$4B Singapore Chip Fabrication Plant, Regional Web3 Investments & Corporate VC Funds - E323

· Web3,VC and Angels,Southeast Asia



“It was interesting because adding Minteo that you mentioned, she used the word internet nation states which kind of triggered all the economics and politics side of me, but I thought it was a perfect encapsulation of both the upside, but also the challenges. The upside obviously is that, like you said, there are digital economies that are happening because if you're spending in aggregate millions of hours in a game and there's real value, right? If you spend millions of hours digging holes in the ground outside, that is a real digital economy, especially if I'm trading the fruits of digging real ground. So I think there is, you're right to say digital economy, value being generated and value being appreciated by other folks. The point of currency is that different nation states have to recognize each other's currency, and that's a big problem.” - Jeremy Au

“The stablecoin use case is actually one of the best use cases in crypto.You don't have to think very hard about people who have experienced crazy inflation and are victims of their country's monetary policy. They have no control and basically they see their purchasing power getting eroded, and it's very hard for them to save. So I think case in point is like in the US, when everyone was trying to sell crazy amounts of yield in Latin America, which obviously has a long history of inflation, the startups there weren't selling any yield. They were just selling like, ‘Hey, you can keep the value of the thing you earned?’ That was the value proposition. So that's the difference in the setup. We don't even have to go to Latin America. If you look at Pakistan, the thing is devalued half over the last year. So, giving people ways to save, easily convert in and out of something that can actually retain value but also get paid, it's case in point.” - Shiyan Koh

“The interchangeability of all these currencies was tough, and a big part of it was that because there's no law that governs the property rights, the currency rights, and the conversion. They created to some point, that there was some level of portability, but no true conversion. And you need military force to enforce the law. That's the interesting dynamic of these internet nation states. They don't have soldiers and so they can't have a court, but there's no way to enforce any of the judgments around property. Some of the digital, smart contracts are supposed to provide that dynamic where you can provide law without force, because it's all done automatically, but we see that over and over again, like FTX, when something really goes wrong, we end up defaulting to some extent, or at least the real life nation states come back in to step in and try to sort it out.” - Jeremy Au


In this discussion, Shiyan Koh, Managing Partner of Hustle Fund, and Jeremy Au, talked about three key topics:

1. Southeast Asia Tech Investment Landscape: Shiyan and Jeremy taled about the significant developments in the region’s tech investment landscape, such as Vertex Ventures closing a fund of $541 million and GlobalFoundries, a leading semiconductor manufacturer, opening its $4 billion chip fabrication plant in Singapore. They also discussed that with the right infrastructure and support, Singapore could have become a prominent player in the semiconductor industry, potentially rivaling countries like Taiwan.

2. Web3 and Cryptocurrency: Shiyan and Jeremy delved into Web3 and cryptocurrencies, and emphasize the value of stablecoins in providing financial stability, especially in regions where traditional currencies are subject to inflation and volatility. They also shared how how digital assets are making cross-border transactions more accessible and efficient. They explained how Web3 is disrupting traditional industries and how this shift toward decentralized systems can empower individuals and communities by reducing the reliance on centralized intermediaries.

3. Corporate VC Funds and Evolution of Southeast Asian Tech Companies: They discussed the region’s tremendous growth in various sectors, from e-commerce, to fintech, and healttech. They also shared the interoperability challenges faced by tech companies operating in Southeast Asia, and how CVCs can potentially help by working with regulators and creating solutions that adhere to different regulations while enabling cross-border operations.

They also explored the impact of recent Singapore events to the country’s economy, the different cryptocurrency use cases, the impact of regulatory dynamics on the crypto space, and the fluctuating nature of Web3-focused funds.


Supported by Ringkas

Ringkas is a digital mortgage platform aiming to solve the access to financing problem for home seekers in Indonesia and Southeast Asia. Ringkas currently collaborates with all major Banks in Indonesia and the largest Property Developers across more than 15 cities. Ringkas vision is to democratize home ownership and create more than 100 million homeowners. Don't just dream about owning a home. Make it a reality. Explore more at www.ringkas.co.id

(01:50) Jeremy Au:

Morning, Shiyan, what a big weekend we had together.

(01:53) Shiyan Koh:

Oh my god, I had so much in person time with you. I don't know if I can handle it.

(01:57) Jeremy Au:

Back to Zoom and across multiple time zones. We had the wonderful Hustle Fund Investor Camp in Bali and I thought it was a wonderful experience, a very camp like experience. People just hanging out.

(02:09) Shiyan Koh:

I don't know what kind of camps you went to when you were a kid, but were they at the Sofitel?

(02:13) Jeremy Au:

Definitely not. It was much more like tents and stuff like that. And sweating it out. And this sounds much nicer. And also ate a lot.

(02:20) Shiyan Koh:

Yeah, we're grown ups now.

(02:21) Jeremy Au:

We're grownups and those food are so nice. I just ate so much sambal. It's all the different types of sambal there with the carbs and fried rice. It was terrible.

