[Updated] Wavemaker Partners confirms making first close at $60m for third SEA fund

Wavemaker's Paul Santos.

Wavemaker Partners has confirmed that it has secured a $60-million first close for its $100-million third Southeast Asian fund, from a pool of investors such as Pavilion Capital, the International Finance Corporation (IFC), and Temasek Holdings.

Other investors or Limited Partners (LPs) who invested in the fund include the family offices of the co-founders of US-headquartered companies such as Microsoft (Vulcan) and Facebook (EE Capital), besides Singapore’s Keppel Corporation, multi-family office Aglaia Family Office, and Lance Gokongwei, chief executive of Philippine conglomerate JG Summit Holdings.

DEALSTREETASIA was the first to break the news on Monday morning, hours before the announcement came in. It also reported on how the Southeast Asia focused early-stage investor was courting IFC to participate as an LP for the fund.

In January this year, we had reported that IFC was looking to make an equity investment of up to $5 million, not exceeding 20 per cent of total fund commitments.

Managed by Paul Santos and Eric Manlunas, Wavemaker Pacific 3, L.P. or Wavemaker SEA Fund III will focus on seed-stage investments primarily in B2B and deep tech. So far, as many as 88 out its 109 investments made since 2012 have been in enterprise and deep tech startups.

“Most VCs in SEA invest in consumer tech. We’re grateful to have had our share of consumer success with Luxola (acquired by LVMH) and Coins.ph (acquired by Gojek),” said Santos, managing partner at Wavemaker Partners Southeast Asia. “With this new fund, we are thrilled to have the opportunity to continue to work with many of the best enterprise and deep tech founders in the region,” he added.

Going forward, Wavemaker plans to invest in 60 new companies with an initial cheque size of about $500,000, according to the announcement.

In August last year, DEALSTREETASIA had reported that the firm was looking to raise $80 million to $100 million for its third vehicle, and added that it had begun soft marketing the fund.

Wavemaker had last raised $66 million for its second Southeast Asia vehicle in October 2017, exceeding its $50-million target. The firm has invested in 75 companies from the second fund.

LPs in the second fund included Singapore-based Temasek Holdings, International Finance Corp, Tim Draper, and top corporates and family offices from the region. Wavemaker typically makes small investments at the seed stage, with an average ticket size of around $250,000.

Its portfolio companies include fashion and lifestyle marketplace Zilingo, enterprise fraud management solution provider CashShield, 3D printing startup Structo, and artificial intelligence, AML solutions provider SilentEight.

Its prominent exits include cosmetics e-commerce startup Luxola that was acquired by LVMH, work chat app Pie (bought by Google) and mobile advertising startup Art of Click (sold to Xurpas for $45 million).