Square Peg to raise $550 million, bullish on Southeast Asian startups
(Corrects spelling of government’s identify in tenth paragraph)
By Anshuman Daga
SINGAPORE (Reuters) -Australian enterprise capital agency Sq. Peg is elevating $550 million to increase its dedication to again startups in its key markets of Australia and Israel, with a rising concentrate on Southeast Asia’s booming tech markets.
“We do wish to proceed to double down in Southeast Asia specifically,” Tushar Roy, a Singapore-based associate at Sq. Peg, advised Reuters in an interview. “We’re at present exploring funding alternatives throughout most markets within the area.”
Based in 2012, the enterprise capital agency is certainly one of Australia’s largest, with greater than $1 billion in belongings underneath administration throughout a number of funds.
Roy stated Sq. Peg’s Fund 4, focusing on new investments, and Alternatives Fund 2, designed to put money into later-stage follow-on choices in portfolio companies, had been set to finish their fundraisings within the first half of the yr.
Enterprise companies have been ramping up investments in Southeast Asia as rising shopper adoption of digital platforms because the COVID-19 pandemic fuels startups throughout many sectors.
“There’s now extra capital that is changing into out there in these markets to take these firms from early stage to mid stage to development stage,” stated Roy, who moved from Sydney in 2020 to arrange Sq. Peg’s Southeast Asia workplace.
“The general prospects of success for firms from an end-to-end journey perspective are higher at the moment than they had been, perhaps 5 years in the past,” he stated.
Final month, international enterprise capital agency Accel launched a $650 million fund for Indian and Southeast Asian startups, whereas Indonesia-focused Alpha JWC Ventures and AC Ventures raised new funding rounds late final yr.
Sq. Peg’s 50-plus funding portfolio consists of Australian design collaboration platform Canva, Singapore-headquartered international e-scooter operator Neuron Mobility, and Southeast Asian fintech agency FinAccel.
The VC agency invests in areas similar to shopper Web and software program as a service, and primarily participates in firms’ Sequence A and B funding rounds. It employed Piruze Sabuncu, a former senior government of U.S. digital funds agency Stripe, as a associate in its Singapore workplace in late 2020.
Roy stated a pointy fall in fairness markets in latest months had affected personal fundraisings of firms. “With spherical sizes stabilizing and presumably getting smaller, it is best to see the commensurate impact on valuations.”
Nonetheless, capital was out there for some firms, he stated.
“You might be seeing a flight to high quality in personal markets the place a smaller cohort of firms which have wholesome unit economics, wholesome steadiness sheets, wholesome enterprise and a confirmed product market are attracting increasingly more consideration,” Roy stated.
(Reporting by Anshuman Daga; Enhancing by David Holmes)
