Antler, a Singapore-based venture capital firm specializing in early-stage investments, has successfully closed its second Southeast Asia fund, raising $72 million. This move signals a significant boost for startups in the region, particularly in Singapore, Indonesia, Vietnam, and Malaysia, during a time of reduced investment activity.
Southeast Asia’s tech industry has experienced a noticeable downturn in funding, with companies raising only $2.31 billion across 328 equity funding rounds from January to July 2024. This figure marks a steep 69.69% decline from the $7.63 billion raised in the same period the previous year. Despite this challenging environment, Antler’s co-founder and managing partner for Southeast Asia and the broader APAC region, Jussi Salovaara, remains optimistic about the opportunities for early-stage investments.
In an interview with TechCrunch, Salovaara emphasized that the current market conditions, while tough, are ripe for identifying resilient and innovative startups. “This environment filters out weaker players, allowing truly innovative and resilient startups to emerge and secure funding,” he said. He pointed out that during economic booms, the market often becomes oversaturated with startups seeking attention and investment, leading to inflated valuations and a focus on rapid growth rather than sustainable business models. The present downturn, however, offers a unique opportunity to support startups with strong foundations, clear paths to profitability, and prudent cash management.
Antler’s SEA Fund II will concentrate on pre-launch, pre-seed, and seed stages, with plans to allocate $27 million to 45 early-stage startups within six to nine months. The fund aims to support around 300 startups in total. Some of these investments will be directed towards companies emerging from Antler’s residency programs, where founders develop and launch their startups.
The VC firm has taken a hyperlocal approach in Southeast Asia, establishing a presence in each country it invests in. According to Salovaara, Antler has at least one partner in every Southeast Asian country to help deploy funds effectively. The fund is sector-agnostic, though it sees significant potential in fintech and health startups, which address critical needs in the region’s rapidly growing economies. Additionally, Antler is actively investing in non-generic, vertical AI businesses designed to solve local market problems.
Southeast Asia presents a diverse and integrated market, with each country offering unique opportunities. Indonesia, with its large and youthful population, is seen as a key market for consumer technology, while Vietnam is emerging as a hub for high-tech manufacturing and gaming, driven by a highly skilled workforce.
Beyond early-stage investments, Antler has also introduced a growth fund, Antler Elevate, which will invest up to $10 million in growth-stage startups from Series A. The firm has launched ARC (Agreement for Rolling Capital), a flexible investment structure providing up to $600,000 in rolling capital during the first six to nine months of a company’s lifecycle.
The second SEA fund has attracted significant interest from institutional investors, with over 50% of the capital coming from entities such as a sovereign wealth fund, a pension fund, and a university endowment, primarily based in Singapore. While the identities of these limited partners have not been disclosed, their involvement underscores the confidence in Antler’s strategy and the potential of Southeast Asian startups.
Antler has already made several investments through Fund II, including Farmio, a food supply chain platform; Zora Health, a fertility and family health services startup; and Clout Kitchen, a Gen-Z-focused marketing company. The firm’s broader Asia-Pacific operations include funds in India, Korea, Japan, and Australia/New Zealand, with APAC funds managing $200 million in assets under management (AUM). The combined AUM for the first and second SEA funds is around $100 million.
The latest fund marks a significant increase from Antler’s first SEA fund, which raised just over $20 million and invested in 91 companies, including notable startups like Airalo, an e-SIM marketplace; Reebelo, a platform for refurbished electronics; and bluesheets, which provides AI-driven bookkeeping automation for businesses.
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