I was supposed to eat the meats and stuff. That's all I wanted was a different type of sambal, right? What did you take away from the Hustle Fund camp?

(02:36) Shiyan Koh:

I mean, I think the camp was a little bit more global, so I think it was interesting to get perspectives from investors from around the globe. I think we had folks coming in from the Middle East, India, U. S., even Australia, New Zealand. And so I think taking people's temperature on what's going on in their home markets, I think there continues to be a lot of regional energy. I think particularly in the Middle East that stood out for me learned about a ton of different government initiatives there in various countries around innovation and startups. I think one thing common across all of the nascent ecosystems is that there is a real desire to connect to larger ecosystems in that like capital alone is not enough. They actually want to learn more about what's going on in other people's ecosystems. What can they bring back into their own regions? So that I thought was like an interesting sort of positive note. And then I think on the investor side, there continues to be interest in the asset class.

But a lot of people are newer to it, and so they're figuring out, at least on the family office side, how do I start doing this? What should my allocation be? How do I even think about it? Moving my more conservative family into thinking about such assets. So I think we were sort of at the early parts of some of those conversations. And it was useful for them to meet other people in the space and get exposed a little bit to the conversations. And I had several people tell me like, hey, are you going to do this next year? I can think of people I want to bring so they can also have this learning experience, which I thought was pretty positive.

But I'm a very biased insider, right? It was our event. So I'm kind of curious to get your perspective, Jeremy. Also, it's the first time we're doing it in Asia, so, we're kind of like working out the kinks in it, but yeah, you go to a lot of conferences, and you talk to lots of people all the time, obviously, so, it'd be great to hear what your experience of it was like, and what you think we could have done better.

(04:15) Jeremy Au:

Yeah I thought it was nice actually to meet the Hustle Fund team. So I've been following many people who were sharing at the conference. That had been following Elizabeth Yin on Twitter. And obviously a lot of us also know Eric Ban as well. So it was just nice to meet them in person, see what the similarities are in terms of knowledge between their online persona versus their in-person. And yeah, everybody's remarkably the same, I think. And I thought it was just interesting to get to know someone in person. We were joking earlier a little bit about celebrities and you're right. You know, Elizabeth was, I realized it's like, Oh I feel, is that parasocial piece where I feel like I know her, but she doesn't know me at all. It's an interesting conversation.

(04:50) Shiyan Koh:

You're saying they are similar? They are similar to their online personas?

(04:54) Jeremy Au:

I think so, in terms of their knowledge and so forth. I think Elizabeth does come across as more introverted compared to her Twitter because Twitter feels like, everybody's an extrovert on Twitter, because she has this, here's my tweet storm and then you look, read it and you're like, Oh, you're extroverted. But to me, at least, Elizabeth, comes across a little bit differently, but the knowledge, the depth of understanding is the same. So that was an interesting dynamic, but I said again, parasocial, right? So I feel like I know her. She doesn't know me at all.

Speaking of parasocial as well, we also had the same experience. So shout out to Aaron Foo and Chandan Deep who both listened to the podcast. And again, it's a similar dynamic where I felt like I didn't know them, but they kind of knew me already from the podcast. So it was an interesting dynamic where we're kind of like catching up, but it was just awesome to hear about how they were commuting to work and using their time to catch up on Southeast Asia news as well. And then the last thing that came up for me was, I think there was a lot of learning from, you shared, Moses Lo from Xendit, Gabby Dizon from YGG, and I thought it was just nice to sit down and I don't know what's the word, have that slightly deeper conversation from a more private group. And so there's a lot of serendipity to happen. I also had the opportunity to hear from, Arthur from Gobel and I thought it was interesting just to hear about, for example, polycentric urban design and how he believes it's going to change the patterns of transportation and how that therefore changes how autonomous requirements are going to be for driving and how he thinks about the space and logistics.

So there's a lot of, like, I don't know what's the word. I think I realized that in my daily life, I'm just very focused on getting stuff done. Be this founder, write this investment memo, build the system, and I thought it was just nice to have that serendipity where it's something that I don't normally listen to, just kind of comes in, and kind of like sparks off some stuff, right?

And so I think you saw me taking notes on my iPhone app. I'll just be like, okay, random tidbits that were really weird from a work perspective, but actually really interesting from a personal perspective. And I thought that was a wonderful experience to have. Yeah on that.

(06:38) Shiyan Koh:

That's true. I met an airline entrepreneur.

(06:40) Jeremy Au:

Oh, wow.

(06:41) Shiyan Koh:

You know, you don't meet a lot of airline entrepreneurs and there's a lot of them in the US, and I never really thought a lot about airlines but he explained why which is basically, the US has like 90% of the world's airports. So, basically, it's like an overbuilt infrastructural item, so there's just way more airports in the US, which actually enables people to do these sort of startup-ey airlines or more limited regional types of things because you can do smaller infrastructural types of efforts, cause he was saying, so he ran a subscription airline and we were talking about how there were certain corridors that seemed like they should have railways.

