Singapore: Insignia Ventures Partners raises $200m for second fund

Yinglan Tan, Founding Managing Partner of Insignia Ventures, at the Asia PE-VC Summit 2019 in Singapore. Photo: DealStreetAsia

Singapore-based venture capital firm Insignia Ventures Partners has achieved the final close of its second fund at the hard cap of $200 million, according to a press release.

The fund, which was “heavily oversubscribed,” has raised capital from limited partners who include sovereign wealth funds, university endowments, foundations and family offices from Asia, Europe, and North America.

Insignia Ventures Fund II will focus on early-stage technology investments in Southeast Asia, adding that it does not see itself shifting focus given the rise of smart capital and top talent flowing into the region.

The fund has made several prominent bets in Southeast Asia, including used car marketplace Carro, smart lock maker igloohome, fintech firm Payfazz, logistics startup LOGIVAN, online lending platform First Circle and co-working space provider COCOWORK (formerly known as EV Hive).

Tan has previously said that Insignia sees Indonesia, Vietnam and the Philippines as key markets and that it is bullish on healthcare and education investments.

Launched in 2017, Insignia Ventures closed its debut fund at $120 million last year. Pavilion Capital, a subsidiary of Singapore’s state investor Temasek Holdings, was an anchor investor in its first fund. Insignia’s first fund was the largest maiden vehicle raised by a Southeast Asia-based VC firm at that time.

Insignia is also believed to have raised a $200-million fund for secondary investments, which entail buying a stake in a startup from its existing investors and/or current and former employees. Backers of the secondaries-focused fund, which has not been publicly disclosed, include the CEOs of Chinese unicorns, according to a July report by DealStreetAsia.

Prior to Insignia, Yinglan Tan was a venture partner with Sequoia Capital, and among its first executives in Southeast Asia. According to his LinkedIn profile, he was responsible for sourcing multiple investment opportunities at Sequoia, including Tokopedia, GOJEK, Carousell, Appier, and Dailyhotel.

In a quick e-mail interview with us, Tan talks about the fundraising experience and how the vehicle garnered huge investor demand. Edited excerpts:-

What sectors and markets will Fund II target? Why?

You can imagine Southeast Asian innovation like a top, spinning at very high speeds of growth in recent years, and we have been fortunate to work with founders capitalizing on opportunities before the top even gets there, with the likes of STOQO tackling the fresh food supply chain and Janio bridging gaps in cross-border logistics. We will carry over this philosophy onto our second fund, as there are still many technological niches and structural asymmetries in the region that remain untapped and untouched by digitalisation.

How do you see the SEA startup scene currently – where are the gaps? Is it quality deal flows, or is it challenges associated with Series B and upwards, or the seed stage? Or is the availability of tech talent a cause for concern?

There are three main challenges Southeast Asian founders currently face. First is technical talent, where demand continues to outpace supply in spite of the influx of talent into the region. Second is making the right choices when it comes to securing capital. With a lot more options both private and public (for more established companies), it becomes necessary to have clear motivations and goals for selecting one source of capital over another. The third is creating the right internal structures to scale across markets. As the race heats up to capitalise on the growth potential in the region, strong governance and internal controls, which are fundamental to the growth of a company, are often lost in the noise. We at Insignia focus on building strong relationships with our founders for us to help them address these challenges early on in their growth.

How do you see valuations across the different stages of investments and markets in Southeast Asia?

The growth stories investors have become accustomed to when it comes to technology companies put enormous pressure on founders, and all the more in Southeast Asia, where expectations have reached new highs as prophetic claims of high returns abound. Even with all this pressure, founders should remain undaunted and focus on building a great company — and that greatness goes beyond valuation. Even then, as more cases surface of the backlash that comes with investing in scale without profit, money in the region is also becoming smarter. This enables founders to better balance profit and scale — all that’s left is to find the right investor.

What is Insignia’s USP other than capital? What value add do you bring to the table?

We work round-the-clock firing on all engines with our founders and their companies. We want to ensure that they are well-equipped to make the right choices when it comes to growing in the region. You can think of us as the Waze or Google Maps for founders navigating Southeast Asia — the go-to for founders when they get in the vehicle of entrepreneurship and start their journey. Given our team’s coverage of the region, breadth of expertise, and depth of the network, we enable them to work with the best opportunities for growth in the region.

You say Insignia’s Fund II was oversubscribed. Was this because of strong performance in Fund I and if so, how is it performing so far? How do you compare to other SE Asian early-stage funds?

Thanks to the hard work of our founders and the support of our long-term investors and partners we have witnessed just how impactful our portfolio has become in the markets they operate and industries they are focused on. This motivates us to continue supporting great founders, and we welcome new institutional investors who share in this commitment.

Where do you see strongest LP interest coming from right now? Why?

As the waves of innovation ripple beyond the circles of the technology industry, more investors in traditional industries and markets are opening up to innovation opportunities. At the same time, investors well-acquainted with technology are following the breadcrumbs of innovators to these entrenched industries which are at the cusp of disruption. This convergence of investor preferences shows how investing in technology is becoming much more ubiquitous as an engine for capital growth.

We understand that you are looking to raise a separate $200m fund for secondaries. Can you confirm this?

No comments.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.