B Capital's Hypothesis Against Southeast Asia's Startup Ecosystem

B Capital, a global multi-stage investment firm, views the Southeast Asia region as one of the fastest growing markets due to its young population, entrepreneurs and digital generation. Indonesia itself is considered a key region with the fastest digital economic growth in Asia.

The positive outlook for the region is encouraging B Capital to give more attention, it can be seen from the initial stage of fund raising for Ascent Fund II worth $250 million which was announced last week (20/7). The investment allocation will be directed to the United States and Asian markets, for pre-early funding up to Series A.

Separately in a joint interview DailySocial.id, Partner B Capital Karan Mohla said the allocation of funds will be used to continue the company's dedication to building Economy of Futures and focus on identifying the next wave of innovation across SaaS technology, healthcare, fintech, logistics, and a number of other developing sectors.

This sector is being looked at for potential because the pace of digitization has accelerated over the last few years across all corporations and final consumers. This potential is offered by the Southeast Asia region. This philosophy, he continued, has been the direction of B Capital's investment since it was first established in 2015 which focuses on the financial sector enterprise, fintech, and healthcare, to over $6,5 billion in assets under management (AUM).

“We will continue to look for startups with outstanding teams and technology that have the potential to advance to become global companies and transform established industries. [..] Also continue to encourage our startup portfolio to grow globally in accordance with our vision to become a global investment platform,” said Mohla.

He continued, his party did not have a special investment allocation for the region, let alone Indonesia, because it worked from the grassroots to partner with dynamic and innovative startup founders in the company's focus area. “We believe that Indonesia and Vietnam are the two fastest growing technology hubs in Southeast Asia and offer great opportunities.”

Regarding the macroeconomic climate and the trend of tightening liquidity, Mohla ensures that he has a long-term view when making investments and partnering with startup founders. He also acknowledged that there are macroeconomic uncertainties that need to be taken into account in investment strategy and decision making.

However, there are market cycles that are predictable and refer to the company's commitment to the Indonesian and Southeast Asian markets. “We remain passionate about seeking investment opportunities in early-stage funding and continue to partner with innovative and resilient startup founders.”

For the record, B Capital is noted to have a number of startup portfolios in Indonesia. Among them, round Memories Coffee funding Series B in May 2020 for $109 million, Ula series A funding $20 million in January 2021, Series B round of $53 million for Payfazz in July 2020. The latest investment made to Finku was $2,8 million in May 2022 and startups social commerce Super for Series C putaran round in June 2022 for $70 million.

Startup selection

Mohla continued the core mission of B Capital is to invest in companies that have a competitive advantage with superior technology, a strong customer value proposition, and the ability to grow rapidly into new sectors and territories. Therefore, he believes that innovation has no limits.

Companies are looking for the world's most promising startups that have the potential to grow into global companies, transform established industries, and will support them from inception to the IPO stage. The founder aspect also does not go unnoticed.

He said B Capital is looking for visionary founders and leaders who can reimagine traditional industries with technology that helps businesses thrive in a digital future. Ambition, integrity, and a willingness to keep learning are important qualities and characteristics we look for in startup founders.

Great startup founders also need to have a vision of where they want to take their company and have long-term goals that will serve as the foundation of the company. How startup founders can stay adaptable to changing business conditions and change their strategy while staying focused on the original vision.

“In addition, we are also looking for startups and entrepreneurs who are aligned with B Capital's values. We seek founders who are inspiring, visionary, persistent, humble, open and inclusive, collaborative, and willing to take risks and learn from their failures. Most importantly, they are willing to innovate and advocate with boundless curiosity and creativity.”

He continued, “Startup success is not about being the first but more about being the best, good knowledge and long experience in their field will give them an advantage over competitors and incumbents in the same industry.”

In managing B Capital's globally dispersed portfolio, specifically in Southeast Asia, its team of investment professionals has strategically partnered with the Boston Consulting Group (BCG). The agreement allows it to provide its portfolio companies in the region with extensive network access with global corporate leaders looking to partner with emerging technologies. B Capital itself has global offices located in Los Angeles, San Francisco, New York, Singapore, Hong Kong, and Beijing.

“Our strategic partners come from specific industries such as enterprise, health care, technology and engineering. This is how we bring local expertise and help our portfolio companies grow.”