So it's like SFLA, Melbourne, Sydney. And why they didn't and, like how they were and so they had launched, in California as a subscription air service, and it was using all of these secondary and tertiary airports to create these routes and make it affordable. And he said yeah, we looked into Melbourne and Sydney because it's like one of the busiest corridors and it would actually be ripe for a subscription service, but the problem is that they don't have enough airport infrastructure to kind of do that. So yeah, so you really think about that and you're like, Oh, that's a really weird fact. It's like, why is it? And like, you know, it kind of goes back to like post-World War II reconstruction and like what people were doing.

It's, there's all this like fun tidbits where you're like, I don't think about these industries or regions very much in my day to day. And then you kind of have a little note in your brain so that the next time you see something like that, you're like, Oh, what? What? Is it this? Is it why this thing happens? So that was kind of cool, but I like to collect weird facts.

(08:08) Jeremy Au:

Yeah. And I think it was interesting as well to meet, for example, Sonny Vu as well, right? He's like the former founder of Misfit Wearables. And I thought it was really interesting because I actually remember, he was just chatting a little bit about how he was building this company for wearables and how they sold the fossil. And I was thinking to myself, You know what? I remember being that nerd in the quantified self movement, in part the clubs, I would be discussing the various trackers and, for me, I used to buy other different variables, versions of it. The ones that work, the one that didn't work. I never eventually got a misfit actually, interestingly, back in the day. But it was just interesting to hear his story and I thought it was cool to meet someone behind a tech product that I was evaluating and have, right? And I think that's one of the big things I always remember.

I think one of the valuable things of some of these conferences is that I think you get to meet your heroes or, not necessarily people that you think are heroes per se right now, but, heroic folks that you meet and you're just like, Oh, they're human, right? They have their own personal interests. They have their own history. They can share the blood and sweat and tears that goes into building something. And so I think that removes the divide between something that's visionary, imaginary about this person, and brings the product to life from that perspective. So I thought it was a nice thing that happens all the time as well.

(09:12) Shiyan Koh:

Yeah. Sonny is awesome. I mean, he speaks 12 languages.

(09:16) Jeremy Au:

What? Twelve?

(09:17) Shiyan Koh:

Well, he has a PhD in Linguistics, but I think that doesn't necessarily mean you speak 12 languages, obviously. And he is really into the study of language, and so he was talking about how he learns it, which ones are hard, and all the different things that he speaks. But he grew up speaking Hebrew, which I think is very unusual. And then everyone's like... Hebrew? Aren't you Vietnamese? It's all very confusing.

(09:38) Jeremy Au:

Powerful combo.

(09:39) Shiyan Koh:

Yeah. I I don't know, people are just doing their thing, right? And I think for all founders on their journey, you're just doing your thing. You're like pursuing your passion, you're interested in stuff, you're making it work. And then hopefully at the end of the day, you've built something big and significant, and then we invite you to conferences, and you tell the grand narrative of how it all came together.

(09:54) Jeremy Au:

Yeah. It's speaking about being invited to be a speaker. So as a fall off, this month has been crazy in Singapore and Southeast Asia. We've had F1, Token 2049. We had SuperReturn. We had the DealStreetAsia PBC conference. Must be missing a few as well along the way they got bundled in Forbes as well, and then also all the various side events that everyone's organizing by Elta, and so on and so forth. So yeah, it was a crazy month. Everyone's flying into Singapore to get it done. I felt like it's quite an interesting dynamic because I know it just gets bigger and bigger every year since the pandemic. So what do you think about that, Shiyan?


(10:28) Shiyan Koh:

I think it's great in that you can have a huge density of meetings in a short period of time, but it can get really be overwhelming because everyone has the same idea. And so, I'm usually in bed by 10 and now it's like, oh, no, you have three events after dinner you have to go to. It's like, how is this even possible? But I think there's a lot of good initial conversations that come out of it, or reconnects with people, which then set up like a good set of follow up meetings later because obviously it's impossible to do any proper meetings during because everyone is running around. So Token I think was a lot more institutional this year. And I think there was a lot more discussion on use cases. Someone told me they had just come from Korea and they're like, Oh, in Korea, they're talking to gaming companies. Everyone is talking about building in Singapore. Everyone only talks about money, and I think that may be as testament to the growth as a financial center concentration of investors, but I think it's good. I think it's good for Singapore to have places and times of year where people congregate and do deals and make relationships. I think that just continues to help build the density of relationships in this ecosystem, especially for people who aren't based here full time to keep building that network out into the world.

(11:34) Jeremy Au:

Yeah, I definitely agree about how everything has been back to back. I think there's also another thing about it, the Milken Institute conference. So everything has been interesting. It's obviously wonderful, most directly, economically for Singapore, for the hospitality and MICE industry. Everybody who's like an MC or doing sound equipment, or hotels has been doing a great month.

