Innovatube, a startup incubator with branches in Vietnam, Singapore, Hong Kong and the UK, has announced the launch of a US$5 million pre-seed fund.

This new fund will seek to invest in enterprise and emerging tech verticals including VR/AR, IoT, AI, fintech and blockchain. It will be targeting the Southeast Asian market, with a strong focus on Vietnam.

The deals Innovatube is eyeing are rounds with a 5 or 10 per cent equity stake tied to them.

The Hong Kong-based fund was set up by Hajime Hotta and Danny Goh — two serial entrepreneurs and angel investors who are based in Singapore and London and have been actively investing in eight Vietnamese startups over the last 3 years.

With this new business model, Innovatube will now be positioned as a venture firm, said an official press release.

Hajime said that although the number of seed VCs has been growing in Vietnam, many young startups are unable to meet the requirements necessary to raise a seed round.

Usually, these Vietnamese startups would raise much smaller rounds to get by until they have enough traction to raise seed funding.

Through Innovatube’s new pre-seed fund, young startups can focus on hitting a more achievable funding target first — one that is substantial but imposes less stringent pre-requisites.

Hajime said Innovatube would not focus so much on the startup’s product, but rather on the founder’s convictions.

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“Often, we seek for at least an extraordinary personality in the founder that we believe is critical to their business model. Take, Trung (Lozi founder) is truly a hustler, which is a must to Lozi model. Once I said he should be in Bangkok for some new business opportunities and the very next day, he was there,” he said.

That said, the risks involved in investing in unproven concepts is high. So Innovatube adopts a hands-on approach in guiding the young startups.

“Working with startups at this stage varies from advising on business model changing to even coaching on a very basic thing, like how to create a good pitch deck for next round,” said Goh.

Goh added that many Vietnamese entrepreneurs limit their focus to serving domestic markets — and he wants to change that.

“They should think of a product that targets regionally or globally as soon as possible. We try to help them form such a product in the early stage thanks to our network & understanding about SEA and Europe/USA,” said Goh.

Image Credit: Innovatube