Editor’s note: This story has been updated at 9.20 am with a response from SeedPlus partner Tiang Lim Foo.
It looks to be the end of the road for Singapore-based seed-stage venture capital firm SeedPlus.
The Jungle Ventures-backed VC firm has decided not to raise a second fund after fully deploying its $18-million first vehicle, according to multiple industry sources aware of the matter.
All but one of SeedPlus’s partners have joined new companies, according to their LinkedIn profiles.
In response to DealStreetAsia’s questions, partner Tiang Lim Foo said in an email: “I am still an active partner at the fund, focusing on working with our portfolio and founders to help them grow and scale. The fund is still deploying capital out of the current fund into these companies.”
Tiang did not address the questions of whether, and why, SeedPlus was winding up its operations.
Meanwhile, two of the firm’s former partners, Michael Smith Jr. and Chirayu Wadke, left to join Amazon Web Services (AWS) and Google, respectively.
Gabriel Lundberg, a former operating partner, has taken on a new role as chief product officer at Swedish logistics firm Einride. Zhiying Chua, a former investment associate, recently joined Neuron Mobility’s team.
DealStreetAsia understands from industry insiders that SeedPlus’s former partners will receive extra carry to manage the portfolio companies backed by its first fund. Its 2016-vintage fund invested in around 20 companies in the region, including Neuron Mobility, BlockPunk, Homage, Logisly and Moglix, according to its website.
According to one industry source, low interest from limited partners (LPs) is understood to be one of the key factors behind the firm’s decision to wind up operations. SeedPlus’s LPs include Jungle Ventures, Eight Roads Ventures, Cisco, Accel Partners (India), SGInnovate, International Finance Corporation (IFC) and Indian business magnate Ratan Tata.
Another source aware of the development told DealStreetAsia that Jungle Ventures deems SeedPlus to be of “lower strategic value” compared to speciality funds it backs such as healthcare-focused HealthXCapital. This executive also added that while HealthXCapital offered a sector-specific differentiated play, a seed fund did not offer such advantages.
Singapore and the wider Southeast Asian market is starting to see the gap widen at the seed funding stage.
Prominent seed-focused VCs in Southeast Asia include Wavemaker Partners and STRIVE (formerly known as GREE Ventures), while other early-stage investors include East Ventures, 500 Startups and Alpha JWC.
But the region’s older VCs such as Jungle, Openspace Ventures and Golden Gate Ventures, which started off by investing in seed rounds, have raised larger funds and are focusing more on Series A rounds and above.
Even as new VC firms targeting Series A-B deals have emerged in the region — these include MassMutual Ventures SEA and Tin Men Capital — there are relatively fewer new entrants focused on seed funding.
Optimists point to the rise in venture building initiatives from players such as Antler and Entrepreneur First. However, these firms have a different mandate compared to seed investors to provide more dedicated capital and focused mentoring, which are highly valued in Southeast Asian markets with little access to capital and networking.