Southeast Asian fintech-focused investor 1982 Ventures is looking at ramping up deployments in the region even as it approaches the first close of its fund.
“We are announcing the first close of our fund shortly. We are now the most active fintech investor in the region and our pace is set to accelerate,” 1982 Ventures co-founder and managing partner Herston Elton Powers told DealStreetAsia in an interview.
The firm’s LP base is a mix of institutional investors, local and global family offices and HNWIs. The firm has also roped in a US fintech firm that is valued at over $7 billion as a strategic LP.
The Singapore-headquartered firm has invested in 10 startups, mostly in the fintech space, across Indonesia, Vietnam, the Philippines, and Singapore. These startups include Brick, Fundiin, Homebase, Hugo, Infina, NextPay, wagely, Go Zayaan.
Powers predicted that the next set of Southeast Asian unicorns will likely emerge from the fintech space. Over the next two years, the fintech-focused investment firm expects to make another 20 investments.
“Our position as the only seed fund exclusively focused on fintech in the region has benefited our ability to source investments. In other markets such as the US, China, Europe, Brazil, fintech companies are amongst the most valuable VC-backed companies,” he added.
Powers and his partner Scott Krivokopich Two were principals at fintech-focused investor tryb before establishing 1982 Ventures.
As an early-stage fintech fund established amid COVID-19, 1982 Ventures is aiming to keep fundraising and deployment flexible. “Fortunately, our LPs have stayed committed and we have not been impacted on this front. However, LPs who have not made decisions are probably delaying their investment decisions in the short term,” Powers had told DealStreetAsia in an interview in April last year. “Our timeline hasn’t changed but we have to be flexible with regards to LPs and when founders are ready to close their fundraising rounds.”
While the firm did not disclose internal targets, industry sources had told DealStreetAsia in end-2019 that 1982 Ventures is targeting to raise around $20 million for its first fund.
Vietnam as a core market
Within the region, the firm is specifically bullish on the Vietnamese market given the country’s growth in e-commerce, online travel and ride-hailing sectors. “But the fintech story is just getting started,” he noted.
Powers believes that digital payment adoption by the Vietnamese government is expected to unlock additional opportunities to build more fintech businesses. “In short, we are watching all fintech segments but are very keen on the entire payments value chain, digital banking and lending (consumer and SMEs), open-banking, insurtech and fintech-focused enterprise SaaS solutions,” he added.
The firm’s Vietnamese portfolio includes affordable mortgage and property financing options Homebase, buy now, pay later startup Fundiin, and digital investment platform Infina.
1982 Ventures, which writes cheques ranging from $100,000-$500,000, is seeking to fill the gap at the seed stage. Powers observed, “the seed stage is the most attractive space to invest in SE Asia from risk-adjusted returns basis and presents the largest opportunity.”
Per DealStreetAsia’s SE Asia Deal Review: Q4 2020 report, fintech startups inked 125 deals worth $1.258 billion in 2020, excluding the estimated $300-350 million investment from Facebook and PayPal into ride-hailing giant Gojek’s e-payment arm GoPay.
Within the fintech space, e-payment startups raised $634 million followed by P2P firms ($142 million), digital banks ($116 million), insurtech ($92 million), and cryptocurrency-focused startups ($58 million).
Vietnam is home to nearly 123 fintech startups of which 75% represent the sub-segments of wealth management, payments, P2P lending, blockchain, and POS, according to the Vietnam Fintech Report 2020.
In one of the country’s big-ticket investments in the space, VNLIFE, the parent firm of Vietnam’s digital payments major VNPAY, last week announced a $250-million Series B round led by General Atlantic and Dragoneer Investment Group, with participation from PayPal Ventures and EDBI, the corporate investment arm of Singapore’s Economic Development Board.
Earlier this year, M-Service, the company behind Vietnam’s largest e-wallet by users MoMo, had raised over $100 million in a Series D fundraising round.