KKR seeks up to $1.5b for Asia tech fund
KKR has launched its debut Asia-focused technology growth fund, two-and-a-half years after first indicating it would add this strategy in the region.
The new fund, known as the KKR Asia Next Generation Technology Growth Fund, has a target of USD 1bn-USD 1.5bn, two sources familiar with the situation told Mergermarket, AVCJ's sister publication. KKR declined to comment.
The private equity firm started approaching existing LPs about the new fund a few months ago with a view to opening to subscriptions from anchor investors in September or October, the sources said. A private placement memorandum was issued within the last two weeks, according to another source.
The fund will focus on technology companies in China, India, Southeast Asia, Korea, Japan, Australia, and New Zealand, participating primarily in Series C and Series D rounds.
Growth-stage technology investment in the region reached USD 79.5bn last year, up from USD 33.3bn in 2020 and USD 37.6bn in 2019, according to AVCJ Research. While activity in China tailed off in the second half of 2021 amid regulatory uncertainty, surging activity in the likes of India and Southeast Asia took the regional total to USD 46.3bn.
Approximately USD 22.1bn was deployed in growth deals in the first half of 2022, which saw substantial corrections in listed technology stocks globally.
KKR has pursued a growth-stage technology strategy outside of Asia for several years. The first Next Generation Technology Growth Fund, which invests in North America, Europe, and Israel, closed on USD 711m in 2016. A successor fund closed on USD 2.2bn in 2020.
Scott Nuttall, the firm's co-president and co-COO, announced the intention to expand the strategy into Asia on an earnings call in October 2019. In February, CFO Robert Lewin said on another earnings call that a launch was likely before the end of 2022.
Last December, KKR appointed Mukul Chawla, formerly of Temasek Holdings, to the newly created position of partner and head of growth equity for Asia Pacific. This coincided with Lucian Schönefelder, who relocated to Asia approximately 18 months earlier as head of technology for the region, transitioning to an advisory role.
KKR's previous growth-stage technology investments have come from its flagship pan-regional funds. The most recent of these, which closed on USD 15bn in April 2021, has an opportunistic bucket to serve this purpose.
Portfolio companies include heavyweights like the Indian mobile network and digital app operator Jio Platforms and Beijing-based short video platform ByteDance. The former was most recently valued at USD 65bn and the latter at about USD 300bn.
The private equity firm has also made several investments in smaller companies such as Vietnam's KiotViet and Philippines-based GrowSari. Both companies provide digitization services to small businesses.
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