Disrupt #12: Addressing the Asean funding gap

By Gabey Goh November 21, 2013

Is there a funding gap because VCs in the region lack business experience?
Or is the lure of India and China simply overshadowing Asean possibilities?

Disrupt #12: Addressing the Asean funding gap BACK in July, Catcha Group founder Patrick Grove (pic) set a lot of tongues wagging when he highlighted a gap in the Asean venture capital (VC) space, noting that the region is lagging behind in meeting demand.

Grove pointed out that the top three cities for social media mobile usage -- Bangkok, Manila and Jakarta -- are all located in Asean, with the regional market on track to becoming the same size as the United States.

Yet the United States boasts over 1,000 VCs while Asean, a region covering 10 nations including Singapore and Malaysia, has approximately 20.

“Even compared with our Asian neighbours, Asean is lagging behind – China has around 600 VC funds; India has 400,” he added. “The Asean number reflects a significant lack of support given the projections for the region.”

For startups at the seed stage, there are funding options, especially from public sector agencies such as Malaysia’s Multimedia Development Corporation and Cradle Fund.

In Singapore there are various government grants, as well as a technology incubation scheme under the National Research Foundation (NRF).

In an interview with Blooomberg Businessweek, Chua Kee Lock, the chief executive officer of Vertex Venture Holdings, a Temasek Holdings Pte unit, said that while Singapore has “solved the problem” of seed-stage incubation, it’s the next stage where funds fall short.

“When the business idea looks interesting, somebody needs to give the big money, and that’s the issue here,” he said.

Is the lack of business experience within VCs in the region the main cause as Grove argued? Is the lure of major markets such as India and China simply overshadowing the possibilities of the Asean region? Or is it too early to view Asean as a single market, with the intricacies of navigating multiple sovereign frameworks still being figured out?

Disrupt #12: Addressing the Asean funding gap The 12th DNA-TeAM Disrupt panel discussion and networking session will delve deeper into this issue. On the panel we have Grove himself, who will expand on the points he made at his keynote address during the AVCJ Private Equity & Venture Forum 2013 in Singapore.

Joining him will be Dr Gabriel Walter (pic), cofounder of high speed LED startup Quantum Electro Opto Systems (QEOS), who will be sharing his own experiences in the fundraising game to secure the “big money” he needed to get his high-tech company off the ground.

Disrupt #12: Addressing the Asean funding gap DTA Capital Partners chief executive officer Dali Sardar (pic) will also be on the panel to lend the VC perspective on the lack of attention for Asean. Dali has been a VC since 1989, starting with a VC firm in New York.

Via its subsidiary, DTA Ventures Management, the company has invested more than US$5 million (RM16 million) to date within technology sectors such as business process outsourcing, e-learning, clinical software systems and mobile messaging.

Most notably, it is an investor in QuickSchools.com, a Malaysian startup currently based in Silicon Valley that offers an online school management system.

Digital News Asia (DNA) founder Karamjit Singh will be moderating the panel, which will take place at 5.30pm to 7pm on Wednesday, Nov 27 at Wisma N2N auditorium, Tower 2, Avenue 3, Bangsar South, No 8, Jalan Kerinchi, 59200, Kuala Lumpur.