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Kaya Founders, a Philippines-based venture capital firm, has on Wednesday announced the first close at $12 million in funding across two new funds to back the next generation of tech-enabled, industry-shaping start-ups across Southeast Asia.
Kay Founders said in a statement that the funding round was anchored by the Gokongwei family and technology solutions provider Accent Micro Technologies Inc (AMTI), both key pillar of the local tech ecosystem.
It also saw the participation of the institutional investors, family offices, high-net-worth individuals, and prominent entrepreneurs.
This brings the total committed capital managed by the firm to $16.5 million.
Kaya Founders is targeting $25 million across two new funds to invest in pre-seed to Series-A start-ups in the Philippines and Southeast Asia.
The first close at $12 million marks the kick-off of the firm’s global fundraising campaign to allow foreign investors starved of yield to access one of the fastest growing tech ecosystems in the world.
Kaya Founders will be particularly focused on nurturing start-ups in its home country, the Philippines, which has been at the center of attention for startup investing in the wider region.
With a growing internet economy, a young and increasingly affluent population, a talented English-speaking population, Kaya Founders opined that the Philippines represents a significant opportunity.
Amidst the global slowdown in venture capital investment activity, it said Southeast Asia has remained a relatively bright spot.
It noted that the Philippines, in particular, is shaping up to be one of the region’s rising stars, as an emerging middle class, increasing digitization driven by growing internet penetration and smart phone usage, and new consumer and business behaviors spurred by the pandemic sustain opportunities for value creation.
It is noted that funding closed by Philippine start-ups exceeded a record $1 billion for two years in a row between 2021 and 2022, in stark contrast to the drop in funding faced by markets such as the United States and Europe last year.
Furthermore, in terms of dry powder, at least $4billion in capital has been closed by local and regional funds over the past two years.
This creates an ideal environment for Kaya Founders as an early-stage investor, providing existing and future portfolio companies with ample opportunities to raise follow-on funding.
“The burgeoning tech scene in the Philippines is reminiscent of previous growth narratives seen in markets such as India in the 2000s and Indonesia over the past decade,” said Kaya Founders Managing General Partner Paulo Campos.
According to him, the surge in these countries’ technology sectors were propelled by a confluence of factors, including favorable demographics and supportive government policies, but arguably no other factor played a more pivotal role than the critical mass of tech talent.
“The same is proving to be true for the Philippines, as new breeds of founders begin to emerge,
“These founder profiles range from home grown talent such as corporate executives and second generation tech talent from tech giants such as Grab, Lazada and ZALORA looking to strike it out on their own; as well as adopted Filipinos and Filipino returnees educated or trained abroad looking to make the Philippines their stronghold or make a difference in their mother land, respectively,” he added.
Over the past two years, Kaya Founders has primarily made its mark operating in the pre-seed stage, which it will continue to do through the upcoming Zero to One Fund.
This pre-seed vehicle will focus on accelerating ventures as early as Day 0, partnering with founders even before they go to market.
The pre-seed fund will follow a two-pronged investment approach: making high conviction bets in existing teams in search of its first institutional backer as well as generating a pipe line of high quality business ideas and scouting strong founder profiles to partner with to bring them to life.
The One to Ten Fund, meanwhile, will invest in more mature opportunities ranging from Seed to Series A that show strong signs of product-market fit and a path to profitability.
In addition to scouring for the best deals across the region, the larger fund will also back the top-performing companies from the Kaya Zero to One Fund — what is anticipated to be a robust source of deal flow —equipping them with the firepower to scale to new heights.
Kaya Founders anticipates their investments to range from $150,000 to $500,000.
While both will remain sector-agnostic, new investment themes, in addition to the aforementioned focus sectors, include direct-to-consumer (D2C) eCommerce, business to business (B2B) marketplaces, future of work, climate tech, and generative artificial intelligence (AI).
“The Zero to One and One to Ten funds are the culmination of what each of us have individually been doing for years as some of the most active angel investors in the Philippines, and collectively over the course of the past year through our first joint investment vehicle.
“The early momentum we have seen with our first fund is what has given us confidence to take our partnership to the next level,” said Paulo Campos.
Meanwhile, the first close announcement coincides with the appointment of Ray Alimurung, former Chief Executive Officer of Lazada Philippines and another notable entrepreneur-turned-angel investor, as General Partner of the Zero to One Fund.
Kaya Founders was founded in 2021 by veteran entrepreneurs and angel investors Paulo Campos(former Chief Executive Officer [CEO], ZALORA Philippines), Lisa Gokongwei-Cheng (President, Summit Media; Senior Vice President, JGSummit), and Constant in Robertz ( CEO, Locad; former CEO, Entrego).
To date, it has 31 companies in its portfolio, spanning eCommerce, digital health, fintech, business to business (B2B) software as a service (SaaS), agritech, proptech, and more.
Some of its most notable portfolio companies include eCommerce enabler, Etaily, salary-on-demand start-up, Advance, and micro, small and medium enterprises (MSME) point of sale (POS) app, Peddlr.
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