Northstar enters Southeast Asia VC space

Shane Chesson, who has spent more than a decade covering the technology space as an investment banker, and Hian Goh, an entrepreneur best known for setting up the Asian Food Channel, which was sold to Scripps Interactive last year, have joined the Northstar team.

For the last year or so they have been investing together on a deal-by-deal basis at Pivotal Ventures Asia, backing companies including online groceries retailer RedMart and restaurant bookings site Chope.

According to industry sources, a VC fund is being planned. Northstar declined to comment, but clearly affiliating with an established PE player offers Chesson and Goh a platform from which they can reach out to institutional and high net worth investors, as well as develop strategy and manage portfolio companies.

"We got together and started screening companies and developing pipelines and making relevant investments," Chesson said.

"We also realized that to do this properly and with the opportunities from fast-growing Southeast Asian technology end-markets, we wanted to join a group that has a presence in the region, as well as the infrastructure and fund management capabilities to run a proper VC platform."

They will target start-ups in Southeast Asia, having seen an influx in quality companies emerging as entrepreneurs come through the seed phase supported by local incubators and government policy. Typical portfolio companies will start in Singapore and grow regionally or offer global solutions from a Singapore base.

According to AVCJ Research, venture capital investment in Southeast Asia came to $921.7 million in 2013, the highest total on record. Singapore-based enterprises received the bulk of the funding. Southeast Asia saw a further $1.2 billion in growth capital investment in 2013, another record high.

Goh notes that Singapore saw plenty of early investment from bigger names targeting hardware and semiconductors, but few early software winners in the B2C or B2B spaces. While the venture capital industries in China and India continue to grow, spurred by the rise in mobile devices, cloud computing and big data, Singapore's early stage tech ecosystem didn't really get going until 2010.

"One of the reasons we can exist today is because of the reboot in Singapore in 2009," Goh says. "The government put its first few schemes together, high net worth individuals came to town, and people started to look at Singapore as a great place to live and do tech work as opposed to Silicon Valley or even Beijing."

With the seed ecosystem now in place, the focus turns to Series A rounds and helping nascent companies achieve scale. This is where Silicon Island will direct much of its efforts.

"I have known Shane and Hian for several years and seen their success in previous ventures. When they described the recent acceleration they were seeing in the Singapore start-up technology ecosystem we realized that there was a really interesting opportunity set developing," said Ashish Shastry, managing partner of Northstar.

Northstar is understood to be in the process of raising its fourth private equity fund, which has a target of just under $1 billion and will invest across Southeast Asia but predominantly in Indonesia. Its previous fund closed at $820 million in 2011.

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• Topics
• Venture
• Southeast Asia
• Technology
• Consumer
• Early-stage
• TMT
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• Southeast Asia
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