Malaysia based Teak Capital Sdn Bhd, a venture capital management firm, is looking to exit some of its investments in the near future. The disinvestment could take place through an IPO, says managing director and founder Chok Kwee Bee.
According to her, Teak Capital’s inaugural fund (Teak Ventures), already in its sixth year,is expected to close in the eighth year. They have already invested MYR 40 million ($ 12 million) in 10 companies, through this fund. “We have already divested our stakes from some of the companies; like the partial exit from YouthAsia. We are now looking to exit some of our other investments in the near future,” she told DealStreetAsia.
One of the exits will be through an initial public offering (IPO) on the Malaysian stock exchange,she disclosed, remaining tight-lipped about the likely IPO candidate.
Other divestment, she added, would be through “some sort of sale”.
“Venture capitalist (VC) have different exit options. We have already done trade sale for our investments in Groupsmore and Says.com. The general preference is to sell or merge (with another company) as VCs need to build a fairly strong entity for an IPO,” she said, adding that there was a strong (market) interest for buying VC backed companies.
“When a buyer finds synergy in a VC’s invested company, they will be interested,” she said, citing the $20 million merger of social news network Says.com with the Catcha Media in 2013 and the sale of Groupsmore to Groupon, which was looking for a Malaysian arm in 2011.
“Investing is only one part of venture capital management; the fun is when we exit and realise the returns,” she said, adding that most VCs aim for a 25% internal rate of return (IRR). Teak Capital targets a minimum of three-time return as IRR.
The firm is focused on investing in companies in the digital space, “I kind of grew up with online (investments) as a VC and this is like a third generation of online companies for me,” she discloses, recalling her foray into the VC world under the Silicone Valley-based Walden International group from 2000 to 2008.
Teak Capital has already started looking for new investment in online companies, under the Axiata Digital Innovation Fund, which the company will manage jointly with the Malaysia Venture Capital Management Bhd (MAVCAP)and Questmark Capital.
A few e-commerce companies are already on the radar, she added.
Chok’s focus is on Malaysian companies which have the potential to scale regionally or globally. “I would like to focus mainly on companies in Malaysia but those which can go offshore,” she explained.
According to her, investments in companies that are more accessible, tends to be more successful. “If you asked me now to look at a China deal, for example, I would hesitate,” she says.
Currently, Teak Capital manages the firm’s inaugural fund- Teak Ventures– in partnership with the MAVCAP, under its Outsource Partners’ Programme (OSP), says the company website adding: “The investment focus is on innovative technology and high growth areas from early to growth stages. The existing portfolio span from areas including semiconductor, LED, e-commerce & online businesses to mobile & wireless technology.”