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Temasek’s Vertex closes record US$305 million Southeast Asian fund

A view of the Singapore skyline next to the Supreme Court in Singapore July 1, 2019. (PHOTO: REUTERS/Edgar Su)

By Yoolim Lee

(Bloomberg) -- Vertex Venture Holdings Ltd., a unit of Singapore’s Temasek Holdings Pte, has closed its fourth Southeast Asia and India fund at a record US$305 million.

The amount raised was a record for an early-stage investment vehicle in the region, underscoring growing interest in its startup scene. The new fund of Vertex Ventures Southeast Asia and India -- the first institution to back ride-hailing giant Grab -- far exceeded its original target of $230 million.

Vertex is among Southeast Asia’s best-performing VC firms. The first Vertex Ventures Southeast Asia and India fund had returned 19.1% as of March, the second fund returned 24.3% and the third 36.4%, according to the firm. That’s “what caused us to continue our relationship in the fourth fund with a larger commitment amount,” Roque Velasco, managing partner of Galdana Ventures, said in a statement.

Investors are putting money into the region’s venture firms to capitalize on opportunities beyond the U.S. and China, the primary focus of deals in recent years. Given the slowdown in China, they are focusing on outfits with strong track records internationally, said Alex Schmitz, managing partner and head of Asia Pacific at Capstone Partners, which helped with fundraising for Vertex’s new fund.

“Many VC players in the region are raising money but none of them has the global platform like Vertex,” said Schmitz.

Vertex Ventures Southeast Asia and India has made 40 investments so far, including in Instarem and Validus Capital. The company plans to continue investing in Series A-stage startups in enterprise technology, fintech and consumer internet. It’s one of six major funds in Vertex’s global network, each of which is independently managed and raises most of their capital externally, though Vertex Holdings is an anchor investor. Just this week, another of the funds announced it had raised more funds than targeted.

Vertex Holdings is in turn a wholly-owned unit of Singaporean state investment firm Temasek.

“We could have easily raised a larger fund, but we felt it was a sufficient size for an early-stage fund like us,” said Chua Kee Lock, managing partner of Vertex Ventures Southeast Asia and India. “At the end of the day, it’s about generating real cash returns to investors.”


© 2019 Bloomberg L.P.