Cheung said his startup’s advantage is that it’s still nimble enough to be able to take risks. 99.co landed in Indonesia less than two years ago, while its big rival and current market leader PropertyGuru had been there far longer, securing partnerships and acquiring local startups.
“We were starting afresh in Indonesia a year and a half ago,” Cheung said. “We had nothing to lose, we didn’t have existing traffic or users.” That gave the company leeway to try different business models to find out what worked in Indonesia’s major cities.
According to Cheung, the startup’s local office employs around 100 people – one of them being the CEO himself these days – and transacts 2,000 properties per quarter, amounting to around US$100 million worth of property every year. It works a little differently than its Singaporean branch, where the website is mostly consumer-facing.
In Indonesia, 99.co works more directly with new property developers and agents, using a much more business-oriented model. “Indonesians are very entrepreneurial and willing to try new things,” Cheung said, pointing out the market’s appeal – besides the obvious population and market size factors.
He recalled something an investor told him: “In Indonesia, companies that sell stuff to people are going to be less successful than companies that help people make money.”
99.co responded by saying that the agents were the ones uploading the material in question and copyright should belong to the agents.
The case is currently awaiting verdict from the Supreme Court of Singapore, a process that could take months. “It’s one of those things you intellectually know [is] possible but never expect to actually happen to you,” Cheung said.
Still, Cheung and the team decided 99.co should be happy about the whole affair. “The only reason someone would want to spend money to get lawyers to sue you is because probably they’re scared,” he quipped.
He feels 99.co’s motivation in the case is standing up for information rights. “Truth is, we’ve had friends whose businesses were shut down because of similar legal issues, and we didn’t think it was right. We were in a good enough position to put up a fight and thought we should – and once and for all, hopefully – establish a good precedent,” he explained.
Reached for comment, PropertyGuru stated: “This is a sub judice matter. We follow the good corporate practice of not commenting on matters that are pending before the court.”
99.co has so far raised US$9.5 million, according to the Tech in Asia database. Its investors include Sequoia, East Ventures, 500 Startups, and Facebook co-founder Eduardo Saverin.
(Disclosure: East Ventures and Eduardo Saverin are also investors in Tech in Asia. Please see our ethics page for details.)
When choosing investors, Cheung recommends founders check their reputation and do reference checks with other entrepreneurs. “Selecting investors is not a one-night stand. It’s a marriage, so you want to pick the right person, not just whatever looks good,” he said.
Founders need investors who stick with the company long-term, so he suggested a test he has in mind: “Give them a choice – do you want to solve for the upside or the downside? You want investors who solve for the upside.
“For example, in your term sheet, you have liquidation preference or pro-rata rights. Pro-rata rights is good for upside; liquidation preference is protection for downside. You want the investors who go for pro-rata rights. If they give up liquidation preference in favor of pro-rata rights, that’s the kind of investor I would go for.”
This is part of the coverage of Tech in Asia Jakarta 2017, our conference taking place November 1 and 2.
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