Hong Kong tycoon Li Ka-shing’s private investment firm Horizons Ventures will make Southeast Asia a priority, with the region’s digital economy booming as the pandemic drives more people to use the internet.
Horizons Ventures will focus in particular on Southeast Asia’s biggest market, Indonesia, co-founder Solina Chau, Li’s long-time confidante, told Bloomberg News in a statement sent by text message.
The firm, whose early bet on Zoom Video Communications contributed to a surge in Li’s wealth during the pandemic, has over the past year invested in three Indonesia-based startups in funding rounds that have raised more than US$210 million ($278 million). Partnering up with Jakarta’s Alpha JWC Ventures, one of Southeast Asia’s largest venture capitalists, Horizons seeks to identify young companies that could be the region’s next most popular.
The investment firm is pivoting into developing economies after previously focusing on North America, Europe and Israel. Covid-19 is fueling a rapid digital transformation and burgeoning startup scene in Southeast Asia as more people use digital services, generating some of the region’s largest listings. New internet users quadrupled year-on-year in 2020 to 40 million in its six largest economies -- bringing 70% of their total population online -- according to an annual study by Google, Bain & Co and Singapore’s Temasek Holdings.
“In the past, we felt more innovation, opportunities and founders with science and technology background in the U.S., Europe and Israel, but now we are seeing Indonesia and broader Southeast Asia really going through a very critical juncture,” Frances Kang, a director of Horizons Ventures, told Bloomberg in an interview. The company “will only deploy more capital” into the region, she said, and has set up a team looking into opportunities there.
Horizon Ventures and Alpha JWC have over the past year invested in Indonesian online stock brokerage Ajaib, rapidly-expanding coffee chain Kopi Kenangan and capsule hotel operator Bobobox. Alpha manages some US$200 million across two funds and has invested in more than 40 startups.
Still, the region’s political uncertainties and fragmented markets remain challenging for investors. Two of Southeast Asia’s leading economies, Thailand and Malaysia, have seen recent government upheavals, and memories of the 1997 and 2008 financial crises linger.
Recent mega deals in Southeast Asia include the US$40 billion listing of Singapore’s ride-hailing firm Grab and a similar deal for Indonesian online travel company Traveloka, with a potential valuation of US$5 billion.
Li, 92, joins other high-profile global investors chasing the region’s growth potential. His son Richard Li, chairman of Hong Kong’s Pacific Century Group, has teamed up with American tech mogul Peter Thiel to set up two blank-check companies seeking merger and acquisition targets in Southeast Asia. Japanese conglomerate SoftBank Group Corp. and billionaire Mohamed Mansour, meanwhile, have invested in Grab, the region’s most valuable startup.
Horizons Ventures has made early investments in a number of other tech giants including Facebook and Spotify Technology.
