Asia's Venture Capital Eclipse: A Preqin and Vertex Ventures Study

ASIA’S VENTURE CAPITAL ECLIPSE:
A PREQIN AND VERTEX VENTURES
STUDY
October 2018
|

1| 1
CONTENTS
24 ASIAN VENTURE
CAPITAL FUND
MANAGER ACTIVITY
25 CAN SOUTHEAST ASIA
EMULATE CHINA?
31 IN FOCUS: ASEAN
32 ASIAN VENTURE
CAPITAL PERFORMANCE
33 IN FOCUS: NORTHEAST
ASIA
34 ASIAN VENTURE
CAPITAL DEALS
42 INVESTORS
4 A WORD FROM
PREQIN’S CEO
5 AT A GLANCE
6 A WORD FROM VERTEX
VENTURES’ CEO
8 CHINA: INNOVATIVE
FUTURE
13 IN FOCUS: GREATER
CHINA
14 VENTURE CAPITAL
FUNDRAISING IN ASIA
17 INDIA: THE GROWING
ENTERPRISE MARKET
23 IN FOCUS: SOUTH ASIA
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A S I A ’ S V E N T U R E C A P I T A L E C L I P S E : A P R E Q I N A N D V E R T E X V E N T U R E S S T U D Y
4 © P r e q i n L t d . | w w w . p r e q i n . c o m
A WORD FROM PREQIN’S CEO
W
elcome to our new report, “Asia’s
Venture Capital Eclipse: A Preqin
and Vertex Ventures Study”, that
we are proud to present alongside
our partners in the project, Vertex
Ventures, a leading global venture capital investor,
and part of Singapore’s Temasek group.
‘Eclipse’ is a strong word, but it has been chosen
carefully. We are all accustomed to using superlatives
when describing the scale and pace of growth in
Asia-Pacific economies, and nowhere is this more
evident than in the venture capital industry: Asia-
focused venture capital assets under management
have more than doubled since December 2014
($88bn in 2014 vs. $221bn in 2017), highlighting
the remarkable growth in the industry, which now
rivals that of the US for its scale and diversity. This
investment has driven significant success: according
to the Global Startup Ecosystem Report 2018, about
one in three unicorns globally now come from China,
comparing favourably with 41% in the US.
The pace of growth may have taken many by
surprise, but with hindsight it was entirely to
be expected. The industry’s growth reflects the
confluence of several factors: rapid economic
growth, young and well-educated populations, high
levels of online activity (800 million internet users
in China), distinct regional and local nuances to
peoples’ habits and requirements, and an astute
global ecosystem of investors capable of spotting the
opportunities that this brings.
The result is a vibrant venture capital ecosystem
capable of driving innovation at pace and scale;
Preqin’s online platform now tracks over 2,600
‘institutional-quality’ venture capital firms in Asia.
Although China accounts for the largest portion of
these firms, significant clusters of venture capital
activity also exist throughout Asia. The dynamics of
each sub-region differ, and the following pages delve
into some of the details.
An important aspect of venture capital in Asia is the
extent to which investors from around the globe are
participating in the opportunity. Asia-based investors
account for approximately 28% of the interest that
Preqin has seen in Asian venture capital, but North
America leads with 53% of all investor interest in
Asia, while Europe accounts for a further 15%. The
market opportunities and the portfolio companies
may be Asian, but the investment opportunities are
truly global, and they are benefitting all investors.
This connectedness runs through the entire venture
capital ecosystem, and many leading players have
positioned themselves to maximum advantage –
firms like Vertex Ventures that operate as a network
of venture firms focused on their individual regional
markets within Asia, but benefit from the network
advantages of being local in many places.
It is a very exciting – and challenging! – time to be
at the forefront of venture capital investing in Asia.
Preqin is committed to investing in our research
and product to bring you the best possible data to
help you chart your course through the exciting
opportunities ahead. Together with Vertex Ventures
we hope that you will find this study and report to be
a helpful guide.
Happy investing!
MARK O’HARE
CEO, Preqin

D O W N L O A D D A T A P A C K : w w w . p r e q i n . c o m / a v c e 1 8
5|
Location of Asia-Based Venture Capital Fund Managers and Institutional Investors
1,063
255
China
134
India
74
110
Japan
137
65
Singapore
36
84
South
Korea
73
45
Hong Kong
42
Fund Managers
Investors
Source: Preqin Pro
AT A GLANCE