And actually, one interesting thing I learned is that Singapore actually does have an industry incentive, so basically what they're trying to do is that they actually compensate and reward organizers for structuring events that keep attendees around in Singapore for longer because, every day is that then, generates more additional local spending and stimulus for the economy. So there's actually, obviously transparent to government, but it's not obvious to attendees. That has an incentive structure to structure those after parties, those weekend parties, that bonus Monday mixer, all those things that are not part of the official event. But it's nice to create that tail before and after to encourage people to come in earlier or to leave later. So I thought it was nice, like you said. For example, I had an old Harvard MBA classmate. He came in for F1 one with his old SEC high school buddies. And then, we just had a wonderful conversation and catch up. So I think it really actually plays not only to hospitality, but also, like you said, the finance industry, some of the synergy and the tech, because that capital allocation is very much also a relationship driven one. And it's, you can do a lot with Zoom, but sometimes you just need an in-person to get it really kick started. So yeah. Lots of also interesting news that we saw and heard a little bit. I think a big one that we saw was that Vertex Ventures, which is backed by Singapore's Temasek, closed a fresh fund of $541 million. So congratulations, Vertex. Any thoughts about that?

(13:04) Shiyan Koh:

I think it's great. Obviously they're a long-time player in the space. They've got multiple funds across multiple geographies, very institutional investor, and it's great that there's continued energy and interest and they're able to close even in this environment, which is challenging. So I think that continues to be a small piece of bright news.

(13:20) Jeremy Au:

Yeah, I think it's also a big part because they have an anchor LP with Temasek. So I think that's been obviously an important part of it. But also I think they've done a solid job in terms of investing not just in Singapore, but across the region as well. I know Carmen Yuen is there as well. So I thought it is a nice dynamic in terms of, if we look at their investment approach, I think one thing I've noticed is that they've been quite thoughtful about their approach which is important in the region as well. In other news as well, GlobalFoundries opened its new 4 billion Singapore chip fabrication plant. I always like how all these chip fab plants never have a million dollar thing, it's never a 10 million dollar chip fab plant, right? So it's four billion dollars. So that was interesting as well.

(13:58) Shiyan Koh: I think the third facility in Singapore. I think it's great right now. We obviously know the strategic importance of chips in the current ongoing trade war. It's their third facility in Singapore. I think it goes online maybe 25, 26. And so obviously they're forecasting that demand will pick up. And I think, what is it, they're the third largest fab behind TSMC and samsung. Crazy, right? It's a $4 million fab and I think it's, what, 1, 000 jobs? It just sort of speaks to how mechanized these things are, and how specialized. But those are great. Those are great, high quality manufacturing jobs.


(14:29) Jeremy Au:

Yeah, I think what's interesting is exactly like you said, is we've talked about in previous episodes about obviously the U. S. and China dynamics that are happening in terms of chips. And I think there's an interesting dynamic where obviously Singapore and other locations are providing that resiliency in case there's conflict, but also it's kind of like a friend sharing dynamic that the U. S. wants. I thought what was interesting, I was just chatting with someone recently, I was like, you know, Singapore could have become Taiwan in terms of being the leader of chips, right? I mean, there's like industrial policy 20 years ago.

(14:57) Shiyan Koh:

Do you think we could have, actually? Do you think we sold Chartered too early?

(15:00) Jeremy Au:

I think it would have required ADB to realize that China and U. S. would, as in, it's too Taiwan centric and then there's conflict that will cause this to uncouple, right? Otherwise, the truth is Shenzhen and Taiwan are actually a really good combo of chips. Yeah, that whole combo is, it was the right decision years ago. But I was just talking, it was interesting that technically we actually were in a similar dynamic where we could have created our own Silicon Shield, technically. Anyway, it would have been Singapore and Penang and it would have been Singapore and Malaysia combo together instead of Shenzhen Taiwan. Should we go back? Yeah.

(15:28) Shiyan Koh:


(15:29) Jeremy Au:


(15:29) Jeremy Au:

So what's interesting is that, someone and I were eating Peranakan for lunch and we're having this speculation. It was like, Hey, you know, could Singapore actually have been that Taiwan, in the sense of building out that silicon shield, could have become the nexus for chips because there was a period of time when Singapore was one of the market leaders for chip production years and years ago, decades ago. And I think obviously there was a decision, I think, from an industrial policy perspective to focus on, from the perspective of higher value add in terms of software engineering and other dynamics that felt like a better fit for Singapore. Silicon and chip fabrication is not easy, right? You need lots of water, you need lots of materials, you need lots of space. You also need to build a whole industry around it. But I think we actually have a position to do it and we've made a decision not to do it for understandable reasons from my perspective. What do you think Shiyan?

