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00:00I mean great timing having you on. We're wrapping up 20 20 we're looking ahead to 20 21. It's obviously been a painful year for the economy for four for startups. What have the priorities been in your view for a lot of these seated startups and you know survival rates. What have you and how does that sort of take us into 2021. Morning guys and thank you for having me. You know as we were coming into March this year I think there was a lot of doom and gloom about it. You know how the world was ending and how cold it was really going to be the dominant thing in the business world this year. And while that has been the case I think what we've observed is that there's been an obsolescence of old business models and a bunch of new ones coming in and taking their place. And most of the new ones and digital digital business models. So really the massive beneficiary of corporate this year has been the startups and the tech companies that have been trying to really accelerate growth. And this is particularly been true in our markets where digital adoption was always the big driver for growth. And I feel like this year we've accelerated that curve and just leapfrog a year or two in a matter of months. So what's hot now when you look at next year. Well you know I think financial services I mean you know the Singapore FinTech Festival obviously that's a big one for us but really pretty much anything that displaces you know some of these old businesses with new ways of working out whether you know it's remote work. I'm on a zoom call right now and have been for most of the year. Whether it's you know new and innovative ways to distribute services like education like health care or whether it's the adoption of some of the stuff that was in the pipeline to begin with digital payments insurance lending all these have taken on a much more CAC first approach. And we're seeing that accelerate even more as we head into 2021. I want to focus on the regulatory environment because of course sitting here in Beijing that's been a big focus for us in the last few months the impacts of course on Alibaba and other tech players fintech players here on the mainland. To what extent are regulators in Southeast Asia taking a look at what's happening playing out here in China but not just China. The discussions underway in the US as well. Also in the European Union and looking to emulate some of those regulations. And what are the potential challenges then for that fintech space. Yeah you know regulation in our markets has always been interesting and you know well I can't comment on what's going on in China or Europe. I think in Southeast Asia regulators have by and large been very progressive. You guys probably saw the new digital bank licences being given out by Singapore. Whether it's the new regulation coming out of the car in Indonesia I think what our regulators in our markets have found is that the best way to drive growth and financial inclusion which are you know the latter being a pretty big objective of all of these regulators is really to promote digital ways of running businesses. And you know this this idea of having tech drive financial inclusion is really at the heart of a lot of regulatory changes and in financial services at least in our part of the world. Most of the other markets are broadly very open. I think one of the things that did benefit from a lot in Southeast Asia is being a hub for talent much like the US has been for several years. We are finding that this is like Singapore are really where the next generation of tech entrepreneurs are moving to to start their businesses. What is the IPO pipeline looking like for you next GAAP. Well you know I think we have a couple of companies in the mix in Southeast Asia and another half a dozen northern India. I think our markets are still relatively early. You know we've been investing in Southeast Asia for about six years and you know very active in the early stages of the business. So our portfolio is just starting to get the scale. Whether it's you know companies like Kojak Electric or PDA companies like Carousel and then a whole bunch of these new companies that are much more traditional tech startups that are still in the serious issues stage. But really seeing this acceleration that you know we are really sort of our best case playing out this year in many of those companies. Since since you brought up the subject I I need to ask you then I'm sure you've seen the news. I'm sure you are aware of what's going on. These talks of course with grad here. Is is that is that the ideal exit getting together with grad. Is it not public markets. What do you think is best for most stakeholders right now. When you look at those two. Well look I mean obviously can't comment on exactly what's going on over there but I do think that what we are seeing is each of these companies is getting such an enormous scale and market dominance. And the second thing that we're seeing that's actually very interesting is that it started off as a as a transportation business for Jihye Lee the breakfast services that they now touch. You know this idea of building a super app for Indonesia you know having a massive financial services player having a very large food delivery place. I mean in most other markets each of these companies is at 10 250 billion dollar company. And all of these businesses are inside one company in Indonesia. So that's what has us excited. I think the future of this company is I mean look the market pool has been incredibly strong whether they go at it alone or whether they go at it together. I think that that remains to be seen. But you know super excited about some of the traction that they've seen this year. It's been very very impressive. AP You talk about some of those delivery companies one of Sequoias portfolio companies I know it's not specifically within your framework necessarily. Door dash looking at evaluation valuation centrally have around 38 billion US dollars. Are you looking at similar style companies in your part of the world in Southeast Asia. I think that's an excellent question. What has said some of these companies apart and we are seeing this in Southeast Asia as well has been this relentless focus on unit economics. The new generation of companies that are coming out are really focused on how to make sure that profitability is at the heart of their business models. And that's what sets aside some of the really good companies which is the ones that might have come in in the first generation that may not have had as much of a focus on the bottom line and don't be too much cash to get to scale. So we're seeing that in our portfolio across India in Southeast Asia where you know unit economics start to work very early in the life of a company. In fact just this year out of the seven companies that we've invested in even at the city's stage have been companies that have been profitable. And so for us this relentless focus on economics is focused on getting business models. Right. Very early on in the life of a company is really what sets apart some of these incredible long term enduring businesses from ones that frankly don't succeed.

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Covid Beneficiaries Are Startups, Tech: Sequoia Capital

Abheek Anand, managing director at Sequoia Capital, discusses his outlook for startups in 2021, his investment strategy and where he’s finding opportunity. He speaks on “Bloomberg Markets: China Open” from the sidelines of the Singapore FinTech Festival. (Source: Bloomberg)

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