V
ertex Ventures was started with the keen
sense that technologies would be a critical
differentiator in an increasingly competitive
world. More than ever, accelerating
technological advances and innovation will
bring even greater disruptions to economies and the
world.
Focused on our mission to seek out promising
disruptive, transformational leaders from around the
world and nurturing them into prospective global
champions, Vertex today is organized as a global
network of independently managed and localized
VC funds. Our global VC franchise comprises four
early-stage, IT-focused funds across China, Israel,
the US, Southeast Asia and India, as well as a global
healthcare fund. Vertex also has a growth-stage-
focused fund that looks at follow-on opportunities
from its portfolio of early-stage companies.
At Vertex, we believe that innovation comes from all
over the world, requiring in-depth, local knowledge
and networks to access the best investment
opportunities. At the same time, markets for
innovative products and services are global. Our
global-local structure enables our professional,
localized investment teams to be deeply connected
with the innovation markets and ecosystems they
operate in. This is important from both deal-sourcing
or portfolio-support perspectives, while having the
unique advantage of proprietary support from the
global Vertex network. Across Vertex today, we have
a deep, global bench of over 40 VC professionals,
representing an impressive array of investor-
operator competencies and experience.
We are proud to have built many great technology
companies that improve people’s lives and transform
businesses. If we look to the answer as to why
we have achieved so much over the years, it was
because we unleashed the energy and individual
genius of entrepreneurs driven by the sole objective
of identifying, investing and supporting global
champions. In doing so, we have also delivered
outsized returns to our investors.
Building on the foundations of our unique parentage
and support from Temasek, deep operating
experience and credible track record, Vertex is
looking ahead towards building a differentiated and
enduring Global Venture Capital Platform.
A WORD FROM VERTEX
VENTURES’ CEO
CHUA KEE LOCK
CEO, Vertex Holdings
ManagingPartner,VertexVenturesSEA&India

CHINA: INNOVATIVE FUTURE
How has China’s tech landscape evolved over the
years and how do you see it developing?
Over the years, China’s vast population has shown
a willingness to embrace new technologies.
Smartphone shipments have increased from 212
million in 2012 to 468 million in 2017. The Chinese
also use online services for gaming, social media
and shopping, registering online sales of $650bn,
spawning a $22bn online gaming industry as well
as increased social media use – as evidenced by
WeChat’s monthly active users rising from 100
million in 2012 to over 1 billion in early 2018.
China is also one of the world’s leading players in
digital payments, with mobile payments exceeding
$12tn for the first 10 months of 2017, nearly 40%
more than 2016. In urban areas, China has practically
gone cashless.
In 2000, there were less than 10 million internet
users in China, now there are 800 million internet
users. The market has grown over 80x. Its market
potential is at least 5x larger than that of the US;
if China has not overtaken the US, it is certainly
catching up fast.
Today, we are observing the next wave of innovation
in China. With a large, tech-savvy domestic market,
China is an ideal place to experiment with new
innovations (e.g. bike sharing, products/services
for the middle class and mobile internet). There
are many innovation opportunities for start-ups,
particularly in retail, healthcare and transportation.
For example, Invented-in-China brands, robots and
AI are fertile breeding grounds for China’s next
unicorns.
With local support and policies attracting talent back
home, China offers a larger domestic market with the
latitude for innovation, sustainable growth and more
space for unicorns to grow. Chinese entrepreneurial
drive is impressive, and this will allow China to
sustain that advantage – giving it a fair chance of
surpassing the rest of the world in innovation.
What do you think is unique about China’s
innovation model?
China has a vibrant ecosystem with no shortage of
funding. It also has a rising middle class that is open
to new business models, services and products like
DJI’s drones.
As a “bicycle kingdom”, most people in China are
used to commuting by cycling. We wondered if a
more convenient and affordable bike-sharing service
could be made available in China. This was why we
began looking out for promising bike-sharing start-
ups and invested in Mobike in 2016. Today, Mobike is
a symbol of China’s innovative transformation which
can be found in more than 200 cities, offering first-
and last-mile solutions to everyone.
How does China compare to other start-up
ecosystems?
An area of distinction is its ascendancy as a global
AI hub. In fact, China has plans to create a $150bn
AI industry by 2030. According to CB Insights, of the
$15bn invested in AI start-ups globally in 2017, about
half went to China. For the first time, China’s AI start-
ups surpassed those in the US in terms of funding.
TAY CHOON CHONG
Managing Partner, Vertex Ventures China

