South Korea’s KB Investment and Malaysia’s RHL Ventures have launched a $55-million co-general partner (GP) fund backed by Malaysia government-backed Penjana Kapital, said a senior executive at the fund.
KB and RHL’s “Hibiscus Fund” comes under a Malaysian government scheme called Dana Penjana Nasional aimed at spurring digitalisation and innovation amidst the COVID-19 pandemic and economic challenges in Malaysia.
Penjana Kapital was set up in July 2020 as a fund-of-funds programme aimed at matching 600 million ringgit, on a one-to-one basis, of the capital raised by venture fund managers and has a target allocation of 1.2 billion ringgit. Eight Malaysian venture capital firms have so far raised 676 million ringgit ($163.58 million) under the scheme as of May.
According to KB Investment principal Steven Hong, Hibiscus will target early-stage startups at Series A and B stages and write cheques of $1-5 million. As part of its mandate under Penjana, at least half of the investments must be made in Malaysian startups. The remaining corpus will be allocated to Southeast Asian firms.
Hibiscus has already begun deployment, with one of its early investments being Malaysian digihealth firm Naluri, which closed a $5 million Series A round led by Integra Partners in June. Hong, one of two executives managing KB Investment’s Southeast Asia portfolio, added that the firm has another 3-4 investments in the pipeline that will likely be finalised in the coming months.
Apart from Malaysia’s Hibiscus, KB Investment also manages Indonesia’s Centauri Fund, another co-GP fund set up with MDI Ventures.
Centauri just reached the first close of its $150 million growth-stage vehicle earlier this month, after securing South Korean sovereign wealth fund Korea Growth Investment Corporation (K-Growth) as a limited partner (LP). K-Growth pumped in 10 billion Korean won ($8.57 million) into Centauri.
Indonesia-focused Centauri Fund has made four investments to-date — Jakarta-based insurtech platform Qoala, Indonesian logistics startup Paxel.co, Indonesian fintech startup Cermati and Singapore-based social commerce firm, WEBUY. Centauri targets fast-growing sectors such as machine learning and fintech.
Hibiscus and Centauri are currently KB Investment’s only two co-GP commitments in Southeast Asia. It also selectively looks at direct investments in the region, particularly in consumer internet startups exploring new and emerging models of commerce whether in direct selling, group buying, or social commerce.
“We’ve seen the first generation of e-commerce players in Southeast Asia like Tokopedia. If you look at India and China, there are several sizeable companies in group buying and direct selling. Given how Southeast Asia is a few years behind, I think we’ll also see similar startups grow out of these conditions as well,” said Hong.
KB Investment recently invested in Mighty Jaxx, a Singapore-based platform for designer toys and collectibles. The firm raised $10 million in funding from Tencent, Korea Investment Partners and KB Investment, according to ACRA filings submitted by the firm earlier this month.