"Iterative" Investment Focus in Indonesia Through the Second Managed Fund

Behind isutech winter and the looming global recession, the technology industry in the Southeast Asian region is still growing rapidly. This can be seen from the presence of many accelerator programs such as Y Combinator, Google Accelerator, and Sequoia's Surge which show the great opportunities for startups in this region.

Inspired by the global company Y Combinator, Brian Ma and Hsu Ken Ooi founded Iterative to support para founder achieve their dreams. Brian was previously the Co-Founder and CEO of Divvy Homes, and Hsu Ken Ooi co-founded the Decide.com platform which eBay acquired in 2013. Both were incubated at Y Combinator.

Co-Founder and Managing Partner of Iterative Hsu Ken Ooi revealed that there are many accelerator programs that want to follow in Y Combinator's footsteps. However, there are two important things to note. First, the investors in Y Combinator are startup founders, so they have hands-on experience developing startups. Second, Y Combinator does not have a curriculum considering that every startup has a different business model and vertical. These two things lead to the birth of Iterative.

Iterative has the jargon "Founders support founders" which means founders support founders. This value is what the company wants to raise, that through iteration, the founders will be fully supported by investors who also have experience and a strong background in developing startup companies.

Fund II

Iterative announced a second fund under management (Fund II) on 29 November 2022 valued at $55 billion or 856 trillion Rupiah, led by Cendana, K5 Global, Village Global and Goodwater Capital. Participating is a large network of Silicon Valley founders and executives, including Arash Ferdowsi (Dropbox), Achmad Zaky (Bukalapak), Andrew Chen (a16z general partner, Uber), Qasar Younis (Former YC COO, Applied Intuition), David Shim (Foursquare), Kum Hong Siew (Head of Airbnb Asia), and Moses Lo (Founder of Xendit).

It is planned that half of this new funding will be intended for follow-up funding. In addition, this fresh funding prompted Iterative to increase its check size to $500.000 and add more programs for founders at various stages, including programs for immature early-stage founders and advanced stage founders who are already gaining considerable traction.

Through Fund II, Iterative has the ambition to develop a larger startup pool, around 30 each. The goal is to invest in more than 100 companies at various stages, including startups. pre-seed, seed, and series A.

Since starting operations in March 2020, the Singaporean venture capitalist has raised $65 million in two funds under management, invested in more than 65 companies, as well as 120 founders, and the company's total value now stands at $1,2 billion.

In a separate interview together DailySocial, Hsu also revealed that, "the company has invested in more than 65 companies within two years, and will soon add 25 portfolios in the next two months."

Investment focus in Indonesia

Regarding the targeted sectors, Hsu revealed that terative has no tendency to invest in specific sectors. It's just that, he believes that to reach a large market, a company must also develop solutions to big problems. In Indonesia, Iterative has invested in several companies, viz yippy, Kipin, Qalbu, and Zi.Care.

Hsu presented the investment thesis that must be fulfilled to invest. Iterative targets startups that create solutions to big problems thereby creating a big market as well. Then, startup must be able to change mindset. For example, Uber. We used to be told not to get in a car with strangers. Now, people feel safe using online transportation services driven by foreigners.

One that is no less important, the company sees founders who are qualified and can direct the course of a business. According to Hsu, the quality of a founder can be seen from three qualities. First, do they really do what they say they do? Someone who is consistent with his achievements is a 'terrible' person. Second, a founder Must be able to convince and have good execution skills.

Third, companies are looking for people with motivation that comes from within, not from outside. That is, they are doing something they really care about, not just for fame or fortune. The combination of these three things will create a founder who have high resilience and dedication.

Touching on Iterative's focus on Indonesia, Hsu said, "I see Indonesia as an opportunity. Not just a printer unicorn most, Indonesia is the only country in Southeast Asia where a founder can build a startup and become unicorn without having to expand to other markets. For example, Bukalapak and Tokopedia."

He also described the ecosystem in Indonesia as 'quite expensive'. It can be judged by the amount founder existing ones, including from startups unicorn. In addition, some venture capitals only focus on the Indonesian market. "Not all countries in Southeast Asia have this," he added.

Recession has a different impact for each circle. Hsu assesses that the startup is still in its infancy early stage will not feel a very significant impact. Meanwhile, investors are at the stage later stages feel a bigger impact. Personally, Hsu sees a projected increase in investment figures next year from this year.

"I believe that investment will increase because many venture capitals are launching fund new like Sequoia and Jungle Ventures. When investors put money in, they expect the money to be invested so that it produces results return. Therefore, we must continue to invest, as well as other managed funds."