No dearth of capital in SEA, valuations to be modest: Reapra’s James Bitanga

Venture Capital firm and business builder Reapra Pte Ltd, an aggressive investor in Southeast Asia with 30 companies funded last year, is expanding into diverse sectors in the region while being bullish on digital media, education and real estate in the region, a top executive with the company said.

The Singapore based firm with an investment of about $100 million in 40 startups and 14 companies, recently made its fourth Malaysian investment in online florist BloomThis Flora Sdn Bhd. It had invested $600,000 in the company, in a bid to expand into diverse sectors in the country.

Its earlier investments in Malaysia were property portals Samurai Internet, and beauty company Aspiria.

The company even has investments in hospitality players — those building hotels, hostel brands and others as well as education segment in other countries like Japan.

“We think there might be an opportunity to bring those products and opportunities into the Malaysian market. At the end of it, we should be able to introduce these companies to Southeast Asia,” Reapra CLO James Bitanga told DEALSTREETASIA in a recent interaction.

Founded by Shuhei Morofuji, a prominent investor in over 10 startup companies, Reapra invests through its two funds Coent and Reapra Ventures.

The firm does believe that there is no dearth of capital in the regional market with Venture Capital funds, some traditional funds, private money and larger Private Equity funds, all trying to enter the VC space.

“A mix of those means there is plenty of money to go around. I don’t think there is dearth of money. I am quite bullish on the availability of funds,” said Bitanga.

He, however added that valuations cannot be expected to be what it was about five years back in Silicon Valley. “You are going to see modest valuations of companies. I don’t expect there to be a unicorn boom but that is not a bad thing. I think if there is a correction in any of the big companies that are making the news, that is probably because there is a global correction, non necessarily a regional one,” he said on the direction company valuations could take this year.

With an investment ticket size of between $200,000 to $600,000, the firm is quite bullish on Indonesia which is a big market but at the same time difficult to crack. “It has a potential and it is the same with Philippines,” he said adding that Thailand, Malaysia and of course Singapore are the countries that the firm is looking at.

On its website Reapra says that it establishes new businesses locally, with the intention to expand regionally, taking off throughout South East Asia and beyond. Rather than simply starting a business in an already established market, REAPRA intends to cultivate industry scale marketplaces. In order to create these new industries, we plan to start and manage numerous businesses ourselves, while simultaneously investing in brilliant entrepreneurs and innovative companies, the firm says.

Meanwhile, his advice to the startups in the region, is this: “Don’t fall into the trap of making false generalizations about market fit and remember that Southeast Asia is only a region by name; it isn’t a singular, homogeneous market.”

He added that growth or success, whether actual or perceived, can be distracting and it takes a lot of discipline and humility to remain skeptical and continually question the assumptions of ones startup idea.

Also Read:

We’re very focused on ASEAN, especially Indonesia: Hari Krishnan, Propertyguru

Malaysian florist BloomThis bags $600k seed funding from Reapra

Japan’s Darma Tech Labs closes $17.5m fund backed by Kyoto Bank