- Premium Content It takes our newsroom weeks - if not months - to investigate and produce stories for our premium content. You can’t find them anywhere else.
Benjamin Cher · · 3 min readSquare Peg to raise another $550m fund in second half of 2024
The Square Peg Capital team / Photo credit: Square Peg Capital
VC firm Square Peg Capital is looking to raise another US$550 million fund, with fundraising to start some time in the second half of 2024.
This will be the sixth fund the company has raised, following a similarly sized fifth fund.
Tushar Roy, partner at Square Peg, told The Business Times that there was no need to increase the fund size given the market environment.
The company will double down on its investments and activities in markets across Australia, Southeast Asia, and Israel, with plans to expand its team in Singapore, he added.
Leila Lee, Square Peg’s head of distribution, has been promoted to partner and will spearhead the fundraising effort.
“We are trying to be disciplined with our fund sizes. As an emerging markets-centric fund manager, we are aligned to what’s the optimal fund size given the state of maturity we’re seeing,” Roy said.
Square Peg will be continuing its current strategy with the new fund, focusing on the fintech, AI, SaaS, and climate tech sectors. It intends to make three to four investments a year, in line with its tenets as a high-conviction investor, focusing on companies that could give above-average returns.
The VC firm has returned over S$1 billion (US$738.8 million) to investors, taking its distributed to paid-in capital ratio to 4.6x. These returns have come from 16 exits at an average multiple of 6x, giving Square Peg an internal rate of return of 44%. These exits span IPOs to sales on the secondary markets and trade sales.
Square Peg’s track record is above average given that most VC funds have reported few exits in the past two years. As interest rates rose, investors moved money out of higher-risk assets and into fixed-income investments – meaning there has been less money for startup funding and growth companies.
(From left) Square Peg principal Ed Barker and partners Piruze Sabuncu and Tushar Roy / Photo credit: Square Peg Capital
That said, Roy sees a light at the end of the tunnel. “We’re coming out of a low point of the market,” he pointed out. “We have companies being approached for an M&A even as they plan to go public.”
The relatively nascent startup ecosystem in Southeast Asia has made exits even tougher to come by, but Roy sees this situation improving as more startups and corporates look toward M&A as a means of expanding in the region.
Stay ahead in Asia’s tech landscape
This is premium content. Subscribe to read the full story.
This will be the sixth fund the VC firm has raised, with the company focusing on investments in the fintech, AI, SaaS, and climate tech sectors.
We know this is not ideal. ⌛ Sign up in 20 seconds. Cancel anytime.
Our subscriber community includes professionals from these companies:
Stay updated on the go with our mobile app.
Get latest insights with smoother, more personalized experience through TIA mobile app.
