Singapore-headquartered Asia Partners, launched by former Sea Ltd president Nick Nash and Naspers B2C e-commerce division’s former CEO Oliver Rippel, announced the final close of its inaugural private equity (PE) fund at $384 million.
The fund – Asia Partners I – is the largest debut technology fund that is focused specifically on Southeast Asia. The PE vehicle seeks to make investments starting from $20 million across Southeast Asian tech startups.
The closing commitment of $384 million signals a strong investor appetite for the region’s burgeoning market for e-commerce, payments, mobile apps, and other tech and internet startups.
The fund made a $78 million first close in November 2019 and another close at $117.85 million in January 2020. The firm’s filing with the US Securities and Exchange Commission in January 2021 showed that the fund was able to secure $282 million in commitments at that time.
Asia Partners said limited partners in the fund include institutional investors, family offices, corporations, and individual investors across six continents. More than 7 per cent of the fund’s capital is from the firm’s co-founders and Advisory Board members.
The Advisory Board is chaired by Hsieh Fu Hua, the former CEO of the Singapore Exchange.
The fund’s investors also include the US International Development Finance Corporation (DFC) and the Deutsche Investitions- und Entwicklungsgesellschaft (DEG) from Germany.
Nash, who left Tencent-backed Sea in December 2018, earlier justified the move for launching a growth fund by saying that Southeast Asia had the potential to create over $400 billion of new technology sector equity value over the next decade.
“Asia Partners is deeply committed to supporting the growth of Southeast Asia’s next generation of entrepreneurs,” said Nash, managing partner and a member of the firm’s investment committee.
His projection was aligned with the earlier forecast of Bain & Company, which expects the region’s digital economy to triple in size and reach $240 billion over the next seven years, with Southeast Asia giving rise to at least 10 new unicorns.
Fundraising momentum slowed down for Southeast Asia-focused PE funds in the first half of 2020 due to the global coronavirus pandemic but activities in the private capital space are picking up, according to DealStreetAsia’s research and analytics report.
In the first six months of 2020, only one Southeast Asia-focused fund managed to reach the final close, against three in each of the three preceding semesters.
Asia Partners has six co-founders who represent six worldwide and regional nationalities: Jill Cheong Hsi Min, Pitra Ciputra Harun, Nicholas Avinash Nash, Oliver Minho Rippel, Kien Nguyen, and Vorapol Supanusonti.
The firm, which launched in 2019, is focused on the intersection of three key themes – the long-term growth potential of Southeast Asia, the rapid growth of innovative technology and technology-enabled businesses, and the scarcity of growth capital for these companies.
Asia Partners has already invested more than $90 million across its first three investments, which collectively have operations across every major economy in Southeast Asia.
In a report released in February, Asia Partners noted an acute shortage of capital in Series C and D stages in Southeast Asia, with the funding gap widening further in 2020 from a year earlier.
Funding between $20 million and $100 million categorise as Series C and D rounds or growth capital, they are crucial for companies looking to scale and go to the next level of business.
Nash earlier said Southeast Asia deploys only 0.05 per cent of its annual GDP into growth equity transactions per year while China deploys 0.08 per cent. The difference means there is $1.09 billion of missing $20-100 million investments in Southeast Asia each year, indexed to China’s ecosystem, and $4 billion missing relative to the US. The gap was only about $930 million in 2019.
“We were hoping we would be wrong about this in 2020 and at the beginning of 2021 but there remains an acute shortage of capital in the growth equity stage,” said Nash.