Antler, a prominent venture capital firm in Singapore, has successfully concluded its second fund dedicated to investing in early-stage startups in Southeast Asia. It has secured a substantial $72 million in funding to further invest in startups across Singapore, Indonesia, Vietnam, and Malaysia.
This is great news for startups. Similar to other regions, Southeast Asia has experienced a consistent decline in funding. From January to July 2024, tech companies in Southeast Asia managed to secure an impressive $2.31 billion through 328 equity funding rounds. There was a significant decrease of 69.69% compared to the previous year’s total of $7.63 billion raised across 426 rounds in the same period.
According to Jussi Salovaara, a co-founder and managing partner of Antler who oversees investments and operations in Southeast Asia and broader APAC, now is the ideal moment for early-stage investing. 
Antler focus for their target market
Undoubtedly, startups and investors have faced significant challenges. According to Salovaara in an interview with Eltrys, this particular environment presents exceptional opportunities for early-stage investments that are unparalleled. During prosperous periods, the market frequently becomes flooded with new companies competing for recognition and financial support, resulting in exaggerated valuations and an emphasis on quick expansion rather than long-term, viable business strategies. On the other hand, the current economic decline eliminates less capable individuals, giving way to genuinely creative and adaptable startups to rise and obtain financial support.
According to the firm, their focus lies in finding and backing entrepreneurs who have a strong vision for sustainable growth and a deep understanding of their target market. In the current business environment, it is expected that investments in early-stage companies will prioritize those with strong fundamentals, well-defined strategies for achieving profitability, and responsible cash management rather than those solely focused on rapid returns. That alone could indicate the underlying priorities during a more optimistic market.
Antler SEA Fund II will prioritize investments in the early stages of startups, specifically before their launch and during the pre-seed and seed funding rounds. The VC intends to invest $27 million in funding into 45 early-stage startups over the course of six to nine months. Additionally, it has plans to invest in approximately 300 startups through the second SEA fund. Part of the funding will be allocated to support startups that have been developed during Antler’s residency programs.
The company found that Southeast Asia is a highly interconnected and remarkably diverse market, with each country presenting distinct opportunities.
When Antler established its inaugural Southeast Asia fund in 2018, it only had a team based in Singapore. The key takeaway from the initial SEA fund was its strong emphasis on a hyperlocal strategy. It strives to create a strong market presence through close collaboration with teams and founders. Salovaara noted that Antler has established partnerships with local partners in each Southeast Asian country to facilitate the deployment of funds from SEA Fund II.
SEA Fund II invests in a wide range of sectors. However, it recognizes the immense possibilities within fintech and health startups throughout the region, as they cater to essential requirements in fast-developing economies. AI is a technology that is already being actively invested in, particularly in non-generic, vertical AI businesses that aim to solve specific problems in local markets.
By 2030, a significant portion of the region’s population is projected to belong to the middle-class, with a majority of them being under the age of 35. These two factors are fueling the increasing demand for consumer-focused technology and contributing to the growth of the B2B sector. With its large population, Indonesia offers a lucrative market for consumer tech, thanks to its youthful demographic. Vietnam is quickly becoming a prominent player in the world of high-tech manufacturing and gaming. This growth is fueled by the country’s exceptional workforce, which is known for its high level of skill and education, according to Salovaara.
In addition to the initial investments, the VC firm plans to allocate up to $10 million towards supporting the growth of startups in the later stages, starting from Series A, through its newly established growth fund, Antler Elevate. In addition, Antler has introduced ARC (Agreement for Rolling Capital). Our investment structure is designed to support founders throughout every stage of their company’s growth. We provide up to $600,000 in rolling capital within the first six to nine months of a company’s lifecycle, ensuring that they have the financial resources they need to succeed.
The VC mentions that institutional investors like a sovereign wealth fund, a pension fund, and a university endowment are responsible for over half of Fund II’s funding. The company did not reveal the identities of its limited partners, but it did confirm that the majority of its institutional investors are located in Singapore.
The VC has made investments in several companies through Fund II, including Farmio, a food supply chain platform; Zora Health, a startup providing fertility, reproductive, and family health services; and Clout Kitchen, a gen-Z marketing startup.
With a strong presence in over 30 cities and 20 regional funds worldwide, this VC not only focuses on Southeast Asia but also has investments in India, Korea, Japan, and New Zealand/Australia in the Asia Pacific region. Salovaara mentioned that while Antler did not reveal the AUM for Antler Global, the APAC funds have an impressive $200 million AUM. Additionally, the combined AUM for the first and second SEA funds is estimated to be around $100 million.
The most recent fund is three times larger than its predecessor, the SEA Fund I, which had a value of over $20 million. The company has made investments in a total of 91 companies. Some notable examples include Airalo, an e-SIM marketplace; Reebelo, a marketplace specializing in refurbished and new electronics such as laptops, iPads, appliances, and power tools; and Bluesheets, a startup that has developed AI software to streamline bookkeeping for businesses.