9|
While the US still has more AI start-ups than China,
the gap is closing.
China is also home to some of the world’s largest
high-tech companies like Huawei, Tencent, BYD,
Gionee, Konka, TP-Link, TCL and OnePlus. These
companies are major contributors to R&D in China
and have substantially upped their budgets in recent
years. Huawei has already surpassed Apple, Oracle
and Facebook in its R&D investments.
According to the Global Startup Ecosystem Report
2018, only 14% of current unicorns originated in
China in 2014. Today, about one in three unicorns
come from China, comparing favourably to 41% in
the US. Beijing boasts of 40 unicorns, second only to
Silicon Valley, while Shanghai is home to 21 unicorns
and counting.
In addition to having more billion-dollar companies,
China has also seen an increase in patents, especially
in the AI and blockchain sectors. While the US
still has more venture capital investment in these
sectors, China has surpassed in terms of patent
applications, with 4x as many AI-related patents and
3x as many blockchain- and crypto-related patents
as of 2017.
The entrepreneurial culture in China has gradually
shifted from “Made in China” to “Invented in China”.
Mobike is an example of China’s many innovative
design products – combining GPS, IoT chips, solar
panel, air-free tyres, chainless, aircraft-quality
aluminum and mobile payments. Millions of orange-
hued dockless bikes have been deployed around the
world.
China has its own factories, and now also owns
technologies, talents, strong spending power and
unique consumption habits. This is expected to
be the flywheel driving more innovative concepts,
models and technologies.
What are the domestic industries that are
particularly exciting?
We spend most of our time looking for potential
investments in AI, deep tech and consumption
upgrade opportunities.
AI: The Chinese Government positioned AI as a
strategic priority and laid out a development plan
in 2017, aiming to become the world leader in the
field. For instance, the City of Beijing plans to build
a $2.1bn AI development park in the city’s western
region that will house up to 400 AI enterprises. Just
last year, local investment was soaring with 7.3% of
all local VC investment going into AI, big data and
analytics start-ups.
Founded in 2012, ByteDance, a popular Beijing AI
start-up famed for its personalized news aggregator
app Toutiao, is now planning for an IPO. Chinese
citizens seem to be embracing AI with similar
enthusiasm, using facial recognition technology for
payment authentication. Machine learning requires
a lot of data to achieve accurate results. China has
abundant data streams, with the majority of its 1.4
billion population online daily.
Facial recognition technology in China is now one
of the most advanced in the world because of its
massive training datasets. SenseTime and Face++ are
the leading facial recognition technology companies
in China. Both started only a few years ago and
have now already received more than $1bn each
from investors. Besides facial recognition, China is
applying AI to healthcare, self-driving cars, traffic
management and various smart city applications.
Our portfolio company, Horizon Robotics, is a case
in point. Horizon uses a proprietary Gaussian-
architecture and embedded AI computer vision
processors that power smart cars and smart
cameras, providing a complete solution including
algorithm, chipset and cloud. It has raised more than
The entrepreneurial culture in China has gradually shifted from “Made in
China” to “Invented in China”.

