Claiming to be the first venture capital (VC) firm to focus on gender lens investing in Southeast Asia, Teja Ventures sees a tremendous opportunity waiting to be unlocked in the space.
“In investing, people often see gender as a limitation rather than an opportunity. I wanted to change that,” Teja Ventures founding partner Virginia Tan told DealStreetAsia. “We structured Teja Ventures using the fundamentals of venture capital to invest in tech-enabled companies that create a positive ecosystem impact for women.”
Gender lens investing seeks to bridge the financing gap for businesses targeted at women and/or founded/led by women without sacrificing financial returns.
“Women are actually multiple markets in one. They are not just 50 per cent of the economy but control 80 per cent of global consumer spending,” Tan said, citing a Bloomberg report.
Women in emerging markets face a credit gap of $260-320 billion, according to a G20-commissioned report by International Finance Corporation and global consultancy firm McKinsey & Co, which cited cultural perceptions and unfavourable regulations as the main obstacles.
A separate McKinsey report in 2015 found that achieving gender equality in the workforce could add up to $28 trillion to global annual GDP by 2025.
Comparing the China and Southeast Asia markets, Tan said Chinese investors are ahead in terms of recognising the economic potential of the She economy.
“I find in Southeast Asia and South Asia that gender lens investing is seen as much more of a social or impact concept and there is much less understanding that this is a hugely untapped commercial opportunity,” she said.
The venture capital industry is dominated by men and there is enough empirical evidence to prove that male decision-makers tend to back businesses founded and/or led by men. Tan says Teja Ventures, much like other VC firms, looks for innovation and scalability of business models and the strength of the entrepreneur. It has an additional requirement for startups – either have women founders or make a positive social impact on women.
“Our portfolio currently has a 60 to 40 per cent ratio between female and male founders. When it comes to gender lens, we target companies with the biggest potential to create a positive impact on women as a demographic, whether as a consumer, workforce or end-user. We go beyond looking at the gender identity of the founder,” Tan said, adding that at the heart of Teja’s investment thesis is the role of technology in creating impact at scale in a cost-effective way.
Teja Ventures is currently raising its debut fund and seeks to close it by the end of this year. Tan refused to divulge the target corpus for the fund but admitted that the COVID-19 pandemic had hampered fundraising.
The VC firm focuses on Southeast Asia, with a majority of its current portfolio based in Indonesia, but also has some exposure to China and India. Teja Ventures, which currently has ten companies under its portfolio, makes early-stage investments from seed to pre-Series A, with the ability to top up in later rounds.
The firm had invested in Indonesia’s FMCG supply chain startup KlikDaily’s pre-Series A round last year. Other portfolio companies include AI-driven social commerce platform Shox and India-based online-to-offline distribution platform Frontier Markets.
“Going forward, I would say Indonesia is our key market in Southeast Asia, given the size of the market, and we are seeing a lot of innovation on the ground and opportunities for disruption of traditional business. We are also currently looking at a couple of deals in Indochina, the Philippines and Singapore,” Tan said.
Women, she pointed out, are both the biggest drivers as well as the biggest beneficiaries of new business models in the internet economy. In the post-pandemic world, she believes that women stand to benefit more, especially as a result of digitalisation.
“The global pandemic has shown us a lot of the gaps in our existing systems. So what was seen as “socially good” and “impactful” is now becoming “urgent” and necessary.” We believe that women are likely to be disproportionate beneficiaries of this digitalisation, increasing their access to goods, services, and opportunities that they may not have had [before COVID-19],” she added.