It’s been some time since Golden Gate Ventures (GGV) touched down in Southeast Asia in 2011, and now the Singapore-based early-stage specialist has announced its first deals. The firm is making undisclosed investments in a trio of e-commerce startups from across the region: TradeGecko, RedMart and Coda Payments.
The firm was started by ex-Lefora founders Vinnie Lauria and Paul Bragiel, and US-educated Singaporean Jeff Paine, and it says that the deals are the result of more than a year of “researching the region, meeting startups and hosting events across a dozen cities”. During that time, the partners met with more than 400 teams, built a network of 1,800 people and clocked up an impressive 500,000 kilometers of travel.
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“The research has given GGV an unrivaled picture of grassroots market opportunities and challenges across South East Asia,” the announcement says, and certainly few have put in anything like that time and effort into mapping out Southeast Asia’s nascent startup ecosystem.
Here’s the skinny on the three young companies:
TradeGecko is a software solution for wholesalers that manages inventories and handles order tracking through one place. The tiered pricing starts from $49 per month for small businesses, with fuller offerings for larger business customers. The two sides were first acquainted when Lauria mentored the team as part of the JFDI Asia Bootcamp 2012. TradeGecko has raised a total of US$650,000, which was led by Wave Maker Labs.
RedMart is a Singapore-based online grocery store that sells all manner of non-perishable goods. The Ocado-style company brings deliveries direct to doors, with no charge for purchases above the SG$75 (US$61.50) mark.
Coda Payments is a micro-payments system that is designed to overcome emerging market issues such as low debit/credit card penetration, and lack of Internet access, to enable online transactions. It is first targeting Indonesia, but has plans to expand to Malaysia and other markets in the region. The company recently landed investment from Japan’s GMO Venture Partners — as part of its new US$12 million Southeast Asia fund — and GGV has put into that round.
Lauria says that GGV is not solely focused on e-commerce startups — despite its first picks — but he does explain that they are attractive investments since “the inherent business model makes Web payment firms sustainable”. A statement from Bragiel reiterates that e-commerce is “only a starting point”.
“We are actively looking across content sites, apps, and B2C services and we are looking in places that other funds are not represented,” says GGV’s US-based partner. “Many people I talk with in Silicon Valley think Asia is just China and India but we see a huge booming market across the region. We are really excited to be at the heart of it.”
Southeast Asia is home to more than 600 million consumers. Though that looks good on paper, Lauria says it wasn’t until the team hit the road that it realized that the region is teaming with startups with growth potential. He explains that GGV has revisited its initial expectation for investments, and it foresees more deals focused on earlier stage development.
“We’re seeing lots of seed-stage startups that we can focus our attention on,” Lauria says. “One year ago, we thought we needed a bigger basket, but in fact there is scope for plenty of deals up to US$200,000. There is a real sweet spot for early-stage startups with potential.”
Keeping tabs on startups spread out across Southeast Asia is no easy task — thanks to physical distances, differing cultures and languages — and Lauria tells me that GGV’s network of mentors are crucial. Not only do they help identify promising opportunities, and provide due diligence but one mentor even cut a check to invest in Coda Payments, which the GGV team took as a clear validation of the startup’s potential.
Next year is shaping up to be a massive one for GGV after it agreed to a deal that will see it become more closely involved in JFDI Asia‘s ‘Bootcamp’ accelerator program; two of which are scheduled for 2013. All three founders were involved mentoring for the inaugural 2012 intake, and Lauria says that the new partnership will allow “tighter integration”.
More specifically, GGV will help identify promising startups and teams for the programs, and participants that the firm nominates will be fast-tracked for follow-on funding of up to SG$600,000 (circa US$490,000). Also, as JFDI co-founder and CEO Hugh Mason highlighted, the link-up will make more of GGV’s strong links to Silicon Valley.
GGV will continue with its own portfolio, despite the JFDI link-up, and Lauria says that there are a couple of other deals that he expects will be forthcoming soon. The firm is expecting to seal more than 10 deals in what it believes will be an “aggressive” 2013.
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