$100mn in Series A+ led by Intel Capital in December
2017.
In the education sector, almost 90 million Chinese
citizens educated themselves online in 2016. The
Chinese online education market is expected to grow
to some 240 million users and a total value of $64bn
by 2021. China’s leading internet giants – Baidu,
Alibaba and Tencent – have all invested heavily in
online education. AI is tested in Chinese schools. One
in four Chinese schools were experimenting with
computer software using deep learning to evaluate
students’ work. It is estimated that 60,000 schools
are testing the technology. A beneficiary of this trend
is XueBaJun – our portfolio company specializing in
the development of mobile online solutions to assist
K12 students in their homework using deep-learning
technology.
Deep Tech: There are also significant deep-tech
opportunities in China. In advanced manufacturing
and robotics, China is a rising world-leader. The
country employs the highest number of industrial
robots in the world and is home to two of the four
unicorns in the advanced manufacturing sub-sectors:
UBTECH Robotics and DJI. According to Inc, Shenzhen
is the electronics manufacturing hub of the world,
making 90% of the world’s electronics.
Riding this trend, we invested in Geek+, a start-up
offering advanced robotics and AI for logistics and
warehouse automation solutions. Geek+ robots
have been deployed in DKSH, SF Express, Tmall
and Suning’s warehouses. We also invested in
SolidEnergy which is a battery technology company
that manufactures the world’s lightest rechargeable
cells. They supply these to large Li-ion cell
manufacturers to be integrated with a separator and
cathode into fuel cells which can be customized for
drones, consumer electronics and electric vehicles.
Now its products have been sold to many large
companies in China and the US.
Yunyinggu develops new display technologies that
can significantly improve the performance of flat
panel displays. Its proprietary solution is the world’s
best in achieving high PPI (pixel per inch) and can
be applied to all kinds of flat panels such as LCD,
LED, OLED and others. Smarter Micro is a fabless
semiconductor company that designs, develops and
provides MMIC, RF and Analog IC. The company’s
product portfolio currently includes Gain block, GPA,
Switch, Power Amplifier, Mixer etc.
Consumption Upgrade: The rise of the middle class,
different spending habits of a younger generation
and the proliferation of social media platforms are
expected to spur the growth of Invented-in-China
brands.
In recent years, consumers have turned to buying
more quality products. Many new local brands have
well-designed products that have been elevated
to leading consumer brands by multi-channel
marketing like online media, WeChat, domestic
movies and TV shows.
We believe there are significant opportunities for
new brands in each consumer segment in China that
meet the unique consumer needs and preferences
of a particular segment. For example, Loho is
an online-to-offline spectacles brand owner and
distributor. Neiwai designs comfortable and natural
innerwear that promotes health and wellbeing. 73
hours designs and sells high heels that are entry-
level luxury – past the point of being basic or cheap,
but within the purchasing power of China’s middle
class. Though it is not technology based per se, this
segment clearly has significant potential.
Do you think there is too much liquidity in China
chasing a few selected start-ups, leading to
excessive valuations?
Overall, valuations do not appear unreasonable. At
a micro level, one should consider valuations in the
context of the start-up’s potential over the longer

11|
term. And China has start-ups with outstanding
prospects. From a market viewpoint, there is also
ample liquidity and exits to support valuations.
As an early-stage investor, valuing a start-up takes
more than simply benchmarking comparable
companies at the same stage; it also requires a clear
understanding of the start-up’s business model,
addressable market, growth potential and barriers to
entry etc.
For example, when we invested in Mobike in 2016,
its valuation was in the tens of millions of US dollars
– deemed relatively expensive then. However, we
invested based on a conviction in its technology and
market potential. When Meituan Dianping acquired
Mobike recently, we exited at a valuation of $2.7bn.
How do you stay ahead of the herd when it
comes to investing in the next big thing?
As a VC, when it comes to investing, we need to
adopt a long-term view of the actual pain-points that
need to be addressed and their second-order effects.
For instance, in 2015, most VCs in China did not pay
attention to smart manufacturing. We observed that
it was getting harder for large factories like Foxconn,
Quanta and Jabil to recruit, having to increase their
recruitment budgets dramatically every year during
peak season.
So we began focusing on smart manufacturing,
especially industrial robotics. This industry can
be divided into three layers: the lowest-level
solution providers at the bottom, robotics body
manufacturers at the mid-tier and the core
component manufacturers at the top. Based on
our research, we thought that the top- and mid-
tier components produced in China still lagged
behind other countries. Therefore, we decided to
start from the bottom tier by investing in ioranges.
By the time 3C manufacturing robotic applications
took off in 2017, ioranges had accumulated many
early successes, gaining recognition from leading
customers and achieving significant business growth.
China imported $227bn worth of integrated circuits
in 2016, more than for imports of crude oil, iron ore
and primary plastics combined. This weakness has
become more apparent in the recent ban on ZTE. We
realized the importance of own-chip development
technologies and products many years ago. Since
2003, we have been investing in semiconductor chip
design and manufacturing companies. For example,
we invested in Horizon Robotics; its core technology
is the AI algorithm and the self-designed chip that
can maximize algorithm performance, while reducing
cost and power consumption. We also invested in
Ancsonic, which is an active noise cancellation (ANC)
solution provider. Ancsonic develops their own
chipsets to ensure the security of the algorithm and
for cost control.
These examples reflect our investment thinking
and why it is important not to get caught up in fads.
Importantly, how we can stay ahead of the curve is
by investing in start-ups that are focused on solving
real pain-points.
We believe there are significant opportunities for new brands in each
consumer segment in China that meet the unique consumer needs and
preferences of a particular segment.

