Since our founding in 2014, Monk’s Hill Ventures has invested in more than 20 fast-growing startups spanning multiple business models and industry verticals. In the process, we honed a set of principles to help us find the right entrepreneurs and to help the right entrepreneurs find us.
Below, we have put those principles into writing for the first time. We intend this to be a living document that evolves in accordance to our own strategic thinking and conditions in global markets, ensuring that we always invest with an eye towards the future.
We at MHV do believe in ‘the right to invest’ in our Founders and we spend considerable time with Founders to understand their motivations and business models. We back startups that have the potential to impact millions of people’s lives, led by passionate entrepreneurs who have the creativity, discipline, and drive to achieve massive scale.
The following six investment principles expand upon these goals.
1. We invest in great entrepreneurs.
This is the crucial, foundational component of our strategy that holds firm regardless of market shifts. Great entrepreneurs are not merely intelligent but driven, disciplined, and strategic, with a deep understanding of technology’s potential to transform their chosen industries. They are fearless leaders who others want to follow, as well as visionaries who are on a mission to build a better world. We believe that, above everything else in the startup world, it is the entrepreneur who creates value, and so we look for entrepreneurs with the passion and dedication to create enormous value for society.
2. We invest in startups that address sizeable market opportunities.
In line with our mission to impact millions of lives through technology, we look to invest in founders who have the vision to address massive problems on a large scale. As Southeast Asia-based investors, we have worked with many locally founded startups that have grown beyond their original ecosystems to carve out a presence in multiple countries in Southeast Asia and beyond. Our portfolio companies KKDay and NinjaVan are just two examples of how ambitious international expansion can have a significant positive impact on customer acquisition and revenue. The process is difficult but rewarding, especially for startups that are willing to learn from their predecessors’ examples. We think globally at MHV, and we want to partner with entrepreneurs who do, too.
3. We invest in startups with a plan to scale up profitably.
Startups in Southeast Asia must scale up quickly to take advantage of sizeable market opportunities and build a competitive moat. However, at MHV, we don’t pursue growth for growth’s sake. We place a premium on companies that scale up profitably. True, companies can buy traction by offering deep discounts on products and services, incurring serious losses while chasing rapid user growth and market share. But if your business model doesn’t include a path to profit from the get-go that’s able to ride the current during downcycles, it’s possible that you’ll never learn how to make money.
At a time when B2C markets are crowded with new entrants, we believe that a well-considered user acquisition strategy is the key to sustainable growth more often than not. For example, designing a strong content strategy can help brands rise above the noise of a crowded marketplace and, more importantly, generates the consistent, quality leads that ensure long-term business growth. Because of its scalability and low cost, user-generated content (UGC) is particularly vital to any content and lead generation strategy. We believe it’s important to ask how our entrepreneurs plan to attract consumers to determine if they can maintain profitability at scale.
4. We like ‘full-stack’ startups that take ownership of the end-to-end customer experience.
Increasingly, platforms that simply match service providers with users—and which then disclaim responsibility for the result—are no longer sufficient. Startups that own the end-to-end customer experience take ultimate responsibility for the quality of the product or service provided, dramatically reconfiguring value capture in their industry. For example, our portfolio company Jio Health doesn’t simply connect patients with doctors. Instead, its platform ensures the quality of the patient’s experience, to the point of dictating the health delivery protocol doctors will follow. In this way, Jio Health captures value across the entire customer experience, not just the matching process.
In an era when consumers demand a higher service standard than ever, companies that take this full-stack approach will likely displace non-tech vertical companies in the same space. However, when startups attack verticals already served by incumbents, delivering the same or better value more efficiently is table stakes. Trust is the trump card. By delivering better, more consistent experience at a lower price, full-stack startups establish deep trust with consumers, making it even harder for competitors to dislodge them from their prime position in the market.
5. We invest in startups that leverage data to create a competitive advantage for their businesses.
Many of our portfolio companies leverage their data assets to create new services or products, or to optimize existing ones. For example, our portfolio company ELSA, which is an AI-enabled language learning platform, decides which markets to expand to next by evaluating data that reveals where organic adoption of its AI-driven language-learning app has already been strongest. In addition, ELSA’s algorithms improve over time as they ingest more data from user sessions, increasing the product’s value. The company also uses this data to train algorithms for totally new accent pairs—for example, someone learning English with a native Thai accent—to expand its product offerings. Careful attention to data can yield important opportunities for startups to capture more of the value chain.
6. We invest in companies that use technology and AI-driven optimization algorithms to improve efficiency, but we also recognize that in this increasingly digital world, we still need human connection.
In an increasingly AI world, companies that use AI-driven optimization algorithms can often work exponentially more efficiently than traditional companies. However, inefficiency isn’t the only problem that needs a solution. Startups must also manage the product or service for the end user, who might be concerned about data privacy and hesitant to rely on machine intelligence in their daily life, particularly for high-stakes decisions about personal finances or health.
In many cases, the solution will involve what we call human mediation: an interface that reassures consumers that human beings with human values are guiding the technology consumers employ to make important decisions. Across many sectors such as wealth management, financial services, child care, recruiting, and real estate, consumers need to feel that there are human beings behind the software who are committed to helping them make important decisions involving sensitive data. In a world where there's a rush to digitize everything, we recognize the need for a human connection.
MHV’s credo is that we are entrepreneurs investing in entrepreneurs. As believers in the entrepreneurial mindset, we know that value is often created when traditions are questioned and broken. Our tenets for investment will evolve based on our own experiences and the inevitable changes brought on by new technologies. Some things, however, will remain constant: Our commitment to great entrepreneurs, bold visions, and world-changing ideas.