Singapore-based cross-border venture capital firm Decacorn Capital is in the midst of raising a $50-million fund for which it has received one-third of commitments so far, according to a top executive of the firm.
In an email interaction with DEALSTREETASIA, Decacorn founder and managing partner, Debneel Mukherjee said the fund is currently being deployed to optimise the IRR while synergising opportunity. The firm also has a co-investment mandate with SGInnovate under the Startup SG Equity Scheme.
“Decacorn is a perpetual structure and we have not set any specific deadline for the final close but that said, we are in advanced discussions with a few strategic LPs, and sovereign funds particularly from Europe, are keen to chip in with large ticket sizes to mop up available allocation and that can happen soon,” said Mukherjee.
In the past two years, Decacorn has made 18 investments – nine in the US, six in Israel while the rest across Asia. The firm’s portfolio includes ride-hailing startup Lyft and social media platform Snapchat. In June, it led a $750,000 seed round in Singapore-based influencer marketing platform Affable.
Two exits have been made so far and the next year “looks promising” with a couple of Decacorn’s investments looking ripe for exits through IPO, said Mukherjee.
“We blend our portfolio mix by way of a bar bell where we stack stable and later-stage opportunities with that of early-stage multi-baggers and as a result, we expect to see regular exits as we chug along. That said, technology plays being binary in its success or failure, the startups that sustain and survive, keep baking value backhanded even after their blockbuster IPOs. So, we will be weighing our options and may decide to stay put with our investments even after their IPO in order to optimise the upside,” he shared.
Based on its website, Decacorn typically cuts checks in the region of $500,000, positioning itself as an early and mid-stage investor. The VC firm seeks to invest in “outstanding businesses” run by resourceful and committed founders – a rare commodity nowadays, said Mukherjee.
“On top of it, good guys have money chasing them, so we have to bring something more to the table over money for the founders to take our money. Curating the good ones and adding value is the key here. Ours is a factor of value and match and not a volume play.”
Having invested in various regions across the world, he pointed out the US and Israel market are very different from those in Southeast Asia.
“The originality of the ideas and the ingenuity of using technology innovatively to disrupt stands out strikingly in both these [US and Israel] markets. That said, these are very crowded market places where one has to dig deep to pick the good from the gruesome which is a very hard ball game. But having played in the deep end of the pool helps us tweak our curation skills constantly while gliding down the Southeast Asia ecosystem.”
“Using the common denominator from a successful cross border play in Israel and US we could act very quickly in Southeast Asia when we zero in on a wonderful opportunity. Towards this end our co-investment partner relationship with SGInnovate comes extremely handy to tap on additional financial resources to cobble together a value accretive deal briskly.”
Expanding investment reach into China
The VC firm has recently inked a strategic partnership with Shanghai-based startup accelerator Chinaccelerator and Taiwan-based MOX to expand its investment reach to China.
“China today is the key driver of global economic growth and much of this is fuelled by the massive adoption curve of its tech giants; the mega-caps, the decacorns, the unicorns and their upstream startups. We see China today as a two-way street, in terms of market access to its invested deep tech startups, as well as to ride on China’s tech play and the adoption by investing in Chinese startups with a South and Southeast Asian ambition,” said Mukherjee.
Both Chinaccelerator and MOX are operated by multi-stage venture fund SOSV, which has $400 million assets under management and currently operates six global accelerators.
“We are extremely happy to welcome Decacorn to our syndicate of SOSV Chinaccelerator and MOX startup investors. The local network, industry expertise and passion for helping entrepreneurs scale cross borders set them apart from those who only bring cash to the table,” said Chinaccelerator and MOX managing director, William Bao Bean. He is also a general partner at SOSV.