Japanese early stage investor Genesia Ventures plans to raise its second fund with a target corpus of $80-100 million next year that will target investments in both Japan and Southeast Asia.
Speaking to DEALSTREETASIA, Soichi Tajima, General Partner and Yuto Kono, Principal of Genesia Ventures who is responsible for investments in South East Asia, said that the $40-million first fund has already invested in 30 startups in Japan and six startups in South East Asia to date.
“In terms of Southeast Asia, Indonesia, Vietnam and Singapore will be the main investment targets, but in the future, we will also strongly consider expanding to Thailand, Malaysia, Philippines and India,” the executives said in an email interview.
Genesia Ventures was set up in August 2016 and is led by Soichi Tajima, the former CEO of Cyberagent Ventures. The firm focuses on the seed and pre-series A stages across various sectors, including new economy, digital media, AI and robotics.
In an exclusive interview with this portal, Tajima and Kono talk about the fund’s investment and expansion plans in Southeast Asia.
How many investments has Genesia Ventures made in Southeast Asia to date?
We have invested in six startups in South East Asia – including Homedy and Luxstay in Vietnam and Docquity in Singapore. There are 3 undisclosed startups [that] we have invested in [that are in] Indonesia.
What stages of funding do you focus on?
We invest in startups from seed to pre-series A stage ($100K~1M) as the initial investment and we can do follow-on investment in the next round. Potentially, our cumulative investment amount per startup is up to $3 million.
How many exits have you had in SE Asia and Vietnam from Genesia Ventures Fund 1 to date?
Since our fund was established less than 2 years ago (December 2016), we have not had any exits yet, nor [are we] seeking any short-term exits. Our investment is geared towards the longer-term horizon to invest and work together with visionary entrepreneurs that create/redefine the industry in South East Asia.
Which are the markets/countries within SEA that you would be actively watching for deals? And, why?
We’ve invested in startups in Indonesia, Vietnam and Singapore so far. Indonesia has the biggest population and economy in Southeast Asia. Vietnam has a growing young middle-class population. Singapore has the most mature startup ecosystem in the region. Our past investment experience and network in Indonesia, Vietnam and Singapore is one of the biggest reasons for us to focus on these markets.
Are you looking to raise a new fund for SEA? Will this focus more on certain markets in the region? If so, which ones?
We are planning to raise our second fund with $80-100 million in 2019. Like our first fund, we will only invest in startup companies from seed to pre-series A stage at the initial investment. And, we are going to put enough budget aside to invest in companies at Series-A or later rounds as a follow-on investment. Our cumulative investment amount per startup would be up to $5 million.
In addition to Japan, South East Asia will still be our main focus for the next 10 years due to its economic growth. Indonesia, Vietnam and Singapore will be the main investment targets, but in the future, we will also strongly consider expanding into Thailand, Malaysia, Philippines and India.
In Vietnam, Genesia led an investment in Luxstay, a platform to connect rental homeowners with tourists or business travellers and realty portal Homedy. What is driving your investment strategy in the country?
In Vietnam, there has been an increase of middle-class layer in their 20s-30s. We believe alongside with the growth of the economy, people will grow to have better jobs, have own family which naturally leads to the intention to purchase homes, cars, financial services, travel and provide better education for their kids. These trends will be similar to what happened in Japan in its prime. We would like to support startups that are aiming to improve and support Vietnamese people’s lifestyle and life events.
Which other sectors will be on the radar of Genesia Ventures in Vietnam after the two sectors above?
We basically would be keen to consider any sectors that leverage technology as their core competency but to give few examples that we have looked at so far are: Fintech, Real Estate, Travel, Healthcare, Education and Logistics. Similar to what we have invested in Japan, we also would like to consider investing in B2B Saas and B2B Marketplace in Vietnam as well.
What do you think about the seed, series A stage investment in Vietnam? What drives your investment thesis?
Despite the startup growth in Vietnam in the past 10 years, there are still areas within the startup ecosystem that could use external support. By utilizing Genesia Ventures’ business know-how and business network, we hope to provide more impactful value-add to bridge the gap in the ecosystem. Furthermore, due to the good relationships between Japan and Vietnam, there are a number of Vietnamese who are working in Japan. While we support the domestic startup ecosystem in Vietnam, we also hope to create opportunities by leveraging each country’s strengths.
What is Genesia’s goal for 2018 in Southeast Asia in general and Vietnam in particular?
Throughout 2018, we will focus on new investments and supporting our existing portfolio companies, as well as solidifying our South East Asia team. Despite our past experiences in CyberAgent Ventures, Genesia Ventures is still a new VC entity. For that, we would like to strengthen and increase our investing activities. In 2018 alone, we have already considered investing in 10 startups in South East Asia.