ABOUT THE AUTHOR
Mr. Tay Choon Chong joined Vertex in 2009. Prior to joining Vertex, he was the Senior VP of GIC based in
Beijing, China, from 2007 to 2009. Prior to that, Choon Chong was the Senior VP of ST Aerospace responsible
for its Component Aviation Service Division. From 2000 to 2005, he headed Fortune VC Singapore and covers
VC investment in China and Singapore. Choon Chong graduated from Imperial College with BEng in Electrical
Engineering and from Stanford University with MSc in Electrical Engineering.
Comparison of Vertex Ventures China Funds vs. Greater China-Focused Venture Capital Funds (Vintage 2007-2015)
41
20
0
5
10
15
20
25
30
35
40
45
Vertex Ventures China I (2008 Vintage) Vertex Ventures China II (2013 Vintage)
NetIRR(%)
Source: Preqin Pro
Top Quartile: 20.9
Median: 16.7

13|
IN FOCUS: GREATER CHINA
Fig. 2: 10 Largest Greater China-Based Venture Capital Fund Managers by Aggregate Capital Raised in the Last 10 Years
(As at July 2018)
Firm Headquarters Total Funds Raised in Last 10 Years ($bn)
China Reform Fund Management Beijing, China 20.2
YF Capital Shanghai, China 5.3
Shanghai Integrated Circuit Investment Fund Shanghai, China 4.4
Shanghai DOBE Cultural & Creative Industry
Development
Shanghai, China 4.2
Legend Capital Beijing, China 4.1
IDG Capital Beijing, China 4.0
Qiming Venture Partners Shanghai, China 3.7
Nanjing Zijin Investment Nanjing. China 3.2
Shunwei Capital Partners Beijing, China 2.9
Baidu Capital Beijing, China 2.7
Source: Preqin Pro
China, Hong Kong, Macau and Taiwan
Fig. 1: Annual Greater China-Based Venture Capital Fundraising, 2010 - 2018 YTD (As at July 2018)
7 8 8 6 6 10 4 6 3
152
210
157 129
173
352
285
152
31
7.8
20.8
11.6
4.0
13.7
18.8
20.9
15.0
7.7
0
5
10
15
20
25
0
50
100
150
200
250
300
350
400
2010 2011 2012 2013 2014 2015 2016 2017 2018 YTD
No. of Funds Closed (Rest of Greater China) No. of Funds Closed (China) Aggregate Capital Raised ($bn)
No.ofFundsClosed
AggregateCapitalRaised($bn)
Year of Final Close
Source: Preqin Pro

