STRIVE raises more than $100m for third fund, opens new Bangalore office
STRIVE (formerly known as GREE Ventures) has closed its third cross-border venture fund above $100 million (around 12 billion Japanese yen), lower than its original target of $130 million (15 billion Japanese yen).
Nikhil Kapur, its Singapore-based partner who oversees Southeast Asia and India investments, said the venture firm had set a hard deadline to round up fundraising efforts and decided not to be out in the market for too long.
“We had set 31 December 2019 in our heads as the deadline to get whatever commitments we could get and just close the fund, and that’s what we did. Wherever it ended, we were okay with it as long as it was at least $100 million or 11 billion yen,” he said. “We would rather spend more time with the [portfolio] companies than trying to fundraise.”
This follows Singapore-based Monk’s Hill Ventures, which recently confirmed closing its second Southeast Asia fund at $100 million, short of a $150-million target it disclosed in an SEC filing in 2018.
STRIVE’s third fund was backed by returning limited partners (LPs) from its previous two funds, including SME Support JAPAN (which operates under the Ministry of Economy, Trade and Industry of Japan), Gree Inc and members of Mizuho Financial Group such as Mizuho Bank, Mizuho Securities Principal Investment and Mizuho Capital. These returning LPs had helped the fund reach its first close in May 2019.
Two other undisclosed Japanese institutional LPs joined the fund’s investor base since then. No Southeast Asian or Indian LPs participated in this round, even though STRIVE deploys regionally across Japan, Southeast Asia and India. About 30 per cent of its fund goes into Southeast Asian and Indian companies – including first and follow-on cheques.
Kapur noted that while LP interest from Southeast Asian and Indian investors was healthy, several are starkly aware of the lack of exits in this nascent market.
“Among the few LP conversations I had, it was still very early days for them to build a strategy. Even among the institutional LPs that we spoke with, I still think it will take a bit of time for them to accept that this asset class is already mature enough in the market,” said Kapur.
STRIVE Ventures writes cheque sizes of between $300,000 and $1 million for its seed investments in Southeast Asia and India, deploying across B2B, SaaS and deep tech opportunities, including IP-backed startups in medtech, quantum computing, cryptography and satellite communications.
Some of its active portfolio companies include Saleswhale, Healint and Travelstop. STRIVE also boasts returns of 1x DPI (distributions to paid-in capital) from its first $50 million fund, a record Kapur says is still unbeaten in this part of the world. Some of its exits include names like Pie, Kudo and Bukalapak.
In early March, STRIVE also opened a Bangalore office with a new investment manager to drive deal flow from India and support its portfolio companies in the country.
The firm is beginning to spend more time outside of Singapore, especially in India and Indonesia, where deal flow quality is comparatively stronger.
Kapur highlighted India as a far better destination for B2B and SaaS seed startups at this point in time given the relative maturity of the ecosystem. He added that it also possesses a more vibrant angel investor scene with networks like Let’s Venture and Angellist which include alumni from top university institutes and homegrown technology giants.
Gloss