In this episode, we have Rajive Keshup, Investment Director at Cathay Innovation, a multi-stage venture capital platform affiliated to Cathay Capital, a US$4.5 billion global investment firm. He comes on our show to talk about the golden age of Southeast Asia startup and venture capital, Cathay Innovation’s approach to this gold rush as a global […]

Rajive Keshup, Investment Director at Cathay Innovation. Photo from Dealstreetasia PEVC Summit

S03E16: Cathay Innovation Investment Director Rajive Keshup on Southeast Asia’s Gold Rush from a global investment firm’s perspective

In this episode, we have Rajive Keshup, Investment Director at Cathay Innovation, a multi-stage venture capital platform affiliated to Cathay Capital, a US$4.5 billion global investment firm. He comes on our show to talk about the golden age of Southeast Asia startup and venture capital, Cathay Innovation’s approach to this gold rush as a global investment firm, and his own experience and learnings as a venture capitalist, board member on several insurtech and SaaS companies, and startup operator in Southeast Asia.

Highlights

  1. 00:27 Introducing Cathay Innovation and what Rajive is excited about as a VC in Southeast Asia; “This other theme that we’re starting to really unpack slowly is founders who are building companies in Southeast Asia, but the products being exported globally.”
  2. 04:17 How startups can go global from Southeast Asia; “And so when I think about how do you build a company that’s going global, I think you need to have an investor or a set of mentors or a set of parts of the team or parts of the capability that have already lived through that journey and lived that experience and could be a good sounding board for you.”
  3. 08:02 How Rajive ended up in Cathay Innovation; “Nick came in and said, “Hey, look, why don’t you try VC? It’s all the variability with all of the upside.” And I said, “Yeah, absolutely.” It’s been close to a year now and it’s like drinking out of a fire hose, but it’s good.”
  4. 09:56 How Rajive’s operator and banking experience as influenced his VC approach; “I look at things through, “If I was running this business, what would I do differently?” And I feel like I can make that mental bridge only because I’ve done that in other parts of my journey before.”
  5. 11:05 Opportunities in Southeast Asia’s insurtech landscape; “There’s not a lot of insurance embedded offline. All of the big guys igloo, Koala, PasarPolis, have all grown via online e-commerce so you can literally draw e-commerce adoption and then their growth curve right next to it, and then if you see a blip or an acceleration, it’s the exact same for these guys.”
  6. 13:50 The emerging dichotomy of SaaS companies from Southeast Asia; “We’ll see SaaS folks for local consumption…And then you’ll see stuff that is built here, but is being exported globally…We like the second bucket more…That’s not to say we won’t look at everyone because if you’re in good traction here, there’s a chance you could still go global based off of that.”
  7. 17:06 Deploying capital in Southeast Asia as a global investment firm; “Deploying capital here, you kind of have to be really careful about the themes you stick to, because you can be very quickly persuaded to go down in other directions based off what other VCs are doing, your classic FOMO.”
  8. 18:55 Future of exits in Southeast Asia; ​​“This SPAC conversation, if nothing else has at least allowed us to get those other indexes ready…five to ten years from now they will be a viable place to have credible listings. But then I think we’ll go back into the slump…where we don’t have exits for a little while, and companies remain private a little bit longer…the good news is that there’s enough private capital to sustain that for the next few years.”
  9. 20:27 The Golden Age of Southeast Asia and Cathay Innovation’s approach to the gold rush; “We have global carry, and so we don’t look at opportunity in the context of Southeast Asia, we look at our context in how this stacks up to everything else that we’re looking at this point in time?”
  10. 22:45 Learnings from running “Unpacking the VC” Clubhouse series; “VCs may have slightly different agendas in terms of the how, but essentially we’re all on the same team. If the Southeast Asian ecosystem wins, everybody wins.”
  11. 24:15 Rapid Fire Round; “Whatever you’re doing, do it a hundred percent. You can very easily get distracted by this, that, and the other thing. And in this position, we get a lot of that between distractions from our own portfolio, new things, what are other VCs doing, content, this, that, but if you’re doing something, just do it a hundred percent and make sure it’s perfect.” 

