Google adds new Singapore data center as Southeast Asia reaches 330M internet users

Google is adding a third data center to its presence in Singapore in response to continued internet growth in Southeast Asia.

It’s been three years since it added a second center in Singapore, and during that time the company estimates that something in the region of 70 million people across Southeast Asia have come online for the first time. That takes the region to over 330 million internet users, but with a population of over 650 million, there’s plenty more to come.

The local data centers don’t exclusively serve their immediate proximity — Asia data centers can handle U.S. traffic, and likewise — but adding more local capacity does help Google services, and companies that run their business on Google’s cloud, run quicker for internet users in that specific region. So not only is it good for locals, but it’s important for Google’s business, which counts the likes of Singapore Airlines, Ninjavan, Wego, Go-Jek and Carousell as notable cloud customers.

The search giant also operates a data center in Taiwan. The company had planned to augment Taiwan and Singapore with a center in Hong Kong, but that project was canned in 2013 due to challenges in securing real estate.

Google opened its first Singapore data center in 2011, and this newest facility will take it to around $850 million spent in Singapore to date, the company confirmed, and to over $1 billion when including Taiwan.

Golden Gate Ventures hits first close on new $100M fund for Southeast Asia

One of the fascinating things about watching an emerging startup ecosystem is that it isn’t just companies that are scaling, the very VC firms that feed them are growing themselves, too. That’s perhaps best embodied by Golden Gate Ventures, a Singapore-based firm founded by three Silicon Valley entrepreneurs in 2011 which is about to close a huge new fund for Southeast Asia.

Golden Gate started out with a small seed investment fund before raising a second worth $60 million in 2015. Now it is in the closes stages of finalizing a new $100 million fund, which has completed a first close of over $65 million in commitments, a source with knowledge of discussions told TechCrunch.

A filing lodged with the SEC in June first showed the firm’s intent to raise $100 million. The source told TechCrunch that a number of LPs from Golden Gate’s previous funds have already signed up, including Naver, while Mistletoe, the firm run by SoftBank Chairman Masayoshi Son’s brother Taizo, is among the new backers joining.

Golden Gate’s existing LP base also includes Singapore sovereign fund Temasek, Facebook co-founder Eduardo Saverin, and South Korea’s Hanwha.

A full close for the fund is expected before the end of the year.

The firm has made over 40 investments to date and its portfolio includes mobile classifieds service Carousell, automotive sales startup Carro, real estate site 99.co, and payment gateway Omise. TechCrunch understands that the firm’s investment thesis will remain the same with this new fund. When it raised its second fund, founding partner Vinnie Lauria told us that Golden Gate had found its match at early-stage investing and it will remain lean and nimble like the companies it backs.

One significant change internally, however, sees Justin Hall promoted to partner at the fund. He joins Lauria, fellow founding partner Jeffrey Paine, and Michael Lints at partner level.

Hall first joined Golden Gate in 2012 as an intern while still a student, before signing on full-time in 2013. His rise through the ranks exemplifies the growth and development within Southeast Asia’s startup scene over that period — it isn’t just limited to startups themselves.

The Golden Gate Ventures team circa 2016 — it has since added new members

With the advent of unicorns such as ride-sharing firms Grab and Go-Jek, travel startup Traveloka, and e-commerce companies like Tokopedia, Southeast Asia has begun to show potential for homegrown tech companies in a market that includes over 650 million consumers and more than 300 million internet users. The emergence of these companies has spiked investor interest, which provides the capital that is the lifeblood for VCs and their funds.

Golden Gate is the only one raising big. Openspace, formerly NSI Ventures, is raising $125 million for its second fund, Jungle Ventures is said to be planning a $150 million fund, and Singapore’s Golden Equator and Korea Investment Partners have a joint $88 million fund, while Temasek-linked Vertex closed a record $210 million fund last year.

Growth potential is leading the charge but at the same time funds are beginning to focus on realizing returns for LPs through exits, which is challenging since there have been few acquisitions of meaningful size or public listings out of Southeast Asia so far. But, for smaller funds, the results are already promising.

Data from Prequin, which tracks investment money worldwide, shows that Golden Gate’s first fund has already returned a multiple of over 4X, while its second is at 1.3 despite a final close in 2016.

Beyond any secondary sales — it is not uncommon for early-stage backers to sell a minority portion of equity as more investment capital pours in — Golden Gate’s exits have included the sale of Redmart to Lazada (although not a blockbuster), Priceline’s acquisition of Woomoo, Line’s acquisition of Temanjalan and the sale of Mapan (formerly Ruma) to Go-Jek.

Southeast Asia-based mobile listings startup Carousell raises $85M

Carousell, the Singapore-based mobile listing service that operates across Southeast Asia, has pulled in an $85 million Series C fund as it seeks to strengthen its business among the region’s competitive e-commerce landscape before expanding globally.

