Why Asia Fund X targets ‘mainstream-oriented’ founders

Jeffrey Seah / Image credit: Timmy Loen

Early-stage investor Quest Ventures has backed some of the most notable tech startups in Southeast Asia, including Carousell, Carro, and ShopBack. In 2020, the VC announced the first close of its US$50 million Asia Fund II.

One of its partners, Jeffrey Seah, recently set up his own firm, MSW (Mettle Salt Wealth) Ventures. Its inaugural fund, Asia Fund X, will target investments across Southeast Asia, particularly those in foodtech, agritech, data tech, and sustainability.

In an interview with Tech in Asia, Seah explains why Asia Fund X was launched amid the market downturn.

Why did you launch a new fund amid the current economic headwinds, particularly for the tech sector?

Seah: Asia Fund X is an opportunity fund – the X stands for exceptional growth and founders with the X factor. It also serves as the follow-on fund for the best companies that I invested in via Asia Fund II, my previous fund at Quest.

In fact, Pavilion Capital – a subsidiary of Temasek – has already co-invested in a number of Asia Fund II’s portfolio companies. Since last year, four Asia Fund II firms have done merger and acquisition deals with competitors.

So I decided to raise a new fund to support these companies to outcompete weaker contenders. The structure of Asia Fund X focuses more on multimarket expansion, which means I need a different set-up than Asia Fund II, which is more focused on investing in early-stage startups.

I’m the general partner for both funds. For Asia Fund X, we already kick-started the due diligence process for several strategic investments. A portion of this fund will be allocated for new companies.

See also: Tech in Asia’s ongoing VC funds tracker

How much has Asia Fund X raised? Who are the backers?

Its backers include Pavilion Capital, Asia Fund II’s anchor investor, other returning sovereign wealth funds, family offices, and high-net-worth individuals. I’m pleased to say that the first close of Asia Fund X has already surpassed the total amount of Asia Fund II.

What do you think of the dropping valuations in tech? How has this affected the sector?

Many well-funded companies died over the past year – being well-funded doesn’t necessarily mean being well-run. After raising a lot of money, many founders do not manage their spending well. I expect the behavior of startups these days to be a lot more mature and mainstream.