Kuala Lumpur-headquartered private equity firm Navis Capital Partners is scouting for growth-stage investments in the technology sector, a senior executive of the firm told DealStreetAsia.
“We start to see interesting opportunities in the Series B and C stage,” said Nicholas Bloy, co-founder and managing partner at Navis Capital Partners.
Bloy explained that this is where the cheque sizes fit his firm’s mandate, where the business model is proven and starting to generate profits.
“E-commerce, payments and fintech are interesting to us. We will look at online education as well, because we have a strong physical education platform,” he added.
The partner also revealed that Navis has made an investment in connected fitness, which was done through its existing brick-and-mortar fitness business Evolution Wellness.
Bloy opined that when investors look at a new economy segment with the potential to be successful, they should consider the question of whether it is going to be a winner-takes-all segment or one that multiple players can thrive.
While there are hundreds of opportunities in the digital space, according to him, only a small proportion of these businesses will make more than paper profits for their investors.
The key challenge is scalability.
“In Southeast Asia, it’s not easy to find the level of scale that we see in China or India. Despite a market of 650 million people, it spans across 10 different markets, languages, cultures and legal frameworks, so scaling is slower and more costly given these frictions,” Bloy said.
In January this year, Navis Capital Partners invested in Singapore-headquartered fintech solutions firm Moneythor.
The firm joins a spate of PE firms that are increasing their tech bets in Southeast Asia. Global asset manager KKR recently backed Vietnam-based SaaS company KiotViet as the first investment under its Asia Next Generation Technology programme. Other PE majors like L Catterton and Partners Group are evincing their interest in tech deals.
Closer home, peer PE firm Creador also told DealStreetAsia recently that it will explore more opportunities in the digital sector.
Navis Capital Partners closed its eighth flagship fund and a continuation vehicle last month, at $900 million and $450 million, respectively. Its Fund VIII invests across Southeast Asia, as well as in Australia, New Zealand, China and Hong Kong. Meanwhile, the continuation fund, Navis Asia Green Loop Fund, will hold five of Navis Asia Fund VI’s portfolio companies, which have built a core climate and sustainability theme to their respective business models.
Navis Capital Partners has primarily been investing in traditional businesses, its portfolio companies being shipping container service Eng Kong, Big Cinemas Malaysia, OPV Pharma, Tawada Healthcare, building materials producer Dscaff, food processor Srithai, and supermarket operator Everrise, among others.
Nicholas Bloy will be speaking at DealStreetAsia’s Asia PE-VC Summit 2021, which will take place from September 28 to October 1.