Fund focus: Intudo targets SE Asia’s sea turtles

Eddy Chan’s investment resume includes big-name US start-ups like PayPal, SpaceX and Palantir Technologies. The Silicon Valley-based VC investor hopes to find a new generation of home runs in Southeast Asia by tapping young talent returning from overseas to participate in the digital revolution taking place at home.

In a trend strikingly similar to the “sea turtle” phenomenon seen in China 15 years ago, “S.E.A. turtles” are flocking back to Indonesia to launch start-ups that leverage the country’s strong economic growth and rising smart phone penetration. Others have struck out on their own after working in the local offices of US and Chinese tech giants as well as local internet businesses.

“Some pioneers returned to Southeast Asia from the US five years ago and launched break-out companies like Grab, Go-Jek and Traveloca. They have created a lot of new job opportunities, attracting more S.E.A turtles to come back and become senior management of these companies,” Chan says.

This availability of talent led Chan and Patrick Yip – who was previously responsible for Goldman Sachs’ PE and VC investments in Indonesia – to form Intudo Ventures. The firm closed its debut VC fund above $10 million, with commitments from Indonesian conglomerates, US family offices, founding partners of US venture capital firms, and founders of start-ups in the US, Taiwan, Hong Kong and Southeast Asia.

In addition to investing in start-ups launched by local founders – like most of its peers in the region – Intudo plans to bring fast-growing start-ups from Silicon Valley and China to Southeast Asia. It will co-found and invest in joint ventures with these companies, setting up legal entities in Indonesia and leveraging its connections with local conglomerates, distribution partners, and government agencies.

“This is very risk-mitigated type of venture deal,” Chan says. “First, the foreign companies provide the brand, technology and know-hows. What we do is to identify leading local distribution partners – for the most part they are local conglomerates or technology firms like Grab and Go-Jek. All these companies can assist the joint ventures with a localization strategy.”

The JV structure will also allow Intudo to exit to the US or China-based parents of these entities, in advance of potential public listings.

The VC firm expects to back 12-16 companies in total, focusing on areas such as consumer, financial services, healthcare, education, and media. It will lead seed and Series A rounds, with initial investments of $200,000 to $1.25 million.

“We closed our $10 million fund in a short timeframe, but there is substantially more capital behind it. LPs want to co-invest in companies when they scale, and we will make follow-up investments as well. Do we intend to be smaller size, focusing on seed and Series A rounds forever? Probably not. Over time we certainly would have to grow,” says Chan.

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• Topics
• Southeast Asia
• Venture
• Technology
• Fundraising
• GPs
• Indonesia
• Intudo
• TMT