About our guest

Rajive Keshup, Investment Director at Cathay Innovation

Rajive is an Investment Director at Cathay Innovation, based out of the Singapore office. Prior to joining Cathay, Rajive played instrumental roles in scaling a number of Southeast Asian startups. Before moving to Singapore, Rajive was a Managing Director at PwC Strategy (formerly Booz & Co.) in New York City where he led the TMT sector for the firm’s Private Equity practice. Rajive started his career at AT&T doing corporate strategy & development in Dallas, Texas. He is also a former-founder having built, scaled and successfully exited a US-based startup in the pet services space. Rajive earned an MBA from Cornell University in Ithaca, NY and a Bachelor of Science from Bentley University in Waltham, MA.

Transcript

Paulo: So in today’s episode, we have a very special guest. Incidentally, he had invited England to a Clubhouse session — it’s already been months, actually a few months back. It was a really great conversation that they had talking about the life of a VC, investing in companies in Southeast Asia. So I listened to this Clubhouse session and I thought we should definitely have him on the show. And this time, I have the opportunity to be able to turn the tables around, so to speak, and get him to share his own insights and thoughts on VC and Southeast Asia. So we have on board the director of Cathay Innovation Rajive Keshup. Rajive, how are you doing?

Rajive: Appreciate it. I’m good. Thank you. I don’t know if my answers are going to be as good as Yinglan’s. He’s a bit of a legend and that’s why he was on Human VC (the Clubhouse Session), but I’ll try my best.

Paulo: Yeah. I’m pretty sure we’ll get to here very unique perspectives as well from you, considering that you’ve been a board member in several interesting companies, also started your own company, being a startup operator yourself, and representing this wave that I would say of investors that aren’t from Southeast Asia that are becoming more and more interested in Southeast Asia, probably setting up their own headquarters in Singapore, for example, or Indonesia and investing more in the region. I think you being part of Cathay Innovation, that’s definitely a part of that trend, and I’d like to talk to you more about that, but first things first, I just like to know what’s keeping you excited these days as a VC at your work in Cathay Innovation.

Rajive: Cathay has been here since 2019. We definitely get labeled as sort of one of the newer folks that are one of the tourists that are in this part of the world but I feel like we’ve been here a little bit at this point. What’s been really exciting for us are a couple of themes that we’ve been following.

So the first one and a big one for us is insurance. And so we’ve made a number of plays within the insurance or the InsureTech space. We think that there’s massive underpriced penetration of insurance in Southeast Asia. 

And then this other theme that we’re starting to really unpack slowly is founders who are building companies in Southeast Asia, but the products being exported globally. So that’s a space that we’re doing a lot of work in both here and in India, to come up with an answer to the question, ”Where are the biggest plays in SaaS and a couple of other related segments and when are they exporting and when can we kind of jump in at the inflection point?”

And so those are two things that I’d say are immediate and what we’re working on at the moment. And you’ll hear deals from Cathay announced within the next 30, 45 days tops in both of those spaces, but that’s essentially what we’re working on.

“This other theme that we’re starting to really unpack slowly is founders who are building companies in Southeast Asia, but the products being exported globally.”

Paulo: For the listeners in the audience and even I when I first heard about Cathay Innovation we confuse it with the airlines or the bank. Maybe you could give a quick intro on Cathay Innovation?

Rajive: Yeah, I get that a lot. And I apologize to folks, but I don’t have tickets for use. Even if I did, it’s not like we could go anywhere at the moment. Cathay is a four-and-a-half billion-dollar global investment firm. Two-thirds of that are in private equity, one-third of that in venture capital. Our LPs are the largest European conglomerates and publicly listed companies, which makes it a very diverse base of folks building out innovation capability. On the private equity side we have small-cap and mid-cap, and then on the venture side, we typically do Series A to Series C, with checks as little as 5 million and as much as 20 to 25 million for the first check. We have eight offices across the world, and on the venture side of managing and investing out of one and a half billion dollars capital.

Paulo: Nobody sent LinkedIn messages to Rajive for any airline tickets. Just send really great pitch decks to him. 

I wanted to go back to what you mentioned about the focus that you have. You talked about insurance and you also talked about looking for startups in Southeast Asia that are looking to go global. A few episodes ago, we were talking about one of the companies in our portfolio igloo company assigned to the CEO and how they’re sort of one of those companies in that class, which is global from day one. Some of their first customers were from the US already from the very beginning. So what are your thoughts on how a startup can actually go into that trajectory? Because you have a lot of conversations around, you either go ASEAN or you go Indonesia. But we don’t really talk about how to go global — that third path. So what are your thoughts on that? And in the context of Cathay Innovation, what are the learnings from the LPs, for example, in your fund that could possibly help startups?  

