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VC Openspace Ventures expects first close of new fund at USD 100 million

Written by Tech in Asia Published on     3 mins read

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Once the final close is completed, Openspace will have USD 625 million in committed capital across four investment vehicles.

Companies such as Gojek, digital therapeutics startup Biofourmis, agritech firm TaniHub, and livestreaming app Kumu have one thing in common—they were all backed by early-stage VC Openspace Ventures.

Launched in 2014, Openspace supports startups in Southeast Asia by participating in their Series A and B rounds. Since its inception, its portfolio has grown to include 33 investments across sectors such as logistics, fintech, agritech, edtech, health tech, clean tech, and B2B software-as-a-service.

The firm is now looking to raise USD 200 million for its new follow-on fund, OSV+, aiming to gather close to half of the targeted amount in the fund’s first close in the second quarter of this year, said a source with knowledge of the development.

The new fund will focus on investing in the Series C stage and follow-on rounds of its portfolio companies but can also back firms it hasn’t yet invested in. OSV+ aims to include about eight to ten portfolio companies, with a ticket size of around USD 15 million to USD 20 million. In September, the fund already participated in the USD 100 million series C round of Biofourmis.

Once the final close is completed, Openspace will have USD 625 million in committed capital across four investment vehicles.

The news comes on the heels of the close of its third fund last month, with investors including Germany’s DEG, Norway’s Norfund, US-based 57 Stars, and Japan’s Mizuho Financial Group.

The company has secured a distributed paid-in (DPI) capital multiple of 1x on its USD 90 million Fund 1, added the source. It means that investors are at breakeven, getting back the principal capital they invested. DPI is a measure of the cumulative investment returned to the investor relative to the total invested capital.

Openspace’s success can be credited to the exits of companies like TradeGecko, which was sold to Intuit in 2020, and Whispir, which listed on the Australian stock exchange in 2019. Other exits include Redmart and Jualo. Openspace hasn’t yet liquidated its investments in firms including Gojek, fintech startup FinAccel, and health tech platform Halodoc.

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Leading the pack

As it stands, Openspace’s Fund 1 is the top VC fund among its peers catering to Southeast Asian startups to return capital at this scale. The 1x DPI compares to 0.2x for Alpha JWC’s first fund, launched in 2016 with a fund size of USD 50 million. Wavemaker’s Fund 1 from 2014, with a fund size of USD 60 million, had a DPI of 0.1x, the same as Golden Gate Ventures’ 2015 Fund II, also with a size of USD 60 million, according to data from Preqin and VentureCap Insights.

The data also shows a net internal rate of return (IRR) for Openspace’s Fund 1 of 35%. Alpha JWC reached a net IRR of 29.1%, followed by Wavemaker’s 17.4%, and Golden Gate Ventures’ 17.3%. The net IRR is a performance measure equal to the internal rate of return after fees and carried interest are factored in. It is used in portfolio management to calculate an investment’s yield or overall financial quality.

Openspace also has the largest amount of committed investment in the region, amounting to USD 425 million for the first three funds. It is followed by Asia Partners that recently closed its debut fund at USD 384 million. Jungle Ventures has a total committed capital of USD 350 million, whereas Golden Gate Ventures, Alpha JWC Ventures, and Wavemaker have all committed less than USD 200 million.

This article was originally published by Tech in Asia

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