At a time when Indonesian VC firms are raising larger funds to deploy bigger ticket sizes into more mature companies, Venturra Capital has gone against the tide and recently launched its $15-million seed fund.
The move by Venturra, which burst onto the scene with a $150 -million first fund in 2015, did raise a few eyebrows, but the Lippo-backed firm believes it was a necessity, given the funding crunch for seed-stage companies in the country.
Raditya Pramana, a partner at Venturra Capital, shares the view that as the funding gap at the seed level becomes apparent, more local VCs are set to follow its (Venturra’s) lead and set up similar seed-stage funds.
“I think we will hear more news soon that some are setting up seed funds,” Pramana said. “It’s going to be crowded again, which I think is a good thing for the ecosystem.”
Raditya Pramana, who had previously looked at the seed investment space when he was with Singapore-based Spiral Ventures (formerly known as IMJ Investment Partners), said the funding crunch at the seed level was a recent phenomenon, and was a result of existing VCs launching larger funds in an attempt to move up the value chain. Besides, the successes many of the firms enjoyed in supporting seed rounds has also resulted in these VCs looking at larger deal sizes and supporting higher rounds, he added.
Local investor Kejora Ventures, for example, has recently closed its second fund at almost $80 million, while Alpha JWC is known to be targeting $100 million for its second fund. Meanwhile, East Ventures and SMDV, along with Yahoo Japan, have joined forces to launch a $150-million fund to be operated in parallel with their respective existing funds.
“It doesn’t make sense for them anymore to deploy a very small ticket size. They need to deploy at least $2-5 million. And so everyone is flocking to Series A, but no one is feeding them,” he said.
Venturra has already started actively investing from its seed fund, Venturra Discovery. With a ticket size ranging between $200k-500k, the fund has backed three startups and is set to announce another addition to its portfolio soon.
Despite being fully backed by Lippo, Venturra’s investments do not have any strategic mandate. It focuses on financial gains and sees real estate, healthcare, financial services and education as promising sectors that can potentially deliver good returns, Pramana said.
In an exclusive interview with DEALSTREETASIA, Pramana spoke about Venturra’s seed investment strategy and shared his personal views on Indonesian founders, VC trends and startup valuations.
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