Rajive: I’ll take the second question first. So on the LPs, these are your largest European enterprises, so think L’Oreal, think Total, Michelin. When they need something as part of their sales stack or this part of their marketing stock, it’s a really good insight into what they’re currently using and where the gaps are within their businesses. And then taking that back and saying, “Okay, I’m very close to what I think is happening here. Let me go find a company in Asia or anywhere in the world that can make that happen.” That’s been a very big theme for us. 

There’s two really big themes that transcend through Cathay. The first one is using our LPs to figure out what they’re investing in, what they use, what they consume as part of their stack, and then going out and finding companies that kind of hit that bucket. 

The second thing that our LPs have really helped us hone in on is time machine thinking and what that is, is every market’s kind of developing on a different trajectory. So the US was first along with China and then came India and then came Southeast Asia. We were early investors in Pinduoduo, and so Pinduoduo in 2015 led to looking all over the world for another Pinduoduo and couldn’t find the exact same infrastructure plus super app plus all of the other things that kind of made Pinduoduo the success that it is today until 2020, when we came across a company in Brazil called Facily that we then invested in and you should hear some massive news about that shortly. So something that we saw in 2015, we kind of looked five years then found it again in 2020. And so that affected the time machine thinking. There’s so many examples like we’re early investors in Chime or early investors in XL. There’s so many good examples of finding a theme in one place and then looking for that exact same theme in another market. LPs have really helped us hone in on what we should be looking for.

And so when I think about how do you build a company that’s going global, I think you need to have an investor or a set of mentors or a set of parts of the team or parts of the capability that have already lived through that journey and lived that experience and could be a good sounding board for you. If you are an Indonesian company with Indonesian investors and none of your team have ever been outside of Indonesia, but you want to build SaaS for the US market. may succeed, but I would bet that you are probably going to need some help along the way, with a bunch of things from language, UI/UX, et cetera. 

And so it’s really making sure that you have those connectivity points. The way we’ve sort of seen companies be successful is they found a little product-market fit in one or two countries in Southeast Asia, and then have seen some inbounds from other parts of the world, to a point where that traffic is then worth warranting going over. 

That’s exactly the company that you’ll hear about soon that we invested in. They started that exact same way — founded in Singapore by an Indonesian woman who has US degrees, so they had some form of connectivity with the US. She worked at Oracle and then lobbed over once she found a little bit of product-market fit. And so you’ll start to hear that theme more and more.

“And so when I think about how do you build a company that’s going global, I think you need to have an investor or a set of mentors or a set of parts of the team or parts of the capability that have already lived through that journey and lived that experience and could be a good sounding board for you.”

Paulo: I think it’s really interesting that you position yourselves as those people that you want on your board to actually help you go global. Speaking of that, I also wanted to focus on what you bring to the table yourself as a VC having joined Cathay a little over a year ago, around 2020. So I just want to start off with what is the context for you going into Cathay and even if Cathay is, I would say, new into the Southeast Asia scene while you have been around in the region for some time already. So what was the context of moving into Cathay?

Rajive: Complete accident, and that’s going to sound super cliche, but Nick (Nicolas DuCray) and I have actually known each other since late 2018, early 2019. We’d kept in touch since then. And there was a point in time where as CFO of a company, I wanted to explore what was new and what was different. And I was missing parts of consulting, which was seeing a lot of companies at one point in time. So I was missing that variability. Nick came in and said, “Hey, look, why don’t you try VC? It’s all the variability with all of the upside.” And I said, “Yeah, absolutely.” 

It’s been close to a year now and it’s like drinking out of a fire hose, but it’s good. I wouldn’t have had it any other way. It’s a really special firm and a really special place. And I’ve been given a lot of autonomy to kind of figure out the two or three areas that I want to go after. It’s been really good. I’d say the only challenge and downside, and I think a lot of folks will empathize with this, is joining any place in the middle of a pandemic.

Paulo: I actually wanted to ask you about that. What was it like? 

Rajive: I joke with our founder, Denis Barrier, about this a lot. I say, Denis, what’s it like for me to come to IC and ask you for like a US$15 to $20 million check, even though we’ve never met the founder. You’ve never met me. We’re completely remote. How do you sort of establish that trust quickly enough? That part’s been, I’d say harder and I can’t wait to meet all of my colleagues from around the world at some point, but apart from that it’s been a fantastic experience. 

