Portfolio Spotlight: ChatGenie
THE LOWDOWN: WHY ACCELERATING ASIA INVESTED
- Team: A team with the right mix of skills, experience and networks to turn their mission and vision into reality.
- Traction: Recorded over US$3 million in GMV and over 70,000 unique transactions.
- Strong growth roadmap and multi market thesis. Rapidly growing business with the ability to exponentially grow the top line.
- Business model & Product: Solving pain points of several merchants, tiered subscriptions, favourable CAC/LTV ratio.
- Early investment: Have already raised over US$200k in last 2 months and are over-subscribed.
THE INDUSTRY
The social commerce landscape is heating up in Southeast Asia. Many companies are trying to provide ingenious solutions to help businesses to grow online and manage different aspects of their operations. The large market size of SEA and potential to generate high lifetime value (LTV) from customers have made investors bullish in this segment.
One social commerce company that we have invested in is ChatGenie. Based out of The Philippines, ChatGenie provides an end to end online store platform with integrations with Facebook messenger, Instagram, Viber, GCash and a suite of other applications. It helps merchants manage their online order and then takes care of the online payments and the necessary logistics.
SOLVING MARKET PAIN POINTS
One of the biggest reasons why we invested in ChatGenie is their ability to solve several frictions points merchants face when they run an online business. Merchants doing online business often suffer from high sales commissions of existing channels (like food delivery apps) and limited interactions with customers they are doing business with.
Furthermore, every platform requires customers to sign up by providing different personal details which in turn deters several customers from joining a platform, thereby potentially reducing the sales of a merchant.
To combat these issues, merchants often start selling online on platforms like Facebook and Instagram which can be difficult to manage all at once.
Here comes ChatGenie, it links to all major online platforms and manages online ordering from every platform and payment collections on the behalf of the merchant while providing insights to the merchant on customer activity.
While doing this, ChatGenie automates delivery dispatching to the customer. ChatGenie ensures customers have a smooth experience with the online store of a seller while the seller gets adequate support to shore up their unit economics and grow the business with the help of data.
SOUND REVENUE MODEL
This leads us to another reason as to why we are bullish on ChatGenie - their revenue model. ChatGenie has different subscription tiers which start at a free subscription level and a small fee per transaction. This free-tier serves as a good entry point for merchants to test the platform and experience the value the platform delivers. Once merchants see the value, they tend to move up the chain to more expensive subscriptions. The CAC/LTV ratio becomes highly favourably over time.
THE MARKET LIKES THE PRODUCT
Since inception ChatGenie has seen impressive traction. They have recorded over US$3 million in GMV and over 70,000 unique transactions, and generate healthy revenue which is further accentuated by a strong sales team. Covid gave them impetus to grow in a gloomy market and now they have a sound growth strategy for the near future which centres around acquiring new clients which have a different profile from their existing clients.
SOLID TEAM
The management has worked across several MNCs developing software and managing marketing campaigns and the founders have worked with the likes of McDonalds, Facebook, Chevrolet, Johnson & Johnson. Their experience will come in handy when they will have to navigate choppy markets and execute growth in new geographies.
ABILITY TO EXPAND RAPIDLY
The final reason why we think ChatGenie stands out is because of their ability to expand into different markets regionally and internationally. Given the geography of the Philippines, ChatGenie will already have a solid domestic market and learnings from scaling there, which will help them optimise the outsourcing of their logistics in new markets.
Also, integrating with platforms in other countries will be relatively straightforward because the team has experience in building products to link to platforms like Facebook, Instagram, Gcash, etc. and some platforms like Facebook and Instagram are present in almost any new geography. We believe that ChatGenie has the ability to succeed in multiple new markets.
IMPACT
At the core of what we do is our guiding belief that entrepreneurs are one of humanity’s greatest catalysts for positive change. Our VC investments and approach reflects our guiding belief, we invest in commercially viable startups that have a path to profit and are addressing at least one Sustainable Development Goal.
Our investment into Chat Genie reflects this approach by delivering impact in:
Goal 9: Industry, Innovation and Infrastructure
- The SDG target 9.3 of increasing access to financial services and market and the indicator is 9.3.1 value of small-scale industry.
- ChatGenie measures its impact based on the number of small businesses who have opted to offer online payment when creating their store.
SOCIAL COMMERCE: PRIMED FOR OPPORTUNITY
The war among social commerce companies is heating up in SEA, with investors vying several companies that they believe will generate high returns on investment. We believe that ChatGenie has the ability to dominate the market in the Philippines and quickly grow in several new geographies. The revenue model is sound and the growth road map has merit to it. Ultimately the founders have experience in the markets, are able to solve challenges by localising the product and have the ability to rapidly scale in new markets.