Recession Run: Australian VC to invest 20% of new fund in SEA

The funding winter is here. News of layoffs and troubles in startups have been cropping up. In this Q&A series, we talk to investors to suss out what opportunities they see, what strategies they’re implementing, and what areas of investment they’re looking at in the next few months.

As conversations around global food security, sustainability, and climate change increasingly overlap, Brisbane-based Mandalay Venture Partners, which specializes in backing businesses in the agrifood tech space, is raising a fund for startups in Australia and Southeast Asia.

Philippe Ceulen observes that the VC firm’s four partners have deep ties to Southeast Asia: either they were born in the region or have spent a considerable chunk of their professional lives there. They are also “incredibly passionate about innovations in agriculture and food,” says Ceulen, who serves as head of strategy at Mandalay.

Philippe Ceulen / Photo credit: Mandalay Venture Partners

A major difference between the two markets’ startup ecosystems is the degree of the government’s involvement. “As opposed to what we see in Australia, in Southeast Asia the ecosystems are largely corporate and private investor-led,” he notes. As such, this often means that entrepreneurs know they are “more or less on their own,” which makes them “more independent and hungrier” because they understand that they have to make it work by themselves.

Here are more insights from Ceulen on Mandalay’s current fund, its search for a counterpart in the region, and its investment plans for Southeast Asia. He also offers some recession-centric advice to founders.

Tell us about Mandalay and the fund you are raising.

Ceulen: Mandalay is an early-stage VC fund committed to playing a role in sustainably feeding the world’s growing population. As a VC fund, we have the responsibility to seek out world-class innovations that can enable this, and support entrepreneurs who can make it happen. The strength of our team is that we have a pretty unique breadth of experience: working in startup ecosystems as founders or employees, serving as commercialization experts within universities and governments, being investors, and more.

We’re raising a fund of A$35 million or about US$25 million. This fund is meant for startups in the agritech and food technology space, but it isn’t limited to agritech itself. When thinking of agrifood systems transformation, startups are high-leverage opportunities to create change. Our “farm to fork” mandate means we look at core agrifood opportunities as well as startups linked to food sustainability, including those in the climate tech space, which will also be part of the fund.

The check sizes are likely to be in between A$150,000 (US$100,000) to A$1.2 million (US$804,000). The first round of the fund has already closed at A$15 million (US$10 million).

Mandalay’s partners (from left): Mark Gustowski, Al Fullerton, Timothy Hui, and Philippe Ceulen / Photo credit: Mandalay Venture Partners

What are Mandalay’s plans for Southeast Asia?

We are likely to invest in 30 startups across Australia and Southeast Asia in the coming years. Recognizing the opportunity that Southeast Asia presents, the plan is to invest up to 20% of the fund in the region.