Denmark’s 3B Ventures launches $60m impact fund in Malaysia

Danish venture capital firm 3B Ventures has announced the launch of a $60-million Frontier Fund II targeting impact investments in Southeast Asia, it said in an announcement today.

The fund will focus on investments in energy, water, agriculture, education and health sectors. According to 3B Ventures, it will target startups at seed, bridge or Series A stages as well as make follow-on investments.

The firm claimed that it has secured initial financial commitments for its fund, and plans to raise the rest from family offices, GLICs, and accredited investors. 3B Ventures general partner James Digby said the firm is aiming for a $30-million soft close by end of this year and will start deploying capital in 2019.

“Soft commitments total $12 million currently from various family funds, a pension fund and a handful of HNWI’s. A final close is expected by the end of third quarter of 2019,” he told DEALSTREETASIA in an email interaction.

3B Ventures has also appointed Andrew Tan of Malaysian VC firm TinkBig Ventures Capital to be its fund manager, as it will be setting up an office in Kuala Lumpur to operate the fund.

TinkBig is a comparatively new venture capital firm in Malaysia that has invested about $2.4 million in eight companies as of early last year, mostly consumer focused. Among its portfolio companies are BurgieLaw, Refash, Sportsplay and GOtixs. The firm picks up a stake ranging between 7.5 per cent and 15 per cent.

“We see such a high quality of startups in the market that have impact integrated in their business. These companies are scalable, profitable and good businesses. Corporates, government-linked investment corporations (GLICs) and industry leaders recognize this opportunity and show more and more interest to collaborate with startups and VCs. The [Malaysian] government has been very supportive here to facilitate this process,” said 3B Ventures general partner Jan-Cayo Fiebig.

Impact investing in UN Sustainable Development Goals is projected to be worth over $12 trillion to the private sector in Business Opportunities by 2030, according to AlphaBeta and the Business and Sustainable Development Commission. The fund is a strong sign for the new era of investing in Malaysia, claimed 3B Ventures.

“On the macro level, we recognize the historic opportunity presented by technology as we look to see how our innovations can impact the lives of the next 3 billion. We invested in the fund because it has the right strategy and the 3B team has the network, experience and expertise to execute it,” said IWI Technologies partner John Raabo.

IWI is also an initial investor in Frontier Fund II’s predecessor, Frontier Fund I.

Digby said that 3B Ventures was set up last year and Frontier Fund I was a $500,000 special purpose vehicle raised through HNIs and family funds based in the Nordics.

The fund has made investments in visual assistance startup Be My Eyes, women-focused personalised wellness startup Yesmom and AI startup Agrieye.

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