Acknowledging the expansive impact COVID-19 has brought upon Southeast Asia’s tourism sector, Velocity Ventures, a venture capital firm based in Singapore that specializes in the hospitality and travel industry, is allocating a $20 million fund to to empower companies to build solutions that address the pandemic’s impact.

The fund, which is the first of its kind in Southeast Asia, emphasizes the themes of innovation and opportunity. The primary target recipients are early stage, tech-enabled start-ups within Southeast Asia from Seed to Series A. Additionally, the fund also supports growth stage start-ups (Series A & above) and SMEs primarily located in Singapore. To drive innovation among travel and hospitality startups, Velocity Ventures intends to provide Seed and Series A funding to startups that are actively harnessing the advantages of new technology.

The fund aims to enable rapid digital transformation in response to the new paradigm the pandemic has created.

In terms of the opportunity theme, Velocity Ventures plans to support startups with series A, B, and higher funding rounds. The focus is also tech-related, but there is emphasis on accelerating growth especially in facilitating business strategy pivots, the restructuring of finances, and new tech adoption.

Velocity Ventures’ $20 million fund does not stop at providing financial backing. It comes with a unique corporate partnerships feature, which is designed to match startups with noted travel and hospitality industry players for them to access mentoring and piloting support. The fund helps guide businesses in using their funds in the most efficient ways and in finding viable business opportunities.

Moreover, Velocity Ventures is collaborating with accelerators such as the Singapore Tourism Board’s Singapore Tourism Accelerator, Plug and Play APAC, and Malaysia Digital Economy Corporation (MDEC). These organizations will aid Velocity Ventures in finding deserving startups to fund and also provide mentorship to portfolio companies.

Velocity Ventures forecasts that it will take up to three years for significant recovery to happen. The recovery will not be quick and easy. Some sub-sectors such as food and beverage will recover faster than others. There are those that may need more time and greater support such as the corporate travel sector.

Velocity Ventures does not view this inconsistency to be a critical drawback, though. Instead, the firm sees unique windows of opportunity. The non-uniform recovery profile allows Velocity Ventures to strategically deploy the fund. The firm expects that the Southeast Asian hospitality and travel industry to attain pre-pandemic growth levels of around 5.5 percent within the duration of the fund.

Velocity Ventures was founded by the former CEO of the Pan Pacific Hotels and InterContinental Hotels Group (APAC) A. Patrick Imbardelli, and renowned entrepreneur-investor Nicholas Cocks. With their extensive experience and expertise in the tourism and hospitality industry, they aim to help recover the vigor of Southeast Asia’s travel industry even as COVID-19 continues to hinder regular business operations. Imbardelli is optimistic in the recovery of the Southeast Asian travel and hospitality market especially with the help of technology.

“The current structural change in consumer behaviour is a game changer as it will not only create new forms of opportunities within the Travel and Hospitality sector but will also drive the sector to develop transformative tech-driven solutions – which has largely been lacking in the industry,” Imbardelli says.

On the part of Nicholas Cocks, he is confident in how Velocity Ventures’ distinctive fund can achieve a significant impact in Southeast Asia’s tourism market. “Our portfolio companies will benefit from far more than just financial investment,” Cocks says.

“We employ our industry expertise, corporate partners, panel of advisors and deep networks within the Travel & Hospitality sector to help these companies successfully grow and scale their brands, products and services across the region,” he adds.

COVID-19 has created a dramatic disruption in the travel and hospitality industry which made it necessary to embrace major changes. As Cocks explains, “COVID-19 is resulting in a complete industry reset and will accelerate consolidation, rapid digital adoption and new business models.”

It’s not all doom and gloom for the industry, though. “All of which provides an unprecedented opportunity for founders and our fund,” Cocks reckons.

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