• Fund oversubscribed by US$10mil, focus on marketplaces, payments, etc.
  • Vietnam under-rated by the VC community, says founding partner

 
June 15, 2016 – SINGAPORE-headquartered Golden Gate Ventures has secured US$60 million for its second early-stage venture fund, with investors across Asia, Europe and the Middle East taking part.
 
The fund was oversubscribed by US$10 million, said the firm, which has invested in over 30 startrups in the region with two previous funds.
 
Existing investors – Singapore sovereign wealth fund Temasek Holdings and Facebook cofounder Eduardo Saverin – were joined this round by South Korea-based Hanwha Life Insurance, Thailand’s Siam Commercial Bank, and German media conglomerate Hubert Burda Media. The firm declined to identify the investor from the Middle East.
 
Golden Gate Ventures founding partner Vinnie Lauria (pic above) said the venture capital (VC) firm will continue to invest in marketplaces, e-commerce, payments and logistics.
 
“We will also continue to look at SaaS (Software-as-a-Service) platforms that enable business-to-consumer (B2C) technology.
 
“Within fintech (financial technology), we’ll start looking into other technologies such as blockchain and business-to-business (B2B) solutions,” he told Digital News Asia (DNA) via email.
 
According to Golden Gate Ventures, startup activity in South-East Asia is at a “critical inflexion point,” with VC funding doubling year-on-year in the first quarter of 2016 despite the economic slowdown and market volatility.
 
“Data indicates a growing number of investment rounds, with US$1.7 billion being invested in 473 deals over the last five months,” the firm said in its statement.
 
“Despite the perceived difficulties in China affecting investor sentiment in the country, investment continues to flow into South-East Asia,” it added.
 

Vietnam under-rated by VCs
 
When asked which of the less-developed emerging economies of South-East Asia that Golden Gate Ventures thinks has been under-rated, Lauria said, “Vietnam, undoubtedly.”
 
“It has some of the best engineers and technical talent in the region, and we have gone to great lengths to foster deeper ties there,” he said.
 
Having said that, Lauria argued that investors are not under-valuing Vietnam.
 
“I think it’s just more complicated to do business in Vietnam – from sourcing deals to working within the legal and financial regulations, to even navigating the country itself.
 
“Most investors probably don’t even know where to begin. Hence, we see opportunities to really find amazing companies there,” he added.
 
READ ALSO: SEA VCs are laggards, Singapore truly a startup up hub: Google-Temasek report
 
Meanwhile, Lauria declared that Golden Gate Ventures’ Fund II is already “very active” across the region.
 
“The majority of our portfolio is in markets outside of Singapore. This is especially true of Indonesia, where we invested in more than 10 companies to date.
 
“Beyond that, unlike many of our peers, we also pay particularly close attention to Vietnam and Thailand – some of our most recent investments hail from there,” he added.
 

Mobile-first or nothing? 
 
Nothing that Internet penetration in the region has been driven primarily by smartphone adoption, Lauria urged startups to think mobile-first, citing Singapore-based marketplace Carousell as an example.
 
“When you compare marketplaces like Craigslist, eBay or even Alibaba, there’s a striking difference between their desktop-centric interfaces and Carousell,” he said in an official statement.
 
Carousell was the first to integrate location-based search and real-time mobile chat,” he added.
 
When asked to elaborate, Lauria told DNA that the mobile platform is so “fundamentally important” in the region that “to ignore it is to put a hard ceiling on potential growth.”
 
“There may be some companies that can thrive being web-only, and if they show the right metrics, we will consider them – as all investors would.
 
“But in South-East Asia, with its accelerating growth in mobile phone and Internet adoption, it would be a mistake to ignore the importance of mobile,” he said.
 

Up-and-coming unicorns
 
In its official announcement, Golden Gate Ventures noted that the region has seen the emergence of its own cohort of unicorns – companies valued at over US$1 billion – including Singapore-based Internet company Garena Interactive, ride-hailing startup Grab, and Rocket Internet-backed e-commerce startup Lazada Group.
 

 
“High-growth startups on track to reach US$1 billion in valuation over the next two years have also been on the rise,” the VC firm said, citing Indonesia-based ride-hailing startup GoJek and Singapore-based mobile marketplace startup Carousell as examples.
 

 
It’s a partnership, not an investment
 
Lauria also shared one of the lessons that Golden Gate Ventures has learnt from its investment journey and which it will be applying to Fund II: Open communications between VCs and startups.
 
“It’s one thing to be able to speak to our founders, and them us,” he said.
 
“There is an entire difference to have them ask us questions, give feedback, request help … and vice-versa.
 
“It’s a partnership, not an investment. As portfolios grow across the region, this is an issue all funds would likely begin dealing with,” he added.

Source from Digital News Asia