Despite the continuing issues caused by the pandemic, the venture capital industry continues to bet on the resilience of the Southeast Asian startup ecosystem. With billions of dollars still being invested into the region, the future remains bright for much of the region.

To find out more about the investment landscape, we had a chance to speak to an experienced investor with deep knowledge of the region. His latest venture, M Venture Partners (MVP) was just launched recently, totaling $30.85 million USD. This industry-agnostic early-stage fund is targeting primarily seed and pre-Series A startups in Southeast Asia and a few select startups in India.

Founded by Mayank Parekh , whose investment experience includes launching Grange Partners and leadership positions at Southern Capital Group and McKinsey & Company, and Joachim Ackermann, former managing director of Google Asia Pacific. MVP has already invested in 11 companies, including one exit on the Australian Stock Exchange (ASX). Other portfolio companies include healthtech startup Naluri; AI company Impact Credit Solutions and more.

Find out what else Mayank had to share with us about the region and his latest fund.

Congratulations on the new fund. Could you share a bit more information about it and what’s the goal?

M Venture Partners is an early stage, sector agnostic fund. What matters to us are the founders. We aim to work with founders who have an impressive professional or entrepreneurial track record. This may sound simplistic, but at this early stage, talent is what truly matters. Concepts may evolve and business models may pivot. We’re betting on founders that persevere through challenges with grit & resilience. Put simply, the quality of the founders directly translates into the quality of the company. Our goal is to invest in about 40 early-stage ventures that are truly groundbreaking. 

Why Singapore? It seems that the ‘little red dot’ is a popular destination for VCs, could you share a bit more about why?

MVP invests largely in B2B or B2B2C companies. Therefore, we need a fertile ground for our startups to launch their business models with leading corporate or business partners. Singapore provides just that. It’s the hub for market leading institutions and it’s not uncommon to see them creating opportunities for new technology or disruptive ideas.

Though we’re based in Singapore, a vast majority of our portfolio companies have regional or global aspiration, leveraging Singapore as the core launch platform. Our Fund also looks to make investments selectively in India and other large Southeast Asian countries with substantial total addressable markets. 

How did you choose your current portfolio – what were some of the factors that led you to invest?

When it comes to early stage investing, there is little historical data or empirical evidence to due diligence. In some cases, the product/service is just being brought to market. We therefore focus on the founder-market fit and intrinsic capabilities of the team. We also focus on identifying and assessing the risks to the business model and execution plan. A few questions we ask ourselves are:

  • What gives this team the right to win in this space?
  • Is the market opportunity big enough?
  • What are the key risks associated and how can we mitigate them?
  • What if it all goes sideways early in the journey, can the business model be pivoted and do founders have the ‘will & skill’ to ‘fail fast’, learn & pivot?
  • Can we help the company grow to the next level? 
  • Do we have partners in mind that can fund the next round?

Once we have answers and we feel comfortable, then we’re all in. 

What are some of the new trends in Southeast Asia’s investment landscape in the next 12 months?

COVID-19 has undoubtedly catalysed significant changes in the way people work, live and play. For instance, demand for remote working, e-commerce, entertainment, education and health services will likely change. The pendulum has swung, while it may swing back some, there will be a new watermark – we look for founders who have the foresight to visualize a new world and new business models that will create distinctive market leaders in this new watermark. 

Is there a market in Southeast Asia that investors are overlooking?

I think Vietnam has been overlooked but is quickly gaining attention. The country has a young population, fast-growing middle-class, and tech-savvy consumers. It’s also full of exceptional talent – engineers and entrepreneurs – which has led to a boom of startups. In fintech space for instance, there were 123 startups in Vietnam in 2020 compared to just 44 in 2017.

In addition to all this, the Vietnamese government has also made it easy for foreign investors looking to set up operations in the country with lucrative tax incentives. It’s definitely a space to watch. 

What’s next for MVP?

Now that we’ve closed our fund, the focus shifts to finding exceptional companies and building a solid portfolio. We’re fortunate to have a strong network of investors and advisors who help us with deal flow and expertise. We also have an experienced team and are ready to build a robust portfolio of distinctive start-ups with exceptional founders.