Golden Gate Ventures to invest US$18M into Malaysia-based startups

 

Southeast Asia-based VC Golden
Gate Ventures has announced it will allocate US$18 million, or
RM 75 million, of its third fund for Malaysia-based startups and
open an office in the country.

The firm’s managing partner, Vinnie Lauria, said that the
company made the move to “solidfiy its on-the-ground presence
there.”

Golden Gate Ventures already has a few Malaysia-bred startups in
its stable. These include GoQuo, ServisHero, Codapay, and Funding
Societies.

It also invested in companies that have expanded to Malaysia,
such as Singapore p2p marketplace Carousell, and is helping its
portfolio company Homage, which provides on-demand caregiving, to
expand to the country.

“The dollars we’ve invested in Malaysia are already
significant, which makes the country the natural location for our
regional expansion,” said Lauria. “Beyond that, we see Malaysia
as representative of ASEAN – it is a microcosm of different
cultures and makes it uniquely diverse, just how ASEAN as a whole
is.”

Justin Hall, another partner at Golden Gate Ventures, said that
because of the country’s diverse economy and people, products and
services developed for the market have an in-built potential for
scalability.

“What this means for a startup is that ‘if you can make it
in Malaysia, you can make it anywhere in Southeast Asia,” he
said.

Lauria also believed that the new Malaysian administration led
by Prime Minister Dr. Mahathir bin Mohamad (who also helmed the
country between 1981 and 2003, and is widely credited for turning
it into a regional economic powerhouse) has led to renewed optimism
in the country’s market.

“Malaysia’s new government, after winning the historic
elections this year, is definitely a positive. People are now
feeling more optimistic and we’re seeing that sentiment extending
to the business sphere,” he said.

Lauria also emphasised Malaysia’s rapid growing ecosystem.
“It’s worth pointing out that co-working spaces only really
took off in Malaysia about a year ago, but the sector’s already
growing at breakneck speed,” said Lauria.

“In our experience, we see a lot of entrepreneurs in Malaysia
having already having solid plans to scale up and that’s why
we’re making a dedicated effort in Malaysia now by opening an
office there,” he added.

Golden Gate Ventures did not disclose how many Malaysian
startups it plans to fund using that allotment, but Lauria said it
will focus on companies geared towards consumers — which is also
at the core of the firm’s overarching investment philosophy.

The startups will also have to be at the Series A stage and have
already passed the seed funding phase.

“Particularly those that are using mobile and online solutions
to reach audiences,” he said.

“These can include companies doing insuretech, edtech,
medtech, e-commerce and B2B SaaS. But as consumers are the ultimate
beneficiaries, we tend to follow consumer internet trends, at the
end of the day,” added Lauria.

Golden Gate Ventures will also be eyeing Malaysian startups that
develop solutions for small and medium enterprises (SMEs).

“We also see them as consumers,” explained Lauria. “Many
of those in region are in their early stages of digitalisation so
there’s a lot of opportunities to help grow start-ups to match
their evolving business needs.”

Golden Gate Ventures recently closed its oversubscribed
US$100 million third fund in September, with backers including
Temasek, Hanwha, Naver, EE Capital, Taizo Son’s Mistletoe,
Mitsui Fudosan, IDO Investments, CTBC Group, Korea Venture
Investment Corporation (KVIC), and Ion Pacific.

It has already backed a few startups using the new fund. Among
them is Shohoz, which is a ride sharing and online ticket provider
in Bangladesh.

It also opened special fund to invest in blockchain technologies
and digital currency startups.

Founded in 2011, Golden Gate Ventures has invested in 40
companies in over 7 countries. Besides its newly-established
Malaysian office, it also has offices in Singapore and
Indonesia.

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