Indonesian early-stage venture capital firm Kinesys Group has hit the final close of its maiden fund at almost $15 million and is currently planning its next fund, one of its partners told DealStreetAsia.
The first fund was closed at a quantum lower than the initial target of $20 million, as the firm decided to wrap it up earlier than planned, according to managing partner Steven Vanada. “Because of COVID-19, digitalisation happened faster than we expected. So we decided to close earlier to capitalise on the opportunity and focus on raising our second fund,” Vanada explained.
He declined to disclose the planned size of the new fund, but revealed that it would be a larger fund that will be able to cut larger ticket sizes to back seed to Series B companies. Additionally, the company also plans to expand its geographical reach by targeting investments in Southeast Asia as opposed to focusing solely on its current market of Indonesia.
“While Indonesia is the biggest market, we don’t want to miss deals from other countries. Other than that, we will get in more professionals, build a talented team to add to the array of sectors and verticals that we can cover,” Vanada said.
Kinesys’s debut fund, launched in 2019, was closed at the tail-end of last year, having sealed investments from institutional and individual limited partners (LPs).
While the firm does not disclose the profiles of its LPs, Kinesys is known to be backed by Northstar co-founder and managing director Patrick Walujo, who is an advisor to the VC firm.
Through the fund, the firm has made investments in 13 companies, eight of them in 2020. Among the companies in its portfolio are edtech firm Zenius, IoT startup Recharge, Muslim needs app Umma, new retail startup Wahyoo, F&B company Goola, and social commerce platform Chilibeli.
Kinesys was founded in the final quarter of 2019 by Vanada, who was a former executive director at Japanese VC CyberAgents Capital, and Yansen Kamto, a former chief executive of local startup ecosystem builder Kibar. The firm cuts cheques of up to $500,000 for promising early-stage startups in Indonesia in their seed to pre-Series A stage.
Seeking COVID-resilient startups
The firm has so far deployed almost 50% of its existing fund and looks to invest in up to eight new companies this year. Given the impact that the pandemic has had on the market, Vanada says Kinesys has maintained a keen eye on companies that are able to adapt and find a balance between their offline and online approaches.
“For example F&B has seen a lot of growth on the online delivery side, even though from the retail side it has been hit negatively. We think this will happen in a lot of other sectors too. The sectors that are able to adapt and capitalise on the new trend post-corona, they will be able to survive and obtain a lot of traffic in a more efficient manner,” he said.
Besides scouring the market for potential investees, Kinesys will also be looking to make follow-on funding into some of its existing portfolio companies — something that has become a key part of the firm’s strategy.
According to Vanada, Kinesys has already doubled down on its investment in Wahyoo, which raised a $5 million Series A round last year, while twice topping up on its investment in Zenius, which bagged a $20 million pre-Series B round earlier this year. The firm is set to announce more follow-on funding soon.
“We have set aside a certain amount of fund for follow-on funding, as we feel there is potential for the companies to grow and it would be a shame if we didn’t support them,” he said.
The performance of these existing portfolio companies this year would be the cue for Kinesys to embark on a roadshow for its next fund, Vanada said. While the firm has laid out initial plans for the new fund, he said that Kinesys will only start fundraising once it has shown some traction with regard to the performance and fundraising of its portfolio companies.