“Nick came in and said, “Hey, look, why don’t you try VC? It’s all the variability with all of the upside.” And I said, “Yeah, absolutely.” It’s been close to a year now and it’s like drinking out of a fire hose, but it’s good.”

Paulo: It’s really great that you’re able to easily adjust even with the circumstances, and I also wanted to talk about how your past experience being an operator, specifically being a CFO and perhaps even being in the banking industry has influenced your approach as a venture capitalist.

Rajive: I approach it with a little bit more empathy and a little bit more understanding or unpacking of the chaos. As a startup founder, I’ve had to do payroll and make payroll and that’s never fun when it’s close to the end of the month and you’re trying to figure out if cash flows enough. And at the same time, as CFO and going out and raising capital, I can understand what goes into the narrative building and parts of the story and what you omit and do that whole dance. And so I feel like that automatically clicks with management teams cause they say, “Oh wait, you’re a little different cause you’ve been here.” And I’m like, “Yes, I’ve seen all the tricks and all the bullshit, let’s cut to the chase.” That part for me has been different and I look at things slightly differently compared to some of my peers. I look at things through, “If I was running this business, what would I do differently?” And I feel like I can make that mental bridge only because I’ve done that in other parts of my journey before. 

“I look at things through, “If I was running this business, what would I do differently?” And I feel like I can make that mental bridge only because I’ve done that in other parts of my journey before.”

Paulo: We’ve talked about your journey as a VC. We’ve talked about Cathay a little bit. We’ve talked about companies going global, but I also want to talk about your thoughts on InsureTechs. We’ve interviewed a couple of them from our portfolio on this podcast, talking about the case of Lifepal being a marketplace for insurance optimizing origination and distribution. And then for Symbo working with e-commerce players, for example, to repackage insurance offerings and all that. What are your thoughts on this space? 

Rajive: I like Adrit and Giacamo a lot. We really liked the space and we think across the value chain there’s going to be disruption, as the proliferation of e-commerce happens, you’re going to have a lot more microinsurance take place. Insurers can’t put up products fast enough because the underlying assets that they’re insuring are constantly changing. There are new products like cybersecurity. There’s a ton of opportunity across the value chain, both in terms of getting everybody insured, embedding insurance into retail products, and then new points of insurance, where we think that it’s a hotbed for activity. 

So we’ve made plays in Igloo, there’ll be plays in insurance plan marketplaces we’ll put out at some point. We’ve done Coherent in Hong Kong which’s turning into a bit of a global business in enterprise SAS. We’re quite bullish on the segment and that’s just the stuff that we’ve done in Southeast Asia. If we go globally, we’ve done Sidecar Health, Cover and a few others. There are like six or seven insurance companies in our portfolio of 35. It’s a big cornerstone for us as far as an investment theme is concerned.

Paulo: And so given that insurance is such a big part of the portfolio, even globally, what are you seeing sort of the gaps in Southeast Asia when it comes to insurtech plays here that could be learned from other markets?

Rajive: There’s very little B2C microinsurance here at this point. And I think that’ll change. And then there’s not a lot of insurance embedded offline. All of the big guys — igloo, Koala, PasarPolis, have all grown via online e-commerce so you can literally draw e-commerce adoption and then their growth curve right next to it, and then if you see a blip or an acceleration, it’s the exact same for these guys. 

Paulo: What would be a good example of offline implementation? 

Rajive: Symbo is doing a little bit of that in India, for example. They’re insuring sunglasses from LensCrafters. And so you go buy your sunglasses, you pay a couple of repeats to get it insured. If anything happens, you can go back, get it reinsured, return and repair it, or whatever free of cost with that insurance. For the retailer, that extra couple of bucks is straight to gross margin. So it’s a no-brainer for them and then brings the customer back into their store. So it’s not like, you know, if something breaks, they go to another store, they have to come back to you. It’s a win-win for everybody. and we need to see a lot more of that in Southeast Asia. Symbo, I feel, is scratching the surface on that more in India than here, but I do think that we need to see a lot more of that in Southeast Asia. 

 “There’s not a lot of insurance embedded offline. All of the big guys — igloo, Koala, PasarPolis, have all grown via online e-commerce so you can literally draw e-commerce adoption and then their growth curve right next to it, and then if you see a blip or an acceleration, it’s the exact same for these guys.”

Paulo: Yeah, Symbo is a concrete example of bringing those learnings from a market like India, just a few more years ahead and then trying to implement it in Southeast Asia as well. Aside from insurance companies that you’ve invested in or sit on the boards of, you also sit on the boards of a couple of SaaS companies as well.

