Week in Review: AirAsia deal shows value of startup-Brick&Mortar collaboration

• US$2.6 mil acquisition gives airline greater share of passenger wallet
• Malaysia announces 2 startup initiatives but value proposition needs to be sharpened

ONE entrepreneur whose instinct for commercial opportunities is razor sharp is Tony Fernandes of AirAsia. A DNA Digerati50, Fernandes just acquired a 50% stake worth US$2.6 million (RM11.5 million) in on-ground travel planning startup, Touristly Sdn Bhd, which runs the portal, Touristly.

Through an earlier investment via Tune Labs Sdn Bhd into Touristly, Fernandes had already seen how Touristly was able to grab a US$185 (RM813) chunk of his passengers’ share of wallet after they get off his planes. As a result, he would have had no hesitation in pulling the trigger on this investment which involves injecting some digital and non-digital assets into Touristly and cash.

And, looking beyond the impact this will also have on Touristly, led by founder and CEO, Aaron Sarma, the big deal about this news is that we have an established Brick & Mortar player, first collaborating with a startup, seeing the value its brings and quickly deepening the relationship via an acquisition that still leaves the entrepreneur running the show and salivating at the prospects of being able to monetize AsiAsia’s 60 million passengers a year.

Let’s hope this acquisition will open the eyes of more Brick & Mortar players to the upside they can carve from their existing businesses by collaborating with startups.  

Meanwhile, the ongoing (it ends today) Global Ventures Summit in Bali focused around startups and the digital economy, saw the Indonesian government reinforce its commitment to becoming a digital economy through identifying policy levers that can unlock the potential of the digital economy.

All its ambitions and targets are encapsulated in its Go Digital Vision 2020 plan (though there is no official document outlining the vision, yet). As I have spoken about before, it is placing strong emphasis on e-commerce and at the Bali conference a public official shared the seven issues government has identified that it plans to use policy as a tool to unblock and let e-commerce thrive.

Through its interactions with both US and Chinese government officials, Indonesia has come to believe that government intervention through policy tools will accelerate the growth of e-commerce with the government targeting over US$130 billion in transactions by 2020.

Beyond the focus on e-commerce and startups (it has a National Movement of 1,000 Digital Startups), I was pleased to note the focus on agriculture where the government has the goal of helping 1 million farmers and fishermen and go digital. Small and medium enterprises (SMEs) are an obvious focus with the target of 8 million SMEs to go digital. With Indonesia having a massive and far flung land area, I was particularly pleased to see that 187 municipalities in 3T areas (the frontier, outermost and remote regions) will also be touched by the government’s digital ambitions.

Having such targets are fine but a critical part now has to be played by the digital ecosystem in terms of holding the government accountable to its promise with yearly reviews of progress and how the private sector part of the ecosystem can play its role to help the government achieve its Go Digital Vision 2020. And it is probably time for them to set up an industry body similar to Malaysia’s TeAM or Technopreneurs Association of Malaysia which was established back in 2003.

The Indonesian government has stepped up, and it’s time for its entrepreneurs as well.

Meanwhile the Malaysian government has no problems stepping up and leading the way through its various digital initiatives and, fresh from unveiling its Digital Free Trade Zone plan, it has just unveiled two more initiatives – Malaysia Digital Hub and Malaysia Tech Entrepreneur Programme.

To be led by Malaysia Digital Economy Corp (MDEC), the country's national ICT custodian, the two initiatives aim to support and further grow the country's tech startup ecosystem.

However, I don’t see any clear value assigned to the Malaysia Digital Hubs. MDEC states that the hubs offer startups with the opportunity to expand globally, enjoy ready access to high-speed broadband, funding and facilitation opportunities, workforce-ready ecosystem, among others.

Other co-working outfits offer the same benefits as well. It will be interesting to see if startups based in the many co-working and accelerator spots in the country start moving there. That will be the ultimate validation that these Malaysia Digital Hubs offer a differentiated value-add.

On the other hand, Malaysia Tech Entrepreneur Programme (MTEP) sounds interesting with the stated ambition of attracting gifted and ambitious individuals from all around the world to Malaysia and help them to kick-start their startups. However, even here, on the MTEP site, the value proposition, is not clearly spelt out.

I expect much better from any MDEC led initiative and both of these right now are not compelling to their target market. Let’s hope the value proposition of both are sharpened, and quickly.

Finally, for those keen to participate in the eSports component under HotShotz, DNA’s inaugural eGames festival on July 22-23, you have till 6pm tomorrow to register in order to take part in the online pre-qualifiers for the PC-based games. The top four teams from each game will head to the first on-ground qualifier at Universiti Malaya on Sat, April 29.

For those keen on the console games, you have till next Friday 6pm, April 28 to register for the Universiti Malaya qualifier. Further details are at hotshotz.asia

Wishing you a restful weekend and a productive week after.

Editor’s Picks:

Indonesia moves to support scale in growth of digital economy

AirAsia takes 50% stake in Touristly for US$2.6mil

Axiata's tower unit edotco gets US$100 mil from new investor KWAP

N2N Connect takes big step towards goal with US$11.5mil HK acquisition

Founder Institute ready to kick off fifth semester

AMD refreshes its GPU lineup with RX 500 series

MDEC introduces Malaysia Digital Hub and MTEP

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