East Ventures sees opportunity as recession looms

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Hints of an impending slowdown have been scattered across front pages and news websites in recent months. From rising interest rates to the swathes of firms announcing layoffs, countries and companies are bracing for impact as recessionionary alarm bells begin to get louder.

The likelihood of losing a job or steady source of income markedly increases in tough economic times. For instance, over 22 million jobs were lost in high-income countries during the last recession.

However, the shrinking of the economy is not a disaster for everyone. In fact, the downturn has got some investors licking their lips.

While a recession wreaks financial turmoil, it also provides a great opportunity to build wealth with a number of firms that are likely trading at depressed valuations in public and private markets.

With a recession looming and startup valuations due for a readjustment, Tech in Asia sits down with Roderick Purwana, managing partner of East Ventures, in today’s premium story to gather his insights on investing amid a financial crisis and the VC firm’s investment plans during this period.

Today we look at:

• East Ventures’ bets during a downturn
• Zalo prioritizes its messaging over possible super-app push
• Other newsy highlights such as Elon Musk and Twitter heading to court and Grab’s heatwave surcharge in Vietnam

Premium summary

Making a dash for it

Image credit: Timmy Loen

“We think that it’s an excellent time to be an investor right now,” East Ventures’ Roderick Purwana says. And his VC firm is backing up his words with action. East Ventures wrapped up 22 funding deals in Q1 2022, a significant jump from the 10 completed over the same period last year.

• Temper expectations: According to Purwana, startup valuations are in line for a reset. “We’re coming into a market that has shifted in terms of expectations, especially in the public markets. We’re seeing a repricing of some of the deals, especially with companies in the later stages. Maybe expectation of valuations will shift as well in the next six to 12 months,” he said.

• Scouting sectors: While East Ventures will look to actively invest in commerce, fintech, logistics, and B2B ecommerce this year, it will also keep a close eye on a few emerging sectors. “We’ve been taking a closer look at investing in both edtech and healthtech. But some challenges around monetization remain, so we’re very cautious about it. We’ve actually invested in a few more healthtech firms, especially on the seed side for East Ventures,” Purwana said.

Taking a different path

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