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Why Vertex Ventures SEA & India likes to be the first VC to invest in a promising tech startup

Carmen Yuen

Carmen Yuen, Partner, Vertex Ventures India & SEA

Recently, we hosted Carmen Yuen of Vertex Ventures SEA & India in our Meet the VC webinar series to know more about their operations and investment philosophy in India and SEA.
Prior to joining Vertex Ventures SEA & India seven years ago, Yuen had a fruitful stint at Enterprise Singapore. She believes her own career journey and a long learning graph makes her better equipped to manage and help startups grow and prosper.
The following are takeaways from the sessions, edited for your convenience:

Key takeaways

  • The Vertex global network has four early-stage funds with teams in Israel, USA, China, SEA, and India. The global network also comprises of a growth and health fund.
  • Vertex Ventures SEA & India closed their last fund in September 2019 which is marked at US$305 million. They have done five investments so far, and are looking to invest in 30 more companies.
  • They usually look to be the first VC to invest in startups, but that doesn’t mean that startups who already raised from VCs or corporates in their seed round won’t stand a chance.
  • “We like working closely with founders, and find that when we are the first VC, we journey the longest way with them.  This path is usually more difficult as the company has the most constraints – monies, people, markets.  Perhaps we have a stronger stomach and have the DNA that is leaned towards younger, moldable ventures,” said Yuen.

Also read: Why Kay Mok Ku of Gobi Partners thinks VCs will become like influencers in a post-pandemic world

  • Their first cheque is US$2-5 million but for the following investment, they can go up to US$10-12 million. They are highly selective in their follow-on investments.
  • They look more at fintech solutions, consumer internet, and enterprise startups. They have in-house research teams to explore upcoming areas such as insurtech.
  • Other than Singapore, Yuen’s playgrounds are Malaysia and Thailand. Malaysia has a long history of tech startups compared to Thailand, and Malaysian founders are also very adaptable.  In fact, they have a few founders in their portfolio who are from the country.

For founders

  • Vertex Ventures SEA & India looks for driven entrepreneurs who have the energy and passion to solve the problem they have set out to.
  • Yuen also thinks founders should be humble and open-minded enough to listen to investors’ advice and be approachable.
  • They should learn to gain respect from the people they work with.
  • A company is made of its people, so how founders treat their people is key.
  • If you are a bootstrapped startup looking to raise their first round, go to the family. This will hold you super accountable to ensure the business is run viably. Next is to go to the angel community before you go to VCs.

For early-stage startups

  • “Always start the conversation and keep us posted.  A cold email is not ideal, and the VC scene is not so big, so try to reach us through your contacts.  But vision is not good enough … having vision but no action is an illusion.”

Impact of the crisis

  • The evaluation process of startups has been similar to the pre-COVID-19 days. But now it is even more apparent that startups have to be nimble, watch their cash flow, scale (not at all cost), and the founder has to be talking to investors, investors, and investors.
  • Advice for startups: Be creative in retention and hiring, focus on customers, and focus on cashflow.

A new hope

  • Looking to the future, Yuen said: “For us, we are looking at what opportunities there are as a result of COVID-19. Several things are worth considering:  Agritech, given food security is paramount for every country … when COVID-19 happened, the supply chain was disrupted.  Then, of course, healthcare as people are wary of going to clinics/ hospitals.  Then there are e-learning opportunities as people are already getting the hang of Zooms, Google Hangouts, House Party… [the question is] how can we use the same platforms to enhance learning.”

Learn more about how they helped their portfolio companies survive and their investment strategy for the upcoming months via the webinar recording

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