East Ventures announces new $28m fund for Southeast Asia

As 2017 kicks into full swing, Singapore-based VC East Ventures today announced its fifth fund worth US$27.5 million for investing in early-stage Southeast Asian startups. (Disclosure: East Ventures is an investor in Tech in Asia. See our ethics statement for more info).

A report co-authored by Singapore’s sovereign wealth fund Temasek and Google projects Southeast Asia’s internet economy to hit over US$200 billion by 2025. It’s the fastest-growing internet market, the report adds, with an existing internet user base of 260 million – growing to 480 million by 2020.

East Ventures is banking on that growth. With the new capital from unnamed prominent families and entrepreneurs, it says it will invest in more than 20 startups in the region – its average number per year.

The firm has 80 portfolio companies in Southeast Asia, making it one of the most active investors.

It says that assets under its management have increased tenfold.

“The firm believes there will be more mergers and acquisitions this year involving its portfolio companies. However, startups can expect there to be little activity in series B investments,” it forecasts in a statement.

Early bets in Indonesia

Partners Willson Cuaca, Batara Eto, and Taiga Matsuyama will follow the same investment thesis in deploying the capital. The firm usually identifies verticals that are poised to expand in a market, then backs people likely to be future leaders of the space. Those founders are either in the prototyping stages or have a product with early traction. Once a clear category winner has been established, the firm will move to other parts of the value chain.

Apart from Tech in Asia, East Ventures has made early bets on companies like ecommerce giant Tokopedia, flight search engine Traveloka, online-to-offline ecommerce startup Kudo, cashback company Shopback, and online payments solution Omise.

Many of those startups are based in Indonesia, where East Ventures has kept its focus. It recently set up two co-working spaces in Jakarta under the name EV Hive, which it also manages. EV Hive hosts more than 100 public tech events every year, with an audience of more than 3,000 and speakers from various industries, startups, and corporates.

“East Ventures’ networks enable it to help companies both expand outside of Indonesia into the region and also enter Indonesia from the region,” the firm notes.

So far, East Ventures has seen exits of seven portfolio companies, including Indonesian daily deals site Disdus, price comparison site PriceArea, and fashion estore Shopdeca.