The former group president of Singapore-based games and e-commerce company Sea, Nick Nash, has filed with the US Securities and Exchange Commission to raise a debut private equity fund – Asia Partners.
DEALSTREETASIA has learnt that Asia Partners I LP is looking to invest from $20 million to $100 million in Southeast Asian tech startups, and the firm has identified growth capital, especially post Series B rounds, as a limiting factor for companies in this region.
Nash, who left Tencent-backed Sea in December 2018 after serving as the company’s president for four years and then leading the company’s landmark IPO on the New York Stock Exchange in 2017, did not specify the hardcap and timeline for its maiden vehicle in the filing.
DEALSTREETASIA has been unable to determine the hardcap for the vehicle, but as the fund is targeting ticket sizes of $20 to $100 million, Asia Partners will logically be seeking to raise a couple of hundreds of millions for its inaugural vehicle, making it among the largest growth funds operating in Southeast Asia.
Last year, after announcing his departure from SEA, a spokesperson had confirmed to Techcrunch that Nash was “embarking on his next adventure” of investing in the next generation of technology and technology-enabled businesses in Asia.
Industry sources said the Asia Partners’ team shared the belief that access to growth capital would allow leading tech companies in southeast Asia to eventually take the IPO route, on the lines of Sea Ltd and Razer Inc, that listed on the New York Stock Exchange and Hong Kong exchange, respectively, in late 2017. These two listings had marked a milestone for the region’s fledgling startup ecosystem.
It is learnt that Asia Partners is set to unveil its team as well as other details such as first close and the targeted corpus it plans to raise in the next 2-3 months.
It must also be noted that Southeast Asia’s growth story, fuelled by a growing middle class and a vibrant internet economy, has lured PE firms to tweak their investment strategy and cut smaller checks.
For instance, Warburg Pincus recently led a $25-million Series B round for Indonesia-based tax compliance solutions provider OnlinePajak, a deviation from the firm’s typical check sizes of $150 million and above. In January, it also led a $100-million Series C round raised by Vietnamese e-wallet MoMo. In 2017, it led a $64-million round for Singapore-based Trax. The startup is now valued at over $1 billion and is eyeing a $3-billion valuation in another two years.
On similar lines, KKR & Co., has also been cutting smaller checks in the region to invest in promising companies. Last year, it pumped in $144 million into already-profitable PropertyGuru to fuel its inorganic growth. In the same year, KKR also made a $175-million investment, along with Tencent Holdings, in Philippine firm Voyager Innovations in exchange for a substantial minority stake in the fintech company. Interestingly, both Warburg and KKR are also backers of Indonesian ride-hailing major GOJEK. Both co-led a $550 million round in the startup back in 2016, then the largest round ever raised by an Indonesian startup.
Other private equity firms looking to enter the VC space in the region (in terms of deal sizes) include TPG, General Atlantic, Northstar Group among others.
The region also has other examples – Swedish private equity firm EQT Partners had invested in Singapore-based corporate services provider In.Corp Group through its EQT Mid Market Fund in 2016. Ever since, In.Corp has been on an acquisition spree to consolidate its market leader position.
The region is also seeing a slew of VC firms targetting the growth capital space to ride the predicted growth in SEA’s digital economy, which is slated to triple to reach $240 billion from 2025, according to a Google and Temasek report issued last year.
DEALSTREETASIA reported today that Singapore’s Jungle Ventures is learnt to be seeking approval from the limited partners backing its third Southeast Asia fund to increase the vehicle’s hard cap after securing capital commitments totalling $225 million.
Other VC funds in this space include Vertex Ventures’ $210-million vehicle targeting India and SEA; EV’s Growth fund which had set to raise $150 million and is learnt to have got commitments to the tune of $250 million so far; Golden Gate Ventures which is seeking to raise $200 million for a new growth fund in partnership with South Korea’s Hanwha Asset Management; and, Malaysia Venture Capital Management Bhd (MAVCAP) and Shanghai-based Gobi Partners’ $200 million Asean Growth fund (that is slated to hit its final close soon).
Last month, this portal, citing an SEC filing, had reported that Singapore-based B Capital Group, which counts Facebook co-founder Eduardo Saverin as a founding partner, has made the first close of its second fund with $406.1 million in commitments. In August 2018, Sequoia Capital India had announced the close of its sixth fund at $695 million to target early and growth stage investments across India and SEA, where it has backed 200 startups including regional unicorns Go-Jek, Tokopedia and Traveloka.
Nash had announced his retirement in February 2018 and stayed on until the end of last year, advising Sea on its long-term strategies with a focus on ensuring a smooth transition. Former Garena CEO Jin Oh left the firm at the end of August. The company also announced the exit of its Group Chief Strategy Officer, Alan Hellawell, who left in November.
Sea started off as a gaming company Garena in 2009 and then rebranded as Sea Ltd in May 2017 after securing $550 million from various investors. It now has three key businesses that include digital entertainment (Garena), e-commerce (Shopee) and digital financial services (AirPay).
Nash joined Sea in December 2014 from General Atlantic, where he was principal and head of Southeast Asia. He originated and closed General Atlantic’s first Asean investment, which was Sea.