Temasek-backed venture capital firm Vertex Ventures has held the first close for its $250-million global growth fund, according to its managing partner Chua Kee Lock.
He did not disclose the amount raised so far for the fund, which will target post-Series B investments globally.
In an interview with DEALSTREETASIA, Chua shared that the Vertex Growth Fund is on track to hold its final close by June this year. This is Vertex Ventures’ sixth and largest fund to date that will write cheques between $10 million and 15 million.
Chua refused to divulge information about the limited partners (LPs) backing the latest fund. Vertex Holdings, a Temasek-owned entity, has been the anchor LP in all Vertex funds and the growth fund is unlikely to be an exception. Chua is the CEO of Vertex Holdings and the managing partner of Vertex Ventures SEA and India.
The Singapore-based VC had previously received investments from Thailand’s Singha Ventures and Kasikornbank Pcl, and Taiwan’s Cathay Life Insurance for its $210-million SEA and India fund closed in 2017. That was the first time it had tapped external investors for funding.
Seeking growth-stage opportunities
According to Chua, the motivation behind raising a growth fund is to make top-up investments in existing portfolio companies. As Singapore’s oldest venture capital firm, it is beginning to see several of its portfolio companies cross the Series A and B stages.
All of Vertex’s five other funds focus on early-stage opportunities. Vertex also keeps a strict 10 per cent cap on its investment per portfolio company within a fund to diversify investment risk.
“When these early-stage companies reach the 10 per cent threshold of our fund size, we have to stop investing. Some of these companies, however, may have accelerated through the C and D rounds. While we may have made good money in the early portion of the investment, we may not be able to capture the remaining value of these companies as they grow,” said Chua.
Having made the first close, Vertex Growth recently led the final close of a $41-million Series C round for Singapore-based digital cross-border payments company InstaREM. Other portfolio companies include IT security solutions provider PerimeterX and medical devices maker Nuvaira.
“The thesis is this – is there a way for us to selectively invest in those companies given that we have knowledge and perspective about trends and what’s happening around the world? Is there a way can we have a better advantage over other investors?” said Chua.
Vertex’s global growth fund places it in the same league as B Capital and Eight Roads, which have been channeling funds into the Series B to C bracket in recent months.
As of October 2018, Singapore-based Vertex Ventures had over $2.5 billion of capital under management across China, the US, Israel, China, Southeast Asia and India.