In a recent webinar with e27, Wanying Zhang, Investment Managers at Qualgro Partners, explains how the firm’s portfolio companies are doing relatively well in times of COVID-19 pandemic –and that their investment focus on B2B startups has something to do with it.

“Part of the reasons why our portfolio companies are doing relatively well is that we tend to be B2B-focussed. They tend to be less impacted by the current COVID-19 situation. Most of our companies still have 12-18 months left in their runway. So far, in our 25 portfolio companies, we have no write-ups,” she says.

While she acknowledged that a number of them have to readjust growth plan or team structure to reserve cash and extend the runway, for the rest of them, the VC firm actually advised them to seize the opportunities.

“Interestingly, for some of our companies, sometimes we suggest them to not to be overly conservative, especially when there are good fundamentals in the business. Because this is the time for them to leverage the opportunity and grow if they have the capacity to do so,” Zhang continues.

Beyond the region

Based in Singapore, Qualgro was founded by Heang Chhor, a French-Cambodian serial entrepreneur who also had a background in business consultancy.

The firm invests in Series A-B stages companies in Southeast Asia (SEA), Australia, and New Zealand, with a specific focus on B2B companies.

Also Read: Morning News Roundup: HR tech startup EngageRocket secures US$3M in Series A funding led by Qualgro

Last year, following their exit from Wavecell, Qualgro was even awarded “Exit of the Year” by the Singapore Venture Capital & Equity Association (SVCA).

“Back in 2015, we don’t think there were a lot of investors that focussed on the B2B sector. There weren’t that many B2B startups as well. But we do think this region has a great potential to produce international B2B tech companies that are just as good as those in Silicon Valley, China, or Europe,” says Zhang.

Qualgro launched its first fund of US$15 million in 2015; it has been fully deployed in 19 companies that included top names in the startup ecosystem such as Patsnap, Shopback, and Wavecell.

In a separate interview with e27, manager Minh Vu Hong says that the firm is currently fundraising for its second fund and is looking to make final close “soon.”

“We already made six investments from this fund,” he says.

Echoing the statement that Zhang said during the webinar, Hong stresses on the firm’s focus on startups with the potential to go regional and even global.

Also Read: Qualgro makes first close of US$100M second fund, will continue to invest in B2B services

An example of Qualgro’s global perspective is its foray to European startup scene through US$11.2 million Series A investment in Pazzi, a French robotics food tech startup.

“What we have as a thesis is that there are strong similarities between Europe and SEA. It’s a one-economy region that is fragmented into different markets. It goes both ways; we can invest in European companies that want to enter SEA, and we can invest in SEA companies that have the potential to become, at least, a regional player,” Hong explains.

In search of the right one

During the webinar, Zhang also took the time to give advice for startups on fundraising.

Apart from the potential to go regional and even global, Qualgro is also looking for startups with a sustainable competitive advantage and a clear path to profitability.

“Most founders are already familiar with the list of things to check when pitching to a VC in general, but for us, we noticed two things: Sometimes, some founders can be a little defensive during idea brainstorming … We just want to see whether the founders really understand market trends and the potential risks. Also, we just want to see whether we are in a position to add value. We really hope to have an open and collaborative discussion,” Zhang elaborates.

For the future, Qualgro aims to focus on investing in early stage startups in the region, with a particular focus in Vietnam.

The firm sources their potential investments through various channels, from an in-house developed tool used to screen the market to referrals from other VCs or accelerators and partners such as the e27 Pro membership programme, which Qualgro is a member of.

Missed the webinar? Check out the video here:

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