Sticking to it’s mantra of “cross-border deals” Singapore-based venture capital fund Jungle Ventures, is keen to invest in companies in Indonesia with the same ethos.
In an interview with DEALSTREETASIA, Jayesh Parekh, Managing Partner, Jungle Ventures talks about plans for its recently closed $100 million second fund. Jungle’s new fund is ten times larger than its first fund of $10 million, which it raised in 2012.
He also discussed the response the firm has got for its seed-stage investment fund SeedPlus, which it launched earlier this year in collaboration with venture capital (VC) partners Infocomm Investments Pte Ltd (IIPL), Accel Partners (India) and RNT Associates. Two strategic partners in this joint entity are Google South East Asia and PwC Singapore. It recently also roped in International Finance Corporation as an investor in the fund that is raising $18.5 million.
How does the new fund look like for Jungle Ventures?
It’s a terrific boost from the first one. We started four years ago and in the first three years we invested from the first fund. A year ago we started investing from the second fund which we just closed $100 million. It’s a pan-Asia fund, which is basically Singapore, Malaysia, Indonesia, Thailand, India and we don’t do China, Korea and Japan. We are still a little small to try and capture those markets.
We try to do cross-border deals. We won’t do a deal in India for India but if there is somebody like ZipDial, which was in India but they wanted to expand to Singapore and other regions. We were one of the last to get into that company and the first to get out because Twitter bought them out. Cross border is what we look for and specialise in adding value to companies that want to branch out.
So it could be companies like ZipDial which came out of India and expanded to Singapore, but there are also companies in Singapore that want to branch out to the US for example. We have a company that is Korean fashion called Pomelo which is in Thailand and that company is now beginning to expand into Singapore, it will possibly go to Indonesia and ultimately it could go to the US. So that’s really our added value, because we specialise in cross border. So its a tech and digital play. We specialise in fintech and we have also done market places.
A few of our companies are doing extremely well. One of them is Pomello, then there is Bangalore-based Livspace that is doing extremely well. Then there is another online inventory management, SaaS platform called TradeGecko.
There is mention about Jungle Ventures getting into newer markets with the new fund, can you please elaborate?
So far we are focussing on Indonesia as the next market. We are very well entrenched in Singapore, in India and we’ve done investments in Thailand and Malaysia. In Indonesia, we have done two investments, one being RedDoorz. Indonesia is a big market. So we are focussing on these countries for now. If we get a deal from Vietnam or Philippines we will see it because we are just inundated with deals. We’ve had three exits in the first fund and we had the fourth exit through Momoe. With all of that the deal in flow has become significant.
Now that we a SeedPlus fund which is a smalerl investment fund, in which Mr Tata is also backing is us, we are going to expand that and potentially look at IoT Plus, Health Tech Plus, so we will look at sectoral funds rather than geographic expansion.
How about new countries?
We have deployed about 30 per cent of our fund already, and 70 per cent of the money we have left to work with and we have to keep some money for follow on investments. I think 2017 will be more about consolidating in that region that we have which is the fintech, marketplace, F&B platform that we have invested in. So those are the companies that we are going to nurture. Potentially, post 2017, when we start looking at the third fund is when we are going to look at expanding to other markets.
Any other sectors that you are keen on investing in?
I personally would like to get into innovative contrarian investments. So there is one investment that we have done in iFlix, which was a small investment just to test it out and it was a huge success. We started at expanding in Philippines and are growing into other markets. Those kind of innovative and contrarian ideas is what we are looking at.
In the second fund are you also going to be looking at larger cheque sizes?
We now do more of Series A, $3-5 million. Before we were doing around 0.5 million, which we will still do but $3-5 million is our sweet spot now that we have a $100 million fund.
Would you also want to cut into the Series B and beyond rounds?
Not yet, not on this fund because I have to keep some follow on. Even if I have to keep my pro-rata Series B I need some money. So now it’s up to Series A and follow on pro-rata to continue to make sure I protect my interests.
Do you also allocate the funds according to geographies?
Singapore is the strongest for us. And, definitely India a huge market, so those are two big countries. Indonesia is a big focus of us, Malaysia also we have invested in like iMoney, CatchThatBus. But to us Indonesia is really the next big push.
How do you see the whole funding environment in Southeast Asia and India?
It’s growing extremely well. Around five-ten years ago, I watched as an angel investor – I watched the play and it was all small amounts and small numbers, people were trying to find good deals and investors. Now the ecosystem has grown dramatically across the board. It is not just Singapore or India, but when I travel to Malaysia, Indonesia or Thailand you see the who ecosystem growing. Ecosystem of entrepreneurship is buzzing everywhere, angel investors are coming forward, venture funds are getting taking more chances to bet on new sectors and new geographies, which is bound to happen because it can’t be a herd mentality.
In Southeast Asia, Singapore, Kuala Lumpur, Jakarta, Bangkok are all buzzing. Some are ahead of others for various reasons, cultural reasons, the risk taking ability. However, India I am extremely bullish, it has just grown. It is so difficult for us to track the in coming deals, we are just inundated with deals.
How has been the response to SeedPlus like?
We make smaller investments through it and we are looking for best in class and we have a separate team that looks at that. We at Jungle Ventures are mentors, so we seed that along with Infocom development authority, we have a joint venture with them along with other partners like Accel Partners. We have invested in four companies so far through SeedPlus.