So I wanted to know your thoughts on that. We also had a conversation a few episodes ago with one of our newer SaaS companies, Nimbly. We talked about the changing of the old guard when it comes to enterprise and these big conglomerates and a newer generation of leaders are becoming more open to adopting these technologies. What are the other factors you see in the region that could help drive this adoption? And what do founders need to think of when pushing for SaaS in Southeast Asia?

Rajive: It’s at an inflection point. But it’s not going to be a point, it’s going to be a little bit of a journey before we kind of get onto the other side of it. 

I’ve worked closely with a number of SaaS players here and they’ve been able to get a little bit of enterprise traction, but really the best route to sell for them has been to go to the West, get a little bit of traction and then get the office [in Southeast Asia] to adopt it, which is bizarre but that’s sort of the route that they’ve taken. And so I feel like. enterprise SaaS, if we sort of break up end demographics, so small and medium businesses, and then large. So small, medium businesses have been spoiled and are getting [products] for free or close to free, or there’s some scheme and so as a result, their willingness to play is relatively low. And then on the enterprise side, they kind of look for best-in-class and are only now starting to get a little bit more sophisticated, going away from one-size-fits-all to best-in-class performance across different parts of the stack.

But I still think that they look westward first, unless the solution needs to be hyper-localized for Southeast Asia, whether it’s language, local tax issues, or local regulation. We get to a point where we have verticalized SaaS for Southeast Asian enterprises made by Southeast Asian startups bought by Southeast Asian enterprises. But I do think that that takes a little bit of time. I don’t think we’re nearly there yet. I think it’s going to be a lot of years before we see wide mass adoption of that across the enterprise stack. 

Paulo: That’s interesting because it brings up two points. One is that because of companies and especially big enterprises, which will usually drive a lot of the revenue looking towards these Western solutions, there’s this incentive for SaaS companies, even those coming from Southeast Asia to actually go global from day one and position themselves as trying to be global in that sense.

Another interesting point from what you mentioned is that creating this very localized ecosystem of companies and SaaS providers within Southeast Asia will definitely take some time. 

Rajive: You summarized it perfectly. We see both of those dichotomies. We’ll see SaaS folks for local consumption. HR easily is a good example of that. And then you’ll see stuff that is built here, but is being exported globally and there’s a whole host of folks you could point to as examples. We like the second bucket more: built here for global [consumption]. That’s not to say we won’t look at everyone because if you’re in good traction here, there’s a chance you could still go global based off of that.

So the folks that we have seen who are building locally it’s because they’re hyper-localized. They’ve picked up on a regulation. They’ve picked up on a theme and they’re sort of driving beyond that. A good example of that is […] in Indonesia — hyper-localized and then they built a bunch of things around the value chain that sort of sit around it and have managed to build a little bit of scale. We like both buckets, but would say for the most part, we’d probably invest a little bit more in building for global than building for local. 

“We’ll see SaaS folks for local consumption…And then you’ll see stuff that is built here, but is being exported globally…We like the second bucket more…That’s not to say we won’t look at everyone because if you’re in good traction here, there’s a chance you could still go global based on that.”

Paulo: Again, we go back to the “building for global” kind of theme. Speaking about that, you talked about the LPs providing all of these learnings, this time machine concept, learning from other markets. For yourself as a VC being part of this global firm, what are the learnings for you as a VC from other markets in terms of how you want to proceed here in the region?

Rajive: If you’re going earlier stage, you need to be hyper-local. That immediately excludes us from a bunch of deals that we would typically go off to and other parts of the world where we are very, very local. We tend to get slotted more like Series A Series B Series C, closer B and C than even A.

That’s sort of one big takeaway from us in the region. Then the other one is there’s no shortage of capital here. And there’s no shortage of really good ideas and really good startups. It’s kind of like the golden, But even in the gold rush, because you see all of these massive headlines of company X and Y raised so-and-so at a hundred times multiple. You hear all of that. But I feel like under the surface, it’s kind of a barbell. And so you see all of that and then you have a very small middle, and then there’s a lot of folks that aren’t raising anything or struggling to sort of get to that next round. 

