As it nears the final close of its $80 million second fund, Japanese VC firm Genesia Ventures says it is likely to spend around 30 per cent of the fund for Southeast Asia.
“We don’t really have a budget (for Southeast Asia) but with our first fund we spent around 30 per cent for outside of Japan, and 70 percent for Japan. For the new fund I think it would be the same,” said Takahori Suzuki, who is in charge of the Genesia’s overseas investments.
Genesia hit the first close of its new fund at $45 million in January this year and is expecting to reach the final close in September.
Suzuki said the VC firm has already started deploying from its new fund, backing eight companies in total so far, including three in Southeast Asia – Indonesia’s insurtech company Qoala and hospitality startup Bobobox, as well as Singapore-based healthtech firm Docquity.
He added that the firm will be looking to make three more Southeast Asian investments by the end of the year.
Its current target markets in Southeast Asia are Indonesia, Singapore and Vietnam. However, Suzuki said the firm is also keeping an eye on opportunities in India, as it has noticed a trend of Indian startups wanting to expand in Southeast Asia.
“Firstly, because the Indian market is very similar to Southeast Asia, but also because the Indian market is super competitive,” Suzuki said. “Some Indian players don’t want to compete there. Southeast Asia, in contrast, is less competitive right now. That is why they decide to expand here.”
The second fund, Suzuki said, sees participation from all of the firm’s first fund LPs, which mostly include prominent Japanese corporates such as Mizuho Bank, Tokyu Fudosan Holding and Marui Group.
While Genesia does not invest strategically for its LPs, it focuses on fields that are relevant to its backers’ digital transformation agenda and often passes on the opportunity for them to invest in their later rounds.
“Our target is in seed stage, whereas big corporate cannot invest in seed. But we after we invest, we report them to the LPs so they know about the companies. So, once the company grows and raise their Series A, the LPs can easily consider to invest. This is a kind of collaboration we do with our LPs,” he said.
Genesia’s first fund was closed at $40 million in 2016. Till December 2018, it has invested in 47 startups, including 35 Japanese companies. Suzuki said the fund’s early stage investment budget has been fully deployed, with a portion of its follow-on budget still remaining.