, a yearly gathering which brings together BEENEXT startup founders, to share experiences and build lasting friendships (see main pic above). He hopes founders will create thousands if not millions of new jobs in emerging markets. Sato’s enthusiasm working with founders is hard to miss. “I’m excited to see new-aged entrepreneurs from around the world inventing the next technological horizon,” he beams.
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