Wavemaker Partners closes second Southeast Asia fund of US$66mil

By Digital News Asia October 19, 2017

Fund closes 32% above target of US$50 million
Future investments to focus on early-stage SEA B2B and deep technology firms

Wavemaker Partners closes second Southeast Asia fund of US$66mil

WAVEMAKER Partners, one of Southeast Asia’s leading early stage venture capital firms, announced the closing of its second Southeast Asia-focused fund at US$66 million (RM278.53 million).

The fund closed at 32% above its original target of US$50 million (RM211 million), with backing from IFC, a member of the World Bank Group.

Wavemaker Partners Southeast Asia managing partner Paul Santos, summed up the mood at the firm. “We’ve come a long way since we started in Singapore five years ago. In many ways, we went through the same growing pains that startups do. Yet we are encouraged by the results we’ve achieved so far and the response to the fund by investors.”

Wavemaker has taken a differentiated approach in Southeast Asia with more than 80% of its investments made in seed stage business-to-business (B2B) and deep technology companies led by founders with deep domain expertise.

The combination of a differentiated strategy supported by a consistent run of results has enabled Wavemaker to attract leading global investors like IFC and Singapore’s Temasek, as well as top companies and families from all around the region.

IFC’s US$10 million (RM42.2 million) investment in the fund is part of a wider effort to support early-stage entrepreneurship, innovation ecosystems, and drive growth in emerging markets in Asia.

“IFC’s increased focus on supporting innovation, digital transformation and entrepreneurship in emerging Southeast Asia has led us to partner with regional early stage venture funds,” said Pravan Malhotra, IFC’s venture capital lead for Southeast Asia and Asia Internet investments.

“We have also stepped up our funding efforts in the region this year. Wavemaker's differentiated focus on B2B and deep tech will help create new, disruptive innovations that IFC will support through the fund and potentially with direct investments in the future.”

Within this new fund’s portfolio, significant follow-on investment rounds have already been raised by several companies.

These include: Coins.ph, a blockchain-based financial services platform; Wavecell, a cloud communications platform; and Zilingo, a mobile fashion marketplace which provides tools for sellers.

Three more are expected to close their Series B rounds before the end of the year. Others have already achieved more than US$3 million (RM12.66 million) in annualised revenues.

These include: Smove, a free-floating car sharing platform; Ematic, a provider of intelligent marketing solutions; and Lynk, an expert-driven knowledge sharing platform.

AddVentures, the corporate venture capital (CVC) arm of Thailand-based business conglomerate Siam Cement Group (SCG), has just announced its first investment in Wavemaker this week.

AddVentures managing director Dr. Joshua Pas said, “We chose to invest through Wavemaker Partners because of the reputation it has built through the results it has delivered - namely portfolio exits and up rounds. We share their interest in B2B and deep tech startups and hope to co-invest and leverage SCG’s network to help them scale.”

Wavemaker is also expanding its deep tech portfolio with investments in companies such as: Structo, which provides 3D printing solutions for the dental industry; Lemnis, which helps address the nausea experienced with current virtual reality (VR) technology; and Silent8, which uses artificial intelligence (AI) to combat money laundering.

Santos looks forward to the next phase of continuing to support the growth of Wavemaker’s portfolio companies. “What we are most grateful for is the opportunity to work with some of the best founders, investors and advisors around the region.

“They’ve inspired us to stretch and grow and keep getting better. We are pathological optimists, so we can’t help but believe that the best is yet to come!”