SINGAPORE-BASED deep-tech investor Wavemaker Partners closed its third South-east Asia fund on June 19 at US$111.5 million, surpassing its target of US$100 million.
The fund is anchored by returning investors Temasek, Pavilion Capital and International Finance Corporation; its new investors include Concentric Equity Partners, the investing arm of Chicago-based Financial Investments Corporation and Vulcan Capital, the investment arm of the late Microsoft co-founder Paul Allen's Vulcan Inc.
Returning investors from Wavemaker's second US$66 million fund accounted for 43 per cent of total capital committed. The third fund had 73 limited partners, comprising a university endowment fund, institutional investors, family offices and high-net-worth individuals. About 30 per cent of capital committed came from South-east Asian investors.
Wavemaker is one of only a handful of active deep-tech investors in the region. Since 2012, the firm has made 136 investments. Out of these, 116, or 85 per cent, focused on business-to-business (B2B) enterprise tech; 44 (32 per cent) are in deep-tech and artificial intelligence. Two-thirds of its portfolio companies are headquartered in Singapore.
The firm saw six exits in the last two years, with a combined enterprise value of over US$400 million. The largest of these exits were for Indonesian mobile point-of-sale system Moka, which was acquired by Gojek for about US$130 million, and cloud-communications software company Wavecell, which was acquired by US-based cloud provider 8x8 for about US$125 million.
Portfolio companies that recently raised funding rounds include construction-site management-software company Novade, B2B fast-moving consumer goods marketplace GudangAda and laser communications startup Transcelestial.
Wavemaker said that the Covid-19 pandemic has further strengthened the firm's conviction that startups that serve the B2B segment represent a tremendous - yet underserved and undervalued - investment opportunity.
Managing partner Paul Santos said: "We're grateful to be able to achieve our fund target despite the tough economic environment. We're hopeful that our focus on investing in enterprise and deep-tech startup teams that solve meaningful problems with superior, differentiated offerings and robust unit economics will pay off in the long term."