Early-stage VC firm Vertex Ventures' SEA and India arm raises $541 million in Fund V

Vertex Ventures raises new India, Southeast Asia-dedicated fund

Venture capital (VC) firm Vertex Ventures Southeast Asia and India has raised $541 million in its fifth fund, contributing to the increasing pool of undeployed early-stage VC funds.

The VC firm's existing limited partners (LPs) including sovereign wealth funds, financial institutions, corporates and family offices across Asia and Europe along with new LPs such as Japan Investment Corporation (JIC), International Finance Corporation (IFC) and DEG (German Development Finance Institution) have backed the fund, it said in a statement on September 12.

The VC firm said that within its fund corpus, there is a designated co-investment fund of $50 million, specifically allocated for partnering with the primary fund in startups led by female founders.

Vertex Ventures said that the strategic move is in line with the VC's commitment to fostering more opportunities for women entrepreneurs, as over 35 percent of the startups in its Fund IV portfolio already have at least one female founder.

Vertex Ventures, which initially targeted $450 million for the fifth fund, said that it was 80 percent larger than its fourth fund which it raised in 2019. It had raised about $305 million in September 2019 for its Fund IV.

"This fundraise is a testament to the quality of opportunities in the India and Southeast Asian markets. The macro opportunity is palpable, but what excites us more is the continuing maturity of the ecosystem and the quality of founders we are working with in building category-defining companies," said Piyush Kharbanda, General Partner of Vertex Ventures Southeast Asia and India.

"Especially in India, we are working with founders tackling very interesting problems across socioeconomic strata in India and building great products for the world. This, combined with our proven track record of adding value to our portfolio companies, gives us a unique positioning in our markets and we are excited about the path ahead," he added.

The VC firm said that it delivered "strong cash returns" to its LPs from its earlier funds after exiting from its investments in Grab, FirstCry, XpressBees, Recko, among others.

“Our earlier funds have had superior cash-on-cash returns and are outperforming benchmarks. This track record led most of our investors from VVSEAI Fund IV to return as investors in VVSEAI Fund V and increase their allocation. In addition, we expanded our total investor base significantly and are happy to welcome all our Limited Partners,” said Ben Mathias, Managing Partner of Vertex Ventures Southeast Asia and India.

Vertex Ventures Southeast Asia and India is one of six major funds in Vertex's global network of venture capital funds. The fund invests in startups seeking their early round of institutional venture capital funding in Southeast Asia and India, with a primary focus on Singapore, India, Indonesia, Thailand, Vietnam, Malaysia, and other emerging hubs across the region.

The VC has made more than 80 investments to date and said it will further invest in sectors like enterprise technology, fintech, consumer internet, digital health, sustainability, and mobility among others. Vertex Ventures Southeast Asia and India has eight investing partners with a total of 22 investing staff across its offices in Singapore, Bangalore, Jakarta, Bangkok, Ho Chi Minh and Gurgaon. In India, it has backed the online meat-selling platform Licious, vernacular audio platform KukuFM and digital lending platform Kissht among others.

Vertex Ventures' new fund comes at a time when a number VCs, especially early-stage investors have raised large sums of money in the recent past, but a large part of these funds remain undeployed thanks to macroeconomic headwinds across the globe. Since 2022, VCs like Peak XV, 3One4 Capital, Accel, Elevation Partners, Nexus Venture Partners, and Matrix Partners, among others, have either raised or launched India-dedicated funds.