Fund focus: Rising tide floats Golden Gate fund

With new research by Google and Temasek finding that Southeast Asia is adding 3.8 million new internet users every month across six countries, it's unsurprising that venture capital players in the region are attracting a broader range of LPs. Singapore-based Golden Gate Ventures is benefiting from this development with its latest Southeast Asia-focused fund, which closed $10 million oversubscribed at $60 million.

LPs include Temasek Holdings and Facebook co-founder Eduardo Saverin as well as Korea's Hanwha Life Insurance, Thailand's Siam Commercial Bank and Middle Eastern investors. European interest, meanwhile, was demonstrated by Belgium-based family office Monitor Capital Partners and Hubert Burda Media, a German conglomerate that also backs another Singapore-based VC firm, Jungle Ventures.

"Southeast Asia is an important investment area for us," says Martin Weiss, CEO of Burda Principal Investments, the company's venture division. "Many consumer-centric internet sectors are still in early stages and therefore provide a massive growth opportunity. One example is Indonesia, which combines early-stage companies with a very large market opportunity."

For Golden Gate, this enthusiasm has translated into a war chest at a time and place where effectively 100% of the 124,000 first-time internet users that are coming online every day are doing so via smart phone. The fund - Golden Gate's second - is expected to target mobile companies across e-commerce, payment, logistics and software-as-a-service.

"In Southeast Asia's unique mobile-first internet penetration phenomenon, we look at companies built in a different age and how they could think about solving problems differently," says Vinnie Lauria, managing partner at Golden Gate. "An example here would be when we first invested in [mobile marketplace] Carousell, a high-risk bet when its founders were just graduating from university. We invested in the numbers and saw a very engaged audience."

Since launching its $10 million Southeast Asia-focused seed fund in 2012, Golden Gate has seen several portfolio companies break through, notably Indonesian online marketplace Tokopedia and region-wide ride-hailing app provider Grab. By the time Sequoia Capital expanded the remit of its fifth India fund last year to include Southeast Asia, the soundness of the regionally-focused strategy was confirmed - but so was the exploding competition for deals. Southeast Asian venture capital funding doubled year-on-year in the first quarter of 2016 despite a slowing global economy and volatility in emerging markets.

Lauria, however, embraces this wave of attention, referring to the activity as a critical inflexion point for regional start-ups. "A competitive funding environment means better companies and the whole ecosystem does better," he says. "Fortunately our brand has been around for a while in the region, and we have some great brands in our portfolio, so that helps great deal flow find its way to us."

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Southeast Asia
• Technology
• Venture
• Fundraising
• Golden Gate Ventures
• TMT