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Gobi Partners and Malaysia Venture Capital to invest in Southeast Asia tech start-ups

March 29
8:27 AM 2016

Gobi Partners, a China-based venture capital company, is seeking to make its debut in the Southeast Asian tech start-up market. The fund has joined hands with Malaysia Venture Capital Management in order to unveil a fund worth at $14.5 million dedicated entirely to seed stage firms in Southeast Asia.

Malaysia Venture Capital is considered to be the largest venture company in the country with nearly $300 million in assets. Gobi Partners along with Malaysia Venture aims to invest in 25 - 35 seed stage start-up firms across the region within the next three-year period. Gobi's move epitomizes the strong interest among investors, who are lured by the region's growing mobile internet sector and income.

Bloomberg cited a data from KPMG and CB Insights, which said that the number of ventures funded deals across the region increased to 71 during the final three-month period of 2015, despite the lower venture capital funding across the world. According to Thomas Tsao, Gobi Partners' managing partner, investors must focus on countries like Indonesia, Vietnam, Thailand and Philippines, which have over 550 million population.

Tsao said, "These are four huge consumers markets, and we call them the IPTV market." Gobi classifies Southeast Asian countries into three parts: mature markets which include nations like Malaysia and Singapore, frontier market like Myanmar and finally the IPTV countries. Gobi's desire in the region stems from Chinese companies like Camera360 that has vast customers in Southeast Asian nations.

Tsao added that the joint venture fund of Gobi and Malaysia Venture will concentrate on tech and mobile internet start-ups in fields like content and digital media, cloud computing, finance-tech, e-commerce, online tourism and big data.

According to TechCrunch, this is the second time for Gobi to team up with Malaysia Venture Capital after creating a joint $50 million fund for investments in China and Southeast Asia in September. The newly formed SuperSeed Fund will be controlled by Thomas Tsao, Kay-Mok Ku, Gobi's partner in Singapore, and Jamaludin Bujang, chief executive officer of Malaysia Venture.

The Gobi arrived Southeast Asian market eight years after its foundation in 2002, the first Chinese venture capital companies to widen its business investment into the region. Since its first entry, the fund has been profitable in the region, Ku said. According to Ku, Thailand being the second largest economy in the region enjoys huge personal spending that is almost double than that of Indonesia.

Tech in Asia pointed out that Victor Chua of Gobi Partners will act as the investment director supervising the start-up deals. The fund expects median deal size to be around US$500K primarily for early stage start-ups. Ku said that the fund is ready to welcome other venture capital firms to join in funding rounds either as follow on or lead.

The SuperSeed Fund is created with an aim to enlarge Gobi's business portfolio into Southeast Asian countries. Southeast Asian unicorns are expected to benefit from this joint venture fund.

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