Indonesia, Singapore key markets for venture capital fundraising: Report

JAKARTA, May 20, 2020, The Jakarta Post. Indonesia and Singapore currently dominate the venture capital (VC) fundraising in Southeast Asia, despite a slower pace of capital raising in the first quarter this year, The Jakarta Post reported.

Indonesia raised US$161 million in the first quarter while Singapore leads with $865 million over the same period, according to a recent report by Deal Street Asia. No closes were recorded by VC funds in Cambodia, Malaysia, Thailand or Vietnam.

Deal Street Asia ASEAN market research head Andi Haswidi in a statement on Tuesday said that the first-quarter fundraising performance did not reflect the true impact of the COVID-19 pandemic.

“This is simply because most of the capital committed by investors to VCs in the first quarter was actually solicited before the region began to tighten social-distancing measures in April,” he said.

BRI Ventures was recorded as the top fund-raiser firm in Indonesia with $136 million, followed by OCBC Ventura NISP and Indogen Capital at $15 million and $10 million, respectively. Meanwhile, Singapore-based B Capital raised $600 million, Vickers Venture Partners raised $200 million and Credence Partners at $50 million.

Southeast Asia-focused VCs were armed with committed capital of around $5.8 billion, based on venture funds that reached a final close in the last four quarters, according to the report, titled “Southeast Asia’s VC Fund: Q1 2020 Review”.

Beyond fund closings, 53 VC firms were in the market to raise $8.4 billion for Southeast Asia-focused funds, of which around 30 percent has been secured.

The SEA-focused VC funds accumulated $1.3 billion in additional dry powder in the first three months this year, ending a year-long streak of quarter-on-quarter growth.

Data from the report also show that capital committed for interim and final fund closes fell 47 percent during the period from Q4 of 2019. However, this figure was still more than triple the value recorded in the same period last year.

Andi went on to say that the outlook for VC raising in the region is expected to deteriorate in the coming months as the full impact of the COVID-19 pandemic started to affect the fundraising process.

“We believe fundraising is going to be more challenging in the second quarter onward as investors’ risk appetites shrink,” he said. “Fund managers are also careful about deploying their dry powder, which could weigh on tech startup valuations despite investors’ loaded war chests.”