On October 27th 2023, J&T Express debuted on the Hong Kong Stock Exchange with a market capitalization exceeding HKD 100 billion (approximately USD 13.4 billion). This marked the first billion-dollar listed company harvested by Qu Tian after six years of venturing into Southeast Asia.
Qu Tian, the founder of ATM Capital, ventured into Southeast Asia and established this fund in 2017, focusing specifically on the Southeast Asian market. It was the first venture capital fund with Chinese background dedicated to the Southeast Asian market. In its inaugural investment move, the fund invested in J&T Express, now the top-ranked express delivery operator in Southeast Asia. Qu Tian gained recognition and became prominent through this successful endeavor.
In 2007, Qu Tian joined Alibaba and became part of the investment department led by Joseph Tsai. He believed working as an investor would allow him to seize opportunities and identify promising projects more accurately. Qu Tian spent seven years at Alibaba, making relatively few investments but successfully leading two major projects: Meituan and UCWEB. During this time, he developed his investment philosophy: focus on quality rather than quantity and aim for big opportunities rather than small ones.
Before founding ATM Capital, Qu Tian established Bat Capital and made angel investments in excellent internet projects such as Tuya Smart and Waterdrop Inc. This experience cultivated his keen insight, as he mentioned, "You can feel the excellence of a person through a simple conversation."
Becoming a Leading Fund
Becoming a leading fund requires entering the market early and successfully investing in companies that will later succeed. Following this growth trajectory, Qu Tian began exploring markets and quickly set his sights on overseas opportunities.
He researched almost all overseas markets, with his criteria being large population, strong consumer purchasing power, and fast economic growth. "Only Southeast Asia is the most suitable," Qu Tian said. In 2017, Southeast Asia had a population of nearly 700 million, ranking third globally, with a per capita GDP exceeding $4,000, rapid economic growth, and high mobile internet penetration. Importantly, Southeast Asia was in the early stages of its venture capital ecosystem at that time.
According to Qu Tian's research at the time, Indonesia was the fourth most populous country globally, with high mobile internet penetration and strong consumer purchasing power. It was considered the most promising, open, and inclusive market in Southeast Asia.
In recent years, Indonesia has capitalized on every wave of the e-commerce era, giving rise to platforms like Shopee, Lazada, and local platforms such as Tokopedia, Bukalapak, and Blibli. Even in 2017, e-commerce remained the most viable business model, but more investment opportunities emerged in the upstream and downstream industries.
Following the upstream and downstream research path of "payment, logistics, supply chain, and new consumer goods," Qu Tian ultimately chose logistics. He believed logistics presented significant opportunities. He believed that there will be companies similar with SF and ZTO to emerge in Southeast Asia.
Quoting Qu Tian in his own words, “The waves in the Southeast Asian market are evident, with one wave following another, and multiple waves overlapping.” Therefore, a more comprehensive investment focus was needed.
As a result, ATM Capital gradually formed four major investment areas: e-commerce and its supporting infrastructure (including logistics), consumer retail, financial technology, and new energy. This approach covered almost all the major industries in Southeast Asia at that time.
ATM Capital Investment Methodology
To quickly find good projects and establish a presence, upon arriving in Indonesia, Qu Tian and his partner Liang Minjun ran daily meetings with founders and discussed projects.
In October 2017, Qu Tian met the J&T Express founding team for the first time. At that time, J&T Express' order volume was close to one million, approaching the volume of Southeast Asia's leading logistics company, JNE. They also had plans to expand to other countries. After six months of communication and contact, ATM Capital became J&T Express’ first investment institution and continued investing in it thereafter."
His impression of the founder of J&T Express was that he was refined, humble, spoke politely, and had a strong and resilient spirit.
Following this line, Qu Tian successively incubated and invested in the beauty brand Y.O.U, maternal and child brand MAKUKU, and coffee brand TOMORO COFFEE.