Deploying capital here, you kind of have to be really careful about the themes you stick to, because you can be very quickly persuaded to go down in other directions based on what other VCs are doing, your classic FOMO. We save no more often than we say yes, unfortunately. And we try to stay very disciplined into the two or three things that we are chasing after to the point where we’ll wait even three, four months. If a deal doesn’t show up that we like, we just won’t do anything. We ended up having that luxury to be able to do that, given the way our fund is structured and given that we’re all a global fund with one pocket of capital. And so if we’re not doing something, but the US is on fire or China’s on fire, that kind of makes up for it.  But that’s how we try and position ourselves here versus in other parts of the world.

“Deploying capital here, you kind of have to be really careful about the themes you stick to, because you can be very quickly persuaded to go down in other directions based on what other VCs are doing, your classic FOMO.”

Paulo: I want to get back to that whole dynamic that you have, not necessarily just a Southeast Asia outfit, but really having this connectivity with other headquarters around the globe. But what I also want to bring up what you mentioned — this whole barbell framework — in terms of the funding here in Southeast Asia, and how would that affect the exits that you’re potentially seeing as a VC here?

Rajive: When you talk about exits, we talk about who are going to be the drivers of those exits. For the last six months we’ve been talking about SPACs less so recently than in the first half this year. That conversation is starting to dry up a bit, which then goes back to the whole, how are you actually going to exit, where are you going to do this? Is the IDX ready? Is the SGX ready? What is Hong Kong doing? What is Australia doing? I think this SPAC conversation, if nothing else has at least allowed us to get those other indexes ready. So I feel like not two or three years from now, but five to ten years from now that will be a viable place to have credible listings. But then I think we’ll go back into the slump after all of these SPACs announcements or de-listings or whatever that come as a result of it, where we don’t have exits for a little while. And companies remain private a little bit longer. I think the good news is that there’s enough private capital to sustain that for the next few years.

I’m less concerned about exits now than I was two to three years ago. Given that we’ve seen a few, we know a small glimpse of what the future could look like if the markets are ready, so on and so forth. We invest thinking that someone smarter than us is gonna figure out that infrastructure and build it up to unlock all of this capital. That’s why we’re here and what we’re doing. 

“This SPAC conversation, if nothing else has at least allowed us to get those other indexes ready…five to ten years from now they will be a viable place to have credible listings. But then I think we’ll go back into the slump…where we don’t have exits for a little while, and companies remain private a little bit longer…the good news is that there’s enough private capital to sustain that for the next few years.”

Paulo: Being part of a global VC and I also want to tie this to your point earlier with this whole dynamic working with different markets. We’re seeing a lot of VCs coming into Southeast Asia, primarily because of these SPAC trends and then this whole generation of unicorn is trying to exit, which may lead to, as you said, a slump when this generation has already exited — what then would be the play here for these global VCs into the ecosystem, and what kind of role would they pay here in the region?

Rajive: This SPAC stuff is just the headlines, but I’ve maintained for at least a year now that Southeast Asia is in the golden period. The next 20 years are going to be like the best 20 years. for value creation, for exits, for founders, we’re going to see all of this activity.

And so it’s more that that’s attracting people knowing that, “Hey, look, I saw a Lemonade or I saw XYZ company in one part of the world and Oh look, we saw Uber five years ago. Then we saw Grab and Grab turned into a $40 billion company. What else is out there? Let’s go pick apart all of the other playbooks that we saw and figure out how we can fund the local version of them.” And I think, that again, time machine thinking is really why you see a lot of folks kind of gravitating towards Southeast Asia. As a result of doing that because they’re used to paying prices in one market, their threshold for valuation tolerance is a lot higher than local valuation terms. And so in some ways, a lot of the local VC ecosystem is going to gain a lot because they’re going to see incredible markups on their portfolio. But in other places they’re going to have a hard time competing if it’s a sustained trend. 

So I think we’re at a very interesting balance. We’re seeing the first, really, really big checks starting to get thrown about, specifically in the fintech sector, but I feel like they’ll come out in other parts of the market as well soon enough. And so it’ll be really interesting to see folks compete. 

To your point about our process, we look at opportunities as a global fund. We have global carry, and so we don’t look at opportunity in the context of Southeast Asia, we look at our context in how does this stack up to everything else that we’re looking at this point in time? And will this be a safer or better “pick-your-metric” quality of investment versus what we’re looking at in China versus the US? And sometimes Southeast Asian companies win. A lot of times they don’t win for a bunch of reasons in our eyes, but that’s starting to change as we start to evolve as a firm. 

“We have global carry, and so we don’t look at opportunity in the context of Southeast Asia, we look at our context in how this stacks up to everything else that we’re looking at this point in time?”

