Silicon Valley-based incubator and accelerator Plug and Play is planning to set up a Southeast Asia-focused fund – with a potential target size of $30-50 million – over the next one or two years after seeing good traction in the region’s startup ecosystem, Plug and Play’s Asia-Pacific managing partner Jupe Tan told DealStreetAsia.
“The priority of this fund is to do larger follow-on funding into our portfolio startups that have great traction and performance,” Tan added.
Plug and Play made a total of nine investments in SE Asia in 2019 and is targeting 20 transactions this year, notwithstanding the fact that the ongoing COVID-19 outbreak has derailed deal-making activity across the region.
So far, since its regional launch in 2010, Plug and Play has invested in 45 startups. Its portfolio in SE Asia includes edtech startup Snapask (HK-based with regional focus), agritech startup Sayurbox and Jakarta-based fintech Brankas, among others.
The proposed fund will target early-stage investments all the way from pre-seed to Series A with an average ticket size of around $500,000 per deal.
At the global level, the Silicon Valley accelerator is looking to launch several sector-focused global funds targeted at insurance-tech, supply chain and smart city spaces.
Plug and Play’s source of capital comes from the balance sheet of the family office of the Amidi Group. Plug and Play’s corporate innovation activities and accelerator programmes are supported by its global network of over 400 corporate partners. And, it teams up with specific corporate partners to launch industry-focused funds.
In the Asia-Pacific, Plug and Play has 36 corporate partners including MSIG and Tokyo Marine from Japan, Astra International and Sinarmas from Indonesia, CP Group from Thailand and FIinvest from the Philippines. It is likely that some of its regional partners would be inducted as potential LPs (or investors) in the proposed SE Asia-focused vehicle.
In Southeast Asia, Plug and Play is also looking at launching its accelerator programmes for the Philippines and Vietnam. It currently operates over 12 batches per year in Jakarta, Singapore and Bangkok and covers financial services, travel & hospitality, sustainability, industry 4.0 and smart city sectors.
“We help drive POCs (proof of concept) and pilot projects so that the startups can showcase and trial their technologies with the corporates and eventually move into commercialization and potential investments,” Tan said.
Talking of exit potential in the regional market, Tan said, “2019 was a great year for us globally with 14 exits including Honey (acquired by Paypal) and 4 of our portfolio companies becoming unicorns. Our SE Asian investments are still relatively young. As an evergreen fund, we have the flexibility to hold on to our investments until they exit via M&A or IPO, usually within 10 years.”
While Plug and Play has seen disruptions in the wake of the COVID-19 outbreak, it has moved a lot of its engagements online, running virtual selection days and events instead of face-to-face sessions. Tan added, there is growing interest [from corporate partners] in startups that are working on cost-saving, efficiency building solutions and also areas like cheap disease monitoring tools, telecommuting arrangements and so on.