Formation Group closes debut US-Asia fund at $357m

When the firm was launched in November 2015, it was said to have already received $200 million in commitments for Fund I, which had a target of around $400 million. The strategy is the same as that envisioned for Formation 8’s special purpose vehicle, which was shelved when the three founders decided against raising a third main fund.

Formation Group sees itself as “going beyond venture capital by establishing a company-building platform designed to accelerate the technology giants of the future.” To this end, the new fund will invest in a concentrated number of early and growth-stage companies with global ambitions, and seek to play a hands-on role in their development.

However, Fund I is just one of many funding platforms and structures that Formation Group will provide to entrepreneurs, the firm said in a statement.

Koo’s approach is in a large part based on experiences with certain Formation 8 portfolio companies. Speaking to AVCJ at the time of Formation Group’s launch, he cited Korean mobile start-up Yello Mobile as an example. "I have calls with the CEO and strategy specialist almost every other day; I am almost working at co-founder level. I try to bring them to everyone in my network as a team member or partner, or so they can do some business together," he said. "The impact can be very big."

Formation 8 participated in a $100 million round of funding for Yello Mobile in 2014 at a valuation of $1 billion and re-upped last year – at a valuation of around $4 billion – by leading a $47.2 million investment structured as convertible debt. This was part of a broader funding round that also involves the likes of Japanese internet finance group SBI Holdings.

Formation Group previously identified five companies that it wanted to work with through Fund I: HonestBee, a last-mile logistics provider headquartered in Singapore; Yello Financial Group, a financial technology platform in Korea; Korean cosmetics e-commerce business Memebox; US-based smart home platform Eva Automation and live-streaming virtual reality content platform NextVR. Memebox, Eva Automation and NextVR are also existing Formation 8 investments.

NextVR raised an $80 million Series B round in August 2016, mostly from investors in Asia, and in which Formation Group also re-upped. Last December, the GP also re-upped in Memebox as the company raised $60 million in an extended Series C round of funding.

Another Formation Group portfolio company based in Asia is Indonesian mobile ride-hailing and delivery platform Go-Jek. The start-up received $550 million last year from investors including KKR, Warburg Pincus, Farallon Capital and Capital Group Private Markets, with an unspecified number of existing backers also taking part. The post-money valuation was around $1.2 billion.

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• Topics
• Venture
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• North America
• Greater China
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• China
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• Formation Group