Hong Kong-based venture capital firm Click Ventures will begin raising its $50-million fourth fund in early-2020, says its managing partner Carman Chan.
The venture capital (VC) firm has already secured $20 million in capital commitments including from existing limited partners (LPs) from Hong Kong. It is actively approaching potential LPs from various markets globally, including those in Southeast Asia to back the fund.
Click is already setting a pretty solid track record for itself. The firm’s portfolio companies include the likes of Spotify, Palantir, and Docusign. Its third fund boasts a valuation size of 2.58x in 1.5 years, shares Chan.
Click Ventures was also recently named as one of the world’s top performing VC fund managers by data provider Preqin – alongside Indonesia’s East Ventures (investors in Tokopedia, Traveloka, Mercari), Silicon Valley’s Benchmark Capital (investors in Twitter and eBay) and US-based fund managers G Squared and Merus Capital.
But Chan, a long-time angel investor, is taking extra effort to ensure this isn’t sheer beginner’s luck.
“During my early days as an entrepreneur, my mind was completely focused on achieving high growth. But after becoming an investor, I quickly realised that LPs were more interested in consistency, not acceleration. The focus was completely different,” explained Chan.
She continued: “So this instantly triggered me to think – how can I prove to my LPs that my success was not based on luck? When we finally received the consistent performance award from Preqin this year, I felt so fulfilled. It’s been a very special year for me.”
She added that Click Ventures prefers a business model-led approach over a sector-focused one, explaining that companies of the future are more likely to operate across different sectors rather than honing into one.
“If you look at the superapp concept, many of them started as a single vertical whether its e-commerce or ride-hailing before branching off into payments, travel…etc. Grab is a great example of this,” Chan explained.
“We target business models which help the company acquire a high volume of scalable assets. These can be leveraged to help set up a much higher barrier to entry while accelerating the business even further,” added Chan.
Chan shared that while most tend to recognise data as a form of a scalable asset today, these can also come in other forms like distribution networks, similar to the successes seen in Facebook, Twitter, and Linkedin.
Click Ventures has raised $20 million across its three funds and invested in 50 companies across the US and the Asia Pacific. Chan shared that the US currently comprises about 70 per cent of its portfolio, but said that this will likely trend downwards as it increases its exposure to Asia.
Chan added that Click Ventures has already made its first two investments in the region – one in Singapore and another in India, and is in the initial stages of looking into markets like Indonesia and Vietnam.
The Hong Kong VC firm targets seed to Series A deals with ticket sizes of $100,000 to $1 million for the first cheque. It reserves capital for follow-on investments and typically looks to grow with its portfolio companies past Series A.
Chan is also considering shifting Click Ventures’s Cayman-based structure to Singapore, citing pull factors like tax-friendly policies, access to investor capital and better deal flow.
In January, the Cayman Islands also passed an Economic Substance Law requiring Cayman-listed entities to contribute economic activity to the country, some of which involve hiring local employees and directors, among many others.
Click Ventures will look at opening a Singapore office as soon as it manages to successfully secure a Venture Capital Fund Management (VCFM) licence in the Asian city-state. Chan added that the process will likely complete by the end of this year.