Despite global headwinds, Southeast Asia’s early-stage startups are still going strong, say the founders of Iterative Capital. Iterative Capital, a Singapore-based venture capital company, has announced that it raised $55 Million from LPs such as Village Global, Cendana and K5 Global for Fund II.
Others backers include Arash Ferdowsi (Dropbox co-founder), Bukalapak founder and ex-CEO Achmad Zaky, Andrew Chen, Andreessen Horowitz general partnership, Qasar Younis former YC COO, Foursquare CEO David Shim, and Kum Hong Siew, Airbnb Asia head.
Since launching Iterative’s Fund I in 2021, the firm has backed more than 65 companies in five cohorts. The portfolio companies it has backed have raised over $163m in additional funding, and total $1.2 Billion. Venture firms that have invested in Iterative’s portfolio companies include Insight Partners, Tiger Global, Monk’s Hill, Wavemaker and Hustle Fund.
The new funding will allow Iterative to increase its check sizes to $500,000 and add more programs for founders in different stages, including ones for earlier-stage founders who aren’t ready for an accelerator yet and later-stage founders who have already gained strong traction. With Fund II, Iterative’s plan is have bigger batches of startups of about 30 each. The goal of the fund is to invest at 100 or more companies in all stages including seed, pre-seed and series A. While Iterative’s first fund did not perform follow-on investments, the firm is now in the position to do so.
Iterative co-founder and general partner Brian Ma said Fund II took just four weeks to raise, because Fund I’s founders performed well. Many of the first fund’s LPs returned and attractive return profiles in Southeast Asia also attracted new LPs.
Start-ups in the Iterative program have access to over 80 potential venture partners. They also have visiting partners who can be contacted. All of these partners include former or current founders.
“More concretely, we run weekly office hours, group office hours, speakers and workshops with our visiting partners, have a scaled-out fundraise bootcamp program, a built-out network to automate white-gloved introductions to investors and 450+ investors engage with our startups at our demo days,” said Ma.
“Some of the most important work actually happens post-cohort, where we help alumni companies deal with negotiating their A’s or B’s, deal with scaling their organizations and help coach them through co-founder issues and other growing pains.”
Some examples of Iterative’s portfolio companies that have recently raised money include Spenmo, which closed an $85 million Series B round led by Tiger Global; travel company GoZayaan, which raised $8 million and acquired FindMyAdventure to expand beyond Pakistan; and proptech startup Propseller, which raised a $12 million Series A in August. PropertyGuru acquired Sendhelper in October, making Sendhelper another Iterative alumni.
Iterative’s founders remain upbeat about startups in Southeast Asia. While there are fewer startup exits in Southeast Asia, the number of early-stage investment continues to rise. For example, a report by Google, Temasek and Bain & Co. found that Southeast Asia is “relatively less impacted by global economic trends” and that its real GDP growth is still 4.6% year-over-year. Iterative’s founders also note that Southeast Asia’s digital economy is expected to reach $200 billion this year, while Indonesia’s online spending it expected to hit $130 billion by 2025. Vietnam’s online GMV is projected to increase by more than twice in three years.
Ma stated that Southeast Asian startups have high potential and are able to get reasonable valuations. “With depressed economies and lofty priced companies in the U.S., China, etc., more capital is flowing into more nascent and higher growth regions like Southeast Asia. We believe this is where the best returns will come from in the next seven to 10 years.”