Singapore-based venture capital firm TNB Aura is in the midst of planning its second fund, having already deployed and allocated around 70 per cent of its maiden fund, according to the firm’s managing partner.
Like its predecessor, TNB Aura 2 will have a similar focus, targeting Series A and B stage companies with a ticket size that can go up to about $10 million, Vicknesh R Pillay told DealStreetAsia in an exclusive chat.
“We try to be a lot more analytical on when we get into a company and whether we can really help them to ‘institutionalize’ the company and prep them for the next round. Therefore, Series A and B are more suitable for us,” he said.
Pillay declined to disclose the amount that the firm is targeting for the new fund. However, sources familiar with the plan say the firm is looking to raise over $100 million, which would be more than 4 times bigger than its debut fund, which was closed at $22.7 million in 2018.
Founded and managed by Pillay and Charles Wong, TNB Aura was set up with the goal to become one of the leading venture capital firms in Southeast Asia. Its first fund was one of five funds approved under the Singapore government’s AME co-investment scheme in 2016 with SPRING SEEDS Capital providing matching funding for select deals.
Besides TNB Aura, the partners also started a company called TNB Ventures, which helps corporates and government organizations carry out innovation programmes. Its extensive network of corporate and government partners has enabled TNB Aura to provide portfolio companies with go-to-market support and opportunities through our extensive corporate partner network
At the moment, the TNB Aura boasts of 16 portfolio companies according to its website. From them, 10 are from Southeast Asia, including Indonesia’s Ralali, Vietnam’s Teko and Singapore’s TradeGecko.
With the second fund, Pillay said, TNB Aura will continue to focus on Southeast Asia, but will see a slight emphasis on Indonesia and Vietnam in particular.
“We want to allocate about 30 per cent to Indonesia, 30 per cent to Vietnam and 40 per cent to Singapore and the rest of Southeast Asia,” he said.
Opportunity in SEA
In terms of target sectors, TNB Aura will remain sector agnostic, a strategy that it will allow the firm to best tap into opportunities in the region, which Pillay said is “wide but shallow”.
One of the ways the firm identifies upcoming sectors to invest in is through pattern recognition, with the Chinese market as its reference. The firm says it had worked with NUS to create a research paper, which analyzed the journey of Chinese unicorns, and used that to map Indonesia and Vietnam towards where China was in terms of their macro-economic climate.
“Indonesia was China in 2013/14, Vietnam was China in 2008/09. And we analyzed what were the kinds of unicorns which emerged in the different sectors. So, we try to do more a top-down approach where we go to Indonesia and Vietnam and try to find those companies, and try to analyze who are the top three guys in the area and we speak to them and try to back one of them,” he added.
Of late, Pillay said that his firm has also started to map Indonesia to Vietnam. Indonesia has given birth to numerous successful tech companies, with business models that may also take off in Vietnam.
“Right now, we already see the emergence of major micro insurance players like Pasar Polis and some other at over $100 million valuation, There are other players such as Kredivo, which are starting to very well now in the buy now pay later space,” he said. “In Vietnam, the market is a very Vietnamese-centric market. You need to be a Vietnamese to win it almost. So, we are starting to look for a consumer lending firm or micro insurance guy in Vietnam and try to back them.”
As for Singapore, which has a markedly different demographic to China and Indonesia, Pillay said TNB Aura will look to align its areas of investments to certain government initiatives. It will also focus more on B2B rather than B2C, given Singapore’s small market size.
A slew of venture capitalists have of late made headlines for raising similar amounts. Wavemaker recently made its first close at $60 million for its third fund of $100 million. Another local peer that is raising a $100 million new fund is BEENEXT – it has already secured $8 million towards the fund as of early November.