(16:11) Shiyan Koh:

Yeah, I mean, it's kind of an interesting thought experiment. So I think, for people who don't know, the government had brought, done a big tech transfer to start Chartered Semiconductor in the 80s. And that was like a period of time when we actually were a pretty big chip maker, and I think we sold it in what, 2009?

(16:26) Jeremy Au:

Yeah. Around there.

(16:27) Shiyan Koh:

Something like that?

(16:28) Jeremy Au:


(16:28) Shiyan Koh:

And so, yeah, I think it's like an interesting question if we had thought that there would be a potential that the US-china relationship would play out to be more antagonistic than it was at that time, then, would there have been strategic value to retaining it over and above just the sort of like number of jobs type of question? And then I think, Intel and AMD, they have a bunch of plants in Malaysia as well. So, would there have been value to us being the Silicon Shield versus Taiwan Shenzhen?

(16:54) Jeremy Au:


(16:54) Shiyan Koh:

You probably can make an argument that may be true, right?

(16:56) Jeremy Au:

Yeah. I mean, I think it's similar.

(16:58) Shiyan Koh:

Really, I mean, 2020 hindsight.

(16:59) Jeremy Au:

A hundred percent. I think it's very hard. I think if you could read some of the real political scientists from earlier, you could potentially have gamed out the first order effects, second order effects. I think even back in the 2000s, people were worried, but I think like you said, the 2000s was really kind of like the peak of US China relations, so, it felt like it was a no brainer.

(17:17) Shiyan Koh:

Yeah, globalization is working.

(17:20) Jeremy Au:

Yeah, everybody, exactly. Everybody felt like everything will go to the lowest cost producer. So it felt like, I remember 2000 was like so optimistic, so, it would have taken a real contrarian person to have been able to say like, okay, we believe that it is the cheapest to manufacture chips in Taiwan and Shenzhen, and you know, with the fabs and Foxconn, et cetera. So, the world is going to require a third source of chips. And so that could be Singapore. That would require a lot of, it's not just economic thinking in terms of industry and manufacturing, but also a political point of view, which is interesting.

(17:51) Shiyan Koh:

I mean, there are still chips here, right? Obviously GlobalFoundries, Micron is here and a number of others. But it would be interesting to get on someone from the Semi's business to kind of talk through the history of that.

(18:01) Jeremy Au:

Yeah. And I think they're really interesting.

(18:03) Shiyan Koh:

Sort of an inside perspective.

(18:04) Jeremy Au:

100%. I think we, if you look at, the top 100 companies on NASDAQ, and you look at them a lot, but just semiconductor, chip fabrication companies, right? And I think people forget, even though we're always talking about the latest digital software, the latest crypto, a lot of it just runs on fundamental hardware. You've got to make chips, you've got to make graphic cards. So it's kind of crazy when I was doing the analysis to be like, wow, there's so many of these flat out hardware companies that just got there. Yeah.

(18:28) Shiyan Koh:


(18:29) Jeremy Au: While talking about stuff that's out there as well, there's also USDC stablecoin issuer circle expands its Asia focus in a push to enter the region's flourishing payments ecosystem. This articles are coming from Asia Tech Review, so shout out to John Russell for this. So what do you think about stable coins, crypto? Actually, this weekend was, again, a little bit more exposure to crypto than I had for a while because I think there's crypto winter. So I think it was interesting to see the insiders who were still thinking about it. What do you think about Web3 and crypto, Shiyan?

(18:58) Shiyan Koh:

I think the stablecoin use case is actually one of the best use cases in crypto.

(19:03) Jeremy Au:


(19:04) Shiyan Koh:

You don't have to think very hard about people who have experienced crazy inflation and are sort of the victims of whatever their country's monetary policy is. They have no control and basically they see their purchasing power getting eroded, and it's very hard for them to save. So I think the stable coin use cases are very, case in point is like in the US remember when everyone was trying to sell crazy amounts of yield in Latin America, which obviously has a long history of inflation, like the startups there weren't selling any yield. They were just selling like, Hey, you can keep the value of the thing you earned, like that was the value proposition. So that's the difference in the setup, and we don't even have to go to Latin America. If you look at Pakistan, I think the thing is devalued half over the last year.

So, giving people ways to save, easily convert in and out of something that can actually retain value, but also get paid, it's case in point. There was a guest here who was part of the conference. She'd hired a babysitter for her kid while she was doing activities. The babysitter was like can you pay me to my Indonesian bank account?

(20:01) Jeremy Au:


(20:02) Shiyan Koh:

I mean, it's like an American cannot pay into an Indonesian bank account, like it's very hard to do this. And so what does she have to do? She had to find an Indonesian person, be like, here is cash. Can you please send this money over to this other person? Because the babysitter had left and wanted to be paid. Imagine if we just all had a crazy idea, if we all had crypto wallets and we all carried USDC or whatever stablecoin. And we could have just transacted like that, but it was very funny because she was like, oh yeah, just go to your mobile banking app, and type in this number and send me the money. And it's like, no lady, it doesn't work that way. She doesn't have an Indonesian banking app, and Venmo is not going to work here. It was one good illustration that just happened.

