US-based MassMutual Ventures (MMV) has announced its debut Southeast Asia fund with a target corpus of $50 million, along with the opening of its first regional office in Singapore.
The proposed Southeast Asia fund will focus on Series A and B investments in digital health, fintech, insurtech and enterprise software, an MMV statement said.
MassMutual Ventures is the corporate venture arm of Massachusetts Mutual Life Insurance Company. In addition to the new Southeast Asia fund, it manages a $200-million Boston based fund that invests in North America, Europe and Israel.
“We think the time is right because there have been a lot of new companies coming up across the region over the last five to seven years, and new capital coming into the region. More importantly, the rise of technology [adoption] and middle class across SEA brings new opportunities for us,” said MassMutual Ventures managing director Doug Russell.
With the new fund, the venture capital firm will seek to back 10-15 startups over the next three years, with average ticket sizes of $2-5 million. It is also open to co-investments with regional VCs as well as regional technology majors such as Grab, Go-Jek and Ping An.
MassMutual Ventures SEA will be co-led by managing directors Ryan Collins and Anvesh Ramineni, who will be both based in Singapore.
Prior to joining MMV SEA, Collins was the Asia head at Manulife’s LOFT incubator, researching and developing new business models and technologies in insurance and investment services. Ramineni was earlier heading the investments team at Singapore-based VC firm OpenSpace Ventures, of which he was a founding member.
“We have been looking at a lot of opportunities and most of them are very interesting. In terms of quality of deal flow, I think that the kind of opportunities that have come up from this region has improved dramatically over the last 4-5 years. We’re not just talking about the volume, but the quality of companies, and the kind of products and services being created in this region. It’s going to be a very interesting time here in Southeast Asia,” said Collins.
The CVC joins Singapore-based HealthXCapital as one of the few funds in Southeast Asia targeting health and insurance-related investments in the region.
Edited excerpts of an interview with MMV managing director Doug Russell and MMV SEA managing directors Ryan Collins and Anvesh Ramineni:
What led to your decision to open the Singapore office and start this SEA fund?
Russell: The decision to open in Singapore came in the early part of this year, when we were launching our second fund, and looking at ways to expand and grow the VC team.
The Singapore government has also been working to foster the right ecosystem, and we’ve seen a number of very good VCs that have established a base [here], many of which we hope to partner with.
We think the time is right because there have been a lot of new companies coming up across the region over the last five to seven years, and new capital coming into the region. More importantly, the rise of technology [adoption] and the middle class across SEA brings new opportunities for us.
What is your investment strategy and how different will it be from your US fund?
Ramineni: We plan to invest in digital health, insurtech, fintech as well as the software space. So the two funds are not very different from our two funds in Boston. We are open to looking at other potential sectors as well, based on the opportunity in the region.
But the healthtech and insurtech spaces are pretty nascent here. Why target Series A to B? Wouldn’t it make more sense to target the seed rounds?
Collins: So we are looking at digital health, enterprise software and insurtech – those sectors are pretty broad already. We’re also looking to making more targeted investments. We’re targeting 10 to 15 investments over the next 3 or so years, rather than making lots of small investments in the seed stage. I do agree that it is relatively early days in Southeast Asia, but we think there’s enough to support that number of investments across all our sectors and the entire region.
Russell: We also want to work more closely with the seed investors who have people on the ground and see opportunities a little earlier than us. They will be writing smaller cheques, but we will be working very closely with them to identify those companies and get to know them at the seed stage so that when they’re ready to raise at the Series A round, the management team and the business already know us.
Do you think insurers can play a bigger role when it comes to fostering innovation?
Russell: If you asked me that 4-5 years ago, I would have agreed. But if you look at the wider insurance industry today, many have adopted innovation strategies and have innovation units. The power of incumbency is still a strong one and partly why we’re investing in enterprise-type businesses is because these businesses tend to look to existing legacy businesses to do what they do better. But the premise that insurance is slower to innovate is a correct one, although I think that’s changed quite dramatically over the last couple of years.