How Eduardo Saverin’s new $360m fund addresses the series B gap

Photo credit: B Capital

Venture capital firm B Capital Group announced last week that it completed the closing of its first fund, raising US$360 million. The firm, co-founded by investor and Facebook co-founder Eduardo Saverin and investor Raj Ganguly, initially targeted a fund size of US$250 million.

(Disclosure: Eduardo Saverin is an investor in Tech in Asia. See our ethics page for details.)

B Capital is addressing the growth stage of tech companies related to financial services, healthcare, transportation and industrial goods, and consumer enablement.

The firm has long talked about bridging the “series B gap,” one of the major hurdles to growth for local startups. After 11 investments, and with three or four more about to be announced in the coming weeks, the VC feels it’s gained more clarity in terms of the companies it wants to back.

Platforms of the future

The VC is intrigued by business models like the advent of nation-wide platforms that can be the bedrock for additional services and new companies to build on. “This opportunity expands the market if you’re able to engage the right way,” partner Gavin Teo tells Tech in Asia.

He brings up Chinese telemedicine service Haodaifu as an example – the company uses Tencent’s WeChat app for functions like user acquisitions and payment. Tencent led the company’s US$200 million series D round last year.

As a counterpart in Southeast Asia, Teo mentions Indonesia-based startup Halodoc, which leverages Go-Jek’s growing services platform as a means of distribution.

The best way to play in ecommerce is through logistics and payments.

“That’s one lens through which we look at interesting opportunities: How do you play within the various national champions who have created their own sandboxes for attracting users at scale?” Teo muses.

At the same time, the firm is careful about how it approaches sectors of interest. For example, when it backed Singapore-based logistics provider Ninja Van, it was a way of tapping into Southeast Asia’s rich ecommerce opportunity in a low-risk manner. It made more sense than backing an inventory-heavy ecommerce startup with high capital requirements in the series B and C stage, partner Kabir Narang explains.

“We think ecommerce is a 30-year story and beyond in Asia, and the best way to play in it is through logistics and payments,” he adds.

In Asia, B Capital has also invested in companies like India-based MSwipe that focuses on payments, Singapore-based healthcare products marketplace CXA, and SME-focused loan and invoice financing startup Capital Match. While the fund has a global outlook, Teo and Kabir foresee that the region will continue to be a strong focus for them.

See: Southeast Asia sees record startup funding in 2017

Filling the vacuum