Seed-stage #startup investor SeedPlus has hit final close on its first fund, it announced today. The target amount was US$18 million but was oversubscribed, partner Michael Smith Jr. tells Tech in Asia.
SeedPlus launched in May last year, when investment firms Jungle Ventures, Infocomm Investments (now SGInnovate), Accel Partners, and Ratan Tata’s RNT Associates came together to invest in seed-stage startups in Singapore.
The fund has made five deals so far, including AI assistant maker Mimetic.ai, mobile app security startup Appknox, and marketplace for elderly care Homage. The team doesn’t share its expected returns or what the timeframe for those returns is.
It targets early-stage local and regional startups that focus on large, cross-border markets both in Asia and internationally.
SeedPlus feels good about its focus one year in. “We have settled on the themes for the fund but of course we continue to look back at our operations quarter by quarter and evaluate and alter our course as needed,” Michael muses.
Finding the right focus
SeedPlus’ close of its fund comes in a challenging environment for startup investments in Southeast Asia, which dropped significantly in the first quarter of 2017.
Managing partner at Tri5 Ventures, Christopher Quek, also a seed-stage investor, feels that investors looking at young companies in the region need to figure out two things: the right verticals and startups to bring up to series A investors; and the right entrepreneurs and tech talent to develop solid intellectual property and go-to-market strategies.
“The trend of marketplaces and Uber-like verticals is beginning to slow as series A investors already have sufficient exposure to such verticals with their current portfolio,” Christopher tells Tech in Asia. “Investors need to go back to basics. Currently it is still all about infrastructure for a developing Asia. The change in investing style is that these infrastructural plays take much longer to commercialize.”
SeedPlus is focusing primarily on business-to-business products. Opportunities for task automation are particularly exciting, highlighted by the fund’s investment in Mimetic, Michael says.
The team is helped along by a select group of limited partners. Last month, the International Financial Corporation, a member of the World Bank Group, poured US$2 million into the fund. Today, SeedPlus announced that Cisco Investments, Cisco’s investment vehicle, and Eight Roads Ventures are also limited partners.
Michael says both new partners see startups as a key part of their own future growth and success in Asia. Cisco’s focus on infrastructure and internet of things projects means the company’s investment arm is eager to find deals that help the mothership. Eight Roads Ventures, the investment arm of financial services and management firm Fidelity International, is making inroads into Southeast Asia where SeedPlus’ local expertise comes in handy.
SeedPlus is also supported by Google and PwC Singapore.
“We find that the region has plenty of good seed stage companies that are looking for money and support. This is an exciting time and Singapore is a perfect place to headquarter a regional seed stage fund,” says Michael.
Converted from Singapore dollars. US$1 = S$1.39