Paulo: It’s really great that you have that big picture perspective at Cathay. And it’ll be interesting to see how the dynamic between global and foreign VC shops coming in with the local VCs. Because right now the global and foreign VC’s are boosting the activity for the local VCs as well. But interesting to see how that plays out. 

And then speaking of working with other VCs and even learning from them I want to go back to how I even learned about you in the first place, which is through the cop-out series multiple sessions over several weeks. And one of them you’ve kindly invited Yinglan to. It was called Unpacking the VC. 

Something I’ve been wondering is, you’ve had some of these conversations, what’s the biggest takeaway, or what’s a commonality that you’ve seen across all of these conversations?

Rajive: VCs are a lot more approachable and a lot more human than are made out to be. They may have slightly different agendas in terms of the how, but essentially we’re all on the same team. If the Southeast Asian ecosystem wins, everybody wins. There’s actually no losers in that metric, VC, founder, management team, whatever. I finally got to understand England’s obsession with the color orange, which was helpful because I couldn’t find that anywhere on the internet. I believe me, I looked. The human VC series was a special one because we’re in the middle of COVID, people that I have always wanted to get to know and would typically get to know through physical meetings. I couldn’t do that and so Clubhouse is the perfect medium to be able to bridge that gap and get to know folks. And then if I can invite other folks along the journey then even better. And so these were really, really fun conversations. 

“VCs may have slightly different agendas in terms of the how, but essentially we’re all on the same team. If the Southeast Asian ecosystem wins, everybody wins.”

Rapid Fire Round 

What are the top 3 skills of a VC?

Rajive: Empathy, objectivity when things are right and wrong. And a little bit about being a dreamer. I think you need to be overly optimistic, and a bonus one and maybe it’s just me is a bullshit meter, and being able to call out bullshit very quickly. Sometimes people will tell you, check out so-and-so company, it’s amazing, and then you look under the hood and not so much. and sometimes founders will say things on their deck that may or may not be accurate. So being able to detect that pretty quickly helps with time management. 

Paulo: Is that just a matter of experience? 

Rajive: I think so. As a VC, I can’t speak to that because I’ve only been doing this a little while, but I’m sure VCs who are experienced get to meet someone and within the first five or 10 minutes, know whether they’re going to invest or not. Check back in 10 years, I’ll let you know.  The way I think about it is I’ve been there. And so I’ve built and I’ve done. And if you say you’re going to go do X, Y, or Z, in so-and-so amount of time, and this is how you plan to get there.  tend to think that’s either going to be easy to do or hard to do, and you’re either over-indexing or under-indexing. And so that’s where my piece comes from. 

Advice for anyone looking to break into VC in Southeast Asia?

Rajive: I’d say there’s no one traditional path. There’s a bunch of paths that you can kind of go to. Any path where you’re doing a really good job in building a ton of founder respect and founder trust will get you there faster. And so whether it’s being a good product builder, whether it’s being a good go-to-market person, the salesperson, there’s been so many different careers that have sort of led to VC. If I think about Peter at Sequoia, slightly a-traditional versus some of the other guys at Sequoia versus Yinglan versus a whole host of others, there have been so many different paths to get there, myself included. So I don’t think there’s one particular path. And so don’t try and hone in and find, if I check all these boxes, this is going to happen. Here I’m going to make a shameless plug for insignia and say, if they take your 12-week course you may have an elevated chance at doing it. 

The other thing I will say, candidly is there’s actually been a democratization of capital and investment into startups. And so put your money where your mouth is. You want to do this? Go angel invest, 2k, 5k, 10k. Do a little bit of that and put a little bit of a portfolio together and see how it does. And if you really enjoy that process, then this may be cut out for you. And if you don’t, then maybe stick to whatever it is you were doing. 

If you could be in the shoes of a tech founder or VC for a day, whose would it be? 

Rajive: For a tech founder, I would say I would probably want to be in the shoes at the moment, Prajit from Nium. So he’s not a portfolio company, so I could feel like I could speak objectively, but he just announced a second acquisition today. I think there’s going to be another couple of massive announcements coming forth in the next few weeks or months. And then he’s off to the States to go from being a Southeast Asian company to building a truly global company, in September. So I would say heroes-wise, I think he, for me, is the Southeast Asian story. Someone who started something in 2015, 2016, I can’t remember, pivoted a couple of times along the way, stuck to his guns, built a really big thing, actually one of the largest fintechs I’m convinced we’ll be the largest fintech out of Southeast Asia all said and done, but at that point we’ll be a global company then. And then it’s truly planting the flag globally. So I think he will make Singapore and Southeast Asia very, very proud, as a result of his success.

