Microsoft co-founder's Vulcan Capital to deploy US$100m in venture funds across S-E Asia

Singapore

THE backer of tech big shots such as Uber, Spotify and Alibaba has waltzed into town brandishing a US$100 million war chest.

US-based Vulcan Capital - the multimillion-dollar investment arm of Vulcan Inc, founded by late Microsoft co-founder Paul G Allen - marked its first international expansion with the opening of its Singapore office on Monday. With opportunities abound in South-east Asia, the firm is looking to cut cheques ranging from US$1 million to US$10 million for startups in the seed to Series B stages.

Vulcan Capital's activities span venture investments to public equity value investing, leveraged buyouts, acquisitions and special situations. But with its Singapore office, the company is taking a shot at early-stage venture opportunities.

"If you look back at our history and our late founder, Paul Allen, his history with Microsoft lends itself to a lot of that early-stage DNA that we have within our platform," said Tommy Teo, managing director and head of South-east Asia, adding that it was therefore a natural fit to focus on early-stage investments for Vulcan Capital's first international foray.

And "if you want to do private investments, then it makes a lot of sense to have boots on the ground."

The firm studied different markets before picking Singapore, which Mr Teo described as being at a stage where there is market validation "all along the value chain". That means plenty of local and foreign accelerators and venture capital (VC) firms in town, unicorns setting up shop in the Republic, and two prominent VC-backed companies - Sea and Razer Inc - that have gone public.

Vulcan Capital has every intention of growing from its initial mandate of US$100 million.

Over the next 18 to 36 months, it is looking to build up a portfolio of eight to 12 names. The office already has a pipeline of two to three deals for the first six months.

Investment returns will be channelled to philanthropic efforts led by Vulcan Inc. Vulcan oversees business activities and philanthropic initiatives including climate change research and conservation projects.

Vulcan Capital's Singapore office will focus on opportunities in Indonesia, Vietnam and Singapore. While its two offices in Seattle and Palo Alto have invested heavily in the United States, 20 to 30 per cent of its global portfolio has typically comprised companies based elsewhere.

For instance, in South-east Asia, Vulcan participated in Grab's US$2 million Series H fundraising round and injected money into two venture funds based in the region. It also backed India's Flipkart, bought by Walmart last year for US$16 billion.

Mr Teo believes Vulcan Capital has an edge over other investors because it is in no rush to exit its portfolio companies - its money comes from a single family office that manages the estate of Paul Allen. This allows the evergreen fund to back startups through more stages of growth.

"We've held positions for up to 15 years before," he said. While Vulcan Capital Singapore is looking at early stage investments now, it is comfortable with supporting companies over growing cheque sizes and maturity.

It is just as well that Mr Teo previously spent six years at Northstar Group, the private equity firm that in recent years has taken a keener look at early-stage VC opportunities that include Indonesian unicorn Gojek.

Heading up the Singapore office alongside Mr Teo is Yu Minjie, who spent four years at Dymon Asia Capital and was later partner at Singapore-based VC firm Ethos Partners.

Vulcan Capital is looking to hire three to five more people for its Singapore office over the next 18 to 24 months. These hires will be junior and support staff, with potentially one more senior level hire.

Bill Hilf, CEO of Vulcan Inc, said in a press statement: "We aim to improve our planet and support communities around the globe through catalytic philanthropy, scientific research and commercial ventures. We're excited to contribute to the region with the new Vulcan Capital office in Singapore."