Kejora Ventures Founding Partner Sebastian Togelang was in Bangkok to attend an event when he chatted with e27 to announce his venture capital (VC) firm had just raised the first close of its Kejora Star Capital II fund.
He said that the VC firm has managed to secure “about one-third” of the targetted fund size of US$80 million.
“We have been in the market since Q3 2016, and we are quite happy to announce the first closing,” he said.
The fund drew investment from international institutions and high net-worth families in Southeast Asia, Europe, and Hong Kong.
Notable names in the investor list include the Barito Pacific Group, the Charoen Pokphand family, and Hubert Burda Media.
So far, Kejora Star Capital II has invested in six startups: C88 Fintech Group, Qareer Group Asia, Etobee, Investree, Pawoon and most recently MoneyTable.
2017: The age of consolidation
While it raised its second fund in 2016, Kejora was founded in 2014. The firm is led by Togelang, Andy Zain, and Eri Reksoprodjo and the team consists of senior figures in the field of entrepreneurship, investment banking, and private equity.
Of all 29 investments that Kejora has made, 16 of them are through the Ideabox programme.
Looking back at the first fund, Togelang could not help feeling pleased about the progress.
“More than 85 per cent of investments [from the first fund] are still performing. We are quite happy and lucky that we did very well with the first fund,” said the founding partner who has invested in around 30 international companies.
“Within two years, we manage to get over 200 per cent IRR (Internal Rate of Return), definitely above the standard IRR in the market,” he added.
He also said the firm’s second fund will be exclusively for Kejora Ventures’ activities, as programmes such as Ideabox have their own sources of financing.
“When we started the fund, we wanted to invest in very strong founders. And the experience in the first two to three years really underlined [that ethos]. I think we even want to set a higher bar for entrepreneurs that we want to invest into,” said Togelang, who co-founded the FinTech Association and acts as the Secretary General of the Indonesia Venture Capital and Startup Association (Amvesindo).
“Definitely it’s not only about the fast-growing market share but really focussing on [building] sustainable business. All the numbers like unit economics, etc., we will be directly focussed on that from day one,” he stressed.
Sustainability is important, especially because in countries like Indonesia, the digital industry has begun to enter an era of consolidation.
“2017 will be a continuation [of the situation that began in] 2016. 2014-2015 was the year of growth, while at the end of 2015 suddenly winter came from Silicon Valley. The unicorn crisis happened in 2016 when a lot of companies became matured, and investors that were once focussing on market growth suddenly realised ‘Okay, it’s now time to ask for revenue, real numbers, to create a sustainable company’,” he elaborated.
“So, for 2017, I guess investors are much smarter now. Hopefully there will be not too much hype anymore, but they will be investing more in sustainable companies.”
Line up, founders
Kejora has operations in four Southeast Asian countries at the moment: Indonesia, Singapore, the Philippines, and most recently Thailand.
In total, Kejora has up to 5,000 square meter of office spaces in Indonesia, the Philippines, and Thailand. The firm is also working on some new projects in Thailand that will be announced “very soon”.
“With our operations, we would love to, and have helped, our startups to grow internationally. So it is not really just about providing money, but also to enable companies to go from Thailand to the Philippines, helping the ecosystem with our network,” Togelang explains.
Thinking about sending a pitch deck to Kejora? This is the profile of what the firm considered attractive startups.
First and foremost, Kejora will continue to remain sector-agnostic. In the first fund, the firm has invested in startups from various industries like fintech, logistics, human resource, and even entertainment.
“We’d like to invest in companies that are solving the problems of a big population … We want to target highly scalable companies, and from the financial returns [perspective] it can be a highly scalable, a couple million dollars company,” Togelang said.
“We invest in very strong entrepreneurs, that have a scalable business and have the potential to be a market leader in Southeast Asia,” he stressed.
Continuing the tradition sets by Kejora’s first fund, the firm would like to invest in early stage companies, such as pre-Series A stage startups.
But some details will be different with the second fund.
“The difference with the first fund, where we invest around US$1 million per company, is that we will invest US$2-5 million per company. We can enter in seed, pre-Series A [stage], but we can also top up to Series A or even B. If we find companies that are really good at Series A or B, we could also invest in that company,” Togelang explained.
Though the firm would generally invest in “an experienced team with a strong track record,” freshgraduates and first-timers need not feel discouraged.
“It’s also important for us to find entrepreneurs who are really passionate about the business, that they can really identify themselves with the idea and the company,” Togelang stressed.
“Passion is also a factor that we are also seeing.”
Image Credit: Kejora Ventures