Given the challenges in finding investible bets and deploying capital in big-ticket deals in the frontier market of Myanmar, Singapore-based Vulpes Investment Management has rebranded its country-focused Vulpes Innovative Myanmar Investment Company as Seed Myanmar, a vehicle dedicated to making early-stage technology investments, a top executive with the firm told DEALSTREETASIA.
Vulpes Innovative Myanmar Investment Company, which was on the road to raise its second fund with a targeted corpus of $25 million, has scaled down the fund size as well as undertaken a makeover to reflect its new focus.
“Because we have such strong Limited Partners, and the ability to deploy capital in Myanmar remains a challenge, we thought it made more sense to close the fund with less capital. This fund will focus only on early stage technology companies which are serving the digital economy. We thought we should re-brand the entity to better reflect this new focus, so we have changed the name to Seed Myanmar, which will be the name going forward,” Field Pickering, chief operations officer and general counsel of Vulpes Investment Management said.
Seed Myanmar will be structured as an open-ended fund after taking into consideration the challenge in deploying capital in Myanmar startups despite having strong LP support.
“We are preoccupied with trying to find good companies to invest in,” said Pickering, declining to reveal the funds raised so far.
As part of the transition, all existing investments made by Vulpes in Myanmar will be considered as portfolio companies of Seed Myanmar. Its portfolio includes startups like freelancer platform Chate Sat, search engine Bindez, logistics startup Kargo, to name a few.
Rita Nguyen, Chief Technology Officer at the SGX-listed Yoma Strategic Holdings, and Ye Myat Min, CEO of nexlabs, have been named as Partners at Seed Myanmar. They will continue with their current roles and will be associated with Seed Myanmar as well. “They are the two most credible tech people in this country as far as I can tell and founders want to work with them,” Pickering said.
Elaborating on the focus areas of the new fund, Pickering said, “the digital economy and the power and potential that comes with such an incredibly high penetration of mobile phones and tablets in Myanmar, presents such an opportunity for disruption and innovation and we want Seed Myanmar to be the preferred investment partner for founders who are bringing these disruptive and innovative technologies to the market.”
On the exit horizon for an early stage investment firm in Myanmar, Pickering predicted, “we anticipate significant growth in the country over the next few years. If that is true, by being first and seeding a number of these tech companies, we should start seeing exits in the form of acquisition by larger regional players in the next two to five years.”
Seed Myanmar’s investor base comprises both local and foreign players who have some association with Myanmar or frontier markets in the past. Seed Myanmar has attracted capital from a range of investors including a family office in Asia, a local business house, and foreign from New Zealand, Hong Kong, Singapore and U.S.
“Investor appetite is strong. 2017 was a challenging year for Myanmar and I was very encouraged that there were pockets of investors who understood the Myanmar story. There are very few other countries with such compelling dynamics yet so underserved by foreign capital,” Pickering added.
Vulpes, formerly Artradis Fund Management co-founded in 2001 by Stephen Diggle, was once Singapore’s biggest hedge fund with $4.5 billion worth of assets. In 2011, Artradis changed its name to Vulpes and has been tapping emerging markets.
Other funds of Vulpes include Vulpes Russia Opportunities Fund that invests in companies in the former Soviet Republic, Crimea, Ukraine and Russia.