Since launching in 2012 with a debut fund of US$10 million ($13.63 million), Jungle Ventures has seen more exits than birthdays.
Profits made from the exits are then used to replenish its war chest and bring in more investors for bigger deals. That was how founding partners Anurag Srivastava and Amit Anand managed to announce a second fund in 2016, 10 times larger than the first, from its Singapore headquarters.
In its third round of funding, Jungle Ventures drew US$240 million from the likes of Singapore’s state investment agency Temasek Holdings, German development finance institution DEG, World Bank Group member IFC, and Bangkok Bank corporate VC fund Bualuang Ventures, among others.
“Temasek has been a great mentor to us,” says Anand, in an interview with The Edge Singapore. “The network that Temasek has, whether it’s the portfolio companies or their investor friends, Jungle owes a lot of our success to partners like Temasek.”
In just eight years, Jungle Ventures, designed to back Southeast Asian start-ups, has invested in some three dozen outfits in the region. It has also delivered 11 exits across different sectors, from travel to e-commerce.
Jungle Ventures has also guided start-ups to acquisitions by Naspers, Twitter, Homeaway, Rakuten and Intuit, the last of which made headlines in August as the biggest software exit in the region.
Reportedly set at US$80 million, the sale of the Singapore-based software company TradeGecko to Intuit marks Jungle’s third exit in 2020 and the first time a global software giant acquired a Southeast Asian tech company.
As TradeGecko’s longest-serving director, Anand helped hire senior executives to the team, while others from the Jungle Ventures’ team helped them set up in the US and connected them to Intuit. “In an exit, a relationship doesn’t start when you are ready for sale.
You need to start building relationships with these people, the potential buyers, way before the sale,” says Anand. “You need to start engaging your potential buyers from very early in the lifecycle of a start-up, so that when you’re ready to sell, you are not new to them; they know your business very well,” he adds.
When Covid-19 struck early this year, Anand and his team issued a stark message to all their portfolio companies: Survive. “The goal that we gave to all our start-ups was to survive this period; make sure you have enough cash. It doesn’t matter if you don’t grow, but the guys who will survive and be alive at the end of the crisis are the guys who win the crisis,” says Anand.
“But quite frankly, I’ve been proven wrong by my founders,” says Anand, referring to the entrepreneurs Jungle Ventures are backing. “What was really mind-blowing to me was that most of the founders ended up not just thinking about survival, but about how they can capitalise on this adversity.”
For example, logistics start-up Waresix raised US$100 million and Indonesia’s largest Series B fund-raising; Indonesian beauty startup Sociolla raised US$58 million in Series E funding; and Indian interior design platform Livspace announced its US$90 million Series D fund-raising.
Indeed, Covid-19 has accelerated the pace of digitisation among Southeast Asian consumers, says Anand. Faced with lockdowns, people have “expanded” their digital behaviour. “For a long time, we as VCs have looked at a lot of very interesting ideas, but have said ‘no’ to them, because we felt the market was not ready. But now, consumers are doing banking, travel, insurance and healthcare [online]; there are so many things that they’re doing online now. VCs must have a very open mindset about the future of startups in the region,” he says.
For now, Anand is advising founders to remain cautious and reassess the market after Covid-19. “I would encourage founders to make sure that they have enough capital, support, [and] a team around them to survive the crisis.”
“The more successful start-ups have used this crisis as an opportunity. I would encourage more founders to step back and start thinking about what more opportunities have been created because of Covid-19 and make sure they don’t lose them,” says Anand.
“This is one of the best moments in Southeast Asia history to be an entrepreneur.”
