SINGAPORE – A new Southeast Asia-focused private-equity firm launched by a group of seasoned technology executives has hit the first close of its debut fund, the latest sign of investors’ growing enthusiasm for startups in the populous region.
The firm, Singapore-based Asia Partners Fund Management Pte Ltd., aims to make investments of between $20 million and $100 million, it said Friday. Among the sectors showing promise are specialized travel platforms, e-commerce logistics and enterprise software, according to executives at the company.
Southeast Asia is “one of the most exciting, and still underappreciated, emerging markets in the world,” said Nicholas Nash, managing partner and one of five co-founders.
Nash was until last year group president of Singapore-based e-commerce and online entertainment company Sea Ltd., which in 2017 listed on the New York Stock Exchange. Before that he was Head of Southeast Asia US private-equity firm General Atlantic.
The region is “about 11 years behind China in affluence,” so “we can learn from what worked well there,” said Asia Partners co-founder and partner Oliver Rippel.
Before his current venture, Rippel was chief executive of business-to-consumer e-commerce activities at South African media and internet giant Naspers Ltd., where he led the company’s investment in the Indian online shopping giant Flipkart. Walmart Inc. last year acquired Flipkart for $16 billion.
Investors have been pouring money into Southeast Asian startups in recent years. The region is home to some 600 million people, many of whom are young and increasingly transacting online via smartphones.
A person familiar with the matter said Asia Partners had raised about $70 million in total.
The size of the region’s internet economy in gross merchandise volume, or the amount of business transacted, should more than triple from $72 billion last year to $240 billion by 2025, according to a report co-written by Alphabet Inc.’s Google and Singapore’s Temasek Holdings.
“The demographics are both sizable and young, and that makes it attractive for investors,” said Johanne Dessard, Bain’s private equity practice director. “That’s a significant opportunity.”
Dessard said the region is seeing fast adoption of new technologies, while governments in places like Singapore have adopted policies to foster startups’ growth.
Ten new companies worth $1 billion or more have emerged in the region since 2012, and at least 10 more unicorns should emerge in the next five years, Bain said in a report last year.
Still, there are challenges. Disparate languages across the geographically diverse region complicate business operations, and top technical talent is harder to find than in the United States or China.
Competition is another factor. Southeast Asian ride-hailing company Grab Holdings Inc. has raised more than $4 billion in recent years from investors such as Japan’s SoftBank Group Corp., while China’s Alibaba Group Holding Ltd. last year invested $2 billion in its Singapore-based regional e-commerce subsidiary Lazada Group. Investors such as Google, KKR & Co. and Warburg Pincus have poured money into Indonesian motorcycle-hailing startup GoJek.
Amid intense competition from Grab and GoJek, Uber Technologies Inc. last year relinquished its battle for Southeast Asia’s riders, selling its local operations in exchange for a minority stake in Grab.
Asia Partners’ additional co-founders are Pitra Ciputra Harun, previously an executive at the popular Indonesian e-commerce platform Bukalapak; Kien Nguyen, earlier an independent member of the board of directors at Vietnamese dairy firm Vinamilk; and Vorapol Supanusonti, earlier an executive at Sea.