Eurazeo-backed Idinvest Partners has reached the 80 million euro ($96.9 million) first close of its Smart City Fund II to invest in mobility, property, energy startups in Asia and around the world.
According to Idinvest’s Singapore-based operating partner Julien Mialaret, the firm is on track to hit the 200 million euro ($242.3 million) final close of the fund by the second quarter of 2021.
The fund’s limited partners (LPs) are mainly corporates from Europe and Asia, including carmaker Stellantis, electric utilities EDF and Mainova, public transportation operator RATP, energy major Total, logistics champion Duisport, institutional investors as PRO BTP, and Thai real estate developer Sansiri through its venture arm Siri Ventures.
Mialaret added that this fund will draw a larger proportion of LPs from the ASEAN region compared to its 137 million euro Smart City Fund I, which was backed by Singaporean corporates Changi Airport Group and Singapore Power.
He did not disclose the names of the potential ASEAN LPs likely to join its second fund but said that they are in serious talks with conglomerates from Malaysia, Thailand and Singapore.
Mialaret added that the lockdowns triggered by COVID-19 last year have forced many ASEAN corporates to seriously re-think their digitalisation plans. Meanwhile, the fund has also found itself addressing a sweet spot in the market for traditional corporates looking for deal flow in new technologies in Europe and the US, where it is an active investor.
He added that most corporates are also internally re-assessing their investment strategies during this period.
“Resources are precious in a time like this, so companies are focused on what is creating value. I think a lot of the corporate open innovation programmes that weren’t strong are probably going to be discontinued. Some of the corporate venture companies (CVCs) that haven’t been producing a lot of value will also see a lot of shifts right now. (COVID-19 has) weeded out some of the lesser performing teams, funds, or corporate VCs,” shared Mialaret.
Idinvest’s second fund will dedicate about 60% of its deployment in Europe and the balance in Asia, focussing on China and Southeast Asia. It targets Series A to B companies in Southeast Asia, with ticket sizes ranging from $2-5 million, with room for follow-on funding. The fund targets companies in mobility, property, energy, manufacturing and logistics sectors.
Idinvest’s first Southeast Asian investment was in Grab in March 2019, which formed the fund’s mandate to help the ride-hailing unicorn seek out new technologies in Europe. It also recently invested in Singaporean co-living startup Cove in December 2020. Elsewhere in Asia, Idinvest has invested in three Chinese companies: DST Car, WeRide and Immotor.
According to Mialaret, Idinvest’s first smart city fund is on track to secure a net IRR of 18% or MOIC (multiple on invested capital) of 2-3x, which is the firm’s historical average in terms of fund performance. It made its first exit via German scooter startup Circ which was acquired by US scooter giant Bird last year.
It has at least one more exit in the pipeline via Volta Industries, an electric vehicle charging network firm, which was recently announced to be acquired by NYSE-listed SPAC Tortoise Acquisition Corp II in a $2 billion deal.