TikTok early investor to put one-third of new $1b fund into Asia

Goodwater’s founding partners Eric Kim (left) and Chi-Hua Chien / Photo credit: Goodwater Capital

Goodwater Capital, a global investment firm established in 2014, continues to focus exclusively on consumer tech companies, even as the sector grapples with post-pandemic losses.

Its portfolio in Asia includes consumer tech leaders such as Xendit, Kakao, Coupang, MoMo, and Toss, and Musical.ly, which was later acquired by ByteDance and rebranded to TikTok.

To date, Goodwater has made 56 investments in Southeast Asia, 70 in India, and 26 in South Korea.

In July, the VC announced it had raised US$1 billion for its early- and growth-stage funds. It has historically invested about one-third of its capital in Asia, and that allocation could increase in the future, co-founder and managing partner Eric Kim said in an interview with Tech in Asia.

He also pointed out that Goodwater’s team of engineers and data scientists gives it a unique advantage in helping portfolio companies leverage data, which is even more crucial in navigating the current challenging environment.

Here’s our conversation with Kim, which has been edited for clarity and brevity:

At a time when most investors have lost interest in unprofitable consumer tech businesses, why does Goodwater remain focused on the sector?

Kim: Consumer technology goes beyond camera filters and online shopping – it is embedded into the very fabric of society.

While most venture-backed startups have upfront losses, consumer tech businesses such as Google, Amazon, Meta, Kakao, and Coupang are some of the most profitable tech companies in existence, thanks to network effects.

We don’t shy away from companies that aren’t profitable from day one. Instead, we lean into helping them achieve market leadership and long-term profitability.

As investors, we must identify the eventual winners in a market since the vast majority of value accrues to the market leader, not the second or third player (e.g. Uber vs. Lyft).

To put it simply, a great consumer tech company offers a service that people can’t live without. Today, we can’t imagine our lives without ride-sharing, video streaming, online banking, and virtual healthcare.

See also: New unicorn Xendit, rivals double down on regional play