“When a digital company gets dominant, it is like the rise of Thanos. What happens next is Captain America and Iron Man collaborate to defeat Thanos. I think this is what will happen in our ecosystem,” said East Ventures Co-Founder and Managing Partner, Willson Cuaca, in a webinar hosted by PricewaterhouseCoopers (PwC) on January 19, 2021.
Collaboration between startups and corporations are more prevalent today as competition becomes more fierce. According to Willson, collaborations will help startups and corporations challenge a company that has become too dominant in the ecosystem.
“The nature of startups is to be disruptive and to challenge the incumbent,” he said.
As startups and corporations possess unique capabilities and vastly different capacities, two things are needed: recognition of the values that each partner brings to the table and the ability to foster long-term relationships.
“I think we are expecting to see even more collaborations because now corporations have started to see the urgency of digitalization, and startups see the need to reduce risk by riding on existing business infrastructure,” said Melisa Irene, Partner of East Ventures, during a panel discussion on the PwC Next Level 2021 Outlook webinar.
The key takeaways from the webinar are as follows:
- Collaboration between startups and corporations are becoming more prevalent as corporations need the tech innovation from startups to stay relevant, and startups need the capacities that corporates possess to make a bigger impact
- Investors’ priorities change amid the pandemic, favoring companies that have shown experience or those with a clear plan of profitabilities
- The COVID-19 pandemic has shifted priorities and deepened partnerships among startups, companies, investors, and their business partners. For instance, SIRCLO works closely with corporates and Waresix currently provides support to small and medium businesses (SMEs).
PwC Next Level 2021 Outlook: SIRCLO and Waresix’s stories
Hosting the theme of “Start-ups, Investments, and Corporate Collaborations”, the webinar was held as part of the PwC Next Level program, in collaboration with East Ventures. PwC NextLevel supports startups, scale-ups, corporates, and investors in a range of different ways to help them pursue their needs and growth ambitions. During PwC Next Level 2021, as many as 24 startups from East Ventures’ portfolio participated in the program.
One of the participating portfolio companies, SIRCLO, has been working closely with both startups and corporations. As an e-commerce enabler, SIRCLO focuses on its mission of helping companies reach their consumers online, which has become a necessity since the pandemic forced swift digital transformation around the globe.
“SIRCLO is a company that wants to help brands sell online. By that definition, we are constantly looking to understand the pain points that businesses have in reaching their consumers and how we can address them,” said Brian Marshal, Founder and CEO of SIRCLO.
Brian further explained that the journey of SIRCLO had always been about observing and seeing the problems that existed in the ecosystem. Through this attitude, SIRCLO as a startup has proven itself to be a valuable partner to other companies — no matter their size.
“Actually, we are a client of SIRCLO,” said Teresa Wibowo, CEO of Ruparupa.com. She believes that as a retailer company, they need to collaborate with startups to get their feet on the grounds and make things faster. “I guess the point is when you have no experience in doing something, it’s better to get someone who’s more experienced to do it so you know what you can build and what you can outsource,” added Teresa.
Upper hand for experienced companies
The changing landscape of the pandemic also provides an opportunity to grow for Waresix, a logistic tech startup that connects shippers and businesses with available warehouses and transporters across Indonesia. Amid the pandemic, Waresix successfully raised US$100 million.
“One of the things about raising during COVID-19 is validation and testament to our business model. We prioritize a strong fundamental approach to logistics and supercharge that with technology. I think what we’re trying to do is to maintain that, because it’s the trust that’s being given to us,” said Eric Dharma, VP Corporate Development at Waresix. He further said that he witnessed the changes in priorities from the investors’ side.
Melisa Irene, speaking from the perspective of investors, notes that the pandemic has given an upper hand to entrepreneurs that have planned for sustainability.
“Having a clear plan of profitability shows strength and breaks the myth that raising funds is the only key to building successful companies,” said Melisa. “And successful execution of that strategy will make these companies more attractive to investors,” she concluded.
Partnership in times of crisis
As a startup that works closely with warehouses and transporters, mostly small and medium enterprises (SMEs), Waresix has been focusing on understanding its partners’ problems and thus deepening partnerships in times of crisis.
“Waresix aims to be a supportive presence for each of our partners. During the pandemic, it’s the bottom of the wealth pyramid that has been disproportionately impacted. Since our focus has been on helping transport SMEs grow, we can see real-time how their approach changed from maximizing profitability to survival mode. For us, it’s about being there and helping them to navigate the difficult times. If we can be that steady rock of demand for them, that’s going to translate into loyalty in the future,” said Eric. “Similarly for the customers, if we can be the steady rock of service and ease of operation for them, that loyalty is going to continue in the future. They’re gonna remember that.”
In the same vein, East Ventures has also deepened the relationship between the firm and its portfolio since the pandemic first hit. One of the ways that East Ventures has shown support for the companies is through having one-on-one calls with the startup founders.
“A lot of our founders are still in their mid-20s when they first started their startup journey. For these startup founders, the COVID-19 crisis is the first crisis that they experienced in their lifetime,” said Willson. “We spent most of our time walking the companies through the crisis to ensure their survival.”
“I believe the companies that have weathered the storm amid this crisis are going to be the ones who come back stronger,” he concluded.
All in all, the changing landscape of the digital ecosystem in Indonesia requires startups and companies alike to engage in deeper partnerships and collaborations. On the investment side, there is a shift in focus to existing portfolios instead of expansion. Priorities might change, but capabilities and capacities are consolidated through the long-term collaboration that is forged amid the crisis. Collaborations, along with competition, will take Indonesia’s digital economy closer to its golden era.