Singapore-based VC Antler has closed its second Southeast Asia fund, raising $72 million to strengthen its support for startups in Singapore, Indonesia, Vietnam, and Malaysia
Startups should anticipate this information with enthusiasm. Southeast Asia has encountered an ongoing funding contraction, similar to other regions.
Tech companies in Southeast Asia had raised $2.31 billion through 328 equity funding transactions between January and July 2024. This represents a 69.69% decrease from the $7.63 billion raised in the same period of the previous year across 426 rounds.
However, Jussi Salovaara, a co-founder and managing partner of Antler, who oversees investments and operations in Southeast Asia and the broader APAC region, thinks the current period is the most favorable for early-stage investing.
“It has undoubtedly been a difficult time for investors and startups.” Nevertheless, this environment provides unparalleled opportunities for early-stage investments, according to Salovaara in an interview with TechCrunch.
“In boom times, the market frequently becomes saturated with startups that compete for funding and attention, resulting in inflated valuations and a preference for rapid growth over sustainable business models.”
Conversely, the current recession eliminates underperforming entities, enabling innovative and resilient firms to establish themselves and obtain funding.
According to Antler, this has resulted in the identification and assistance of founders who are dedicated to long-term expansion and possess a comprehensive comprehension of their market.
“In this climate, early-stage investments are more likely to prioritize companies with robust foundations, clear paths to profitability, and prudent cash management, as opposed to those seeking rapid exits.” That in itself may suggest what the priorities were during the market’s more optimistic period.
The pre-launch, pre-seed, and seed money stages will be the primary focus of Antler SEA Fund II. Within six to nine months, the venture capital firm intends to distribute $27 million in funding to 45 early-stage enterprises.
The second SEA fund is also intended to invest in approximately 300 businesses. A portion of the funding will be allocated to companies established during Antler’s residency programs.
The company discovered Southeast Asia is a highly integrated and diverse market, with each country providing distinctive opportunities.
2018, Antler established its inaugural Southeast Asia fund with a Singapore-based team. The primary takeaway from the inaugural SEA fund was that it implemented a highly hyperlocal strategy.
It endeavors to forge a market presence by collaborating closely with founders and teams. Salovaara stated that Antler has at least one collaborator in each Southeast Asian country who will assist in deploying funds from SEA Fund II.
Antler’s SEA Fund II is sector-neutral. Despite this, it recognizes substantial potential in fintech and health startups throughout the region, as they cater to essential requirements in swiftly expanding economies. AI is a technology in which it is currently investing, emphasizing non-generic, vertical AI enterprises that will address issues in the local markets.
Two factors are anticipated to drive the high demand for consumer-focused technology and the growth of the B2B sector in the region by 2030: approximately 65% of the population will be middle-class, and 60% will be under the age of 35.
The youthful population of Indonesia, the most populous country, presents an exceptionally substantial market for consumer technology. Salovaara also noted that Vietnam is becoming a high-tech manufacturing and gaming hub, which is being propelled by its highly educated and skilled workforce.
The VC firm will allocate up to $10 million to growth-stage businesses from Series A through its new growth fund, Antler Elevate, in addition to its early-stage investments.
Additionally, Antler has implemented Antler has implemented ARC (Agreement for Rolling Capital). During the initial six to nine months of a company’s lifecycle, this investment structure supports founders from the early construction stages to the growth phase by providing up to $600,000 in rolling capital.
According to the VC, institutional investors, including a sovereign wealth fund, a pension fund, and a university endowment, contribute over 50% of Fund II. Antler did not disclose the names of limited partners; however, it affirmed that most institutional investors are in Singapore.
The VC has already invested in the following startup companies through Fund II: Clout Kitchen, a gen-Z marketing startup; Zora Health, which provides fertility, reproductive, and family health services; and Farmio, a food supply chain platform.
The VC, which has offices in over 30 locations and 20 regional funds worldwide, has funds in India, Korea, Japan, and New Zealand/Australia in the Asia Pacific region, in addition to its focus on Southeast Asia.
Salovaara observed that Antler Global’s AUM was not disclosed; however, the APAC funds have an AUM of $200 million, and the first and second SEA funds collectively have an AUM of approximately $100 million.
The most recent fund is three times the size of the previous fund, the SEA Fund I, which was slightly more than $20 million.
Airalo, an e-SIM marketplace; Reebelo, a marketplace that deals in refurbished and new electronics such as laptops, iPads, appliances, and power tools; and Bluesheets, a startup that has developed AI software to assist businesses in automating their accountancy processes, are among the 91 companies in which it has invested.
