HONG KONG • Hong Kong tycoon Li Ka Shing’s private investment firm Horizons Ventures will make South-east Asia a priority, as the region’s booming digital economy drives more people to use the Internet.
Horizons Ventures will focus in particular on South-east Asia’s biggest market, Indonesia, co-founder Solina Chau, Mr Li’s long-time confidante, told Bloomberg News in a statement sent by text message.
The firm, whose early bet on Zoom Video Communications contributed to a surge in Mr Li’s wealth during the coronavirus pandemic, has over the past year invested in three Indonesia-based start-ups in funding rounds that have raised more than US$210 million (S$280 million).
Partnering with Jakarta’s Alpha JWC Ventures, one of South-east Asia’s largest venture capitalists, Horizons is seeking to identify young companies that could be the region’s next most popular.
The investment firm is pivoting into developing economies after previously focusing on North America, Europe and Israel.
Covid-19 is fuelling a rapid digital transformation and burgeoning start-up scene in South-east Asia as more people use digital services, generating some of the region’s largest listings.
New Internet users quadrupled year on year in 2020 to 40 million in its six largest economies – bringing 70 per cent of their total population online – according to an annual study by Google, Bain & Co and Singapore’s Temasek.
“In the past, we felt more innovation, opportunities and founders with science and technology background in the US, Europe and Israel, but now we are seeing Indonesia and broader South-east Asia really going through a very critical juncture,” said Ms Frances Kang, a director of Horizons Ventures.
The company “will only deploy more capital” into the region, she told Bloomberg, and has set up a team looking into opportunities there.
Horizon Ventures and Alpha JWC have over the past year invested in Indonesian online stock brokerage Ajaib, rapidly expanding coffee chain Kopi Kenangan and capsule hotel operator Bobobox. Alpha manages some US$200 million across two funds and has invested in more than 40 start-ups.
Still, the region’s political uncertainties and fragmented markets remain challenging for investors. Two of its leading economies, Thailand and Malaysia, have seen recent government upheavals, and memories of the 1997 and 2008 financial crises linger.
Recent mega deals in South-east Asia include the US$40 billion listing of Singapore’s ride-hailing firm Grab and a deal for Indonesian online travel firm Traveloka, with a potential valuation of US$5 billion.
Other high-profile global investors chasing the region’s growth potential include Mr Li’s son Richard Li, chairman of Hong Kong’s Pacific Century Group, who has teamed up with American tech mogul Peter Thiel to set up two blank-cheque firms seeking merger and acquisition targets.