Sequoia Capital India Exits Appier: An Early Investment Success

Appier Group's IPO: A Milestone for Sequoia Capital India

The initial public offering of Appier on the Tokyo Stock Exchange represents a significant achievement, not only for the company itself but also for Sequoia Capital India, an early investor. Founded in Taiwan, Appier was the fund’s inaugural investment outside of India. Notably, it is also the first portfolio company outside of India to become publicly listed.

Early Investment and Founding Team

Appier’s founders – CEO Chih-Han Yu, COO Winnie Lee, and CTO Joe Su – initially focused on developing AI-powered gaming engines through a startup named Plaxie. The concept originated during their graduate studies at Harvard University, though market demand proved limited at the time.

Abheek Anand, a managing director at Sequoia Capital, connected with the team in 2013 following their strategic shift towards big data and marketing. Shortly after, Sequoia Capital India made a Series A investment in Appier.

A Highly Technical Core

“Looking back, it’s clear what worked and what didn’t,” Anand stated in an interview with TechCrunch. “What truly distinguishes Appier is the exceptional intelligence of its team.” He emphasized the company’s strong technical foundation, asserting it was among the most technically proficient Series A companies he’d encountered in recent years.

Chih-Han Yu possesses a PhD in computer science from Harvard, while Winnie Lee holds a PhD in immunology from Washington University in St. Louis. Joe Su earned an M.S. in computer science from Harvard. The company further bolstered its expertise by recruiting AI and machine learning researchers from leading universities across Taiwan and the United States.

Focus on AI Expertise

Sequoia Capital recognized a growing trend towards AI adoption within enterprises. However, Anand noted that many companies were attempting to address business challenges without possessing the necessary technical depth. Appier differentiated itself by approaching the problem from a position of substantial technical expertise.

Competitive Strategy and Product Suite

Since its establishment in 2012, the landscape of companies utilizing machine learning and big data for marketing automation has expanded. Appier maintains its competitive edge through a strategy of cross-selling new products and concentrating on specific applications, rather than developing a generalized platform.

The company’s flagship product, CrossX, is a cross-platform advertising engine designed for user acquisition. Additional offerings include AiDeal, which optimizes coupon distribution; AIQUA, a user engagement platform; and AIXON, a data science platform that leverages AI to forecast customer behavior, including potential repeat purchases.

Emphasis on Efficiency

“The company has consistently prioritized efficiency,” Anand explained. “Clients possess vast amounts of data, both internal and external, which they utilize to achieve business objectives. This presents a complex technical challenge.” Appier’s approach involves providing solutions that are initially easy to implement, then progressively expanding to offer more comprehensive capabilities.

First Taiwanese Listing in Japan in Decades

Appier’s listing is historically significant as the first instance of a Taiwanese company being listed in Japan since Trend Micro’s IPO in 1998. Japan represents a key market for Appier, with clients including Rakuten, Toyota, and Shiseido, making the Tokyo Stock Exchange a logical choice.

Tokyo Stock Exchange Advantages

The Tokyo Stock Exchange was attractive due to its strong retail investor participation, liquidity, and trading volume. Furthermore, core investors like JAFCO Asia and SoftBank Group Corp. are also based in Japan. However, the exchange is predominantly comprised of domestic companies.

Recent reports, such as one from Nikkei Asia, have highlighted potential obstacles for foreign companies, including a higher corporate tax rate and a limited number of potential underwriters, particularly for smaller listings.

Paving the Way for Future Listings

Despite these challenges, Anand believes Appier’s successful debut could encourage other Asian startups to consider the Tokyo Stock Exchange. “Preparing for the Japanese exchange required adherence to stringent accounting practices, reporting standards, and compliance procedures. It was a lengthy process, and we were pioneers in facilitating external companies’ access to the exchange. Over time, this process will undoubtedly become more streamlined.”