Why did you invest in X or Y company?

Beyond the individual factors of each business, there are broader trends that drive our partnerships with our portfolio companies and their founders.

A few examples of these trends can be found in some of our newer portfolio, in this case we look at:

• Dr Clear Aligners Group, a leading provider of dental clear aligners with a presence across seven markets in Asia
• Konvy, Thailand’s leading online beauty retailer
• Surfin, a global provider of consumer fintech solutions with a presence across several countries in emerging markets regions

(1) “Outsider” companies with an independent track record.

None of these companies, prior to our initial investment, had raised institutional venture funding. See the first round press releases of Konvy in 2022 (Series A), Dr Clear Aligners in 2024 (Series A), and Surfin in 2024 (Series A).

The growth they had achieved thus far is more likely proof of the business and validation of their products/services, rather than being capital-fueled traction.

In industry reports, Southeast Asia’s venture ecosystem has been called going into a reset. This “reset”, while presenting a challenge for companies that have been overvalued or unable to meet growth expectations from their last raise, also present an opportunity for companies with proven growth outside of the ecosystem to enter the fundraising market — but these latter companies won’t just raise for the sake of securing a war chest.

(2) Global ambitions that can benefit from venture partnership.

If these companies are already growing on their own, why raise? This is where their ambitions meet our role as a firm — supporting their journey to solidify their global presence and narrative, in the markets they serve, the markets they aim to expand to in the future, and even the capital markets.

“Global ambitions” can be a loose term, but the business’s competitive edge should also be suited to these goals. This edge can lie in owned distribution (e.g., Konvy’s omnichannel distribution across online channels and even their own offline stores), proprietary technology (e.g., Surfin’s AI-driven credit bureau technology), and/or execution ability (e.g., Dr Clear’s ability to build a network of dental clinics and care providers even as a late mover).

And because these companies already have a baseline performance without funding, they are able to better adjust expectations for stakeholders while still going for moonshot goals.

(3) Continued growth driven by self-innovation.

As much as these companies have already been growing on their own, the founders recognize the need for reinvention and adaptation, especially as they expand into new business lines or markets to take their growth to the next level.

Oftentimes companies raising early stage funding are in their first iteration of successful product-market fit. In the case of these high-performing outsiders, they would have already been profiting off this first iteration for a few to several years and are taking on a new risk of exploring further iterations (hence the incentive to secure venture funding) or looking to scale this first product into new markets.

In Konvy’s case for example, their venture into channels like physical stores and TikTok, or new markets like the Philippines and Malaysia came in the last 2-3 years of their more than a decade journey.

In Surfin’s case, their initial go-to-market of providing consumer financing services has opened up new opportunities for them to expand into other consumer financial services like credit cards and wealth management.

In Dr Clear’s case, it was not enough to just differentiate their clear aligner service on operations, but also technology, incorporating automation into post-treatment monitoring for example.

As much as these companies have already grown significantly prior to their first round, they are under no illusion that there is still a lot more work to do to meet the ambitions with which they decided to raise.

Funding Recovery in Southeast Asia will be driven by the High-Performing “Outsider” Company

As Southeast Asia goes through the brunt of a bear cycle, companies that were born and raised through venture funding, oftentimes having secured a Series A or B at an above market valuation, are today struggling to raise a succeeding round especially if their business has also been impacted by the inflationary environment in the last two years or worse yet, the business has not actually been proven to be self-sustaining.

Companies entering the venture market today will find capital in shorter supply compared to before but what matters more is what positioning they have coming into the market. It may be better in such environments to come in as high-performing “outsider” than being “born and raised” in the ecosystem but without much proof in the pudding.

This makes it even more important than ever to enable such “outsider” entrepreneurs and companies to enter the venture market if they have ambitions and fundamentals for venture scale (the three items we covered above).