Sunday, July 12, 2020

Indonesian VC East Ventures Announces First Close of US$88M Eighth Fund

East Ventures

The seed fund by East Ventures is focused on innovations for a post-pandemic world

 

By Sharon Lewis

 

Indonesia-based early-stage tech investor East Ventures has announced the first close of its eighth fund, a seed fund that aims to raise US$88 million to support post-Covid-19 digital innovation startups in Southeast Asia, in a statement today.

 

The funds have been contributed by U.S.-based private equity investment firms Pavilion Capital and Adams Street Partners amongst other institutional investors, global funds, and family offices, the statement said.

 

“The pandemic has created a chance for a new breed of entrepreneurs to think about new problems and how to solve them in efficient ways via technology,” Managing Partner of East Ventures Willson Cuaca said in the statement. “We remain optimistic about the future of Southeast Asia’s digital economy, and we’re particularly bullish on the Indonesian market.”

 

The statement also said that East Ventures is working closely with its existing portfolio companies on implementing “wartime leadership,” which Cuaca said entails helping companies understand the impact of the pandemic and how to navigate it tactically.

 

The 2009-founded East Ventures chose to cap the fund at under $100 million to facilitate easier fund deployment to its early-stage portfolio companies, the statement noted. It added that by narrowing its focus to early-stage investments, the firm can help companies find product-market fit quicker.

 

The firm’s Multiple on Invested Capital, which is a return on invested capital, has touched 1000x on some of its deals, according to the statement, and the company claims a 7x Distributions to Paid-In Capital, which is the amount of realized returns distributed to investors who commit money to the fund.

 

The firm saw prominent exits in 2017, when Singaporean on-demand consumer services app Grab acquired East Ventures’ portfolio company Kudo, and in 2019 and 2020, through the acquisitions of Loket and Moka respectively by Indonesian superapp GoJek, the statement noted.

 

Other notable portfolio companies include coworking space CoHive, and fintech lending platform Koinworks, as well as Indonesian ecommerce unicorn Tokopedia, and online travel services platform Traveloka, it added.

 

Prior to the seed fund, East Ventures last significant kitty was its oversubscribed sixth fund closed in August 2019, which raised $75 million-more than twice its initial target of $30 million.

 

Pavilion Capital and Adams Street Partners joined other investors pitching in for the fund, including CEO of Meituan-Dianping Wang Xing, Co-founder of Facebook Eduardo Saverin, Co-founder of Razer Kaling Lim, and Singapore-based institutional investor Temasek.

 

Indonesian family offices Sinarmas Group, Triputra Group, and Emtek Group also contributed to the fund, aimed at supporting Southeast Asian startup ecosystems.

 

Southeast Asia is quickly emerging as the startup hub of the world, giving strong competition to Silicon Valley. While Beijing has the most number of unicorns worldwide, Hangzhou, Jakarta, Seoul, Shenzen, and Tokyo are expected to become robust startup ecosystems in the coming years.

 

Further, the post-pandemic outlook for the region is looking positive, with countries such as Indonesia, Lao, Myanmar, the Philippines, Singapore and Thailand expected to bounce back from the economic downturn due to Covid-19 (according to Asia Development Bank’s 2021 Gross Domestic Product forecasts.)

 

This is partly due to the growing internet economy amongst Southeast Asian countries, which touched $100 billion in 2019, and because of ongoing trade conflicts with China that are pushing companies to exit the giant economy in search for friendlier pastures in the Southeast Asian region.

 

Header image courtesy of East Ventures

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