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The startup life is often about disruption: These companies are trying to solve problems through innovative solutions, and sometimes these can seem pretty weird.
Consider ride-hailing services like Uber and Grab. Jumping into the back of a stranger’s car that you booked through an app so you can get to your dinner meeting seemed pretty weird back in the early 2010s, but it’s common now.
Still, not all new business models and innovative solutions take off. After all, 90% of startups fail (for various reasons, yes, but business models are one of them).
That’s why the Vietnam-based private equity (PE) firm we spoke to in today’s premium story has chosen not to bet on startups. Instead, it’s focusing on later-stage companies that have demonstrated good unit economics. It’s a strategy that certainly makes sense in the volatile world we live in.
Today we look at:
- Mekong Capital’s approach to investing
- The state of ecommerce in Southeast Asia
- Other newsy highlights such as robots that can cook, make coffee, and do dishes and this Philippine VC firm’s newest funds
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Less risk, more rewards
Image credit: Timmy Loen
Founded in 2001, Mekong Capital is one of the oldest investment funds in Vietnam. It’s built a strong reputation backing popular consumer-facing businesses such as Mobile World, Pizza 4P’s, and Pharmacity.
In an interview with Chad Ovel, a partner at Mekong Capital, Tech in Asia learned more about the firm’s investment approach and why we’re seeing a shift from VC funding to PE money for some tech firms in Vietnam.
- Making the right bets: Mekong Capital has maintained its stance of not backing risky startups with unproven business models, even when other VCs deemed Vietnam as the region’s next growth market after Indonesia. According to Ovel, the firm scouts for companies that have solid unit economics and a clear and exciting vision.
- VC to PE: Ovel anticipates that more companies in Vietnam’s tech market will transition from VC financing to PE firms as they mature due to the nature and size of the checks they require.
- Eyes on biotech: Biotech has come up as an area of interest for Mekong Capital in Vietnam. The country doesn’t have high regulatory costs, unlike places like the US. This enables biotech founders to bring their products to market faster.
Read more: Why this Vietnam-based PE firm doesn’t bet on startups
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