Southeast Asia-based venture capital firms held a final close for five funds in the first quarter of this year, raising $694 million in total proceeds. The number of funds closed was the highest in a quarter since the COVID-19 pandemic hit the region at the start of 2020, shows DealStreetAsia’s latest report.
There was also a quarter-on-quarter jump in new capital raised in Q1 — this was calculated by deducting the capital raised for previous interim closes from the five final closes and adding two interim closes reported in the first quarter. The seven fundraising milestones gathered $535 million in total. In comparison, there were three closes – interim or final – and $77 million in new capital raised in Q4 2020.
B Capital Group, a tech-focused global VC firm co-founded by Eduardo Saverin and Raj Ganguly, led the pack among VCs that closed a fund in Q1. The firm raised $415 million for a vehicle that will provide follow-on capital to top companies in its existing portfolio.
Singapore-based Openspace Ventures raised its $200 million third fund in the first quarter, completing the fundraising process in eight months in the midst of a pandemic.
“The fundraising environment continues to be constructive for [VC] funds with strong track records,” said Openspace Ventures executive director Jessica Huang Pouleur. “In the beginning of the pandemic, there was concern by LPs and GPs alike that fundraising would be moderated due to travel restrictions. As the lockdowns persisted through the summer months of 2020, most LPs and GPs had no choice but to get comfortable with the norm of fundraising and doing diligence over Zoom.”
Global VCs with a mandate to invest in Southeast Asia also secured capital for new funds in Q1. These include US and China-based GGV Capital, which accumulated $2.5 billion for four funds during the quarter.
SE Asian VCs continue to accumulate dry powder for the region; there are at least 55 funds in the market seeking to raise $4.7 billion, of which $1.2 billion has been secured so far, DealStreetAsia data shows.
Developments such as Singapore-headquartered super app Grab’s announcement of the largest ever SPAC deal — it plans to list in the US via a merger with blank-cheque company Altimeter Growth at a value of nearly $40 billion — are placing SE Asia firmly on the radar of large institutional investors, said an industry veteran.
“There has always been considerable interest amongst LPs on the potential set of Southeast Asian opportunities. Their key concerns have centred principally on the number of notable exits in the region. Grab’s recent SPAC merger announcement is a clear and compelling testimony that the Southeast Asian region is indeed a healthy, vibrant and uber attractive market for the next generation of global champions,” said Vertex Holdings CEO Chua Kee Lock.
Vertex Holdings, which manages a network of six venture funds, is the VC arm of Singapore’s state investor Temasek Holdings and is one of the oldest VCs in SE Asia. It was one of Grab’s early backers.
In addition to the capital being raised by SE Asian VCs, the region will see capital inflows from several global and regional vehicles that are currently on the fundraising trail. According to DealStreetAsia data, there are at least 13 global VCs currently in the market to raise $1.7 billion for funds that have Southeast Asia as one of their target markets. Of this corpus, $503 million has been secured through interim closes.
Our latest report, SE Asia’s VC Funds: Q1 2021 Review, captures:
- Southeast Asia-based VCs’ fundraising performance
- Updates on global VC funds with an SE Asia allocation
- Quarterly and yearly VC fundraising trends
- Insights from prominent investors
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