Streaming service iflix might be Malaysia’s next unicorn, Google report predicts

Iflix, touted as a competitor to Netflix, offers access to hyper-local shows, movies, live sports and news.
Facebook/iflix
  • SEA’s internet economy is now worth US$100 billion.

  • The region’s “aspiring unicorns” earned US$1.1 billion in funding in the first half of this year, among them KL-headquartered iflix.

  • An aspiring unicorn is a company with a valuation “tantalisingly close” to US$1 billion.

  • Malaysia has few homegrown unicorns, meaning it gets less funding than places like Singapore, Indonesia, and Vietnam.

Funding into South-east Asia remains at a “healthy pace” despite the slow global economy, with 70 startups in the region earmarked as potential unicorns, according to an annual report on the region’s digital economy.

Jointly published by Google, Temasek, and Bain & Company, the report – published on Thursday (Oct 3) – looked at trending digital services and funding for startups.

It estimated that South-east Asia’s internet economy was worth US$100 billion in 2019, and would triple to US$300 billion by 2025.

Malaysia’s own internet economy grew by over 20 per cent to hit US$9 billion this year.

Google said that the overwhelming number of people in South-east Asia joining the internet economy every year forced it to revise its previous prediction upwards by US$60 billion.

Read also: Southeast Asia’s Internet economy is now worth US$72 billion – and Google predicts it’ll hit US$240 billion by 2025

“When we look at Southeast Asia, we really only see two speeds: fast and faster (growth),” Google’s managing director for South-east Asia, Stephanie Davis, said at a media briefing.

Davis added that the region’s 180 million internet economy users had the world’s highest mobile engagement rates, with users from Malaysia, Indonesia and the Philippines leading the pack with four hours of daily usage. (The global average is three hours and 13 minutes.)

70 “aspiring unicorns” in the region, among them Malaysia’s iflix

e-Conomy SEA report 2019

The report found that US$7.6 billion funding went to regional startups in the first half of 2019, and was expected to beat 2018’s record-breaking amount of US$14.1 billion.

South-east Asia currently has 11 unicorns, and a “growing cadre” of about 70 aspiring unicorns whose valuation is tantalisingly close to US$1 billion, said Temasek’s investment head, Rohit Sipahimalani.

Among the startups identified were Malaysian streaming service iflix, which is headquartered in Kuala Lumpur and serves the Southeast Asian market.

The company, touted as a competitor to Netflix, offers access to hyper-local shows, movies, live sports and news.

Also on the list were Indonesia’s Halodoc and Akulaku, Vietnam’s Sendo and Tiki, and Singapore startups Carousell, ShopBack, Ninja Van, PropertyGuru, Zilingo, Carro, aCommerce, GoBear and One Championship.

The low number of homegrown unicorns in Malaysia also accounted for its low startup funding compared to countries like Singapore, Vietnam and Indonesia.

e-Conomy SEA report 2019

The hottest online industries: E-commerce and ride-hailing/food delivery

Reuters

The two industries the report identified as the fastest growing this year were e-commerce and ride hailing (including transportation and food delivery).

The e-commerce market, which the report said saw five million orders per day, was estimated to be worth US$38 billion.

Meanwhile, ride-hailing was estimated to be worth US$12.7 billion, thanks to a growing number of dual-income, time-conscious middle class families seeking convenience.

This industry was dominated by unicorns Grab and Go-Jek.

“Food delivery has undergone a fundamental shift in consumer behavior since 2018. From a niche service that was used only occasionally by a small group of users, it has become common for busy professionals and families alike to order food online for everyday meals and special occasions,” the report said.

e-Conomy SEA report 2019

“By sparing consumers the inconveniences of humid weather and traffic jams, food delivery has become particularly popular in metro areas… the convenience of having piping hot food delivered to one’s doorstep is highly valued,” it added.

The report said that a wide variety of food options, including affordable meals from hawker stalls, was the factor that led to recurring usage of delivery services.

Other rapidly-growing internet industries identified in the report were e-payments (US$600 billion) and online travel bookings (US$34.4 billion) – which was mainly driven by bookings of budget hotels.

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