PERSONALITIES

A Strong (Re)Opening

By Marc Almagro
20 Nov 2020

Well-entrenched practices and standards have insulated Launcho Ventures from the pandemic shock, allowing it to focus on what is to come.

Venture capitalist Martin Berry is perhaps better known for his entrepreneurial achievements, and this not a coincidence — he has grown and catapulted start-ups to international renown to the point that they have overshadowed even his name. Foremost among these is founding Gong Cha Korea, acquiring its parent company Royal Tea Taiwan along the way, and continuing to scale the former into a global brand with a market footprint in 18 countries. Berry has previously held key global positions previously in consumer banking at Citibank, Barclays, and Standard Chartered.

Today, as founder and CEO of Launcho Ventures, he continues to fund, build, and grow consumer companies across Asia with a distinct entrepreneurial bent. The Singapore-based venture incubates regional start-ups in the tech and consumer packaged goods sector. Besides funding, it provides strategic direction and full support in operations areas from finance to recruitment.

Berry’s team at Launcho Ventures comprises entrepreneurs with deep expertise in tech, e-commerce, financial services, consumer goods, venture capital, and private equity for some of the world’s leading brands. During the COVID-19-led lockdowns, they spent time studying the market from both supplier and consumer perspectives and drew up a strategic plan to prepare for seismic shifts in the market.

In an interview with Portfolio, Martin Berry identifies vital areas where well-timed funding can jumpstart recovery and long-term change.

Everyone was caught off-guard by the COVID-19 pandemic outbreak’s speed and the scale of subsequent restrictions imposed by governments. What was on your plate when the lockdown was implemented, and what were the direct consequence of the restrictions on your operations as a whole?

Before the pandemic, our view was that the market for start-ups looked a little too easy when it came to lots of liquidity being injected into new ventures with questionable ideas and which had also played through to stretched valuations.

As a result, Launcho Ventures decided to take a very cautious approach and be incredibly selective in the ventures we wanted to start ourselves or those that we might want to invest in. Then came COVID-19, which clearly nobody could have ever quite foreseen, and the implications of which provided the opportunity for a muchneeded reset in the start-up world.

What crucial first steps did you have to take to safeguard your business interests? What cushioned the impact of these lockdown-led disruptions on your business?

As we hit lockdown, the team and I – strong believers in seeing opportunity in a crisis – decided to double down on extensive research across the region to understand the impact on consumer behavior better and unearth new opportunities. We also ramped up our efforts to launch a series of new ventures and evaluate several early-stage companies seeking investment.

In terms of our existing investments, as we hit COVID-19, we largely saw a positive impact in large part thanks to a diversified portfolio of global tech investments. Breaking this down, many of our investments in verticals such as digital health have seen a massive increase in traction, as have those that are heavily leveraged to the sharing economy as people try to stretch their dollar further and companies providing technologies that help offline businesses to go online.

What specific qualities have you developed within your company that allowed it to respond agilely?

In terms of safeguards, we ensured we had significant cash buffers to take advantage of opportunistic bridging rounds and funding new ventures we were looking to build.

A global presence has exposed several businesses to major risks following the shutdown of cross-border trade and fulfillment. What was your particular situation?

Thankfully, the majority of Launcho Ventures’ existing investments are in the SaaS space, meaning they are platforms that don’t entirely rely on physical goods and supply chains and have recurring revenue contracts with their customers.

Many of our investments in verticals such as digital health have seen a massive increase in traction, as have those that are heavily leveraged to the sharing economy.

A consequence of cross-border trade disruptions is the rise of opportunities within domestic markets. Do you foresee this as a continuing trend? What types of businesses are you interested in getting off the ground — if this were the case?

Yes, I do feel strongly about this. The pandemic has demonstrated the vulnerabilities in traditional supply chains. This, combined with increasing political tensions around the world and a stronger desire to support local in tough economic times, means we believe this will present opportunities in domestic and neighboring markets.

To this point, we are launching several Singapore-based, regionally focused ventures that aim to capitalize on this in unison with many other positive catalysts that exist in Southeast Asia.

We’ve seen the hastening of digital migration and tech adoption during the pandemic – with most of them geared towards supplanting or complementing disrupted operations. What was your particular experience in this area? Have you digitalized your operations before the lockdowns? Did you have to migrate digitally alongside other businesses?

As a firm that founds and funds companies with a heavy focus on technology, we like to walk the talk. We like to stay lean and leverage technology to run our company and adapt new and agile ways of working.

As a result, we were quite well prepared for COVID-19 to shift the team to remote working and continue to get things done with minimal disruption.

The only major impact was that we spend a lot of time strategizing and brainstorming as a team, kicking around concepts and ideas. It’s just not the same when you do this virtually.

We’re seeing new opportunities developing. What are some of the growth sectors that you are training your sights on? Are they more or less the same growth drivers as in the previous economic situation?

At Launcho Ventures, we are looking to capitalize on the intersection of e-commerce adoption and increased consumer focus around well-being or health and beauty across Southeast Asia. As a result, we have several new companies in our pipeline around these themes targeted to launch in the first quarter of 2021.

It is a slight pivot to our model in that previously. We were investing in early-stage technology companies globally, and now we want to shift to more of a venture builder model with a sharp focus on Southeast Asian consumers.

What do you think would be the catalyst for broad and massive economic recovery? Are you looking into those sectors to develop new ventures?

The catalyst to a massive recovery has to be a vaccine that helps the world get this terrible situation under control. Without that, and as we see now, it will be challenging.

While we are not in the business of creating vaccines, we will soon be launching a series of unique and compelling products in the health and wellness space that we hope could help to be a proactive solution for consumers rather than the cure.