Despite global headwinds, startups in Southeast Asia are still going strong, say the founders of Iterative capital. The Singapore-based venture capital firm, which runs a YC-style accelerator program, announced today that it has raised $55 million for its Fund II from LPs including Cendana, K5 Global, Village Global and Goodwater Capital.
Other funders include a group of founders and executives such as Dropbox co-founder Arash Ferdowsi, Bukalapak co-founder and former CEO Achmad Zaky, Andreessen Horowitz general partner Andrew Chen, former YC COO Qasar Younis, former Foursquare CEO David Shim, and Airbnb Asia head Kum Hong Siew.
Since launching Iterative’s Fund I in 2021, the firm has supported more than 65 companies across five cohorts. The portfolio companies have raised $163 million in follow-on funding and are worth a total of $1.2 billion. Venture firms that have invested in Iterative’s portfolio companies include Insight Partners, Tiger Global, Monk’s Hill, Wavemaker, and Hustle Fund.
The new funding allows Iterative to increase the check size to $500,000 and add more programs for founders at different stages, including programs for early-stage founders who are not ready for an accelerator and founders in a later stage stage that have already gained a lot of traction. With Fund II, Iterative’s plan is to have larger batches of startups of about 30 each. The goal is to invest in more than 100 companies at more stages, including pre-seed, seed, and Series A startups. While Iterative’s first fund did not make follow-up investments, the company is now in a position to do so.
Iterative co-founder and general partner Brian Ma said it took only four weeks to raise Fund II because Fund I founders performed well. Many of the first fund’s LPs returned and attractive return profiles in South East Asia also attracted new LPs.
Startups in iterative programs have access to the 80+ group of venture partners and visiting partners, all of whom are former or current operating founders.
“More concretely, we hold weekly office hours, group office hours, speakers and workshops with our visiting partners, we have an extensive fundraising boot camp program, an extensive network to automate glove launches to investors and more than 450 investors engage with our startups on our demo days” , says Mom.
“Some of the most important work actually happens post-cohort, where we help alumni companies negotiate their A’s or B’s, deal with scaling their organizations, and help coach them through co-founder issues and other growing pains.”
Some examples of Iterative’s portfolio companies that have recently raised funds include Spenmo, which is one $85 Million Series B Round Led by Tiger Global; travel company GoZayaan, which raised $8 million and FindMyAdventure acquired expand outside Pakistan; and proptech startup Propseller, which raised $12 million Series A in August. Meanwhile, another iterative alum, Sendhelper, was acquired by PropertyGuru in October.
The founders of Iterative remain optimistic about startups in Southeast Asia. While fewer startups are currently leaving, early stage investment continues to increase. According to a report by Google, Temasek and Bain & Co. found that Southeast Asia “relatively less affected by global economic trends” and that annual real GDP growth is still at 4.6%. Iterative’s founders also note that Southeast Asia’s digital economy is expected to reach $200 billion this year, while Indonesia’s online spending is expected to reach $130 billion by 2025. Vietnam is a particularly promising market, with predicted to more than double its online GMV over the next three years. years.
Ma said startups in Southeast Asia benefit from high potential and reasonable valuations. “With depressed economies and high-priced companies in the US, China, etc., more capital is flowing to more burgeoning and higher-growth regions such as Southeast Asia. We believe that this is where the best returns will be achieved over the next seven to ten years.”