Buyers and Builders
00:00:00 · Mikk, Eric Tan
[00:00:00] S0: My guest today is Eric Tan, the CEO of Catcha Digital, Berhad. 14 acquisitions and counting. Catcha Digital owns and operates market leading businesses in digital media, B2B expo and technology sectors. Thanks a lot for coming to the podcast, Eric. [00:00:16] S1: Thanks for having me. Big fan of the show. Been wanting to come on it for a long time. Really, really my pleasure to be here. [00:00:22] S0: It's great that we finally got to do it because we first met in Stockholm earlier this year. So we were just having those sofa conversations around what you guys are building. And Patrick was there as well, and we thought, like, it would be great to have you on on the show. So here we are. It's July. So great to talk to you today. [00:00:43] S1: Wonderful. Likewise. [00:00:45] S0: Yeah. You've been doing this for many years, and the goal, as I understand, is is not being this financial buyer chasing short term IRR, but the real ambition is is to becoming this permanent home for market leading companies in Southeast Asia. So could you give us an overview and a bit of the thesis about what you guys are doing there?
00:01:15 · Eric Tan
[00:01:15] S1: Maybe before I get into the thesis, give a quick kind of background how you all get started. Right? So I graduated in 2016 from the LSE and I moved back home. And at a point of time, my my personal mission was to really create high quality jobs. It's something that's very personal to me back at home. And I decided that at the point, probably the best way to be to be able to do that was to become a founder myself. And I wasn't ready... I wasn't sure if if I was ready at the time with, student debt and, like, lack of experience, etcetera. So I joined Patrick, as you mentioned, Patrick Grove is a... My current chairperson, my chairman at his private vehicle, doing a bit of building, investing and acquiring. And over the years, really revolving around buying or building high growth classified businesses, media businesses in Southeast Asia. And in 2020, I left and we spoke about me becoming a founder. Patrick became my investors in 2020, right in the middle of COVID. A couple of years in that didn't really work out. And we shut down the business and Patrick and I reconvene again. And we were both at the same time researching Constellation software independently. It was all not planned. We just met one day, and then they asked what I've been doing. I said, hey, I just came back from London. I spoke to a friend in investment bank, and they are looking into Constellation Software, and I said, oh my god, are you serious? I'm looking at it as well. And we started discussing, hey, Eric, what are gonna do next? And after a few rounds of iteration, Catcha Digital was really born. And where we are today, as you can see, it's a three pillar serial acquirer out of Southeast Asia. We're based in primarily in Malaysia. Pillar one is in digital media businesses. Pillar two is in B2B expo, and and a third is just a general technology pillar and generating about 30,000,000 US in revenue, about 6 odd million in EBITDA a year now. And and the overall thesis is really very much like what you see in the West where you have a lot of high quality SMEs that is not too big for the for the IPOs or or PE to be interested, but it's also too big for individual kinda sponsor to just take it on, and it's an issue with succession.
00:03:27 · Eric Tan
And we see that in particular in this part of the world where we think there's an opportunity for us to build something that allows founders to hand over their their business to someone like us as an institution and still the legacy continue to serve the the customer. And you might ask, hey, why these few particular pillars? And this is primarily areas that we are more familiar with. You won't see us going into, I don't know, restaurant business or run a cafe or that sort of businesses. Right? So we have been in media and digital media for the last twenty odd years. In this part of the world, we're quite familiar with the nuances of running these sort of businesses around the region, classified software, an expo that was an offshoot in in some of our our online businesses. So we we really focus on these few things because we think we're uniquely positioned to to be able to build a a good business out of it. In the future, we might expand to new pillars that is adjacent to that. But for now, we want to stick to what we know best and then refocus on those.
00:04:31 · Mikk
[00:04:31] S0: Okay. That's great. Now you brought out the startup phase. I really believe it's all about those special individuals like yourself, folks, enjoying the game, building great businesses, great investment firms. So in your case as well, before starting Catcha Digital, you weren't an executive. You were a startup builder yourself, and it didn't go well. So could you maybe talk about those startup days? What did you learn, and what did you maybe even change when approaching this this new opportunity? Because I'm trying to understand, like moving forward forward in the future as well, maybe it's a great idea to bet on folks who have tried building startups, haven't succeeded and now trying to get into more traditional profitable businesses. So maybe you can share a bit of lessons there.
00:05:30 · Eric Tan
[00:05:30] S1: I'm definitely kind of one of these guys, right? I think how I went into the startup was really I found an idea that I thought I can uniquely relate to as a consumer. And I went into it knowing that it's going to be hard, but it is like one of those things where, you don't really know how hard it is until you get yourself into it, I walked away with a couple of learnings as I was reflecting on it, I think on a more professional level, I've realized that it is very difficult to fight against macroeconomic structure and and kind of long term tailwind. You just purely using a willpower as a as an individual, right? Because I launched a startup in a market where I knew it was quite difficult to raise external funding as an entrepreneur, but I kind of just went for it, like, as with all entrepreneur, our mindset is, okay, let's let's just go with it and see what happens, even though you know you're swimming against the tide, but at the end of it, I I realized that it's impossible for me to bend reality to wheel in in the market where just it's not favorable to to build startups. So, it's like for example, in Malaysia, it's not a very big market. A lot of investors would want to invest in in a big single market and someone is building something similar in China would would command, let's say, like, times the valuation just simply because the size is bigger. So it took me, like, really, really in the face to to to really understand, hey, You can't fight against a macroeconomic structure. It's just against your favor. And from then, like, moving forward from from then on, I became a lot more conscious around finding opportunities that really fits well with the long term trend and and overall kind of macro structure, I don't swim against the tide because I've been there, done that. I find it just unnecessarily difficult to to do that. On a more personal level, I think it taught me to be a little bit more empathetic. It humbles me because before that, I was doing a a bit of investment, investing in startups here and there as Angel as part of the fund, and it is quite easy to say, hey, go do this and go do that, mister founders, but in reality, it is never as simple as in in theory.
00:07:42 · Eric Tan, Mikk
We can put the best PowerPoint and excel up and tell the founders to fire a bunch of people or change a business plan, but the reality is, it's just, it's just, it means nothing if you can't execute it, which I think in, it, weirdly, it makes me relate a lot better with founders and businesses in my role today, as a serial acquirer, I think, for, for, for most cases, I think founders understand they have been through the trenches, it gives you a little bit more respect, and they understand that it did not come from a place of arrogance, but it come from a place of, in some sense, pain and, and, and, and learnings from the past. [00:08:21] S0: Okay. Now the Catcha Digital, the portfolio today, how do you structure it? Because you said you have three pillars. You have those events, software, and also digital media. Yep. Is it decentralized, centralized? How do you run it? How do you structure it structure?