Singapore-based venture capital firm Golden Gate Ventures is seeking $200 million for a new growth fund it is raising in partnership with South Korea’s Hanwha Asset Management, DEALSTREETASIA has learnt.
According to an industry executive familiar with the development, the VC firm has secured commitments worth $80 million so far for its growth fund.
Golden Gate on Tuesday announced that it is partnering with Hanwha to invest in Southeast Asia’s Series B stage startups. It did not disclose a dedicated corpus for its growth stage investments.
The companies will invest in consumer-centric platforms and services, such as marketplaces, financial inclusion technologies, tech-enabled healthcare, and logistics-as-a-service platforms, according to a statement.
“Startups [in Southeast Asia] seeking Series B financing often find themselves in the difficult position of syndicating rounds from multiple Series A investors or appealing to alternative, often unconventional sources of later-stage capital, such as family offices and global PE buyout firms,” the statement said.
The two companies expect to see 80-110 Series B investment opportunities over the next two years alone and believe this number may double within four years.
The VC firm is learnt to have adopted the warehousing model for the fund, which allows Golden Gate to make investments before it starts to sound out other LPs or hits the first close.
In general, warehousing is done with the help of a supportive limited partner (LP) — in this case, Hanwha — who is willing to commit seed capital for the VC firm to kick off its first investment for the proposed fund. In other words, warehousing would ease the fundraising process if a VC firm can show its potential investors some of the actual investments made by the fund.
When the VC firm finally closes the fund, the shares of the investments made will be acquired by the VC from the LP at the cost at which they invested.
Golden Gate’s growth fund is set to make its first investment into a Singapore-based tech startup, according to an industry source who asked not to be identified.
The growth fund comes shortly after Golden Gate Ventures closed its third fund at $100 million last September to invest in Southeast Asian consumer internet startups.
Fund III was oversubscribed and anchored by existing backers including Temasek Holdings, Hanwha, Naver Corp. and EE Capital, the firm said in a statement. New investors included Japanese entrepreneur Taizo Son’s Mistletoe and Korea Venture Investment Corp.
The firm’s managing partner Vinnie Lauria had told DEALSTREETASIA in a past interaction that the VC reserves half of every fund for follow-on investments. Its first fund had returned 1.7x to investors.
Last August, it also launched a $10 million fund, LuneX Ventures, to invest in cryptocurrency and blockchain startups. The fund has made two investments as of last November.
Founded in 2011, Golden Gate Ventures has built a portfolio comprising about 40 companies in over seven Asian countries in the consumer internet space. Some of its notable investments include C2C marketplace Carousell, car marketplace Carro and P2P lending service Funding Societies.
Some of the firm’s exits so far include Singapore’s grocery startup Redmart, Taiwan’s Woomoo, Indonesia-based fintech startup Mapan (formerly known as Ruma), carpooling startup TemanJalan and Thailand’s dating app Noonswoon.