(20:40) Jeremy Au:

Yeah. You're reminding me about some transactions I have to do, and every time I transfer to a different country, it's like a 25 service charge.

(20:47) Shiyan Koh:

Oh my God. The wire?

(20:48) Jeremy Au:

Yeah, the wire.

(20:49) Shiyan Koh:

So brutal.

(20:51) Jeremy Au:

So brutal. Yeah. And I'm just like, why? And I think you forget how much friction, how much cost there is, and that, especially when you're an individual, obviously, if you're a business, you can negotiate it down, your sum, if you're transferring $100,000 than what is 25 anyway, but if you're doing something small in sum, effectively is a regressive tax where it's a high percentage of the quantum for the smaller folks or the poorer folks with English transactions in general. So their service fee was like, pushing me back to become a Web3 bull.

(21:18) Shiyan Koh:

It's weird though. You know, DBS, if you do it personally, there's no fee.

(21:22) Jeremy Au:


(21:22) Shiyan Koh:

It's the inverse. But if you do it out of your business account, they'll charge you the wire fee.

(21:26) Jeremy Au:


(21:27) Shiyan Koh:

And, if you're a small business, you have no negotiating power. They, won't even entertain you.

(21:30) Jeremy Au:

Yeah. I think it makes sense. You're locked in.

(21:32) Shiyan Koh:

It's completely exasperating.


(21:34) Jeremy Au:

Yeah. Well, I think it's interesting to see Circle obviously expand. I think they're out hiring lots of different folks. In fact, we had one of the Circle executives had previously came on the podcast sharing about how he likes to hire former founders because he himself was a former founder as well. So I thought it was interesting just to see that there are more jobs because crypto winter has been painful. I thought it was interesting to sit down with everybody and also feel like, crypto might be back. It's like, I sit down and it's like, I think stable coins is a big one, but I'm not sure what else there is in terms of utility. Obviously, I think games, and fractional ownership is a big thesis that's out there right now as well. Do you have any thoughts about that?

(22:06) Shiyan Koh:

I mean, games is an easy one in that. Virtual economies already exist in games. It's not like, you don't have to change people's behavior there. They already want the better sword or the better car or whatever it is. And that's been around for 20 years and the big innovation is, can you make it transportable? My value that I've created because I've played 5,000 hours of this game isn't trapped by some game studio who wants to devalue or inflate. I can trade it out of the game to somebody else. And I think there's a creative possibilities, which is like, Hey, can assets work across multiple games? And that could be an interesting idea, but that's the sort of core mechanic of, can I get value out of things that I've already built, and can I do it in a more open ecosystem, it's pretty interesting and not that hard to think about.

The real world asset one is often more of a legal problem than a technology problem in thinking about what is a security? What is the regulation around trading security's KYC? I think one of our speakers' men was like, just because something is tokenized doesn't mean it's not K. Y. C. You could put K. Y. C. on top of some of these things. No one is advocating for total anonymous trading. And so, imagine if instead of your house, imagine if you could tokenize your own house. And your parents wanted to help you with the down payment. But essentially they were just like buying a percent of the equity of your house for you, right? And they could benefit in the upside. You can imagine that when you sold your house. The proceeds would all be distributed automatically to the holders of that token. And you wouldn't have to actually do any side contracts to enforce it. Or they wouldn't have to do any side contracts to enforce it, right? It would just sort of, that's what it would mean to own a house. It's like you would own all the tokens and you would pay out that thing, and software would send the things appropriately. And you can imagine that with rental too. I've seen so many starters with this.

A group of friends wants to share a vacation home, and rent it out for income, but also use it themselves. Let's make a startup to do this. And it always just ends up being a huge cluster because there's no liquidity. One friend wants to get out. The others, they're all in an LLC that bought this thing. But it's like, if you thought about it, actually there are easier ways to do that. And crypto offers some ways that would ease that, but the hard part isn't necessarily the technology enables that, but the hard part of those businesses is the legal and so I think that still has some ways to go, but people are tokenizing commercial buildings people are tokenizing funds I think there's a lot of work being done there, but I think it's always one of those things who could go the distance with the regulations. Thank you. and fight through that, because it's always hard to change the status quo.


(24:28) Jeremy Au:

Yeah. And I thought it was interesting because adding Minteo that you mentioned, she used the word internet nation states which kind of triggered all the economics and politics side of me, which was like, but I thought it was a perfect encapsulation of both the upside, but also I think the challenges of this, which is, I think the upside obviously is that, like you said, there are digital economies that are happening because If you're spending in aggregate millions of hours in a game and there's real value, right? If you spend millions of hours digging holes in the ground outside, that is a real digital economy, especially if I'm trading the fruits of digging real ground. So I think there is, you're right to say digital economy, value being generated and value being appreciated by other folks. I think that's very true. So I think that reminds me of different international state, but exactly like you said, is the point of currency is that different nation states have to recognize each other's currency, right? And that's a big problem, right? I think we saw that. Oh, it's one of my favorite parts. I was like, my friend's antique shop Inshan, all right? And she was like, there was this shelf full of different currencies. So it was like a closing down sale. And it was like the warring kingdom of China. And there was like 20 different types of currency that were available. Some were in the shape of swords, some were in the shape of knives, some in the shape of coins.

