Singapore-based venture capitalist KK Fund is in the process of raising its third investment vehicle and aims to
make the first close by the end of this year, its co-founder and general partner Koichi Saito told DealStreetAsia.
The fund will invest in around 30 companies, said Saito, declining to disclose the corpus it is targeting to raise. Saito
said he is eyeing startups in healthcare, education and human resources, while noting that competition for fintech
and logistics deals are much higher.
The Southeast Asian, Taiwan and Hong Kong-focused VC has two other funds – a micro-fund that was started in
2015, and one that was launched at the end of 2016 to focus on seed-stage startups.
Both funds have separately made around 13 investments so far. While the first fund has been fully deployed, about
80% of the second one has been exhausted so far.
KK Fund was established in 2014 by Saito, a former director at IMJ Investment Partners, and Kuan Hsu, previously a
principal at GREE Ventures, the venture arm of Japanese gaming group GREE.
The firm typically invests around $500,000 in each seed-stage deal, but Saito said its cheque sizes could go up going
forward.
The third fund’s corpus is expected to be larger than its predecessors, he said, without disclosing the amount that the
other two funds raised previously.
Most of KK Fund’s LPs are from Japan. Its investors in the second fund include gaming giant Sega Sammy Holdings,
digital advertising agency Septeni Holdings and Mistletoe, an investment firm headed by Taizo Son, who is Softbank
billionaire-founder Masayoshi Son’s brother.
Thrust on gaming
Another sector KK Fund is betting big on is gaming.
While it has so far invested in only one gaming company Infofed in Thailand, Saito said the sector could witness
significant action in Southeast Asia, owing to the growth of mobile phone users, and the middle-class and their
disposable income.
International game developers are also making their foraying into the region.
In January this year, South Korean gaming firm Gravity opened an office in Singapore, following its entry in Thailand and Indonesia in 2019. A month before that, League of Legends-creator Riot Games opened a game development studio in the city-state to expand its presence in Asia.
Meanwhile, KK Fund co-organised a virtual eSports business summit with Infofed and global media agency dentsu X
in April this year to accelerate the growth of the burgeoning eSports ecosystem in Asia.
According to Newzoo, 82% of Southeast Asia’s urban online population were gamers in 2019. Among them, 80%
played games on mobile devices. And though it is “notoriously challenging” to get mobile players to spend money on
games, the gaming research firm found that more than half of the gaming population did so.
However, overall gaming revenue in the region still lags behind their Northeast Asian counterparts. Southeast Asia
generated game revenues of $4.4 billion in 2019 – up 16% year-on-year – whereas South Korea, Japan and China
spent $6.2 billion, $19.0 billion and $36.5 billion in 2019, respectively. (Source: Newzoo Global Games Market Report 2019)
“If you look back at e-commerce in 2011, 2013, there were not many investments [in the industry]. Users were still not used to buying things online. I think it’s similar for eSports in Southeast Asia – we expect huge growth in the future,” Saito said.
He singled out Malaysian and Thailand governments as particularly being supportive of the industry. Since 2019, the
Malaysian government has allocated part of its national budget to the local eSports industry, while Thailandofficially has recognised eSports as a sport in 2017.
From: DealStreetAsia