Will deploy up to $30m more in Asia, says Vickers Venture’s Finian Tan

Recession Run is a Q&A series where we talk to Southeast Asia’s investors to suss out the opportunities they see this funding winter.

As a deeptech-focused fund, Vickers Venture Partners invests about US$10 million in startups that are past the proof-of-concept stage and aim to make “the world a better place,” says Finian Tan, the VC firm’s chairman and founder. The timing of these investments are often in the startup’s corporate life cycle.

Vickers Venture Partners founder and chairman Finian Tan / Photo credit: Vickers Venture Partners

Timing of when funds are deployed – and raised – is crucial. For instance, when Tan’s firm was raising its sixth fund, Covid-19 struck and the markets turned. So the firm switched strategies and moved away from being “purely in a venture fund,” Tan tells Tech in Asia.

More on this, on suitable corporate governance, as well as the firm’s recent SPAC activities ahead:

How is the deeptech industry likely to be impacted by current economic headwinds compared to other sectors?

Tan: The funding winter affects everybody. Valuations have come down and it’s much harder for companies to raise capital. But the good ones will always be able to find money in this flight to quality.

There is also a flight to safer bets. Although the deeptech sector has tech risks, it has much fewer market risks. Companies that have achieved proof of concept for their technology should be seen as less risky than a company that is trying to be the next TikTok or Angry Birds.

Any impact of the downturn on your investment activities?

Our fundraising activities are pretty much constant. Our portfolio companies always need capital to grow.

How much are you looking to invest in the region in the near future?

We look at Asia as a whole and are aiming to deploy another US$20 million to US$30 million to the region in the next couple of years. Deeptech companies are most prevalent in Singapore, Japan, and Korea, though other markets can always have innovations that interest us. Asia makes up about a quarter of our latest fund.

Can you shed some light on your sixth fund?

We actually exceeded our targets. We had wanted to raise US$500 million and thought to do it purely in a venture fund. But as the markets turned during the pandemic, we switched strategies and raised US$260 million in our Global Deeptech 2 fund, US$140 million in a SPAC fund, and over US$100 million for co-investments, which exceeded our target raise.