Singapore-based venture capital firm Quest Ventures has announced the first close of its new US$50 million VC fund named Asia Fund II, in a company statement today. The new fund is backed by Singapore’s Pavilion Capital and QazTech Ventures from Kazakhstan, along with support from entrepreneurs, C-Suite executives, Asia family business founders, family offices, and institutional investors across more than a dozen industries and nationalities.
Already present in fast-growing economies such as Vietnam, the fund will strengthen and expand its footprint in other Southeast Asian nations such as Indonesia, Myanmar, and the Philippines, according to the statement.
The fund’s investment thesis lies in backing emerging South Asian startups that have scalability and replicability in large Internet communities. According to the official report, the fund will invest in startups at the post-Seed and Series A stages, and back driven founders with disruptive business models that can create new sustainable value to the end customer.
“Coming from the original disruption industry of the advertising and marketing communications world, I have witnessed how established businesses and startups view each other differently. This operational chasm between established businesses and start-ups was more perceived than real. At Quest Ventures, we encourage established businesses to partner with startups beyond proofs-of-concept. Although the starting points may be different, the common objective is survivability, and sustainable business models that can scale,” said Quest Ventures Partner Jeffrey Seah.
According to a Quest analyst Michelle Quek, the fund will be focus on investing in the digital economy including sectors like ecommerce, data, deep tech, entertainment, esports, fintech, foodtech, retail tech, and others.
Although the new fund is called Quest Ventures Asia Fund II, it is Quest’s first institutionally-backed fund since the first fund was invested out of the personal capital of its Managing Partner James Tan.
According to The Straits Times, the fund will reach its target of $50 million by April 2021 and will back 40 to 60 startups in Southeast Asia and emerging Asian markets, with investments between $500,000 and $1 million.
Quest Ventures Fund I has invested in a range of startups, including cashback platform ShopBack, property search portal 99.co and online marketplace for secondhand goods Carousell, which is valued at $850 million. The first fund has returned over 40% so far, Seah told Bloomberg.
Moreover, Kazakhstan’s national economic initiatives have seen increased business activities between Central Asia and Southeast Asia. For Qaztech, Kazakhstan’s sovereign wealth fund, this is the first investment in a VC fund in Asia. It is aiming to tap into Quest Ventures’ experience in emerging Asia and in developing innovation ecosystems.
“The cooperation of Kazakhstan with Singapore’s leading venture fund is an important step in bringing together the innovative ecosystems of Southeast Asia and Central Asia. This partnership with Quest Ventures and Pavilion Capital will enable Kazakhstani start-ups to secure important investments, improve competencies, and gain access to global markets,” said Mr Adil Nurgozhin, Chairman of the Board of Directors at QazTech Ventures.
Additionally, Quest is also set to launch an accelerator program in Kazakhstan to provide a head start to the country’s digital economy.
“As the digital economy matures across the world, the venture capital industry in Asia is now poised to play a mainstream role to bring the public and private markets closer. Besides robust financial returns, investors look for value creation derived from business models built on strong fundamentals. Our approach has been validated by more than 50 portfolio companies in the first fund. We are humbled by the belief that our investors have in us,” said Tan.