East Ventures hits first close of US$88m fund to seed post-pandemic startups

EARLY-STAGE venture capital (VC) firm East Ventures has raised about US$57 million for the first close of its US$88 million fund to target tech companies emerging in the post-lockdown aftermath of the Covid-19 pandemic.

The firm's eighth fund has secured commitments from global and regional institutional investors, including Temasek unit Pavilion Capital and private market investment firm Adams Street Partners, which are both existing limited partners (LPs).

The fund will be sector-agnostic in its investment focus. Singapore-based East Ventures has backed more than 170 companies that include Indonesian unicorns Tokopedia and Traveloka, Kudo (acquired by Grab), Loket (acquired by Gojek), ShopBack and Ruangguru.

"The pandemic has created a chance for a new breed of entrepreneurs to think about new problems and how to solve them in efficient ways via technology," says East Ventures' managing partner Willson Cuaca.

"We remain optimistic about the future of South-east Asia's digital economy, and we're particularly bullish on the Indonesian market. We feel the current situation proves our core hypothesis that great founders will find a way to make their companies thrive, even in times of crisis."

The firm said it is keeping its latest fund under US$100 million to quickly achieve its key objective of being the best-performing asset class for its LPs. While larger funds mean that more capital can be deployed to fuel startups' growth and invest in more companies, it also means that the fund must bag many more blockbuster wins to achieve the same return multiple.

East Ventures joins a horde of other VC firms raising money amid the economic downturn. A total of 42 South-east Asia-based VCs are in the market for US$4.9 billion in funds, deal news outlet DealStreetAsia reported in May.

Three of the largest funds being raised are Vanda Global Capital's US$1.5 billion agritech fund, B Capital's US$750 million second fund, and Vickers Venture's US$500 million sixth fund.