Singapore-based venture capital firm Insignia Ventures Partners announced Monday the close of its latest funds totalling $516 million.
This includes $388 million for the main fund IVPF III, $28 million for an Entrepreneurs’ pool that invests alongside the main fund and Annex Fund I at $100 million, Insignia Ventures said in a statement.
These funds will focus on early-stage technology investments in Southeast Asia and comes as the firm celebrates five years of “building great companies”, it said.
Like the prior funds raised by the Southeast Asia-focused early-stage technology venture capital firm, it said Fund III was oversubscribed and reached its hard cap for limited partner commitments.
Investors in the new fund span premier institutional investors including sovereign wealth funds, foundations, university endowments, and renowned family offices from Asia, Europe, and North America, it added.
“We could have raised a much higher amount but we have learned that smaller, tighter funds do better,” said Insignia Ventures Founding Managing Partner Yinglan Tan says, noting that when they were raising their first $120 million fund, limited partners were initially skeptical of whether Southeast Asia was sufficiently large and addressable.
And so for Insignia Ventures, this has meant a continued focus on the quality of its investments – all the more important in the current environment.
“We see a once-in-a-decade opportunity to capture outlier returns, as the winners become very obvious when the tide goes out. At the same time, winners cannot just be defined by valuations and scale but are ultimately companies with sustainable unit economics and concrete value creation. There is a fine balance between speed and endurance that defines our search for outlier returns,” he added.
Since 2017, Insignia Ventures has backed unicorns like the Southeast Asia auto retail platform Carro, Indonesian digital investment platform Ajaib, artificial intelligence (AI) for business intelligence company Appier which listed in Japan last year, and Indonesian tech juggernaut GoTo which listed in Indonesia this year; category leaders like the pioneering rural Indonesian fintech Payfazz (now Fazz Financial), the Indonesian commerce enabler Shipper, and the Philippines’ first fully digital bank Tonik; and fast-emerging pioneers like the Asia-first mental health tech company Intellect, conversational AI market leader WIZ.AI, and the open banking platform leading Southeast Asia’s open banking adoption Brankas.
Riding the rising wave of investment activity in the region with a maiden fund of $120 million, the early-stage venture capital firm has since been leaving its insignia on the region’s rapidly evolving tech markets with Insignia Ventures being the first institutional investor in a vast majority of its backings. Then in 2019, the firm announced the close of Fund II at $200 million.
Over these past five years, Insignia Ventures’ approach has been defined by backing unstoppable founders building market leaders or makers making an outsized impact on the way millions of people across Southeast Asia and beyond live and grow businesses.
To date, the firm’s enterprise value is over $46 billion on $304.9 million of invested capital, with a loss ratio of less than 2 percent. Their portfolio companies have also attracted $7.7 billion in follow-on funding.
And even with this progress and performance, Yinglan sees this as just the tip of iceberg when it comes how much more tech market creation can come out of the region.
“We are proud of the impact our portfolio companies have created and proud to have been partnered with them since their early days, going through the trenches of growth with them and witnessing firsthand how they have shaped Southeast Asia’s digital economy. But this is still the beginning for us; it is still the early days of digitalization in the region. We believe there are many more opportunities for such companies to emerge in Southeast Asia,” he said.
Among these opportunities, the firm aims to be more aggressive on “next-decade sunrise sectors” in the region like web3, climate tech, healthcare and agriculture.
“The impact made by the biggest companies out of Southeast Asia in the past decade will be surface-level compared to the impact market makers of the next decade will be making. There is understated but critical alignment between the solutions coming out of these areas and long-standing problems in the region from end-to-end food sustainability to trust with institutions,” said Yinglan.
“The solutions to these problems cannot be solved by technology startups alone and these sectors themselves may still be early, but the right founders matched to the right problems can move the needle, and that is precisely why we cannot waste a minute in this ‘golden hour’ to back them,” he added.