German development finance institution DEG has committed 25 million euros ($28.4 million) to Indonesian venture capital firm East Ventures’s second growth fund, according to a disclosure.
The fund, EVG Fund II, will target investments in tech companies that are incremental for the economy, such as B2B distributions and logistics, artificial intelligence and cloud-based applications, e-commerce, fintech, healthtech, and digital media, DEG said.
DealStreetAsia had in December reported that the VC firm is targeting a $350 million final close of its second growth fund in the first quarter of 2022. The fund will invest in mid to later-stage tech deals in Southeast Asia, with a focus on Indonesia.
The first fund in the series was closed at $250 million in 2019, exceeding its initial target of $150 million. It was launched by EV Growth, a joint venture between East Ventures, venture capital firm SMDV, which is backed by Indonesian conglomerate Sinar Mas, and Yahoo! Japan Capital, which merged with LINE Ventures in 2021 and rebranded itself as Z Venture Capital.
East Ventures took control of the JV and assumed its management in March last year. EV Growth has since been rebranded as East Ventures (Growth Fund).
The debut growth fund has invested in over 20 startups across Southeast Asia, such as Traveloka, Grab, Gojek, Sociolla, Ruangguru, Shopback, Stockbit, and Fuse.
The second fund, DEG said, will spur the growth of the Indonesian economy by creating jobs and developing business sectors.
“Capital will be used to promote growing businesses in the region creating demand for qualified labour,” it said. “Capital will further be used to invest in innovative technology companies within traditional industries (e.g., SME digitization, financial inclusion, healthtech, etc.) thereby supporting development of sectors.”
DEG, the investment arm of the German state-owned development bank KFW, has been an active investor in Southeast Asia. It recently disclosed a $10 million funding for commercial lender HDBank in Vietnam and a $17.5 million loan for a Vietnam-based farm animal medicine manufacturer.