First ASEAN fund in the works!
We're proud to announce that we have our initial interest in our first ASEAN fund. The intended companies are for either companies already operating in ASEAN or for stable, mature international companies looking or open to expanding into SE Asia with the initial financial risk taken off the table. However we will not be supporting companies with or planned operations in countries with either currency outflow controls or insufficient rule of law for foreign investment i.e. China, Cambodia. Investing into India and Indonesia have various issues but it may be possible to work them out.
The potential fund allocation is quite significant and the minimum ticket size will be $1m EUR with our initial first tranché to fill being $10m EUR. Much more is available potentially depending on what a company needs. Unfortunately this is not for venture capital (for now) and will look more like private equity or late-growth stage with the main goal of stable yearly returns.
Here's what we're looking for generally speaking
Companies that may have "flatlined" in terms of growth and have a stable 7-8 figure ARR and may have peaked and no longer considered unicorn potential by their VC and now having a difficult time raising more funding on growth metrics alone. For the company, the funding represents a second or last chance at getting the growth "hockey stick" back up. We're looking for stable returns first and exit / capital appreciation second. If your VC considers you a company they're looking to "park", we may be what they're looking for.
Companies or assets that were doing well before Covid but were shutdown or suffered because of the pandemic. We can be flexible here and wait for up to a year before the first return.
International companies that already had ideas on Asian expansion or would be willing to set up a significant enough operation somewhere in SE Asia. We understand that during these times the funding might be desperately needed to shore up domestic operations but hiring staff or having staff relocate to SE Asia also represents significant opportunity and potentially up to a 4x geoarbitrage on costs. Low costs, better internet infrastructure than the West in most cases, far lower Covid numbers and large local populations that are tech crazy, For example, Thailand's tech ecosystem is growing 4 times faster than Australia's despite the language barrier. These are only some of the benefits to be discovered.
Requirements / Company types
Returns do NOT have to come from Asia, they can come from other parts of the world as long as you have operations in Asia. This is recognizing that local Asian companies that primarily serve local markets often have lower margins
We have a goal of supporting or bringing more deep tech / AI / hardware / mobility / biotech / renewables, really anything highly technical or scientific to SE Asia. Companies in these sectors are preferred but otherwise we can be sector agnostic. Unlike the West where investors generally now run away from this stuff for more "capital efficient" and safer CRUD apps (simple tech that just reads in and out of databases mostly) without technical risk where metrics can be pumped up quickly, both Asian govts and investors aren't impressed and neither are we.
The company is ideally around 5 years old, minimum 3 years old.
Must have raised at least $1m USD or have at least double that in annual revenue
Ideally 20-30% minimum net margins which we can plan and structure your return around. Generally we'll take about as much of an long term equity position as the return. However we know that it isn't ideal to be losing this percentage over time in the long term and if growth really does start to take off, we're open to negotiating down or eliminating the stable returns to aim for the moon in terms of exit with you :)
We'll take a minimum of 1-2 board seats depending on the size of the investment
How we'll prioritise
Priority 1) Companies that have had relatively stable revenue even throughout the pandemic period and are able deduct their first yearly payment from our initial funding amount
Priority 2 / Bonus) Successful western companies that can relocate or expand to Thailand's EEC (Eastern Economic Corridor) or Malaysia's Cyberjaya (more on these below later)
Priority 3) Companies that have or will have their Asian operations elsewhere in Asia or the ASEAN region.
About Thailand's Eastern Economic Corridor
The EEC is intended to be Thailand's more industrial version of Silicon Valley intended to house all the highest potential "S Curve" tech industries of the future. Both software/"digital" and hardware industries are welcome. High tech tourism is also an intended feature, for example Sony/Columbia Pictures will be building the Aquaverse theme park in the region as well. Please click here for the complete list of planned industries and further info
About Malaysia's Cyberjaya
Cyberjaya was Malaysia's attempt at creating their own Silicon Valley type city from scratch. Wired up with fiber optics and designed by Mckinsey to be very similar to Silicon Valley (or Bellevue, Washington). Two decades later it is described as a failure but that was before the AI age. Who needs a fully developed high tech city as a blank canvas? everyone involved with AI, hardware and the "4th industrial revolution". Minimal to no traffic for autonomous vehicle developers? check. Clear skies for things like drone delivery? check. Govt support / MDEC in the heart of the city and highly permissive/flexible and self contained city-within-a-city policy towards this? check. We think Cyberjaya is ripe and prime for a second act and with our help to rip out the call centres or at least introduce some long needed, real tech alongside, it's time may be coming.
For more on what Cyberjaya is like, click here
Around the city in Cyberjaya