As one of Asia’s most active technology venture capital investors, East Ventures has locked in capital from prominent family offices and entrepreneurs across the continent, widening its footprint in Southeast Asia.
Singapore-based venture capital firm East Ventures announced today that it has raised a US$27.5 million new investment fund for early-stage technology startups in Southeast Asia. This is the fifth East Ventures investment fund to date, and partners Willson Cuaca, Batara Eto, and Taiga Matsuyama, plan to deploy the capital to further their thematic investment thesis as the startup ecosystem matures.
According to Singapore state-investment firm Temasek Holdings, Southeast Asia is leading the growth of internet users in Asia with its internet economy projected to grow to more than US$200 billion by 2025. East Ventures has successfully contributed to Indonesia, one of fastest growing internet market in the world, helping to build the startup ecosystem in Asia.
With 80 active portfolio companies in Southeast Asia, East Ventures is anticipating the boom, having earned itself the moniker as one of the most active tech startup investors in Asia. From 2015 to 2016 the firm’s inbound deal leads increased 133% from 331 to 774. Despite an increased inbound deal flow, East Ventures’ selectiveness has remained constant, investing in 2.5% of incoming leads in 2016. The firm has backed more than 20 new startups per year and witnesses a follow-on investment rate of 75%.
With 80 active portfolio companies in Southeast Asia, East Ventures is anticipating the boom…
East Ventures focuses primarily on companies with strong founders that are in the idea/prototyping stages of their company building process or have a product with early traction. East Ventures method of backing pre-product companies early seems to be paying off. To date, the firm has made early-stage bets on fast-growing tech companies like Tech in Asia, Tokopedia, Traveloka, Kudo, Shopback, IDNTimes, Moka POS, Talenta, Jurnal, Jojonomic, Ralali, Popbox, Ruangguru, Cermati, 99co, Glints, and Omise.
“East Ventures is the undisputed VC in Southeast Asia, in my opinion. I have worked with ten VCs in the Southeast Asian region and none can match EV’s overall value-add. Both potential investors and entrepreneurs respect their pro-founders philosophy. As a founder I have seen the first-hand benefits of working with the fund.” Kudo successfully built a platform to bring financial inclusion, via its network of 300,000 agents, to the unbanked population in Indonesia.”
— Albert Lucius, Co-founder of Kudo
East Ventures works closely with local and regional governments to help identify trends and opportunities in their respective technology sectors. This in turn fosters development in emerging markets. In Asia, East Ventures’ portfolio companies are spread out across Singapore, Indonesia, Malaysia, Thailand, and Japan.
Investing in Founders
East Ventures has a thematic investment thesis. The firm identifies technology verticals that are poised to expand in each market, then backs people whom it believes will be future leaders of the space. Once a clear category winner has been established, the firm will shift its focus to other parts of the value chain as the market matures.
“As East Ventures’ first investment, we have been in a relationship for seven years and can attest to their supportive and founder-friendly nature. Their loyalty to portfolio companies has built a vast portfolio network and helps build the network effect between entrepreneurs in the Southeast Asia startup community.”
— William Tanuwijaya, Founder and CEO of Tokopedia, Indonesia’s largest consumer-to-consumer (C2C) e-marketplace.
Today, Tokopedia serves over one million online merchants and is considered the clear C2C e-commerce winner by many in Indonesia.
Once East Ventures fulfills a theme and invests in the market leaders of that category, they move onto a promising vertical ensuring they stay ahead of the game.East Ventures’ investment philosophy is a highly founder-centric one aimed at helping young and first-time founders rapidly scale companies.
“East Ventures has been instrumental to Tech in Asia’s growth. We’ve received solid feedback from Willson and Batara since Tech in Asia’s early days. Their advice sticks to me up to today.”
— Willis Wee, Founder of TechinAsia
In the past, East Ventures has seen successful exits of seven portfolio companies. Groupon acquired Indonesian daily deals site Disdus in 2011, Korea’s Yello Mobile purchased price comparison site PriceArea in 2014, and Singapore-based media firm Migme bought up local fashion e-store Shopdeca in 2015. One of Indonesia’s largest media conglomerates bought up e-reader platform SCOOP in 2016. East Ventures’ assets under management in aggregate across the funds in South East Asia have increased ten fold.
East Ventures’ networks enable it to help companies both expand outside of Indonesia into the region and also enter Indonesia from the region. E-commerce rewards company ShopBack is one recent example of a Singapore-based startup entering Indonesia. “East Ventures has been a strong supporter of ShopBack. With strong market access and networks, EV’s guidance has been instrumental to our growth in Indonesia,” said ShopBack CEO Henry Chan.
Building an Ecosystem
In the past year, Indonesia saw a 700% increase in the announced dollar value of tech venture deals. Big players like Sequoia Capital, SoftBank, Alibaba, and others have become increasingly serious about Indonesia’s budding technology ecosystem.
East Ventures is also investing heavily in the archipelago’s ecosystem. It recently set up two co-working spaces in Jakarta under the name EV Hive (located strategically in South Jakarta and BSD City), which it also manages. In less than two years, EV Hive has become one of the most high-traffic co-working spaces in Indonesia, as the venue hosts more than 100 public tech events every year, with an audience of more than 3,000 and speakers from various industries, startups, and corporates.
“I have been working with Willson and East Ventures for over 5 years in 3 different startups – I truly believe that the greatest strength that East Ventures have built till today is the network of amazing entrepreneurs. We are able to share our experiences and learn from each other be it through mistakes, strategies, or operational structures at different stages of our startups.”
— Jason Lamuda, CEO of Berrybenka and former co-founder of Disdus.
Alongside the existing co-working spaces, East Ventures has been working with local and regional governments to further build the startup ecosystem in Asia.
“East Ventures has been Traveloka’s key partner in scaling within Southeast Asia in the past four years. They have stayed true to the founder-friendly approach and we are grateful for the tireless support EV has provided.”
— Ferry Unardi, co-founder of Traveloka, the largest online travel agency in Indonesia. East Ventures invested in the team during the company’s ideation phase.
With its new investment fund for Southeast Asia, East Ventures aims to ramp up its activities and empower more first-time entrepreneurs. The firm wants to leverage technology to disrupt traditional industries, fill gaps in various verticals, increase stakeholders’ value, and ensure significant return on investment to its shareholders.
In 2017, East Ventures expects its number of leads to double for the year while its number of deals will remain the same. The firm believes there will be more mergers and acquisitions this year involving its portfolio companies. However, startups in the region can expect there to be little activity in series B investments. The fund aims to shift its focus in verticals as the ecosystem matures and clear category winners mostly backed by East Ventures have emerged.
East Ventures is one of the most active early-stage venture capital firms in Southeast Asia. The company provides early-stage seed capital to promising startups. In total, it has five offices in Singapore, Jakarta, Tokyo, and San Francisco, with its global team having invested in hundreds of companies across Asia and the US. East Ventures’ portfolio focuses on commerce, social, games, SaaS, and mobile services.