Singapore-based venture capital firm Jungle Ventures has closed its third Southeast Asian fund at $240 million. The fund was oversubscribed.
According to Jungle Ventures, its limited partners (LPs) include Temasek, International Finance Corporation, Cisco Investments, German financier DEG, Singaporean billionaire and Wilmar International CEO Kuok Khoon Hong, Dutch development bank FMO, and Bualuang Ventures, the corporate venture capital arm of Bangkok Bank.
Jungle Ventures aims to back 10-15 startups across Series A to B stages in Southeast Asia. Its average cheque sizes are $3 million for Series A and $8 million for Series B rounds.
The Singapore-based VC added that it will stick to its core investment focus – consumer brands and software companies in the region. Some of its portfolio startups include Thai online fashion retailer Pomelo; Indonesian online beauty platform Sociolla; Southeast Asian fintech startup Kredivo; and Singapore-based cloud platform startup Deskera.
Jungle Ventures is one of Southeast Asia’s oldest venture capital firms, first raising its debut fund of $10 million in 2012. Its second vehicle was closed at $100 million in 2016.
Oversubscribed interest in Jungle
Overseas investor interest in Jungle has been notably strong this year, according to its managing partners, Anurag Srivastava and Amit Vedprakash Anand. About 70 per cent of its LPs are new investors.
The Singapore-based VC was last reported in May to be negotiating with LPs to raise its hard cap above $225 million, following a first close of $175 million in the same month. As a result, a $40 million special purpose vehicle (SPV) was constructed to include later entrants who wanted to join the fund. The remaining $200 million came from other LPs.
Anand and Srivastava told DealStreetAsia that the VC strove for a more diversified LP base to further differentiate itself from other investors.
Around 90 per cent of its LPs are institutional investors, of which 60 per cent are from outside Asia. The fund’s LPs comprise a global mix from Asia, Europe, US and the Middle East. Those from Europe and the Middle East, in particular, are relatively new to the region.
“Most of these newer LPs were already in the region back in 2016, but they wanted to spend more time understanding the teams, their experience, the way they approach deal flow and portfolio construction. So now that they have the comfort of identifying an institutional process and portfolio they like, they’ve decided to put in money with us,” said Anand.
Anand and Srivastava added that they also saw value in adding corporates like Cisco, which can provide top-level expertise and network access to its portfolio companies.
Deal picking in Southeast Asia
Jungle Ventures has come a long way since its first fund in 2012, but so has Southeast Asia’s startup ecosystem.
Jungle’s deal pipeline has grown fat along the years, thanks to the public successes of unicorns like Grab, Gojek and Tokopedia. According to Anand, the quality of deal flow in Southeast Asia has also risen significantly with several founders progressing onto their second or third ventures. Many have tasted the challenge and thrill of startup life, having gained exposure at tech-focused companies like Grab.
Anand noted that it makes for exciting and tedious deal picking for Jungle. “I think it’s a golden era of Series A investing,” he said. “I remember when we started in 2012, we used to see just 200 to 250 deals a year on average.”
Today, Jungle scours through roughly 3000 deals a year just to finally invest in 5 to 6 startups for Series A alone. He added that startup opportunities are still vast in the region.
“I think there are still a lot more white spaces that entrepreneurs can go after, and there are still a lot more entrepreneurs that investors can go after. I don’t think we have reached the kind of saturation that India or China sees, where there are 5 or 10 terms sheets for every deal you see and everybody’s fighting to get it. Not at all,” said Anand.
Anand shared that Jungle Ventures has no interest to launch a growth or select fund, emphasising that its strength remains at the early-stages.
Jungle’s principal Grace Yun Xia said to depart
Jungle Ventures’s successes in fundraising, however, have been somewhat overshadowed by departures of its key investment team members.
According to several sources aware of the development, Jungle’s principal Grace Yun Xia has resigned from the firm. This makes it the Singaporean VC’s second departure in two months, after its head of fundraising and investor relations, Menka Sajnani, left to join Eduardo Saverin’s B Capital.
Grace Yun Xia, a former senior director at Tencent, nurtures ambitious plans to strike out on her own as an entrepreneur, an industry source aware of the matter said.
Anand and Srivastava of Jungle Ventures declined to comment on this development. Yun was not reachable for this story.