From dating and social commerce, to investing and audio-entertainment, Joseph Phua has been a mainstay in Asia’s entrepreneurial scene. Originally from Singapore, Joseph has started numerous successful ventures like Paktor and GaiGai, as well as the immensely successful M17 Group.
After a transition out of M17 Group, where he stepped group CEO of the livestreaming startup and assumed the role of non-executive chairman, Joseph has finally revealed his latest venture. He is now the Managing Director for Turn Capital, a ventures that goes for quality rather than quantity of deals.
We had a chance to catch up with Joseph again after his latest investment into SoundOn, Inc, Taiwan’s leading podcast platform. This is a joint acquisition by Kollective Ventures (KV), a capital advisory and investment firm based in Singapore and Turn Capital, the family office of Joseph Phua.
We spoke to Joseph when he was growing M17 into an industry leader
We spoke to him about his new venture and why podcasts, what he sees for the industry and more.
Congrats on your first investment. What’s next for Turn Capital?
This is actually our second investment. The first was a much smaller investment and we weren’t leading, so no announcements around it.
The key for Turn Capital revolves around Passion Investments, with Outsized Returns through Operational Expertise Transfer. We have to feel passionate about the portfolios that we invest into, and we expect significantly outsized returns for each investment. Venture industry generally expects most portfolio companies to just break-even, with a few achieving outsized returns.
Turn Capital makes much fewer investments, but each deal is expected to turn into a homerun, aided by hands-on approach through operational expertise transferred by our team to our portfolios. We do work with partners, ranging from equity to debt, to complete deals when we feel our partners are able to add value to the investments. We like to take larger stakes in companies as we spend more time with our portfolio companies than most funds, so our time has to be rewarded.
We expect to close another 1-2 deals this year and spend the bulk of our time helping our portfolio companies. As we are a single family office, we are very flexible in terms of the size, stage and industry of our investments. We also do not have a fund life to adhere to, so our investment return horizon can be as long as needed, and there is no pressure to deploy capital unless we spot extremely high quality opportunities.
How do you define the audio-entertainment industry? What does it encompass?
Audio entertainment is all entertainment that doesn’t encompass visuals. Examples include Spotify, Himalaya, Apple Podcast etc. For one, the podcast industry is a giant industry, one that exceeds $10B in 2020, and we expect it to double at minimum, within the next 24-36 months.
SoundOn has grown rapidly over the last year to be the largest hosting platform for podcasts in Taiwan, driving over 35m podcast downloads each month. This number is projected to grow to over 500m downloads in 2021. Currently, it has more than 70% of market share in Taiwan. In fact, the pace of growth is in line with the growth of YouTube during its initial popularity in Taiwan. Likewise, we expect the same trend to occur in Southeast Asia. After all, podcasts are another medium for the transfer of information and the sharing of content which is much like videos on YouTube and other significant content distribution platforms.
What is the potential for the podcast market in Southeast Asia?
If we’re looking at Southeast Asia specifically, podcasts are definitely ripe for adoption in the region. The industry is still in its nascent phases so we can expect the rate of growth to be very high. We expect there will be a significant number of similar ventures popping up soon in this space and we are looking to make further investments and acquisitions in the general audio-entertainment space.
What we need to do to facilitate its adoption is to educate the public – in terms of consumers and content producers. The responsibility of educating the general public of any industry that is in its early stages of growth usually falls on the leaders. Thus, it’s not any different in this case with the podcast industry. We expect that we will be investing resources, from time to capital, into SoundOn and the podcast industry at large, to assist SoundOn on its path to becoming the dominant podcast platform in the region.
We expect there will be a significant number of similar ventures popping up soon in this space and we are looking to make further investments and acquisitions in the general audio-entertainment space.
Joseph Phua, Turn Capital
We expect there will be a significant number of similar ventures popping up soon in this space and we are looking to make further investments and acquisitions in the general audio-entertainment space. We believe that the future of audio entertainment is just beginning and this acquisition of SoundOn marks a step towards establishing an Asian beachhead on this front.
What are some interest industries you are currently considering? What is the potential for Southeast Asia?
We are industry agnostic, but biased towards where our team’s expertise lies. Social and entertainment are sweet spots, and we prefer platform-to-consumer businesses. We are focused not only in Southeast Asia but also Asia at large.
More importantly, apart from looking at industries, we need to feel we can significantly value add. This could be expertise but it could also be network, or competitive edge through various means including tapping on team’s resources (i.e tech talent supply). We need to see that we can immediately create value once we close the deal, without leaving anything to chance. Anything that is beyond / on top should be icing on the cake and pure upside.