“Move fast and break things” was the dominant ethos of U.S. tech startups and their venture capital investors when we founded Jungle Ventures nearly nine years ago, before Mark Zuckerberg’s “Hacker Way” manifesto went viral.
This year the story — and WeWork is just one part of it — is about what happens when you break more than you build. We chose a different approach when we raised $10 million in 2012 for our first fund: build to last.
We just closed Jungle Ventures III and raised $240 million, including $40 million in separately managed account commitments, more than double what we raised for our second fund in 2016. This makes us one of the largest venture capital firms in Southeast Asia (SEA). This is an amazing milestone for the firm and the region. We’re grateful for the hard work of our fabulous Jungle team, our founders, co-investment partners and global investors, new and returning, who have been on this journey with us. Thank you all for being part of the Jungle family!
We are very fortunate and proud of our track record in recognizing and helping founders build category-defining companies such as Livspace, Kredivo, Moglix, Deskera, Paysense, Mobikon, Pomelo Fashion and Reddoorz in the region. Our build to last ethos has been essential to our success as the preferred and first institutional partner for all of our portfolio companies.
So how do we build to last?
The traditional view of SEA is that it’s a fragmented region of countries with more differences than similarities. But thanks to rapidly rising internet penetration, demographic shifts and mobile-technology adoption,
SEA is now home to a fairly homogenous addressable market of more than 250 million cyber-sophisticated young people comparable to any “developed” market. We saw the tide shifting early on and focused on consumer companies that leverage technology to address this regional horizontal market.
We were initial backers of the first generation of technology-powered regional category leaders such as: Pomelo Fashion (fast fashion); Livspace (interior design); Reddoorz (travel & accommodation) and Kredivo (consumer financial services). Altogether, these companies have opened more than 100 new locations across SEA to serve more than 50 million millennials online.
We saw there was a similar horizontal market opportunity in the small-to-medium enterprise (SME) space. SEA’s 150 million SMEs are rapidly adopting technology. We were early investors in disruptive, market leading companies such as Moglix (procurement), Mobikon (restaurant tech) and Vayana (trade finance).
We make fewer investments than our peers and only target entrepreneurs with ambitions to build regional or global category-leading businesses. We engage with about 300 companies yearly and invest in just 5 or 6 of them.
We led a $60 million investment in Deskera out of Jungle Ventures II and a $30 million round in Engineer.ai from Jungle Ventures III. These are good examples of our ability to not just deploy early stage capital, but also be lead partners to companies looking for early growth capital and expertise to fuel their rapid expansion.
We built a team with more than 100 years of relevant experience, diverse networks across the region, and a commitment to help founding teams accelerate their development. We also have world-class sector specialists. With several decades of sales and marketing experience, our U.S.-based operating partner focuses solely on helping our software companies with go-to-market strategies. As a result, our portfolio companies TradeGecko, TookiTaki, and Saltmine have expanded rapidly in the US market.
Build to last. We aim to help build profitable and capital-efficient companies from day one while supporting them with patient long-term capital.
The combined revenue of 7 of our early stage investments from Jungle Ventures II has grown 35-fold over 4 years as combined costs grew only about 5-fold. Their aggregate enterprise value consequently grew 10-fold to $2 billion over the same period. This is especially noteworthy as we made just 13 key investments from Jungle Ventures II. You can move fast and do well without breaking things!
Our next step? That’s simple: stay consistent.
Our investment strategy remains focused on the same three themes: consumer brands for the digitally native; platforms that enable digital transformation of SMEs; global technology leaders born in Asia. Our new fund has already invested in new category leaders in AI-assisted bespoke software creation (Engineer.ai), online beauty products (Sociolla), lifestyle experiences (SweetEscape), store management software (KiotViet) and logistics (Waresix), among others.
We are fortunate to be able to play a role in Southeast Asia’s historic economic and technological evolution. We’re again grateful to the founders of our portfolio companies, our co-investment partners and global investors who have supported us as we build to last.