VENTURE CAPITAL
FUNDRAISING IN ASIA
T
wo hundred and fifty-one Asia-focused
venture capital funds reached a final close
in 2017, securing $20bn in aggregate capital,
down from the fundraising peak of $28bn in
2016 (Fig. 3). With aggregate capital targeted
standing at a record $67bn in July 2017 (Fig. 6),
and 68% of all Asia-focused funds closed meeting
or exceeding their targets in the same year (Fig.
4), the decline in aggregate capital raised does not
necessarily indicate a slowdown in the Asian venture
capital market, but rather highlights the fact that
many large fund managers are now actively investing
their capital rather than raising it. It is perhaps
unsurprising that China-focused funds closed make
up the majority of aggregate capital raised in 2017:
74% ($15bn) of all Asia-focused aggregate capital
raised by funds closed in 2017 is targeting China (Fig.
9), and seven of the 10 largest funds closed in the
past 10 years predominantly target the country for
venture capital opportunities.
Fig. 3: Annual Asia-Focused Venture Capital Fundraising, 2006 - 2018 YTD (As at July 2018)
104 127 131 144
234
290
239 217 262
460
374
251
67
6.7
10.0
12.0
5.7
11.6
24.1
15.9
7.7
18.8
22.7
28.1
20.4
11.0
0
5
10
15
20
25
30
0
100
200
300
400
500
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 YTD
No. of Funds Closed Aggregate Capital Raised ($bn)
No.ofFundsClosed
Year of Final Close
Source: Preqin Pro
Fig. 4: Fundraising Success of Asia-Focused Venture Capital Funds, 2006 - 2018 YTD (As at July 2018)
35% 30% 30%
53%
25%
41% 44% 35% 40%
20% 20%
31%
19%
48%
33% 42%
47%
58% 33%
38%
38% 30%
48% 51%
43%
42%
17%
36% 27%
17% 26% 18% 27% 30% 31% 29% 25%
38%
0%
20%
40%
60%
80%
100%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 YTD
Below Target Met Target Exceeded Target
ProportionofFundsClosed
Year of Final Close
Source: Preqin Pro

15|
Fig. 7: Annual ASEAN-Focused Venture Capital
Fundraising, 2006 - 2018 YTD (As at July 2018)
0
100
200
300
400
500
600
700
800
0
2
4
6
8
10
12
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018YTD
No. of Funds Closed Aggregate Capital Raised ($mn)
No.ofFundsClosed
Fig. 8: Annual India-Focused Venture Capital
Fundraising, 2006 - 2018 YTD (As at July 2018)
0.0
0.5
1.0
1.5
2.0
2.5
0
5
10
15
20
25
30
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018YTD
No.ofFundsClosed
AggregateCapitalRaised($mn)
Year of Final Close
Year of Final Close
Fig. 5: Average Time Spent in Market by Asia-Focused
Venture Capital Funds Closed, 2006 - 2018 YTD
(As at July 2018)
12.2 11.9
13.1
15.3
17.1
8.3
17.0
18.5
15.6
14.5 14.8
18.8
12.1
0
5
10
15
20
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018YTD
AverageTimeSpentonRoad
(Months)
Year of Final Close
Source: Preqin Pro
Fig. 6: Asia-Focused Venture Capital Funds in Market
over Time, 2013 - 2018
60 84 102 150 188
517
7.2 9.6
13.9
19.3
66.5
60.1
0
10
20
30
40
50
60
70
0
100
200
300
400
500
600
Jul-13 Jul-14 Jul-15 Jul-16 Jul-17 Jul-18
No. of Funds Raising Aggregate Capital Targeted ($bn)
No.ofFundsRaising
Source: Preqin Pro
Source: Preqin Pro Source: Preqin Pro
Fig. 9: Annual China-Focused Venture Capital Fundraising, 2006 - 2018 YTD (As at July 2018)
22
46
67 80
166
220
159
134
177
357
292
160
32
2.2
4.2
7.9
2.8
9.0
21.2
11.6
4.6
14.9
18.1
23.1
15.0
7.6
0
5
10
15
20
25
0
50
100
150
200
250
300
350
400
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 YTD
No.ofFundsClosed
Source: Preqin Pro
Year of Final Close
AggregateCapitalTargeted($bn)

Fig. 10: Largest Asia-Focused Venture Capital Funds Closed, 2006 - 2018 YTD (As at July 2018)
Fund Firm Vintage
Fund Size
(bn) Fund Type
Final Close
Date
China Integrated Circuit Industry
Investment Fund
SINO-IC Capital 2014 138.7 CNY Growth Dec-14
Shanghai Integrated Circuit Investment
Fund
Shanghai Integrated Circuit
Investment Fund
2016 28.5 CNY
Venture Capital
(General)
Apr-16
Shenzhen Guoxie I Equity Investment
Fund Partnership
Shenzhen Zhaoshang Guoxie
I Equity Investment Fund
Management
2017 30.0 CNY Growth Dec-16
Shanghai Municipal Creative (Design)
Industrial Investment Fund
Shanghai DOBE Cultural & Creative
Industry Development
2011 26.9 CNY
Venture Capital
(General)
Aug-11
Hillhouse Fund III Hillhouse Capital Management 2016 4.2 USD Growth Feb-16
Beijing Zhongjiao Jianxin Equity
Investment Fund
CCCC lndustrial Fund Management 2014 20.0 CNY Growth Dec-14
Nanjing Jianning Zijin Equity Investment
Fund I
Nanjing Zijin Investment 2012 3.2 USD
Venture Capital
(General)
Mar-12
Inventis China Growth USD Fund V
Inventis Investment Holdings
(China)
2010 3.0 USD Growth Sep-10
Zhongjieneng Seasalt Green
Development Industry Investment
Center
CECEP Huayu Fund Management 2017 3.0 USD Growth Feb-17
Actis Emerging Markets 3 Actis 2007 2.9 USD Balanced Dec-08
Source: Preqin Pro

