Charticle: First-time VC fund managers in SE Asia had one of their toughest years in 2023

First-time general partners in Southeast Asia looking to secure capital for their inaugural venture capital (VC) funds had a tough time in 2023 as capital allocators (aka limited partners, or LPs) tightened their belts and preferred to stick to established fund managers with proven track records.

In 2023, only three debut VC funds achieved a final close, compared with 12 in 2022, according to SE Asia’s VC Funds: H2 2023 report by DealStreetAsia DATA VANTAGE.

The three final closes raised a combined $90 million, down 85.7% from the $630 million amassed by the 12 debut funds that secured a final close in the previous year.

The three maiden VC funds that closed last year were by the Indonesia-centric Creative Gorilla Capital at $20 million; another $20 million by Resolution Ventures; and $50 million by the corporate venture fund of aelf, a Singapore-based developer of Layer 1 blockchain networks.

Creative Gorilla Capital (CGC) is a VC firm formed by Future Creative Network (FCN), Malaysia-based Vynn Capital, and adtech firm Pomona. Launched in January 2023, its $20-million Gorilla Silverback Fund backs consumer-focused early-stage startups. Among its portfolio companies are the alternative protein startup Offmeat, mortgage startup Ringkas, beauty product Kynd, and fashion line Allura.

aelf’s fund, on the other hand, eyes Web3 startups that are addressing substantial market needs spanning gaming, DeFi, NFTs, and public goods. It counts decentralised Web3 game ecosystem Crystal Fun; and Mythic Protocol, an entertainment company developing games, among its investees.

Resolution Fintech Fund I, meanwhile, received commitments from fintech-interested institutions, family offices, finance executives, and entrepreneurs. The fund invests across pre-seed and seed funding rounds in Southeast Asian fintech startups.

Drop in overall fund closes

The three debut funds were among the 26 vehicles closed by Southeast Asian VCs in 2023. The number of final closes fell over 38% from the preceding year’s historical high of 36 closes.

However, the capital amassed from the 26 final closes in 2023 rose 22.5% to a record $5.39 billion, but this was heavily skewed by the $2.1 billion haul of B Capital’s Growth Fund III, which closed in January 2023. B Capital’s growth fund typically invests between $10 million and $100 million in Series B-, C-, and D-stage companies, in sectors such as software, healthcare, fintech and, more recently, climate-tech. It also focuses on opportunities across the US, China, India, and Southeast Asia.

Discounting B Capital’s vehicle, the capital raised from final closes fell 25.2% year-on-year.

Vertex Ventures’s fifth Southeast Asia & India fund secured the second-highest final close last year. The vehicle raised $541 million, or about 80% higher than its predecessor fund.