East Ventures, one of Indonesia’s most active venture capital firms, today announced that it has closed its fifth fund, and the vehicle’s partners – Willson Cuaca, Batara Eto, and Taiga Matsuyama – said they plan to use ‘deploy the capital to further their thematic investment thesis as the startup ecosystem matures’.
The company raised $27.5 million in its fifth vehicle to be invested in early-stage tech startups in Southeast Asia.
“With its new investment fund, East Ventures aims to ramp up its activities and empower more first-time entrepreneurs,” it said in a statement, while adding: “We want to leverage technology to disrupt traditional industries, fill gaps in various verticals, increase stakeholders’ value, and ensure significant return on investment to its shareholders.”
East Ventures has been backing businesses in the prototyping stages. Its investment thesis identifies technology verticals that are poised to expand in each market, then backs people whom it believes will be future leaders in the sector. Once a clear category winner has been established, the firm will shift its focus to other parts of the value chain.
Among East Ventures’ current portfolio are Tech in Asia, Tokopedia, Traveloka, Kudo, Shopback, IDNTimes, Moka POS, Jurnal, RuangGuru, and many more. East Ventures had successfully exited seven portfolio companies, including Disdus, PriceArea, ShopDeca, and SCOOP.
In total, East Ventures has 80 active portfolio companies across the region. From 2015 to 2016 alone, the firm’s inbound deals increased 133 per cent from 331 to 774. The firm has backed more than 20 new startups per year and witnessed a follow-on investment rate of 75 per cent.
This year, the company aims to double the number of lead investments while maintaining a stable amount of deals. There will be more mergers and acquisitions involving its portfolio companies in the months to come, it said. At the same time, startups in the region can expect little activity in series B investments as the ecosystem matures.
Southeast Asia, as the leading force of Asia’s growing online users, is projected to have an internet economy worth $200 billion by 2025, with Indonesia as the key market. The country saw a 700 per cent increase in the announced dollar value of tech venture deals in the past year, attracting big players such as Sequoia Capital, SoftBank, Alibaba, and others.