Antler, a venture capital firm based in Singapore, has announced the closing of its second Southeast Asia fund, raising $72 million. This news comes as a welcome relief for startups in the region, which has experienced a significant funding slump. The amount raised by tech companies in Southeast Asia through equity funding rounds between January and July 2024 decreased by 69.69% compared to the previous year. However, Antler sees this challenging environment as an opportunity for early-stage investing.
Jussi Salovaara, a co-founder and managing partner of Antler, believes that the current downturn filters out weaker players and allows truly innovative and resilient startups to emerge and secure funding. During boom times, the market can become 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 climate prioritizes companies with solid foundations, clear paths to profitability, and prudent cash management.
Antler’s second Southeast Asia fund, known as Antler SEA Fund II, will focus on the pre-launch, pre-seed, and seed money stages. The firm plans to allocate $27 million to 45 early-stage startups within the next six to nine months and aims to invest in around 300 startups overall. Some of the funding will support startups created during Antler’s residency programs.
When Antler first entered the Southeast Asia market in 2018, it only had a team in Singapore. However, the firm quickly learned the importance of adopting a hyperlocal approach. Antler now has at least one partner in every Southeast Asian country, allowing it to establish a presence in each market and work closely with teams and founders.
While Antler’s SEA Fund II is sector-agnostic, the firm sees significant potential in fintech and health startups across the region. These sectors address critical needs in rapidly-growing economies. Antler is also actively investing in AI technologies, particularly non-generic, vertical AI businesses that solve specific problems in local markets.
The high demand for consumer-focused technology in Southeast Asia is driven by the region’s growing middle-class population, expected to reach 65% by 2030. Additionally, with 60% of the population under 35, there is a strong market for B2B technology. Indonesia, with its young population, presents a massive market for consumer tech. Vietnam, on the other hand, is emerging as a high-tech manufacturing and gaming hub due to its highly-skilled and educated workforce.
In addition to its early-stage investments, Antler has launched a growth fund called Antler Elevate, through which it will invest up to $10 million in growth-stage startups. The firm has also introduced an investment structure called Agreement for Rolling Capital (ARC), which provides up to $600,000 in rolling capital to founders within the first six to nine months of a company’s lifecycle.
Antler’s second Southeast Asia fund has attracted significant institutional investment, with over 50% of the fund’s capital coming from institutional investors such as a sovereign wealth fund, a pension fund, and a university endowment. While the names of these investors have not been disclosed, they are based in Singapore.
Antler’s global presence extends beyond Southeast Asia, with offices in over 30 cities and regional funds in India, Korea, Japan, and New Zealand/Australia. The total assets under management (AUM) for Antler Global have not been disclosed, but the Asia Pacific funds have $200 million AUM. The combined AUM for Antler’s first and second Southeast Asia funds is approximately $100 million.
Overall, Antler’s second Southeast Asia fund represents a significant investment in the region’s startup ecosystem. With a focus on early-stage companies and a hyperlocal approach, Antler aims to identify and support founders who are committed to long-term growth and have a clear understanding of their market. By investing in sectors like fintech, health, and AI, Antler is well-positioned to capitalize on the region’s rapid economic growth and emerging technological trends.