Native PE·VC Accelerate Expansion into Southeast Asian Markets like Singapore and Indonesia

[Asia Economy Reporter Park So-yeon] As the COVID-19 pandemic situation eases, domestic capital is knocking on the door of the Southeast Asian investment market. Native venture capital (VC) and private equity (PE) firms are establishing bases in Southeast Asia one after another and accelerating global investments.

According to the investment banking (IB) industry on the 14th, Daol Investment (formerly KTB Network) plans to establish a base in Singapore within the year. While aiming to convert into a corporation in the future, it will first set up an office. To this end, it is sending staff locally to carry out the necessary procedures.

Kim Chang-gyu, CEO of Daol Investment, said, "The atmosphere in Southeast Asia, including Singapore and Indonesia, has changed significantly compared to the past," adding, "With the easing of the COVID-19 pandemic, a hopeful and lively atmosphere can be felt."

Daol Investment is the first domestic VC to enter the US and Chinese markets. It is currently continuing active investments through its Shanghai office and US local corporation. Approximately 40% of its assets under management are invested annually in overseas companies. Considering that other firms’ overseas investment ratios are around 10-20%, it is putting considerable effort into the overseas market. It plans to maintain the policy of investing 40% of its annual investment amount in overseas companies. In addition to the US and Chinese markets, it plans to seek investment opportunities in emerging Southeast Asian countries.

Until now, the Southeast Asian market mainly attracted attention from asset management companies such as Aegis and Mirae Asset, but before and after the COVID-19 pandemic, as the growth of early-stage companies noticeably increased, PE and VC firms have begun to actively focus on scouting investment targets.

Stick Investment and IMM Investment are the most representative examples. In 2020, Stick Investment invested about $200 million in Grab, an application (app) operator providing ride-sharing and delivery services headquartered in Singapore. In India, it invested $10 million each in the delivery service company Dunzo and the hospital chain Sahyadri. In Indonesia, it invested $33 million together with Naver and others in HappyFresh, a fresh food delivery company.

IMM Investment is actively conducting overseas investments through its Hong Kong local corporation, IMM Investment Global. In March, it raised a total of $400 million for the COPA Fund (Corporation Partnership Fund) together with Daewoo Engineering & Construction. Through this, it plans to jointly invest in promising companies and quality assets related to cold chain (logistics) and ESG (environment, social, and governance) infrastructure in overseas markets such as Vietnam, actively pioneering new businesses.

In the first half of the year, it also plans to raise the COPA Fund up to $500 million with SK Ecoplant. The first investment target is expected to be a waste treatment company in Singapore. Han Jung-rok, Managing Director of IMM Investment, explained, "After the COVID-19 pandemic, the ability to have a local corporation and conduct due diligence has become even more necessary," adding, "Efforts to discover investment opportunities through local networks are actively underway."