12/12/2018 – ICT Fund, a venture capital firm in Singapore is planning to launch its second vehicle in 2019, after it last closed a US$35 million ICT Fund I in 2015.
The fund made investments in six startups including Latize, Six Scape, Taiger, Vi Dimensions, and cloud company Deskera, which provides Desk – an ecommerce platform for SMEs.
Brijesh Pande, the Founder and Managing Partner of ICT Fund said the second fund will target 20 to 25 limited partners, of which it expects 10 to 15 to be new backers.
Pande also added that the venture capital firm will be seeking out more corporates and family offices this round and that the fund’s average LP commitment size will be around US$4 million to US$5 million.
The ICT Fund II will have a total investment capital of US$100 million, which it will use to invest in 12 to 14 enterprise technology firms across Southeast Asia with an average cheque size of US$10 million.
According to Pande, the fund is also looking to merge a few of its companies to create a larger entity.
“We will be using Fund II to look into that strategy. Some people have done this really successfully in other parts of the world. We feel we have the ecosystem to be able to operate and manage these companies and to create a larger player in the enterprise tech space,” he said.
The fund also expects to see exits from its portfolio companies in the next two years.
“We are already talking to a few industry majors regarding our portfolio companies. We are likely to have one or two exits in 2019. Given our companies have patented core technologies, we will most likely exit via trade sales other than Deskera, which is likely an IPO candidate,” said Pande.
As the deep tech ecosystem develops the next big opportunity, ICT Fund is looking to invest in the Series B and Series C deals of specialized platforms, on top of extending their support to existing companies through later financing rounds.
“There are large global funds focusing on investment sizes of at least US$50 million, who have deep tech expertise, but the US$10 to US$50 million bucket for enterprise technology companies is still not easy to come by,” said Pande.
“This definitely does result in some enterprise tech companies funding themselves through internally generated cash flow,” he added, citing Deskera for instance, which did its first institutional financing almost 8 years after being established.
While ICT Fund has not started marketing Fund II yet, the VC firm is confident with its past performance records that the firm believe they will be oversubscribed as almost all their LPs will re-up in Fund II and a number of new LPs have expressed strong interest to partner with them.
