Quest Ventures looks to bridge S-E Asia and Central Asia with second fund
Singapore
LOCAL venture firm Quest Ventures is vying to strengthen startup collaborations between Central Asia and South-east Asia, having clinched the support of Kazakhstan's QazTech Ventures to hit the first close of its latest fund.
On Friday, Quest announced that it has achieved a US$26 million first close for its US$50 million second fund.
Despite the headwinds from Covid-19, fundraising is still on track and Quest is in the process of deploying the freshly-raised capital into about five deals, Quest partner Jeffrey Seah told The Business Times.
Investors in Quest's latest fund include Pavilion Capital, the Temasek-owned private equity firm, as well as QazTech, a venture capital firm under Kazakhstan's sovereign wealth fund, Baiterek National Managing Holding.
Founded in 2011, Quest has backed over 50 regional startups through its first fund, including Carousell, ShopBack and SGAG. The first fund was invested out of the personal capital of Quest's managing partner James Tan, a former entrepreneur who co-founded Chinese e-commerce firm 55tuan.
With its second fund, Quest will target not just South-east Asian startups, but also those in emerging Asian markets, at the post-seed and Series A stages. It will launch an accelerator in Kazakhstan to "jumpstart the region's digital economy".
"Kazakhstan is like China 10 or 15 years ago, and they are catching up really fast. We know the South-east Asian market very well, so for the startups there that we think are good, we can help them come to South-east Asia and benefit this region," Mr Seah said.
According to a November news report in Azerbaijan, Quest and QazTech signed a memorandum of understanding in October for QazTech to invest US$10 million in Quest's second fund. Of this, US$2 million is to be invested in Kazakh startups over the next three years. Quest declined to disclose the specifics of the agreement.
Adil Nurgozhin, chairman of the board of directors at QazTech, said that his firm's investment in Quest is "an important step in bringing together the innovative ecosystems of South-east Asia and Central Asia".
"This partnership with Quest Ventures and Pavilion Capital will enable Kazakh startups to secure important investments, improve competencies, and gain access to global markets," said Mr Nurgozhin in a press release.
When he visited Singapore back in November, Mr Nurgozhin had then told BT that QazTech was exploring more opportunities in South-east Asia, given the two regions' similarities: a young population and distinct markets united by geography.
"In many respects, Central Asia is somewhat similar to South-east Asia, (in) high-growth opportunities... Fintech here started earlier, so all the successes and mistakes are very applicable back home. We have a lot of niches that are not addressed, so we can also bring in (South-east Asian startups) and help them expand," he had then said.
With its latest fund, Quest also hopes to "bring the public and private markets closer", given the maturing of the digital economy, said Mr Tan.
By working with Quest, Pavilion hopes to "play an important role in the venture capital ecosystem here", added Tow Heng Tan, chief executive of Pavilion.