Therefore, when it comes to selecting people and projects, ATM Capital tends to prefer entrepreneurs who are based in Indonesia, have entrepreneurial experience, have a team to help them execute, and an executive team that is preferably international and diverse. The projects they are interested in should be in a large market, have high growth potential, and a business model suitable for the local market.
How does ATM Capital approach investments in Southeast Asia? When asked this question, Qu Tian mentioned a few key phrases — "staying focused " and "in-depth research."
ATM Capital's slogan is to discover, assist, and accompany outstanding Chinese entrepreneurs, starting from Southeast Asia, to build globally leading companies and become the next billion-dollar valuation company. ATM Capital focuses on four historical growth opportunities in the new economy: e-commerce and its supporting infrastructure (including logistics), consumer retail, financial technology, and new energy.
"The process of digitization driven by the internet in various industries in Southeast Asia has just begun," said Qu Tian. "In Southeast Asia, there is no investment company that operates the way we do."
The focus of ATM have two directions. First, it is to focus on entrepreneurs rooted in Southeast Asia, investing in line with the trend rather than against it. Second, it involves acquiring more accurate information about various industries, with a deep understanding of the industries. The Chinese background is an advantage for ATM Capital's fund, and its specialization in incubation is a distinctive feature, which is rare among investment institutions in Southeast Asia. "To achieve specialization, you must be focused."
"For many entrepreneurs, we are their first investors," Qu Tian said. "We understand each other better, and it's easier to gain trust. In terms of investment frequency, Qu Tian does not prioritize quantity but rather focuses on quality. Up to now, ATM Capital has invested in more than 20 projects, and several companies have started to become profitable.
Opportunities in Southeast Asia and Beyond
Recently, Qu Tian had just returned from the Middle East, where he had a delightful conversation with a prince from the region who has shown interests into ATM’s investment portfolios. In Qu Tian's impression, the local people are open and friendly.
However, market maturity still needs time. Qu Tian believes that while the Middle East market is indeed vibrant, it has a long way to go before the entire industry and business models can fully mature. From the perspective of emerging markets worldwide, Southeast Asia is still more suitable for entrepreneurs.
Qu Tian indicates that there is a sequence to going global, starting with Indonesia, then expanding to Southeast Asia, and finally targeting emerging markets worldwide. He observes that many internationally successful companies are primarily concentrated in origin countries such as China, the United States, Japan, South Korea, and Europe. However, he believes that Indonesia will be the next origin, and at least 30% of globally expanding enterprises will emerge from Indonesia.
Qu Tian also advises entrepreneurs aiming for globalization to start with Indonesia as their first destination and excel in the Southeast Asian market. He sees numerous opportunities here, especially in the broad consumer retail sector, including food, beverages, retail, and offline chain services.
In addition, the pandemic has also driven the popularity of online payments in Southeast Asia. The online payment user base in Indonesia has increased from 20% in 2017 to 50% at present, marking a significant change. With the future development of the online economy in Southeast Asia, there are also tremendous opportunities in this direction.
ATM Capital is also paying attention to investment opportunities in the field of new energy. Qu Tian believes that new energy is another area with enormous potential in Southeast Asia. However, as it is a long-term development track, the industry may need 3-5 years to experience rapid growth.
When asked about advice for entrepreneurs and investors, Qu Tian shared some basic principles: identify the direction and go all-in, enter the market early, establish a local team, conduct in-depth market research, choose areas with enormous potential, and ensure that the business model aligns with the local market.
For investors, Qu Tian emphasized a crucial point, saying, "To be a permanent partner for entrepreneurs, it requires us to maintain in-depth research and observation of the industry while also paying long-term attention to these entrepreneurs."
In Indonesia, Qu Tian, when he has time, gathers with friends to discuss ideals, and talk about the future. He does not have much personal life, as he travels domestically and internationally every month.
Beyond the busy world of investments, ATM Capital aspires to nurture the venture capital landscape in Southeast Asia.