What does it take to build a great business? Investment group XA Network believes that investment capital is only part of the answer. Entrepreneurs also need hands-on expertise and advice from those who have been there and done it – and this part of the secret sauce is a lot harder to find.
“Right now the world is full of liquidity. There are billions of dollars on the verge, “said John Wood, the former Microsoft executive, whom XA Network today introduced as the youngest member of its advisory board. “Entrepreneurs with good ideas can find capital, but they are looking for someone they can trust to give them good advice along the way.”
Join the XA network, comprised of around 100 members who have held leadership positions at most of the world’s leading technology companies. It can count on the alumni of companies like Alibaba, Google, Amazon, Netflix, YouTube, Gojek and Grab. “These are the people who cut their teeth at unicorn tech companies,” Wood adds. “It’s a one-stop shop for entrepreneurs.”
To underline this point, Wood points out that in addition to him, XA Network is today announcing a number of other high profile advisory board appointments. His colleagues are Steve Chen, co-founder of YouTube, Maya Hari of Twitter, and David Thevenon of Balderton Capital and Google.
The larger advisory board will support XA Network as it continues to invest in technology companies across Southeast Asia. With increasing competition for stakes in such companies, Wood and his colleagues believe their network is a key differentiator from traditional venture capital and private equity investors.
“Capital has become a commodity. The only way we’re on is to be a founder first,” he says. “We want to be able to work with founders as long as they want us at the table.”
(From left to right) Steve Chen, David Thevenon, Maya Hari and John Wood
The XA Network, founded two years ago – the X describes any technology company with a valuation of USD 1 billion and the A refers to alumni – has so far invested in around 30 companies in various sub-sectors, including mobility, health technology, food technology, edtech, adtech and fintech, social commerce and proptech.
Today’s board memberships come just days after the network announced its first exit through the sale of the Singaporean video-sharing service Lomotif for $ 125 million. But Wood is very keen to emphasize the group’s long-term time horizon. “We want to be stable investors. We’re not looking for quick flips, ”he emphasizes. XA Network is definitely in the process of being set up: the company is currently investing 15 to 20 companies per year, but sees an increase to around 50 as a realistic prospect.
The group believes that Southeast Asia has enormous potential with a total population of 580 million and positive trends such as high connectivity rates – 70% of the people in the region are online – increasing urbanization and favorable demographic characteristics. The digital economy contributed $ 100 billion to the region’s economy last year alone, and that contribution is projected to grow to over $ 300 billion by 2025.
Additionally, this is a market that is much shorter than the giant incumbents that dominate in regions like the European Union and North America. Dynamic companies with strong management can grow very quickly, argues Wood, citing the example of the technology company Sea, which reached a market capitalization of USD 100 billion earlier this year, less than four years after going public in October 2017. “There are many more companies with the potential to become trillion-dollar organizations or dozens of trillion-dollar organizations,” he says.
Along the way, XA Network believes it can invest purposefully and support Southeast Asian businesses with solutions that will help the region survive on the world stage. “We are all deeply committed to the power of intelligent capital, intensive support and the promotion of integrative innovations,” adds Wood.