Singapore-based venture capital (VC) firm Qualgro has announced making the first close of its $100-million ASEAN fund, confirming an earlier report by DealStreetAsia. This is the firm’s second vehicle targeting Southeast Asia.
According to Qualgro managing partner Heang Chhor, 60 per cent of the fund has been committed and it is on track to hit its final close in 6-9 months. Limited partners (LPs) include a mix of institutional investors, corporates and family offices from around the world.
The second vehicle is double the size of Qualgro’s first $50-million fund, indicating the firm’s growing confidence in the region. The VC firm also intends to increase its ticket size to $5-8 million for its second vehicle from $2-3 million for its first vehicle.
According to Qualgro, its first fund has made 19 Series A and B investments over three years, mainly covering B2B companies in artificial intelligence, security, data analytics and SaaS. The second vehicle will maintain the same sectoral focus but veer largely towards Series B investments.
“We believe the opportunities in B2B are significantly untapped in Southeast Asia. There are many talented entrepreneurs in B2B companies with the potential to grow into regional and global players. B2B companies are also less constrained by country boundaries, allowing them to scale,” said Chhor.
He added that B2B companies tend to offer more reasonable valuations compared to B2C companies, which have received heightened investor interest in recent years.
Qualgro joins a number of VC firms eyeing the growth potential of B2B and deep technology companies in Southeast Asia.
Venture capital major 500 Startups is looking to invest in more deep tech companies in the region over the next four years while Wavemaker Partners expects companies in B2B and deep tech to receive the highest inflow of early-stage investments.
New players are also entering the fray. Last week, Singapore-based Tin Men Capital announced the first close of its $100m maiden fund targeting B2B technology companies in the region.
Observers are expecting a boom in internet and technology adoption in Southeast Asia. According to a report by Temasek and Google, Southeast Asia’s internet economy is projected to grow at an annual growth rate of 27 per cent and is on track to exceed $200 billion by 2025.