But all these different currencies and different things and if the interchangeability and all that stuff, it was just tough, and a big part of it was that because there's no law, like you said, that governs the property rights, but also the currency rights and conversion. They created to some point that there was some level of portability, but no true conversion. And you need military force to enforce the law. I think that's the interesting dynamic of these internet nation states, is they don't have soldiers and so they can't have a court, but there's no way to enforce any of the judgments around property. And obviously I know some of the digital, smart contracts are supposed to provide that dynamic where you can provide law without force, because it's all done automatically. But I we see over and over again, like FTX and so forth, when something really goes wrong, I think we end up defaulting to some extent, or at least the real life nation states come back in to step in and try to sort it out. Right. So the SAC is working with the FTX dynamic and so forth. So I think it was a really good metaphor that helped me encapsulate a lot of my concerns. I think about how to think about Web3, some aspects of it.

(26:25) Shiyan Koh:

Yeah. It's always easy to go into this theoretical phase. And it's like, at the end of the day, it has to be what is the use case? Who is actually going to use this? But, I don't know. I think you can leverage existing regulations to this. It's like this interoperability question which is like, right now, a lot of countries have their own individual systems that are not that interoperable. Everyone has their own set of rules that govern how things work. And so, can code bridge some of that and make it easier to interoperate across geographies?

(26:54) Jeremy Au:

100%. I guess not everybody uses the USD. We're just like the petrodollar that has been systemized and structured. So that is the default currency. And we see some economies, I was reading the newspaper, like, Latin M is starting to, some of them are starting to dollarize the economy again because they don't have their own currency under control. And it's very much again, talking about the 1990s and 2000s, that's a very 1990s and 2000s phenomenon to have back again, to see the dollarization of your local currency. But interesting to see that happen in other news as well. Sorry?

(27:23) Shiyan Koh:

Venezuela is practically dollarized.

(27:24) Jeremy Au:

Yeah. So this official dollarization and it's unofficial dollarization, right. Also, I think what's interesting is now a lot of people are using Web3. So it's not dollarization in terms of USD cash, the dollar rising US, USDC, right? So that's one of the interesting dynamics as well to see people do.

(27:38) Shiyan Koh:

Yeah, but I think there's also flows, right? Like, we have a portfolio company, they operate in Venezuela, and they were saying something like a very high percentage of the account's credit cards that were linked actually have US zip codes. And so that's like the diaspora sending money into the country via USD. And they denominate their prices in USD, right? So they're like, I'm not going to deal with this inflation, this currency risk. I'm just going to take it out by operating in USD.

(28:05) Jeremy Au:

Yeah, I think we saw Parallax, right? A Philippines based startup that actually does this as well. They use crypto stable coins for cross border payments. And they recently raised $4.5 million so, congratulations to the Parallax team. And I think there's a lot of folks that are out there trying to re-tackle this cross border dynamic as well.

On similar crypto news Thai Bank Kasikorn has gone official with a new 100 million fund for Web3 and AI. So that's interesting to see more investments by some financial institutions into Web3. I think it's a good way as a corporate VC to be able to see the next wave of innovation, but also get a little bit of ownership stake, but also potentially be a strategic acquisition down the road. So I think interesting to see a lot of incumbents basically start to deploy and explore the space. What are your thoughts, Shiyan?

(28:49) Shiyan Koh:

I think it makes sense for banks to do, right? I mean, there's so many financial use cases. It's kind of the core of the crypto innovation. And so for them to kind of have a advanced look at what are possibilities for them to extend their reach, provide additional functionality to their consumers and customers, I think that makes a ton of sense. I think in general, I'm always a little wary on CVC types of initiatives because they have to continue to stay interested in it. And 10 years is a long time to stay interested in something, especially if you think about management team, priority changes and things like that.

I think in financial services, it's probably a little bit more in line. But I mean, I think that the counter piece of news is, Ant Financial had 100 million crypto fund and T and they just said they're unwinding it. And there was some management challenges there. But I think If it isn't in the course of operating business, you always have the risk that management's just like, oh, it's too much effort. You know, we can't pay attention and we need to prioritize. Let's just focus on the main thing.

