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“We’re not going to slow down investments since this is the time to build,” Jussi Salovaara, co-founder and managing partner for Asia at Antler, tells Tech in Asia.
If you’re are a regular reader of Recession Run, our Q&A series that explores the investment plans of big-name VC firms during the current economic downturn, then you’ve probably already spotted a running theme: Investors are on the hunt and are hungry for deals. This is somewhat understandable, given startup valuations are now relatively low.
However, Antler is not throwing caution to the wind, as picking the winners and losers of recessionary times is no easy feat.
The current macroeconomic conditions have further blurred the lines between overvalued, fairly valued, and undervalued firms. Even strong businesses, which make for good (or even spectacular) long-term investments, are likely bleeding cash now.
In today’s feature piece, Salovaara details the key factors required to identify businesses or sectors that are resilient and able to survive the headwinds. Furthermore, the premium story delivers exclusive insights on what kind of businesses Antler will likely avoid, the strategies they’re implementing, and what sectors they’re looking to invest in in the coming months.
Today we look at:
- Antler’s investment strategy during the current economic slump
- SoftBank’s promised cost cuts after posting a US$23 billion quarterly loss
- Other newsy highlights such as Hodlnaut halting operations and Australia piloting its own central bank digital currency
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A bit of everything
Image credit: Timmy Loen
Antler’s Jussi Salovaara was not joking when he said that now is a great time to build investments. Antler is targeting to almost double its investment in Asia this year compared to 2021, with hopes to back 70 to 80 companies.
The VC firm, he says, is looking to take part in about “30 to 35 deals in Singapore, 30 to 35 deals in Indonesia, and 15 to 20 deals in India” for the year.
- Key criteria: Industries considered essential such as healthcare, food, and consumer staples are common investment plays in times of an economic slowdown. But what factors should investors of growing and loss-making tech companies consider? According to Salovaara, the answer lies in the capital requirements of the sector and the time to reach profitability.
- Some industries may collapse: Tech in Asia has extensively covered the rise of quick commerce in Southeast Asia – especially in Indonesia. You can also find a list of the key players in this space here. However, these firms are unlikely to find a backer in Salovaara, who predicts that these are “exactly the type of business that is absolutely going to crash and burn.”
- In the business of forever: The recent crypto crash has shaken investor confidence, but Salovaara believes the space will bounce back in the long run. “We’re not in the game of doing quick slips with tokens or anything like that. We want to make everlasting businesses… we’re believers in blockchain and we’re going to be supporting projects that have a steady base,” he says.
Cushioning a US$23 billion loss
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