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ask a vc: Vickers Venture Partners

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In a series of blogs we’re speaking to Southeast Asia’s leading VC funds to find out about their thoughts on the current state of the region’s startup and venture ecosystem and what they currently are looking for in companies. This week we’re with Dr Damian Tan of Vickers Venture Partners.

tell us a little about Vickers

Vickers is a venture capital firm focused on deep tech. We’re now one of the largest firms in Southeast Asia by assets under management. For our 5th fund we raised $230 million. Now we’re on our 6th fund and we’re targeting $500 million. We fund startups from seed through to those nearing exit. We follow on as the company grows, which is unusual for some VCs.

how is the Southeast Asian startup and VC ecosystem looking?

We got started in 2005 when there were hardly any VCs in Singapore. Now it feels like everybody wants to be a VC. Everywhere in the world, the VC scene is growing.

There are a lot of problems to solve in the world. It used to be that you’d get ideas from random bursts of inspiration. Now people are systematically looking at problems to solve. We’re seeing founder profiles evolve too. The most successful entrepreneurs are in their forties, leaving big organisations to come in with enough domain knowledge to disrupt their industries in a very significant way.

prediction for the Southeast Asia ecosystem for the next 2 years

Fintech is going to continue being a disruptor. So much of Asia remains under- or un-banked. Cash is king in places like Indonesia and India. E-commerce has already proven to be huge, particularly where these platforms are coming up with solutions specifically tailored for this under-banked demographic.

We’re also interested in the deep tech companies operating in this space. Take Spark Systems, they’re a Singapore-based exchange platform for currencies. Although we’re a finance hub, everything is routed through other places, and there’s a lag of about 300 milliseconds. But if Trump coughs or Kim sneezes, it’s not enough. How do you get it to 3 milliseconds? That is IT rocket science. It was started with people who had the deep knowledge and was supported by MAS.

Healthtech is also going to be interesting. Healthtech companies are going to be a game changer. When you change the medical scene, you change the economics of the market. You have people who are no longer out of work and can contribute again, so it’s not just health, it also has financial implications. If you can cure cancer, not only can you remove a big drain in resources, and stop pain and suffering, but you can contribute to the economy in other ways – instead of cancer treatments, you can free up hospital wards to do other things. It’s very exciting.

So for example, we’re working with AWAK, who do portable dialysis. With their technology, people can go to work, interact with their grandchildren, and contribute and participate in society again.

One thing’s for sure – it’s not going to look the same. I used to work with Oracle – these were part of the last wave. It’s an everchanging industry. But even the current Googles and Amazons are going to have to continue innovating in order to remain relevant.

people talk about Indonesia due to its market size, but which countries in Southeast Asia are producing amazing startups?

We’re country agnostic, but we’ve invested in Thailand, Malaysia, Indonesia, Singapore. We happen to have a lot of Indian entrepreneurs in our portfolio. There are so many with deep tech expertise, and a very well-educated ecosystem to tap in order to scale the company.

has your approach to investing changed as you have become more active, e.g. risk appetite, deal terms, number of investments?

We’ve definitely refined our investment strategy. We prefer companies that have a lot of defensible IP, and where we can calculate the market. That is, deep tech that is able to be commercialised.

We’re not going to be investing in an Angry Birds – who could have predicted that? We don’t focus on disruption of business models. We’re looking for the right technology in the right company in the right space.

We have also evolved from one fund to another. We used to be more open to all kinds of risk – we were more of a seed fund/incubator model, managing a couple of million dollars. But when you’re $200 million, you looking seriously at who is getting traction, who is worth a $100 million series A.

Our reach was initially Singapore and China. Now we’re global. It takes some time. If you want to be a successful VC, it takes a good 10 -15 years. In the last 5 years, we’re starting to see the exits. And then the better you do, the more deals come to you and the more investors come to you.

tip for founders pitching to you?

If you’re starting a business, don’t come to us. If you’re on track to becoming a young unicorn, let’s talk.

We invest in people who are extraordinary, who are going to make the world a better place, significantly – not necessarily with a business model, but with a breakthrough in technology, addressing a global problem. Like biodegradable plastic alternatives, like healthcare.

I want to move to a point where if you’re sick and you sneeze, you can go home and already have three pills waiting for you to help you get better. We all want to get there – what innovations need to happen to enable this?

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Are you looking to raise funds for your startup in Southeast Asia? Our team of lawyers are market experts in tech and VC. We’ve gained this experience the only way that works – by doing deals (hundreds of them) and by immersing ourselves in the tech ecosystem.

If you need help with your term sheet or have questions about raising your round, book a time to speak to one of our lawyers.

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