Golden Gate Ventures | Venture Capital for Southeast Asia

Golden Gate Ventures Announces US$50M Second Fund For Southeast Asia

After 25 successful investments, Golden Gate Ventures, a South East Asia fund focused on strengthening ties between Silicon Valley and Asia, announces their second fund, a US$50M early-stage VC fund.

SINGAPORE – 29 July 2015 – Golden Gate Ventures announces the first close of their second fund, Golden Gate Ventures Fund II LP, a US$50M fund for Southeast Asian tech startups. Golden Gate Ventures closed US$35M from an international mix of investors and advisors to the fund, including Temasek, Eduardo Saverin (co-founder of Facebook), and Monitor Capital Partners, a European multi-family office. Additional partners included Singapore’s National Research Foundation, NAVER (parent company of LINE messenger), and Far East Ventures, the venture capital arm of Far East Organization, one of the largest property developers in Southeast Asia.

On the heels of this announcement, Golden Gate Ventures released its first ever research report comparing investment trends in Southeast Asia to those of China and India. This report sheds light on the state of investment in South East Asia and hints to explosive growth in the region.

The reports finds the number of deals and the investment climate in Southeast Asia mirrors that of China and India in 2005 and 2010 respectively. Based on the analysis, Southeast Asia is predicted to emerge as a foreign investment destination in 2016.

If you’re looking to invest in Asia, China’s not only overpriced, but it’s starting to cool down. Earlier this month the Chinese Securities Regulatory Commission went so far as to put a moratorium on tech IPOs, an action that has since stunted as many as 28 IPOs. Meanwhile Southeast Asia has explosive growth in development and investment at much lower valuations – it’s like going back in time and getting in on the ground floor of China’s tech scene.” – Vinnie Lauria, Managing Partner, Golden Gate Ventures

Bridging Silicon Valley

Golden Gate Ventures has invested in more than 25 companies across 7 countries in Asia. Their portfolio has created over 500 new jobs in the region and is projected to generate over $60M in revenue for 2015. Golden Gate Ventures has helped bring top tier VC firms into the region, including follow-on investments into their portfolio by Sequoia Capital into Carousell and 99.co. Additionally, they’ve successfully helped startups expand to the US such as Bessemer backed Nitrous.io.

Mattermark ranked Golden Gate Ventures in 2014 a top 10% portfolio globally, based on the portfolio’s web traffic, mobile downloads, employee count, and social media reach.

The firm will continue to focus on internet and mobile startups targeting the Southeast Asian consumer and SMB markets, in sectors such as e-commerce, payments, marketplaces, and SaaS applications. In addition, Golden Gate Ventures will maintain its ‘community first’ approach, and continue to support the ever-maturing ecosystem through events, mentoring, and community-building activities such as WalkaboutSG, a city-wide open house that showcases Singapore’s top startups, co-hosted by SGX, the Singapore Exchange.

Jeffrey Paine, a Founding Partner at Golden Gate Ventures said: “We’ve been quite fortunate with our companies to date. We’ve had no startups drop off the radar, on the contrary we’ve been able to bet on terrific entrepreneurs building high growth companies, such as online grocer Redmart, baby related e-commerce Bilna, online social credit scoring company Lenddo. And we’ve worked with great regional co-investors, such as Jungle Ventures, with inventory management SaaS company TradeGecko

Why Now

The Southeast Asian market has some of the fastest growing economies in the world due to an emerging middle class, strong government stimulation, high technology adoption rates and widespread industry investments leading to GDP growth of 6-14% year over year. With mobile devices becoming so affordable, each month there are 1 million new internet users coming online for the first time.

Sectors such as e-commerce, mobile payments, and logistics and inventory management systems are beginning to see enormous growth, and the opportunities are becoming more apparent. Investors, having already poured over US$500 million into investments across the region, will continue to do so, so long as these trends continue as expected.

Government support has been a catalyst as well. The Singapore government committed US$12.6 billion from 2011 to 2015 for scientific research and development. In 2015 alone, the Malaysian government committed US$500 million for research, innovation, and investment. This has had a spillover effect into the rest of the region, where you see companies expand into neighboring countries, such as the recent acquisition by LVMH of Luxola in Singapore, initially co-funded by Singapore’s National Research Foundation (NRF) and GrabTaxi in Malaysia, initially funded by a grant from Malaysia’s Ministry of Finance agency, Cradle.

What’s Next

With over 600 million people, as the region looks ahead to economic integration under the Association of Southeast Asian Nations (ASEAN) Economic Community, SEA is emerging as the third pillar of growth in Asia, after its predecessors China and India.

Over the last half decade there has been over US$1.7 billion invested into startups in the region. Since the beginning of the year, there have been over 20 acquisitions in Southeast Asia, many by corporates from other geographies, such as Korea’s Yello Digital Marketing (YDM) and Germany’s Rocket Internet each acquiring multiple young startups. Some recent notable exits include online cosmetics site Luxola by LVMH and the US$100M acquisition late last year of Nonstop Games by Candy Crush creator, King. And Japanese and Chinese corporates are also opening their checkbooks. In 2014 we saw Alibaba write a US$250M to expand e-commerce logistics by SingPost.

A recent report shows that like China and India before it, Southeast Asia’s economy is on the brink of a meteoric rise. In terms of number of deals and the aggregate value of Series A investment, the region today follows the same trajectory followed by India in 2010 and China in 2005. In particular, Singapore continues to be the lead destination for investment in Southeast Asia.

“I’ve been studying innovation in Asia for the past decade and in 2011 published Chinnovation, which covers the ascent of Asia and how it has introduced new avenues for entrepreneurship, especially in China. What I’m seeing now on Southeast Asia – particularly with the fervour of US-educated engineers returning to the region to start companies and the influx of smart money in the region – reminds me of China in early 2000s and I’m excited for what lies ahead” – Tan Yinglan, (Honorary) Adjunct Associate Professor at National University of Singapore and author of Chinnovation.

Finally, as the region looks ahead to the expected implementation of ASEAN Economic Community (AEC), Southeast Asia is expected to become a focal point for global investors. Given the fact that AEC aims to tap the diversity of the region by combining the capital and technology of the advanced nations like Singapore, with the sheer growth of Indonesia (71 percent YoY growth in B2C e-commerce in 2014), and the labor and resources of its developing nations like Myanmar, Southeast Asia is indeed expected to emerge as the third pillar of growth in Asia.

Information For Editors

Golden Gate Ventures – http://goldengate.vc

Golden Gate Ventures is an early-stage venture capital firm investing across Southeast Asia. Since 2011, the firm has invested in over 25 companies across more than 7 countries in Asia. The firm invests in internet & mobile startups across many sectors, including e-commerce, payments, marketplaces, mobile applications, and SaaS platforms. Notable companies in the portfolio include consumer marketplace Carousell.com, online grocer RedMart.com, property website 99.co, and mobile payments platform Coda Payments.

The firm was founded by three former entrepreneurs from across the globe. Vinnie Lauria, who co-founded 2 Silicon Valley startups, including Lefora forum hosting which was acquired in 2010. Jeffrey Paine who has over a decade of experience managing investments in Asia and helped launched 50+ Founder Institute companies. Paul Bragiel is an Investor/advisor in 33 Silicon Valley companies, including Uber, and previously founded 3 global tech companies.

Asia VC Investment Report
http://goldengate.vc/bamboo-report-july-2015/

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Media Kit: http://ggv.sg/media-kit-15