The round was co-led by existing investor Rakuten Ventures and EDBI, the corporate investment arm of Singapore’s Economic Development Board. Other participants included returning investors 500 Startups, Golden Gate Ventures and Sequoia India as well as new investor DBS, Southeast Asia’s largest bank with over $330 billion in assets.

TechCrunch previously reported that Carousell had agreed on the round last October, when it was $70-$80 million. We understand that it remained opened for strategic investors, before finally closing earlier this year. When asked in October if it had invested in Carousell, DBS said it hadn’t so it potentially came on board recently; Tech In Asia previously reported that EDBI became a Carousell investor in 2017.

This new round means that six-year-old Carousell has now raised over $126 million, according to Crunchbase. It closed a $35 million Series B in October 2016.

“It’s been six years since I made my parents very angry when I decided to do a startup, so it’s great to again get the validation of our investors,” co-founder and CEO Siu Rui Quek joked in an interview with TechCrunch. “Six years ago it was mobile, now we’re going into an AI-first world [with other challenges such as] how do we make payments a lot more frictionless.”

Carousell’s core business is a consumer-to-consumer sales which, like a listings site, lets people sell unwanted items to each other. To date, the platform has helped sell over 50 million items and today it has 144 million listings. In recent years, it has fanned out to offer more verticals that include cars, property, jobs, services and finance.

The primary C2C portion of the business remains free, but the company has begun to monetize over the past several quarters, Quek explained.

Its revenue streams include advertising and partnerships — such as financial services and travel insurance — promoted listing and ‘spotlight’ ads for sellers, cost per click ads, and certain premium verticals, including automotive, real estate and more.

Carousell co-founder and CEO Siu Rui Quek

Living with e-commerce giants

While its offering is different since it centers around person-to-person sales, Carousell more generally competes with e-commerce unicorns Alibaba-owned Lazada, Sea’s Shopee, and Alibaba’s Aliexpress, as well as Tokopedia (yup, also funded by Alibaba) in Indonesia.

Quek said, however, played up the role of these straight-up e-commerce firms.

“They serve an important part of the system, they’re very complementary,” he explained. “For example, when Lazada runs a big sale, we’re quite happy because people will have unwanted items or things to sell later.”

“Lots of e-commerce guys have come [to Southeast Asia] but we continue to grow,” he added.

Figuring out just how large Carousell is in Southeast Asia isn’t all that easy. The company doesn’t talk about GMV. Quek said the number isn’t relevant — it doesn’t take payment for consumer-to-consumer sales, and advertising/services are major income streams — although sources last year suggested Carousell’s GMV could be around $5 billion.

Considering Carousell business is different to the others, that number is impressive. Shopee claimed $1.6 billion GMV during its most recent quarter — which would be $6.4 billion annually — while Lazada no longer reveals its figures but claims to be larger.

Back to topics that Carousell does talk about, and global expansion remains something of interest to the team — which hails from Singapore’s NUS; making them arguably Singapore’s first home-grown startup.

“We do have global ambitions as a company, but the focus is really still cementing our leadership in Southeast Asia. It’s such an exciting region, it’s still nascent and there’s still a lotto work for us to do in the grand scheme of things,” said Quek.

That discussion about moving outside of the region is likely to happen in “the next year or so,” he added.

Hiring is the single biggest challenge

For now though, Carousell is focused on growing its position in Southeast Asia, and in particular expanding its premium offerings — automotive, real estate and partnerships — beyond Singapore and into markets like Indonesia, the world’s fourth most populous country, and Thailand. The startup is also keen to grow its engineering chops, especially around AI which helps it match buyers and sellers.

“Hiring is extremely difficult,” Quek explained. “The single biggest focus for me and my team is going back into the weeds to find great talent. We already have over 100 product engineers covering 19 nationalities, we’ve got to bring people in from across the world.”

Beyond an HQ in Singapore, Carousell has been pragmatic in opening up offices where it can find talent. There’s a team of 20 in Taiwan and a small office of 10 engineers in Vietnam, too, while it has made three acquihires to bring in talent and expand its business. Those have been case-by-case, Quek said, so we shouldn’t expect the company to necessary go out and make more acquisitions following this new round of investment.

“Acquisitions are not a specific stream we’re deliberate about at this point – -but we’re definitely keen to see if opportunistic acquisitions might come about,” he said.

Finally, with Carousell now one of Singapore’s best-funded local startups — with influential bank DBS on its side, too — there’s likely to be talk about potential exits. Sea, formerly Garena, held a rare Southeast Asia IPO in the US last year, and Hong Kong is heating up as a tech listing destination with the likes of Xiaomi and Singapore’s Razer filing there.

For now, though, Quek said that isn’t a thought he or his team are giving time to.

“There are no plans for an IPO, we’re still super excited about the long-term opportunities and building on the mission,” he said. “We always say we are less than one percent done.”