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Singapore-based Iterative, an early-stage VC firm that also runs a YC-style accelerator, has raised $55M from notable LPs including Cendana, K5 Global and Village Global. It will use the funds to expanding its check sizes to up to $500k USD and run more programs to support both earlier stage founders that aren’t ready for acceleration, and later stage founders that already have significant traction.
Summary Points
- Since the launch of Fund I in 2020, Iterative has backed over 65 companies over 5 cohorts. Iterative’s portfolio companies have raised $163 million in follow-on funding and collectively worth more than $1.2 billion
- Despite global headwinds, Southeast Asia’s growth has maintained pace. Iterative is doubling down on the early stage opportunity in the region.
- Iterative now plans to back 100+ companies at more stages—it now invests up to $500,000 for pre-seed, seed and Series A startups across the region
30 November, SINGAPORE: Iterative, an early-stage venture capital firm that also runs a YC-style accelerator, has closed its second fund at $55M to invest in startups across Southeast Asia. Fund II was led by Cendana, K5 Global, Village Global, Goodwater Capital with participation from a large network of Silicon Valley founders and execs including Arash Ferdowsi (Dropbox), Achmad Zaky (Bukalapak), Andrew Chen (General partner a16z, Uber), Qasar Younis (Former COO YC, Applied Intuition), David Shim (Foursquare), Kum Hong Siew (Head of Airbnb Asia), and many more.
With the launch of Fund II, Iterative looks to invest over 100 companies across Southeast Asia at more stages, ranging from pre-seed to Series A. It has also expanded its investment range and now writes checks up to $500k USD depending on the stage of the startup.
So far, the VC firm has accelerated over 65 companies across 5 cohorts. Iterative’s sixth cohort (W23) will kick off in February 2023 and is currently accepting applications.
A Successful Fund I
Since Iterative made its first investment in June 2020, its companies have gone on to raise $163M in follow-on funding from investors like Insight Partners, Tiger Global, Monk’s Hill, Wavemaker, Hustle Fund, and more. Currently, Iterative’s total portfolio is worth $1.2B USD.
Some of Iterative companies that have announced their funding rounds include: fintech startup Spenmo (W21) that closed an $85M Series B round led by Tiger Global in January, travel startup GoZayaan (W21) which has closed $8M in capital and acquired it’s counterpart in Pakistan, and proptech startup Propseller (S20) that raised $12M Series A in August. Sendhelper (S20), a home services startup was acquired by PropertyGuru in October.
“We’re very grateful to our founders for letting us be a small part of their journey,” said Brian Ma, co-founder and general partner at Iterative, “and equally thankful to our existing and new LPs who continue to believe in the power of entrepreneurship to positively impact the region”
Southeast Asia Early Stage Continues To Be a Good Bet
Despite macroeconomic headwinds and lesser exits from the Southeast Asia, early stage investments are increasing, according to research from Google, Temasek and Bain & Co. Southeast Asia’s real GDP growth has maintained pace at ~4.6% YoY while regions like China, the EU, and the US have all stalled.
Moreover, the region’s digital economy is set to hit $200 billion this year, with Indonesia’s online spending is expected to grow to $130 billion by 2025. Vietnam, on the other hand, is experiencing the fastest growth in the region, more than doubling its online GMV in the next three years.
It’s evident that even during an economic slowdown, there are still pockets of growth across Southeast Asia, especially in the earliest stages.
Scaling Iterative
Iterative's mission is to increase the GDP of Southeast Asia through entrepreneurship. It does so by making entrepreneurship more accessible to more people and giving founders the tools and support to be successful.
“Although our mission remains the same, this fund gives Iterative more resources to provide more help to more founders,” said Hsu Ken Ooi, co-founder and general partner at Iterative.
With Fund II, Iterative plans to:
- Have Larger Batches – Iterative has always wanted to invest in more founders. With this fund, an internal team to support it and an exponential increase in applications, we can now do so.
- Invest in Community – Although the Iterative Community is already vibrant, mainly because of the people involved and the shared experiences of being a founder, we want to take a more active role in bringing our community together. That means starting each batch with having all founders meet in a specific city and having an annual event for all of our founders.
- Follow On Investments – We made a conscious decision in the first fund to not do follow on investments. Instead to use the capital to invest in more startups. Although that was the right decision for the first fund, we are now in a position to do both.
For more information, please contact:
Ka Kay Lum: kakay@iterative.vc
Appendix
About Iterative
Iterative is a YC style accelerator focused exclusively on Southeast Asia. Iterative invests US$150K-500K in a batch of startups and runs the accelerator twice a year. Upon admission, they invest the full amount then work with the founders closely on their idea for 3 months. After 3 months, they present to a select group of investors with the goal of raising a larger round of investment.
Founders
Brian Ma Founder, General Partner
Brian was previously the Co-Founder and CEO of Divvy Homes (unicorn startup backed by a16z, GIC, Tiger). Previous to that, Hsu Ken and Brian founded Weave (YC S14) in 2014 and Decide.com (2009) an early machine learning company that predicted the future price of consumer goods. It was acquired by eBay in 2013. In 2005, he was one of the first PMs at Zillow before they launched. Brian has a BS in Computer Science and Electrical Engineering from the Uniersity of Washington.
Hsu Ken Ooi Founder, General Partner
Hsu Ken was previously the Chief Product Officer of Workmate, an on-demand blue collar staffing platform in Southeast Asia. In 2014, he was VP of Product at Weave (YCS14). In 2009, he started Decide.com an early machine learning company that predicted the future price of consumer goods. It was acquired by eBay in 2013. Hsu Ken has a BS in Mathematics and Statistics from the University of Washington.
FAQ
How does Iterative's program work?
Our program does 3 things: (1) it invests US$150K-500K in early-stage startups, (2) it works with the founders on their startups and (3) it helps founders with investors. We do this through a mix of office hours with Iterative partners, small group sessions, speakers, a fundraising boot camp and culminating in a Demo Day to over 400 investors.
Find out more about Iterative's program here.
Why is Iterative good for the ecosystem?
Our goal is to actively guide founders to achieve their startups next major milestone, which is typically a raising their first or second round of funding. We’ve found that founders in Southeast Asia struggle with this today, not due to a lack of capital or hustle, but because of limited exposure to experienced operators. There are simply not enough experienced operators in the ecosystem yet, and those who are experienced are often too busy working on their own startups.
How did Iterative start?
Hsu Ken who's originally from Southeast Asia (Penang, Malaysia), moved to Singapore in 2018. He was surprised by (1) the abundance of opportunity and capital, (2) the raw material quality of the founders but (3) the inability to develop founders. He started talking to his long-time co-founder Brian Ma, who's originally from Hong Kong, about the opportunity and both became increasingly excited about getting involved.
We wrote about this in more depth here.
Why Southeast Asia?
A combination of personal ties to the region, a thesis that Southeast Asia was the next big opportunity, that it's founders were ready for prime time and personal desire to help early founders in much the same way more experience founders had helped us.
