Singapore-based Golden Equator Capital expects to exit three investments from its first technology and innovation fund in the next 12 months, CEO and founder Shirley Crystal Chua told this portal in an email exchange.
“With three potential exits in sight within the next 12 months, we are looking to achieve an IRR of 22 per cent; for the rest of the fund life, our target is to achieve an IRR of 25 per cent and above,” Chua said about the fund which started investing in 2015.
The first fund had invested in ten companies, including Paktor (now M17), MC Payments, Glints, Vault Dragon, Eunoia, MyPay, Oaxis, and waach.
Golden Equator Capital announced the raising of its second technology fund, Technology and Innovation Fund, in Q1 2017 with a corpus of $100 million. Currently, the fund is unclosed, with a representative of Golden Equator saying it was “still in the midst of fundraising and talking with various parties on potential collaborations”, with the fund’s first investment being into Indonesian e-commerce startup Sale Stock.
Recently, the firm also launched the Korea-Singapore Healthcare Incubator in partnership with Korean regulatory and clinical research provider C&R Healthcare Global (C&R).
Korea-Singapore Healthcare Incubator
The Korea-Singapore Healthcare Incubator, Chua says, will focus on companies operating in medical devices, medical technology, cosmetics and cosmeceuticals.
“Golden Equator is interested in a broad variety of companies covering biomedical, pharmaceutical, medtech, consumer healthcare, as well as B2B enterprise models for digital health,” she said.
The contours of the partnership with C&R and the Korean Health Industry Development Institution will see the former identify and financially support Korean companies operating in these sectors, with Golden Equator facilitating access to investors and business partners, advisory and commercialisation insights, and regional expansion and market entry strategies.
Given the unaggregated nature of the emerging markets in Southeast Asia, Chua elaborates: “Korean healthcare startups cannot apply a ‘copy and paste’ business model to the dynamic and diverse markets of Southeast Asia. There is a strong need for founders to learn and understand the local nuances and different business landscapes in the region.”
The healthcare market in the Indo-Asia Pacific region, comprising pharmaceuticals, medical devices and healthcare technology, is forecast to reach $510.7 billion in 2017, up from $472.5 billion in 2016, and is estimated to corner close to 30 per cent of global revenues, according to business consultancy Frost & Sullivan.
It also remains one of the fastest growing regions globally, with a growth rate of 8 per cent for 2017 compared to a global growth rate of 4.8 per cent. With public and private health systems increasingly embracing and funding technology-enabled care, there is also a growing appetite for exploring the adoption of robotics, automation and artificial intelligence in clinical settings.
Investment strategy & ASEAN exit landscape
Golden Equator Capital is part of the Golden Equator group of companies—independently managed companies covering fund management, wealth management, a fintech platform, business consultancy, and SPECTRUM’s technology and innovation business club.
Due to these assets, Chua claims that the investment firm can leverage this “ecosystem of resources and extensive regional network to connect founders and companies to capital, strategic business networks, investment strategies and fundraising advice”, as well as facilitate their access to business and digital consultancy services that can assist their founders with market entry and expansion strategies.
Talking of the ASEAN exit landscape, Chua says more and more technology companies are likely to raise funds via the capital markets.
“As investors gain more understanding and awareness of technology investments, we foresee that tech listings will start to increase over the next few years. However, due to the fragmented nature of Southeast Asian markets, trade sales and acquisitions are still the primary modes of exit,” Chua said.
She says mergers and acquisitions in the region would be fueled by multinational corporations (MNCs) and technology majors becoming “more aggressive in pursuing strategic acquisitions of startups as a way to develop new revenue streams, fast-track expansion across geographies, and consolidate market share” and the entry of North Asian players such as Chinese, Korean, and Japanese corporates into the region.
The final factor that Chua feels is critical is the growing interest in the technology sector across Southeast Asia and in Hong Kong, particularly from institutional investors. The increased interest from private equity (PE) firms and sovereign wealth funds (SWFs) provide a secondary exit opportunity for venture capitalists and entrepreneurs, she added.