This “growth stage funding gap” is something that Southeast Asia’s VCs in are looking to tap into by raising larger funding vehicles—sometimes in the hundreds of millions. Jungle Ventures raised its October 2019 $240 million fund with this in mind, as did Singapore’s Vertex Ventures ($290 million).
“This is why we cannot do it ourselves and decided to go for a partnership,”
Even Indonesia’s most prominent early-stage firm East Ventures has moved up the food chain. East Ventures raised a $200 million growth fund, EV Growth, alongside Yahoo! Japan’s corporate venture arm YJ Capital and SMDV, the VC arm of Indonesian conglomerate Sinar Mas, in May 2019. An industry source told us that it is likely to extend its fund size to $250 million.
The company describes its growth fund as a “natural progression” of its role supporting its portfolio companies. Its co-founder and managing partner Willson Cuaca estimates EV Growth has deployed over $100 million across the region. In Indonesia, he claims, East Ventures has invested in some 70% of all startups that seek a Series A deal.
“For us, the purpose of doing a growth fund is very clear—we already have a deal flow from the seed investments we made,” said Cuaca, who founded the firm a decade ago. Lauria’s rationale is the same as Cuaca’s, with Golden Gate intending to offer a more structured alternative.
Running a growth fund such as this represents a very different type of challenge, says Cuaca, even for East Ventures, which has emerged as one of the biggest, if not the biggest, seed investor in Indonesia. While seed stage deals are often about the founding team, talent and finding product-market fit, Cuaca said growth stage deals require emphasis on corporate financing and structure.
“This is why we cannot do it ourselves and decided to go for a partnership,” he said.
Similarly at Golden Gate Ventures, Lauria, who is a popular figure among founders and other investors in Southeast Asia, isn’t involved in the day-to-day operations of the growth fund. That’s handled by another partner while the firm is actively recruiting from the private equity world.
There are concerns about such rapid growth, however. According to one VC founder, Lauria is the sort of person who often returns WhatsApp messages at 2 am in an “always there for you” approach. This might have worked earlier, but as Golden Gate scales up, can he still continue to work the same way?
“Golden Gate is so good at seed it is almost a shame that they’re not there anymore,” one prominent VC who has co-invested with the firm told us on the condition of anonymity.
“Vinnie has developed so much on a personal level, he’s now definitely a top five Series A investor in Southeast Asia,” the investor added. “I’ll admit I was sceptical [when the firm moved beyond seed deals] two years ago, but now I think it works quite well for them… they are rising and growing in importance in the ecosystem.”