Meet SEA’s growing founder-VC mafia

This week, On the Rise dives into Southeast Asia’s founder-turned-VC network, Geniebook’s financials, and potential changes in Indonesian edtech. [Read from your browser]( On the Rise 🚀 Welcome to On the Rise! Delivered every Tuesday via email and through the Tech in Asia website, this free newsletter breaks down the biggest stories and trends in emerging tech. If you’re not a subscriber, get access by [registering here](. Written by Nikita Puri Journalist Hello {NAME} Over the last weekend, I wondered for the nth time if US actor Anita Barone - who was originally cast as Carol in Friends - yearns for the career she could have had, seeing how the sitcom went onto become one of the most popular shows of all time. Barone reportedly left the show because she wanted a full-time role and Carol’s wasn’t written as one - the character does have a number of appearances, though. While hindsight is always 20/20, I think almost everyone thinks about how our lives boil down to that one leap we did or did not take. And some of us even take a second leap. By conservative estimates, at least 111 startup have taken that second leap and gone onto wear the VC hat, as in the cases of Monk’s Hill Ventures’ Lim Kuo-Yi and Golden Gate Ventures’ Vinnie Lauria. And while this pattern of founders becoming investors isn’t new, as my colleague, Tian Wen, notes in the Big Story, slightly over 75% of founders in Southeast Asia have transitioned to a career as a VC in just the last half a decade. Besides having numerous advantages that can work in favor of VCs and startups, being a founder-turned-VC is also a reversible switch. VCs can go back to being founders. An “irreversible” shift is the one toward online learning, Geniebook co-founder Neo Neo Zhizhong tells my colleague, Samreen, who in the other Big Story, peers into the finances of the Singapore-based edtech startup, which has seen 100% revenue growth in 2021. Meanwhile, there's a quiet storm brewing in Indonesian edtech, with Nadiem Makarim, the country’s education minister - also Gojek’s founder - announcing that he intends to make changes to Indonesia’s university entrance exam. It’s a move that could make edtech firms sweat a bit. More on this from my colleague, Aditya, in Making Waves. -- Nikita  --------------------------------------------------------------- THE BIG STORIES 1️⃣ [The rapid rise of SEA’s founder-VC mafia]( Three out of four founder-turned-VCs emerged in just the last five years, and a significant number have established their own firms.  2️⃣ [Geniebook tops the class with 100% revenue growth in 2021]( The Singapore-based edtech firm grew its user base 5x between 2020 and 2022.  ---------------------------------------------------------------  MAKING WAVES Winds of change for Indonesian edtech Here’s what happened: - The Indonesian education minister, who is also Gojek's founder, scrapped natural and social science subjects from the national university admission test. - One reason is to help students who don't attend private tutoring services. - Edtech startups may need to overhaul their curriculum and the composition of their tutors to cater to this change. Here’s our take: When I was at high school in the 2000s, the mindset of many parents in Indonesia was to put their children through private tutoring on top of regular school in order to pass school examinations and university admission tests - the tests that one needs to clear to pursue higher education. However, my parents couldn’t afford that as tutoring services usually charge a hefty price, so I had to be self-dependent. More than a decade has passed, and the internet and smartphones have become mainstream. Edtech players such as [Ruangguru]( and [Zenius]( have tried to disrupt the market by providing learning apps to help students learn better. These edtech firms’ services are relatively more affordable than traditional tutoring. The edtech firm and private tutoring services (called bimbel in Indonesia) offer similar products. That similarity has only deepened after Ruangguru opened a [private offline tutoring service]( called Brain Academy, while [Zenius acquired]( a similar service called Primagama. The edtech firms try to differentiate themselves from conventional tutoring service [by saying]( that the lower-middle class can still afford their services. But that’s not enough, especially for the Indonesian education minister Nadiem Makarim. Recently, [Makarim announced]( that he will omit natural and social science subjects from the national university admission test. The test next year will only include scholastic topics - consisting of Math, English, and Bahasa Indonesia questions - that will focus on comprehension and logical thinking. According to the minister, one reason for this decision is to make the test more inclusive, so people who can't afford private tutoring service can be on equal footing. Questions for national and social science subjects usually require students to memorize heavily and use a creative formula to solve equations, encouraging parents to sign up for private tutoring services. Some private tutoring firms that I talked to said that the change is quite sudden and will push them to change the way they work. It may affect the number of tutors that they have, as most private tutoring services have half or more teachers for science and social subjects. With the new arrangement, their workload may reduce significantly. On top of that, the edtech firms may need to give more training to teachers of Math, English, and Bahasa Indonesia, who will become the main tutors for the national university admission test, to understand more about the new approach from the education minister. It may require them to invest more into creating a larger bank of test-related material and video content for their apps. Edtech firms may still have stable revenue, as students usually buy a package that combines school regular examination and the national university admission test. Some prestigious universities also still run a special admission test that may require national and social science subjects in the test. However, it’s really tricky to predict the dynamics between the Indonesian education ministry and edtech firms in the future, especially with elections coming up in 2024. -- Aditya  --------------------------------------------------------------- NEWS YOU SHOULD KNOW Check out Tech in Asia’s coverage of the emerging tech scene [here](. 1️⃣ After a delay of nearly 18 months, Indian edtech major Byju’s has [released its earnings]( for the financial year ended March 2021. While its revenue growth has slowed, the firm’s losses have widened by 12.5x. 2️⃣ Virtual Internships, a work-program service for the youth based out of England and Vietnam, has raised [US$14.3 million]( in a series A round led by Hambro Perks. 3️⃣ The team at Fanbyte, a gaming-focused news and entertainment subsidiary of Tencent Holdings, [has been hit with sudden layoffs](. The round of layoffs comes after Tencent, in its earnings release for the second quarter, revealed that revenues fell by 3% from the same period a year ago. 4️⃣ Derrick Ko, one of the Singaporeans behind e-scooter startup Spin, [has co-founded]( Matchday, a new venture focusing on European football. 5️⃣ AC Ventures, a Southeast Asia-focused VC firm, has reached the first close of its fifth fund, which has a [target of US$250 million](. The fund has already raised 65% of its capital target  --------------------------------------------------------------- That’s it for this edition - we hope you liked it! 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