Southeast Asian private equity major Northstar Group has secured the final close of its maiden venture capital fund at $140 million, a tad below its target.
The early-stage-focused Northstar Ventures I, L.P. (NSV I) was targeting a final close of $150 million, sources had told DealStreetAsia earlier.
“We have raised $140 million, which is around our estimated target. It has been a challenging fundraising environment in general. Since quite a few of the fund’s backers are existing LPs, we managed to raise this capital successfully,” Northstar’s top executives confirmed to DealStreetAsia.
PE fund managers have been facing a challenging funding climate this year.
Four PE funds reached a final close in the first eight months of 2023, of which at least three failed to meet their initial fundraising targets, according to DealStreetAsia DATA VANTAGE‘s report Private Equity in SE Asia: H1 2023.
Growtheum Capital Partners, for instance, closed its first fund at $567 million in August this year, below the target of $600-800 million. The Asia Energy Transition Fund, by Switzerland’s SUSI Partners, which closed at $120 million, also failed to meet its initial target of $250 million.
“It has been a challenging fundraising environment in general, but we were fortunate to receive support from existing Northstar investors,” said Northstar’s head of investor relations Roger Suter.
DealStreetAsia had reported quoting sources that Northstar held the second close of NSV I at $120 million in March this year and the first close at $90 million in January. Singapore Sovereign Wealth Fund GIC was said to have been roped in as the anchor investor of the vehicle, which also received backing from other institutional investors in Southeast Asia and the Middle East.
NSV I invests between $1 million and $15 million per deal. Its core focus areas are consumer internet, financial technology, and enterprise software and mainly targets startups in Indonesia and, to a lesser extent, other countries in Southeast Asia.
The vehicle has already backed a few startups in the region. Some of its investments from the fund are Makmur Tech Pte, an Indonesian investment app that helps users invest in mutual funds; metaverse platform UTown Singapore Technology; 1Bstories, a startup that helps creators, brands, publishers, and platforms build interactive stories; and Wahyoo, which provides digitalisation services for restaurants.
In a freewheeling interview with DealStreetasia, Northstar’s head of investor relations Roger Suter; managing director Carlson Lau; senior partner Sunata Tjiterosampurno; and chief investment officer Wong Chee-Yann spoke about the VC fund’s investment plan for 2024, the current market situation, and some updates on its PE funds.
NSV I is targeting more deals in agri tech and will invest around 70% of its capital in Indonesia.
Stressing that Northstar’s PE and VC strategies are complementary, Lau said: “Northstar’s PE fund can also write larger cheques if the portfolio companies of the VC fund scale well.”
DealStreetAsia had reported in November that Northstar Group is targeting $600 million for its sixth fund and plans to launch this vehicle in early 2024. Singapore-based Northstar Group closed its fifth fund, Northstar Equity Partners V Limited (Northstar V), at $590 million in December 2021.
Edited excerpts from the interview: