Anika Begay
Antler, the Singapore-based VC focused on early-stage investing, has just closed its second fund in Southeast Asia, raising $72 million to double-down on startups in Singapore, Indonesia, Vietnam, and Malaysia.
This should be good news for startups. Like other regions, Southeast Asia has been facing a persistent funding slump. Between January and July 2024, tech companies in Southeast Asia raised $2.31 billion across 328 equity funding rounds. This was a 69.69% decline from the previous year’s total of $7.63 billion raised across 426 rounds during the same period.
But Jussi Salovaara, co-founder and managing partner of Antler, which manages investments and operations in Southeast Asia and the broader APAC region, believes this is the best time for early-stage investing.
“It’s certainly been challenging for startups and investors alike. However, this is the kind of environment that offers unique opportunities for early-stage investing like no other,” Salovaara said in an interview with TechCrunch. “During boom times, the market often becomes saturated with startups competing for attention and funding, leading to inflated valuations and a focus on rapid growth over sustainable business models. In contrast, the current downturn filters out weaker players, allowing truly innovative and resilient startups to emerge and secure funding.”
For Antler, that has meant identifying and backing founders “who are committed to long-term growth with a clear understanding of their market,” he said. “Early-stage investing in this climate will likely focus on companies with strong fundamentals, clear paths to profitability, and prudent cash management rather than those chasing quick exits.” That in itself might say something about what the priorities might have been when the market was more bullish.
Antler SEA Fund II will focus on the pre-launch, pre-seed and seed money stages. The VC plans to allocate $27 million in funding to 45 early-stage startups within six to nine months. It also aims to invest in approximately 300 startups through the second SEA fund. Part of the funding will support startups created during Antler’s residency programs.
The company has discovered that Southeast Asia is a highly integrated and incredibly diverse market, with each country offering unique opportunities.
When Antler raised its first Southeast Asia fund in 2018, it only had a Singaporean team. The biggest lesson from the first SEA fund was taking a very hyperlocal approach. It aims to establish a market presence by working closely with teams and founders. Salovaara said Antler has at least one partner in every Southeast Asian country who will help distribute SEA Fund II.
Antler’s SEA Fund II is sector agnostic. However, it sees significant potential in fintech and healthcare startups across the region, as they address critical needs in rapidly growing economies. AI is a technology it is already actively investing in, particularly in non-generic vertical AI businesses that will solve problems in local markets.
About 65 percent of the region’s population is expected to be middle class by 2030, with 60 percent of the population under 35, two factors driving high demand for consumer-focused technology along with the growth of the B2B sector. Indonesia, the most populous country, has a particularly massive market for consumer technology because of its younger population. And Vietnam is emerging as a high-tech manufacturing and gaming hub driven by its highly skilled and educated workforce, Salovaara said.
In addition to early-stage investments, the VC firm will invest up to $10 million in growth-stage startups from Series A through its new growth fund, Antler Elevate. Antler has also launched ARC (Agreement for Rolling Capital). This investment structure helps founders from the early-stage buildout to the growth stage by providing up to $600,000 in rolling capital within the first six to nine months of a company’s lifecycle.
The VC says more than 50% of Fund II comes from institutional investors, including a sovereign wealth fund, a pension fund and a university fund. Antler did not disclose the names of the limited partners, but confirmed that most of the institutional investors are based in Singapore.
The VC has already invested through Fund II in: Farmio, a food supply chain platform; Zora Health, a startup offering fertility, reproductive and family health services; and Clout Kitchen, a marketing startup for Gen Z.
In addition to its focus on Southeast Asia, the VC, which has offices in more than 30 cities and 20 regional funds globally, has funds in India, Korea, Japan and New Zealand/Australia in Asia Pacific. Antler did not disclose AUM for Antler Global, but the APAC funds have $200 million in AUM and the first and second SEA funds combined have about $100 million in AUM, Salovaara noted.
The latest fund is three times the size of the previous fund, SEA Fund I, which was roughly north of $20 million. It has invested in 91 companies, including Airalo, an e-SIM marketplace; Reebelo, a marketplace that sells refurbished and new electronics like laptops, iPads, appliances, and power tools; and bluesheets, a startup that has created artificial intelligence software to help companies automate their accounting processes.
