Deep dive into LPs’ views on venture capital in Southeast Asia

For over a decade, East Ventures has been one of the leading sector-agnostic venture capital (VC) firms in Southeast Asia. Its strategic investments in the region have been vital to its tech evolution. From e-commerce to healthtech and beyond, East Ventures has nurtured innovations and entrepreneurship and shaped the region’s brightest minds into excellent founders.

However, this was all not without the propulsion and support from its Limited Partners (LPs), who have shown unwavering trust in East Ventures. The enduring partnership between East Ventures and its LPs has been pivotal since the early days, even when the market was very nascent and uncertain.

During the East Ventures Summit 2023, a panel discussion titled “Deep dive into LPs’ views on venture capital in Southeast Asia,” four of our Limited Partners: Sinar Mas (Jesslyne Widjaja), Adams Street Partners (Sunil Mishra), DEG (Markus Bracht), and Oppenheimer Generations Asia (Edoardo Collevecchio), shared their years of journey with East Ventures and insights on the current state of Southeast Asia’s tech landscape. Here’s the summary of the panel discussion.

Early beginnings and impact-driven investments

Jesslyne Widjaja emphasized that Sinarmas saw the potential and growth of the tech startup scene and believed in entering new businesses that “touch people’s lives.” The conglomerate group is looking for businesses that will disrupt, enable, and transform their business.

“I think, as a pioneering VC fund focusing on the early stage in Indonesia, they were very well-positioned to capitalize on this trend. Eventually, it was a bet on Willson. We like his decisiveness, his killer and sharp instinct in picking entrepreneurs, and his long-term, very forward-thinking vision in this space,” Jesslyne said.

Meanwhile, Markus Bracht added that DEG’s goal is to improve the living conditions of people in (its) markets, and that is through the “Impact, Climate & Return” strategy. Though only starting DEG’s venture program in Southeast Asia in 2019, East Ventures was an “easy decision” for the firm, according to Markus.

“When we look at an investment, for example, a fund investment, our first look is purely commercial. As with every other investor, we look at teams, track records, performance, and governance – and then we also look at the impact. East Ventures really fulfilled many many of our criteria. They [East Ventures] are a well-established firm, have a good track record, and ESG is already deep in their mind. So, it was a good mixture of factors that made it easy for us to come to a conclusion to invest in East Ventures,” said Markus.

Over time, East Ventures has also evolved alongside the Southeast Asian market. To that, Jesslyne commented, “They have evolved from an early-stage fund to an institutionalized platform. They’ve backed some of the most successful startups. Not only have they been recognized as one of the top-performing venture capital funds in this region, but their ability to balance profit and purpose has been amazing. Their focus on ESG and their impact in Indonesia definitely, if not in the region, have been amazing. I’m very proud to be part of them.”

“Tech winter” and LPs’ role in supporting startups

The global economic recession has deeply affected the tech industry in the past year, including funding disbursement. Though the volume of funding has decreased globally, a lot of capital was raised in the last cycle – and East Ventures even managed to close its Growth Plus fund, securing a total of US$250 million. The most recent fund showcases LP’s vote of confidence in East Ventures’ investment strategy.

Edoardo Collevecchio emphasized that the objective of funding is to build a long-term business that stands the test of time.

“At the end of the day, we’re trying to be a good long-term partner in terms of ‘patient capital’ for these founders over time, and where possible, trying to add operations expertise for connections to other networks to see how they can help us scale. Basically, I would be cautious and prudent, but I wouldn’t panic. I think there’s still a lot of capital waiting to be won,” said Edoardo.

“‘Prudent’ is the most important word. A lot of capital is on the sideline waiting for the right opportunities. Everybody is scrutinizing and asking more questions. Some of that ‘easy money’ is gone, but the money is there. You have to burn muscles to be able to access that,” chimed Sunil Mishra. He also highlighted that some of the best companies actually came from crises.

The panel discussion can be rewatched on demand on our official YouTube channel.