Obor Capital, a Cambodian venture capital fund that is targeting a corpus of $30 million, plans to invest $13 million in startups in CLMV (Cambodian, Laos, Myanmar, Vietnam) countries this year, according to a top executive of the firm.
The fund, which is managed by the Securities and Exchange Commission of Cambodia-licensed OBOR Management, will invest as much as $11 million in its existing portfolio companies to increase the fund’s ownership and participate in subsequent capital increases.
Meanwhile, the remaining $2 million will be used for new investments. The firm targets to up to 3 companies in sectors such as digital finance and microinsurance.
“The $30 million capital raise is currently in process and an advisor has been appointed. We expect the closing to happen during Q2-Q3 2020,” Christophe Forsinetti, Chairperson of the Board of Directors at Obor Capital told DealStreetAsia in an interaction.
Founded in 2016, Obor Capital focuses on logistics, mobility, finance – within it microfinance, microleasing, microinsurance – and other traditional sectors such as waste management and water treatment with ticket sizes ranging from $100,000 up to $1.5 million per investment.
“We strongly believe in the development of logistics and mobility in these countries and since we like to build synergies and leverage on other companies in the portfolio, we are actively looking at this space,” he added.
Most recently, Phnom Penh-based venture capital firm Obor Capital has led a $900,000 pre-Series A round in French-Cambodian logistics startup ShopRunBack. Last October, the firm has closed an early-stage equity fundraising deal with online supermarket platform Delishop.Asia.
The venture capital firm has invested in as many as 5 startups to date, mostly in Cambodia. According to Forsinetti, even though it’s still a small eco-system with gaps at the different stages of development, Cambodia makes up for a good eco-system to invest in.
He pointed out that the combination of a new and young middle-class eager to consume, coupled with factors such as the penetration of cellphones/smartphones opens interesting opportunities for the firm.
Cambodia, which lags other Southeast Asian countries in terms of the tech ecosystem development, has recently seen the birth of a spate of local venture capital funds such as Smart Axiata Digital Innovation Fund, Negocia Ventures.
In March 2019, local media reports cited that Cambodian Prime Minister Hun Sen that the country will set up an entrepreneurship fund with an annual capital of $5 million to spur up its digital economy. Regional funds active in this market include Belt Road Capital Management and Emerging Markets Investment Advisers.
Meanwhile, Myanmar, which is described as the last frontier market of southeast Asia, saw a spike in venture capital and private equity investments last year.
Last November, Delta Capital Myanmar, the frontier country’s largest asset manager with $120 million in assets under management, actively focused on ESG sectors (environmental, social and governance).
Erarlier, Myanmar Private Equity and Venture Capital Association (MPE&VCA) was formed by some of the most active players in the region in a bid to boost investment activity in the frontier market. The association has also received funding from CDC Group, the development finance institution wholly owned by the UK government.