SEA VC funds accumulate $1.3b in additional assets

Singapore and Indonesia dominated the VC fundraising market.

Southeast Asia-focused venture capital (VC) funds garnered $1.3b in additional dry powder in Q1, according to a research report by DealStreetAsia.

The amount of capital committed for interim and final fund closes fell 47% QoQ over the same period. This is said to end a year-long streak of QoQ growth as final closes stagnated.

Singapore and Indonesia dominated the VC fundraising market with total fund closings of $865m and $161m, respectively. Meanwhile, no closes were recorded by VC funds based in Malaysia, Thailand, Vietnam and Cambodia.

The top three Singaporean VC firms in terms of capital raised in the first quarter were B Capital ($600m), Vickers Venture Partners ($200m), and Credence Partners ($50m), whilst BRI Ventures ($136m), OCBC Ventura NISP ($15m), and Indogen Capital ($10m) raised funds in Indonesia.

Funds run by VC firms headquartered in the region contributed 77% of the total amount raised, with the rest coming from foreign VCs investing in Southeast Asian countries.

Beyond fund closings, 53 VC firms are currently in the market to raise $8.4b for Southeast Asia-focused funds, of which about 30% have been secured. The largest funds in the market are Vanda Global Capital’s $1.5b Agritech fund, B Capital’s $750m Fund II, and Vickers Venture’s $500m Fund VI.

Despite the slower pace of capital raising in the first quarter, Southeast Asia-focused VCs have $8.21b (US$5.8b) of committed capital, based on venture funds that reached a final close in the last four quarters

On the other hand, capital-raising outlook for the region’s venture funds is expected to worsen in the coming months, as most of the capital committed by investors to VCs in Q1 was solicited before the region began to tighten social distancing measures and impose travel restrictions in April.

Andi Haswidi, head of ASEAN market research at DealStreetAsia, believes that fundraising will be more challenging in Q2 and onwards as investors’ risk appetites have shrunk. “Fund managers are also careful about deploying their dry powder, which could weigh on tech startup valuations despite investors’ loaded war chests,” he added.