Kaya Founders, a Philippines-based early-stage venture capital investor, announced that it has already raised 1 billion pesos (about $18 million) in the second close of its two new funds.
The second close was backed by a number of investors, including Singapore-based Pavilion Capital, Gabriel and Geraldine Sunshine of Boston-based hedge fund Bracebridge Capital, and US-based family office Concentric Equity Partners.
The new funds — Zero to One Fund and One to Ten Fund — will be sector-agnostic and invest in tech-enabled, industry-shaping startups across Southeast Asia, with a particular focus on Philippine companies.
The investment, which will focus on pre-seed and Series A startups, will range from $150,000 to $500,000. While sector-agnostic, the funds’ new investment themes include D2C e-commerce, B2B marketplaces, future of work, climate tech, and generative AI.
Kaya Founders targets raising $25 million in total for the two funds. It made a $12-million first close of the two funds in June last year.
“The two funds are in a ‘stapled fund’ structure where we have a consistent investment thesis and one unified team assessing deals. The main difference is the stage at which we invest,” Managing general partner Paulo Campos told DealStreetAsia.
The Zero to One Fund is focused on very early, pre-seed companies. It will invest at “day zero” of the journey when there is just a founder with a vision and potential, Campos added.
The One to Ten Fund, on the other hand, allows Kaya to invest in slightly more mature seed to Series A companies that are already showing promising signs of product-market fit, as well as double down on the most successful companies from the Zero to One Fund.
“Given where the Philippine startup ecosystem is currently, we feel the need to play an active role in catalysing deal flow by convincing talented individuals to throw their hat into the entrepreneurial ring by being a supportive partner in the earliest days of a founder’s journey,” Campos said.
Founded in 2021, Kaya Founders has 44 companies in its portfolio to date, spanning a wide range of sectors including e-commerce, software as a service, healthcare, financial services, agriculture, and more.
Noteworthy investments Kaya has made include e-commerce enabler Etaily; cloud logistics platform Locad; salary on-demand provider Advance; global plastic credits marketplace Plastic Credit Exchange; and microinsurance platform RuralNet.
Campos said the Philippines is a particularly exciting market to be investing in, yet remains underlooked and underinvested. The country’s digital economy is expected to reach $35 billion by next year, data cited by Kaya Founders show.
“We feel that many of the defining companies of the country will be built over the next decade, and we want to play a role in identifying, funding, and supporting these companies,” Campos said.
Vertical-specific B2B and B2C marketplaces and aggregators will usher in the next wave of innovation in trade, Campos said, adding that the vertical marketplace is a space Kaya Founders will continue to monitor and actively invest in.
Artificial intelligence is also something the VC firm is taking a closer look at as it seeks to find 30-40 qualified startups to invest in.
“We would be remiss not to mention AI—the defining technological revolution of our time. We spend a lot of time thinking about the intersection between AI and the business process outsourcing (BPO) industry, which is one of the biggest drivers of the local economy,” Campos stressed.
Kaya Founders was launched in 2021 by veteran entrepreneurs and angel investors Campos (former CEO, ZALORA Philippines); Lisa Gokongwei-Cheng (president, Summit Media; senior vice president, JG Summit), and Constantin Robertz (CEO, Locad; former CEO, Entrego).
The second close of the two funds comes as investors continue to prefer smaller deals in the region, as evident in the scarcity of big-ticket transactions in February. Of the 63 deals last month, 26 were seed rounds and 7 were pre-seed transactions, according to DealStreetAsia’s Southeast Asia February Deal Review.
