Iterative raises US$55 million for Fund II, will back over 100 companies
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EARLY stage venture capital(VC) firm Iterative raised US$55 million for its second fund, Fund II, with lead investors Cendana Capital, K5 Global, Village Global and Goodwater Capital.
The fund had also received cheques from Silicon Valley founders and executives such as Kum Hong Siew, head of Airbnb Asia, and Andrew Chen, general partner at venture capital firm, a16z.
Iterative’s Fund I portfolio companies raised US$165 million in follow-on funding. The VC firm’s total portfolio value is currently worth US$1.2 billion. Some notable startups include fintech Spenmo and home services startup Sendhelper, which was acquired by PropertyGuru in October.
“Fund I did extremely well for our limited partners (LPs), thanks to our founders, so Fund II took just four weeks to raise. Many of our LPs wanted to continue to back us and the attractive return profiles in South-east Asia allowed us to bring in many more new LPs,” said Brian Ma, co-founder and general partner, Iterative.
The VC firm runs a Y Combinator style accelerator for startups, a 12-week programme run twice a year, where Iterative invests between US$150,000 and US$500,000 in a batch of startups. When startups are admitted, the VC firm invests the full amount and works with the startups and sets goals for the programme, culminating in a demo day to raise more money. Fund I has run five cohorts with over 65 startups since 2020.
Iterative will be investing in over 100 companies across South-east Asia with Fund II, ranging from pre-seed to Series A, with cheques sizes up to US$500,000 depending on the stage of the startup. With the bigger fund, founders of each new batch will now meet in a specific city at the start of a new programme. There will also be an annual event for all the portfolio founders to meet. The VC firm is looking to run five cohorts of its accelerator programme with this new fund.
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“Given Fund II’s size, we’ll be backing more companies, writing larger checks, and participating in more follow-ons to continue to support our community,” says Ma. A third of Fund II will be reserved for follow-on funding.
The VC firm is still bullish on South-east Asia, as the real gross domestic product (GDP) of the region has continued to grow at 4.6 per cent according to Bain, Google and Temasek’s e-Conomy 2022 report. The digital economy is also set to hit US$200 billion in gross merchandise value this year, rising to US$330 billion in 2025.
Iterative said its mission is to increase the GDP of South-east Asia via entrepreneurship, making it more accessible to more people and providing tools and support for founders to be successful.
“Although our mission remains the same, this fund gives Iterative more resources to provide more help to more founders,” said Hsu Ken Ooi, co-founder and general partner, Iterative.
Even as macroeconomic headwinds and inflationary pressures hit the region, Iterative has not seen much impact to the early-stage startups yet.
“Great startups continue to be founded, and VC money continues to be deployed,” said Ma.
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