The rise of super VC scouts in SEA

In a young startup ecosystem, getting funded by a VC is like being admitted into an exclusive fraternity. But Southeast Asia is maturing: Just consider the fact that the region has bred 23 unicorns so far this year.

However, with maturity come growing pains, and VCs are starting to feel them. The region is diverse and its emerging markets are becoming more competitive. Startups are targeting more niche verticals and offering deeper tech capabilities. Besides, Covid-19 has limited investors’ ability to meet founders and perform their due diligence.

That’s why scout programs are springing up across Southeast Asia. Scouts are VCs’ eyes and ears in the region – they sense potential deals and spot promising founders. As more innovation blows in from beyond the startup hubs of Singapore and Indonesia, scout programs will be vital in connecting tech entrepreneurs to the capital they need for growth.

Monk’s Hill Ventures (MHV), which launched Venture Scouts in September, is the latest to join the growing trend. This program is different from others in the region in that it brings together so-called “super scouts” – successful, well-connected founders and operators of startups.

They include the likes of Bukalapak co-founder Achmad Zaky, Zopim co-founder Royston Tay, R Fitness founder Gita Sjahrir, and Kumu chief product officer Crystal Widjaja.

Monk’s Hill’s ‘superconnectors’

“When [MHV] started, you could barely find anyone who had any experience in tech to help you build companies,” says Peng Ong, co-founder of MHV.

That began to change three or four years ago when graduates from the first wave of Southeast Asian startups helped launch and support new ventures. That’s also when MHV started thinking about creating a program that would use scouts to enable the VC to learn more quickly about promising companies and founders beyond its direct network.

The program began taking shape early this year. Instead of undertaking a formal process where one applies to be a scout, MHV brought together startup founders and operators whom its partners already knew firsthand.

“They’re entrepreneurs. We work with them, but we don’t necessarily have to have invested in them. We like them, and wanted to figure out ways to work closely,” Ong tells Tech in Asia.

MHV is not looking to add more scouts to the program at the moment.

The ideal scout should have a strong network to generate deal flow. In MHV’s case, scouts also need to have experience running or founding startups. MHV’s philosophy is to have people with startup experience investing in other founders, and that also applies to its scouts. In other words, it’s about “entrepreneurs backing entrepreneurs backing entrepreneurs,” says Ong.

Demystifying the scout playbook

Are scouts the key to startup diversity?