Singapore and Los Angeles-based seed investor Wavemaker Partners is in the market again to raise its fourth Southeast Asia-focused fund, with a target corpus of $120 million, according to a disclosure made by the International Finance Corporation (IFC).
IFC, a member of the World Bank Group, is proposing an equity investment of up to $10 million in the fund – Wavemaker SEA Fund IV – but not exceeding 20 per cent of the vehicle’s total capital commitments.
The fourth fund aims to invest primarily in enterprises or B2B and deep tech companies led by entrepreneurs creating superior value by leveraging technology to deliver high-impact automation, data, intelligence, IFC disclosed. DealStreetAsia has reached out to the firm for confirmation.
Wavemaker is one of Southeast Asia’s largest and most active seed investors, having invested in over 130 startups since 2012. Its third Southeast Asian fund closed in June 2020 at $111 million, exceeding its $100-million target.
IFC also invested in the fund, joining Temasek, Pavilion Capital, Concentric Equity Partners, and Vulcan Capital as anchor investors.
The venture capital firm has clocked at least eight exits with a total enterprise value of $491.5 million. These include Art of Click ($21.5m), Coins.ph ($72m), Gushcloud ($8m), Luxola ($40m), Moka ($130m), Red Dot Payment ($65m), Wavecell ($125m), and undisclosed ($30m).
IFC said its proposed investment in Wavemaker’s latest fund will help address the VC funding gap in the region, especially in the very early seed or series A stages. IFC considers these stages as riskier segment and lacks sophisticated institutional funds.
It expects the fund to provide access to early stage capital and operational support that will lead to increased ability of startups to scale and succeed.
“The fund’s innovative investees bring new business models, sometimes into underserved parts of the region, demonstrating the viability of early-stage VC investments in a region where VC funding is still in its infancy,” IFC said.
About 86 per cent of Wavemaker’s Southeast Asian portfolio companies are enterprise-focused firms, while the remaining 32 per cent are deep tech and artificial intelligence startups. Some notable names include construction site management company Novade, B2B FMCG marketplace GudangAda, and laser communications startup Transcelestial.