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VC firm that backed Snap and Pinduoduo expands to Southeast Asia

Lightspeed to deploy capital to region from its recently raised $4bn

Lightspeed Venture Partners has invested in Grab and is now looking to double down on Southeast Asia's tech scene. (Photo by Ken Kobayashi) 

JAKARTA -- Lightspeed Venture Partners, the prominent U.S. venture capital firm that backed the likes of Snap in the U.S. and Pinduoduo in China, launched its Southeast Asia operations on Thursday in a sign that the region's tech ecosystem is continuing to attract big players even amid the coronavirus pandemic.

While the company has already made a few investments in Southeast Asian startups, most notably in Singapore's Grab, it has decided to double down on the region by setting up an office in Singapore and has made two new hires as part of its four-person regional team.

"We have been investing in the region [but] at that point it was [more] learning, experimenting," said Akshay Bhushan, partner at Lightspeed. "The difference is now there is a set of global funds [at Lightspeed] where Southeast Asia is specifically part of the mandate."

The firm raised $4 billion across three funds earlier this year, and will look to deploy a portion of that capital into the region.

Bhushan said that countries like Indonesia and Singapore have "emerged as the next set of leading entrepreneurial hubs in the world," helped by the likes of major startups like Grab, Gojek and Tokopedia.

"More recently we have seen a lot of interesting talent coming out of these companies, talents which help scale these companies and would go on to build the next generation of companies," he said. "COVID-19 has also accelerated digital adoption overall." These factors, he added, have given Lightspeed "more conviction to double down on the region."

Lightspeed will be making "sector agnostic" investments, meaning it is not focusing on specific sectors to deploy capital, but Bhushan said the firm will be keeping its eye on areas like education tech, fintech and e-commerce.

The expansion of Lightspeed into Southeast Asia shows that even though the coronavirus pandemic is crippling many economies and businesses, global investors remain confident in the region's tech scene.

Despite COVID-19 disruptions, Southeast Asian startups still managed to raise a combined $5.7 billion in the first half of this year, a 25.6% rise compared to the same period last year, data from Dealstreet Asia showed. That was across 330 deals, a near 30% jump from a year ago.

"I would say [COVID-19 is] a mixed blessing," Bhushan said, explaining that a by-product of the pandemic is that "a lot of these companies [that survive] will come out stronger" financially, as they will have used the pandemic to strengthen their financial discipline.

The pandemic has also forced consumers and businesses to embrace technology more, be it in education or daily grocery shopping. "It is like a forced trial for consumers and businesses, and they have experienced the benefits of adopting technology," Bhushan said. "I don't think the levels will persist at the same level post-COVID as things get back to normal, but the technology adoption level will be a lot higher."

"I would never want to call it a blessing, but it is an interesting by-product of a difficult situation," he said.

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