Fund focus: Intudo proves a tight focus has broad appeal

It is unusual for overseas investors to account for 50 out of the 70 LPs attending the first annual general meeting of a venture capital firm focused on a single Southeast Asian market. So, when Indonesia's Intudo Ventures had just such an experience in May last year, it seemed more than plausible to go back to market less than a year after closing the debut fund.  

Foreign investors made up the bulk of the LP base in Fund II, helping the vehicle rally $50 million this week, a year to the month after Fund I closed at $20 million. Backers included veteran Silicon Valley VC Founders Fund, which has maintained a rapport with Intudo co-founder Eddy Chan for two decades, and strategic players such as food and retail conglomerate Uni-President Enterprises, which operates some 7,000 7-Eleven stores across Taiwan and the Philippines. 

LPs had been encouraging Intudo to move upmarket ahead of the fund launch in July 2018. Much of the justification revolved around quickly realized follow-on rounds for Fund I companies like co-working space operator EV Hive, which picked up a $20 million Series A last year. But Chan attributes most of the fundraising traction to the opportunity set itself, and the idea that Intudo is the only VC with a deep, exclusively-Indonesia strategy.

"If we took a regional mandate, we maybe could have raised more money because the investor universe would have been wider, but it would be a lot more competitive as well," Chan says. "It's not for everyone, but for the investors who understand and appreciate it, it's a very logical choice because it's easy to underestimate the challenges of Southeast Asia. Indonesia is the biggest market for every single regional consumer unicorn in the region. All eyes are on that prize."

Fund II will write checks of $2-5 million, backing 12-15 Series A-stage companies with a view to taking ownership stakes of 17-20%. Focus sectors will reflect the strengths of the LP base, including consumer, healthcare, financial services, and education. One investment has been made to date in a food supply chain company. 

LPs also include a substantial spread of local operators, including second and third-generation family businesses. While Chan spends about eight months of the year making connections in the US, fellow co-founder Patrick Yip has been rooted in Indonesia since 2005. He expects his local network – including many traditional businesses hoping to go digital – will be particularly welcoming to technology start-ups.

"Being a country-focused fund really depends on the depth of relationships that you have in that country. If you don't have 20 different families that can turn on a wide variety of different distribution channels or strike up partnerships, it's going to be tough," says Yip. "That's why we don't spread ourselves over seven different markets or fly in from Singapore and Hong Kong for founders who need full-time support on the ground."   

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