(29:41) Jeremy Au:

Yeah, makes sense. And also financial, right? It's a Chinese entity primarily. And so obviously, China has banned a lot of the crypto cases. So, in that scenario also there isn't a geographic match and it's also regulatory risk to explain to the regulators every year to be like we don't do Web3, but here's this fund that does investments. I think it's just, like you said, too much bother for the management team. I think that also reminds me of Saison Capital, which is a great fintech VC fund across Southeast Asia and also Asian world that's based out of Singapore. But for them, they're backed by Credit Saison, right, which is the Japanese card insurance as well. So I think there's a lot of synergy because you have cash and you have bank statements. And then you're just saying like, Hey, is there a way for us to deploy this in a n effective way, but also provide that sensor network for what's coming down the road as well. I think what's also interesting in terms of news is that the Bioformance CEO stepped down. So not much news, but Dealstreet Asia broke the news so, I thought it was a, something that would come up, but I'm not sure what you think about it. I actually know very little about what's going on. I just saw the article.


(30:38) Shiyan Koh:

I think that as companies get bigger and approach IPO, investors often try to make a determination around whether the current team can take it the whole way and whether or not there is an opportunity to augment the team with folks who have managed larger organizations or have done the IPO before. I think you see that most in the CFO role. Generally, people will try to insert a CFO who has public market IPO experience. And then often you can see it in other C level folks as well. I think some founders also sometimes decide they don't want to be a public company CEO. It's pretty different in terms of being held accountable to the quarterly earnings, and the amount of compliance that's required to run a publicly traded business. And so they might have said, hey, I've had a good run. I don't have any backchannel here, but it's probably a combination of a lot of these things.

(31:20) Jeremy Au:

Yeah, I think I'll just read out the facts on this and I'm reading primarily from the district article. So could it saying Rushwood founder and CEO has stepped down two months after the company laid off 120 employees worldwide. Bandwidth, when a maker of General Atlantic is taking over. He most recently served as Vice President of Enterprise Strategy at Humana and has held leadership roles at Aetna and Walmart. Wanamaker has also been appointed a board of directors. In parallel, Balik Machmuda Chief Medical Officer at Bioformance has also resigned. And Kuldeep Singh Rajput continues to remain as a board director. So, these are the facts that were reported by article and then. I'm not sure what's going on, but I think it'd be interesting because Biopharm is has.

(31:57) Shiyan Koh:

Yeah, they're attacking the US market. It's a guy who has a ton of US market experience, especially it sounds like with insurers who handle reimbursement, which is a nightmare of a system in the US. And so, it could make a ton of sense just to bring in someone with that background to help the next stage of growth.

(32:12) Jeremy Au:

Yeah, I think this is one of the few Southeast Asia unicorns that's out there. And so I kind of wish the whole team luck and continue to wave the flag a little bit. Because I think their success is also quite key to the ecosystem continuing to mature and be able to provide better growth over the future. So based on this entire conversation, from your perspective, what's one thing that you think about on your mind as you go into the next few weeks?

(32:33) Shiyan Koh:

Oh, gosh. I have one tactical one and one sort of, I just have a ton of follow ups, right? I've had so many conversations in the last ten days that I just need to follow up and I've been taking notes and everything. I need to do all my follow ups, but I think it's just useful sometimes to step back because you're so in the grind of the day to day that sometimes when you step back and you kind of reflect on what's going on in the broader ecosystem. I can make you more hopeful. So I think because of the funding slow down and the crypto winter, I think often when you're in the day to day, people can feel a bit down in the dumps but being able to take a moment, take a step back can give you perspective on how much progress has been made, what things there are still to be optimistic about. And I think just connecting with people who are doing interesting things gives you that kind of energy. And so, I kind of want to take that positive energy forward. How about for you?

(33:17) Jeremy Au:

For me, I kind of realized I miss my little kiddies. So, I think when I think about this coming week I'm trying to think to how to similar to you, I think do a lot of work. Meet a lot of people, also squeezing that family time as well. And I think it's interesting because I really never had that issue three years ago before my kids arrived. You know, I would be like, yeah, I would happily sacrifice my personal sleep and health to work. I mean, it's just felt like binary thing. It's like, you can bypass and skip your friends and all these other things, and you just focus on work, but now there's this family dynamic, and I thought it was interesting because I was traveling to and fro, and I was like doing the video calls with the kids, and obviously I've been traveling over the past few years. But I thought I kind of felt it a little bit more this time around. So I thought it was an interesting sensation to have.

(33:56) Shiyan Koh:

Bring your kids next year, Jeremy.

(33:58) Jeremy Au:

I think some folks did. I thought it's pretty smart. And then they were like, Oh, you know, then they bring the wife or husband as well. And there's a nice dual combo, dual, double track. I saw someone's kid Sunny Vu's kid, right? With the badge as well. And I was like, Oh, the youngest attendee, big things are in store for this kid. Yeah.

(34:15) Shiyan Koh:

Yeah. I mean, maybe, yeah, next year we can see if there's enough interest or people will self organize anyway. But, you know, there's a kids club and your kids are small. They're not even going to miss any school. It could be a one, two, then you kind of get the best of both worlds.

(34:26) Jeremy Au:

All right. See you around.

(34:27) Shiyan Koh:

Take it easy.