Golden Gate Ventures US$100mil Fund III oversubscribed, closed to investors

• Invests in opportunities that tap into rising consumer internet, mobile trends in SEA
• Sees 3 trends coalescing including rise of serial entrepreneurs and skilled tech engineers

GOLDEN Gate Ventures (GGV), a Singapore based VC focused on Southeast Asia (SEA), is oversubscribed on its third fund, a US$100 million (RM414 million) early-stage (Series A) VC fund focused on consumer internet trends in SEA. This comes less than three months after the fund’s first close.

The US$100 million fund is oversubscribed and closed to new investors. Golden Gate Ventures Fund III is anchored by existing investors which include Temasek, Hanwha, Naver, and EE Capital. New investors include Taizo Son’s Mistletoe, Mitsui Fudosan, IDO Investments, CTBC Group, Korea Venture Investment Corporation (KVIC), and Ion Pacific.

The announcement comes on the heels of three trends coalescing in SEA. First is the rise of consumer spending and mobile internet adoption. The second is the flood of foreign capital looking to invest in the region. Some recent examples are Sequoia’s latest fund of US$695 million for India and SEA, and Chinese tech leaders Alibaba and Tencent pouring billions into unicorns such as Lazada, Tokopedia, Go-Jek, and Traveloka.

The third is the rise of serial entrepreneurs and skilled tech engineers in the region: as the ecosystem nears seven years old, ex-founders and ex-CTOs are breaking out of unicorn companies to start new businesses as the second generation of entrepreneurs. GGV’s proprietary deal tracking database is forecasting at least 400 VC investments across the region in 2018.

Its investment strategy since day one has been the same: invest in opportunities that tap into the rising consumer internet and mobile trends in SEA. Investment strategy revolves around putting the entrepreneur first and actively contributing to the ecosystem. The VC firm’s founders leverage on their Silicon Valley experience and networks to identify teams that can become regional heroes.

“When I compare the tech ecosystem of SEA to other markets, it’s really hit an inflection point —annual investment is now measured in the billions. That puts SEA on a global stage with the US, China, and India. Yet there is a youthfulness that reminds me of Silicon Valley circa 2005, shortly before social media and the iPhone took off,” notes Vinnie Lauria (pic), GGV cofounder.

“GGV has strongly supported our growth since our start, not only with financing but with strong strategic advice, operational support, and connections to other entrepreneurs and investors. They have been an essential part of our journey so far,” says Nathanael Faibis, CEO of Indonesian health startup, Alodokter, where GGV founding partner Jeffrey Paine sits on the board.

Meanwhile, Siu Rui Quek, Carousell CEO, which was the flagship investment of GGV shared that he started getting help from the VC before it even invested.

“GGV began helping us months before they became an investor. Vinnie was key in helping us improve our product’s retention mechanisms, amongst other product enhancements, and Jeff gave us good advice regarding capital strategy and partnerships.”

In order to continue scaling into its third fund, Golden Gate Ventures has taken a page from the startup playbook and is leveraging technology to accelerate growth and team learning. The firm uses Slack to keep in close touch with founding teams across the portfolio, while letting founders connect with each other. More than 12,000 messages are carried on the platform per month. The VC firm also uses CRM software in tracking more than 1,000 deals/year across over 450 funds, along with proprietary in-house databases for investment tracking, follow-on financing, and relationship management of over 21,000 contacts.

And it’s all paying off. To date, Golden Gate Ventures’ first two funds have had distributions of cash (DPI) of 1.56x and 0.13x, resulting in IRRs of 48% and 29%, respectively. Golden Gate Ventures Fund 1 is a top performing fund globally, beating Cambridge Associates’ Top 5% benchmark of 0.85x DPI for a 2012 vintage.

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