Update: The previous version of this article has wrongly stated the firms’ prediction for upcoming Series B rounds as the firms’ investment plan. We apologise for the inconvenience.
Singapore-headquartered venture capital firm Golden Gate Ventures and asset management firm Hanwha Asset Management today announced a partnership to invest together in Southeast Asian Series B startups.
The firms will invest together on consumer-centric platforms and services, such as marketplaces, financial inclusion technologies, tech-enabled healthcare, and logistics-as-a-service platforms.
“We are looking to invest into startups targeting Southeast Asian markets and raising Series B financing of US$15-30 million,” said Golden Gate Ventures Managing Partner Vinnie Lauria.
Prior to the partnership, the two firms have invested together in Southeast Asia starting in 2014.
The partnership was meant to tackle the problem of Series B funding gap among Southeast Asian startups.
“Startups seeking Series B financing often find themselves in the difficult position of syndicating rounds from multiple Series A investors or appealing to alternative, often unconventional sources of later-stage capital, such as family offices and global PE buyout firms,” the firms said in a press statement.
“In the US and Europe, according to SVCA, 50 per cent Series A-funded companies receive Series B funding. In contrast, the rate of follow-on financing in Southeast Asia was less than a third for the same cohort. This meaningful decline can be largely attributed to a lack of growth-stage funding within the region,” it added.
Golden Gate Ventures and Hanwha Asset Management expect to see 80 to 110 Series B investments in the market over the next two years alone, and believe that this number may double within four years.
The prediction was made based on Golden Gate Ventures’ proprietary database of deal tracking, which showed over 215 Series A deals in the past 24 months.