Antler Closes Second Southeast Asia Fund, Raises $72 Million for Early-Stage Investments
Antler, a Singapore-based venture capital firm that focuses on early-stage investments, has closed its second Southeast Asia fund, raising $72 million to support startups in Singapore, Indonesia, Vietnam, and Malaysia.
A Welcome Development for Startups
This news should be welcome for startups in the region, which have faced a persistent funding slump. Between January and July 2024, tech companies in Southeast Asia had raised $2.31 billion through 328 equity funding rounds, a 69.69% decrease compared to the previous year’s total of $7.63 billion raised across 426 rounds in the same period.
A Time for Early-Stage Investing
Jussi Salovaara, co-founder and managing partner of Antler, believes that now is the best time for early-stage investing. “It has no doubt been challenging for startups and investors alike. However, this is the kind of environment that offers unique opportunities like no other for early-stage investments,” Salovaara said. “During boom times, the market often becomes saturated with startups vying for attention and funding, leading to inflated valuations and a focus on rapid growth over sustainable business models. In contrast, the current downturn filters out weaker players, allowing truly innovative and resilient startups to emerge and secure funding.”
Fund Structure and Investment Strategy
Antler SEA Fund II will focus on pre-launch, pre-seed, and seed money stages, with $27 million allocated to 45 early-stage startups within six to nine months. The fund will also invest in around 300 startups, with some funding supporting startups created during Antler’s residency programs.
The firm has identified Southeast Asia as a very integrated and incredibly diverse market, with each country offering unique opportunities. Antler has established a presence in the market by working closely with teams and founders, with at least one partner in every Southeast Asian country.
Sector Focus and Growth Potential
Antler’s SEA Fund II is sector-agnostic, but the firm sees significant potential in fintech and health startups across the region, which address critical needs in rapidly growing economies. AI is also a technology the firm is actively investing in, specifically non-generic, vertical AI businesses that will solve problems in the local markets.
The region’s growing middle class and young population are driving demand for consumer-focused technology, while the growth of the B2B sector presents opportunities for startups. Indonesia, the most populous country, presents an especially massive market for consumer tech due to its younger population, while Vietnam is emerging as a high-tech manufacturing and gaming hub driven by its highly skilled and educated workforce.
Additional Investment Vehicles
In addition to its early-stage investments, Antler will invest up to $10 million in growth-stage startups from Series A through its new growth fund, Antler Elevate. The firm has also launched ARC (Agreement for Rolling Capital), an investment structure that provides up to $600,000 in rolling capital within the first six to nine months of a company’s life cycle.
LPs and Portfolio Companies
More than 50% of Fund II is coming from institutional investors, including a sovereign wealth fund, a pension fund, and a university endowment. Antler has already invested in Farmio, a food supply chain platform; Zora Health, a startup offering fertility, reproductive, and family health services; and Clout Kitchen, a Gen Z marketing startup.
Conclusion
Antler’s latest fund is a significant development for the startup ecosystem in Southeast Asia, providing much-needed funding for early-stage startups. The firm’s focus on fintech, health, and AI, as well as its sector-agnostic approach, demonstrate its commitment to supporting innovative and resilient startups in the region.
FAQs
Q: What is the size of Antler’s second Southeast Asia fund?
A: The fund has raised $72 million.
Q: What is the focus of Antler’s SEA Fund II?
A: The fund will focus on pre-launch, pre-seed, and seed money stages, with a sector-agnostic approach.
Q: What is the size of Antler’s growth fund, Antler Elevate?
A: The fund will invest up to $10 million in growth-stage startups from Series A.
Q: What is ARC (Agreement for Rolling Capital)?
A: ARC is an investment structure that provides up to $600,000 in rolling capital within the first six to nine months of a company’s life cycle.
Q: Who are Antler’s limited partners for Fund II?
A: More than 50% of Fund II is coming from institutional investors, including a sovereign wealth fund, a pension fund, and a university endowment.