So that would be on the founder side. And then on the VC side, I would probably say Shailendra from Sequoia. His view and vantage, having been doing this for like 10, 12 years now, seeing India first and then Southeast Asia second, I think is second to none globally, actually, to be able to build out two massive regions and really two firms and kind of build it into one, but then exude the passion that you’re doing this for the right reasons, right? You’re doing this because you really, truly care about founders and founders success, to me, is a really cool vantage point, so I’d say him if I had to pick a VC from here. 

How would founders describe you as a VC? 

Rajive: Newscasters that have a suit on the front and red shorts underneath, like that. To the outside world, I’m like a cheerleader. I might as well have pom-poms on like I’ll retweet, tweet. Anywhere I talk to, my founders can walk on water, but like underneath, I’m kicking their butt. I’m constantly saying things like, “Where the hell is this? Why is this?” And I’m like a torrent for a lot of them. So I feel like this is a good dichotomy of good luck, bad love, or hard love, not-so-nice love. but it comes from a place of “Hey, let’s execute faster. Let’s build bigger. Let’s go faster.” And I’m trying to drive cultures of accountability within our portfolio across the board, and bring a little bit of PE discipline to our startups a little bit earlier and in governance a lot earlier. So I’d say I’m a little bit of a newscaster or someone who’s outward one thing but inside it’s a totally another thing. I’m hoping that’s how everybody else is, and I’m not a weird one here. 

We’ve all been students once (and always are arguably) — most memorable class you’ve been in? 

Rajive: Calculus three, MA 243 in Boston where I met my wife. 

Being a father yourself, what’s the most important lesson you’ve learned from your father? 

Rajive: Whatever you’re doing, do it a hundred percent. You can very easily get distracted by this, that, and the other thing. And in this position, we get a lot of that between distractions from our own portfolio, new things, what are other VCs doing, content, this, that, but if you’re doing something, just do it a hundred percent and make sure it’s perfect. That’s something that I think about a lot. 

And then the second one, that’s big for us, is to always be grateful. I’m constantly grateful about the situations that I get put into and make sure you show gratitude. I have this sticker that I keep, that reminds me on my computer that says I’m lucky to be here. And so I keep this as a reminder to constantly be grateful for the opportunities that I have. 

“Whatever you’re doing, do it a hundred percent. You can very easily get distracted by this, that, and the other thing. And in this position, we get a lot of that between distractions from our own portfolio, new things, what are other VCs doing, content, this, that, but if you’re doing something, just do it a hundred percent and make sure it’s perfect.”

You’ve lived in many cities across the world — in which city would you want to (a) be born, (b) build a company, (c) retire? 

Rajive: So born, Singapore. I feel like there’s no better place in the world to raise a child. I have a five-year-old and he’s living his absolute best life at the moment. And so I feel strongly about that. If I could ask my parents to do that again.

I would build a company either here or in Bangalore. Amazing talent, much cheaper than other parts of the world on the value scale and all of the capital and all of the funding for the right ideas to really push out 

And then retire — my wife and I have already decided that we’re going to retire on Venice Beach in California right outside of Los Angeles. So we’re going to have a home there and I’m going to teach part-time at Cornell. And so we’re gonna have a home in Ithaca, New York. So between those two that’s my plan if this VC thing works out the way I think it will. 

What do you do to de-stress / take care of your (mental) health?

Rajive: Yeah, two things. So when I mentioned I have a five-year-old and that’s all the stress busting I can handle. If you ever want to relieve some stress, hang out with some kids. I don’t care whether they’re your own or somebody else’s really doesn’t matter. They have an amazing way of simplifying things, in distilling things down very quickly, and are super fun to hang out with. And so I hang out with my son and all of his friends, and that’s a lot of stress busting. We played Beyblades and I’m currently the reigning champion of my son’s toy room. And I cycle a fair bit. I picked that up doing the circuit breaker last year and have sustained it, and it’s been pretty good. I’m not as good as some other VCs, like Michael Lynch, but I do my best.

How can people reach you? 

Rajive: Easiest way is Twitter or my LinkedIn. Both are @Raj1ve. That’s typically the easiest way. I’m pretty responsive. 

***