17|
INDIA: THE GROWING
ENTERPRISE MARKET
How have market conditions in India changed
over the years and how has Vertex adapted to
the changing environment?
There has been significant growth in the Indian
startup base from around 3,000 in 2009 to over
5,000 in 2017. While the US and China are the top
two geographies for number of unicorns, India has
the second highest average unicorn valuation, led
by Flipkart. Several prominent start-ups projecting
tremendous growth stories include Paytm, OLA,
Flipkart, Inmobi and Swiggy.
Exits are also generally positive. The IPO market is
very robust with more than 100 IPOs in India in H1
2018, with NewGen Software and consumer tech
firm Dixon Technologies having successful local
IPOs. We are also seeing a lot of M&A happening
right now. H1 2017 included more than 50 M&A
deals (up 25%), with corporates’ M&A share rising
to about 30%. B2B acquisitions continue to rise,
mostly focused on building tech capabilities (e.g.
Altran Technologies bought Aricent for $2bn). B2C
acquisitions are primarily for market expansion (e.g.
Walmart’s $16bn acquisition of Flipkart).
While these are good times, there are also
challenging parts of the cycle. We were fortunate
that we slowed down during 2014 and 2015, when
the markets were overheated. In fact, our CEO, Mr
Chua Kee Lock, told the media then “that it was easy
to raise money as the [2015 Indian] market was hot,”
but had added that “the music would soon stop,
and at that time, you should not be caught without
a chair.” Some VCs were upset with his stance then.
They asked him why we were not actively investing in
India. But he had been speaking from experience of
having seen such cycles.
Anecdotally, for every 10 start-ups a VC fund invests
in, it will typically lose money in five, make modest
returns in three and make great returns in two. So
at least half of all start-ups will go through some
existential challenge in their life. In India, we saw the
first wave of mortalities in 2015, but you will continue
to see companies fail, just as you will continue to see
companies become wildly successful. Venture capital
is a high-risk, high-return business.
In the aftermath, many of our VC peers had to
deal with insider funding rounds or down rounds.
Although we did not deal with those, we did make a
few investments during that period such as FirstCry
(online store for baby products), XPressBees (last-
mile delivery) and Yatra (online travel firm) that have
turned out very well for us. FirstCry is by far the
market leader in its category and Yatra is now listed
on the NASDAQ.
Looking ahead, the Indian Government is aiming to
create a trillion-dollar economy through its “Digital
India” campaign in the next few years. Close to a
billion people will come under the digital ecosystem,
making the scale and opportunity unprecedented
anywhere else in the world. Many multibillion-dollar
companies can be created out of India which will
ride this wave of digital innovation. To prepare for
next decade, a new generation of public and private
digital infrastructure in the form of IndiaStack, GST,
low-cost data etc. is converging in India. We raised
SEA & India Fund III to capitalize on these emerging
opportunities.
BEN MATHIAS
Managing Partner, Vertex Ventures
Southeast Asia & India

What was the rationale for setting up an SEA &
India fund instead of a standalone India fund?
We see a lot of similar trends across Southeast
Asia (SEA) and India, particularly in internet and
fintech businesses. For example, Validus is an SME
digital lending platform across SEA that we invested
in. We had seen similar businesses in India and
were therefore able to evaluate Validus effectively.
Moreover, SEA is generally the first port of call for
Indian companies looking to expand overseas. So
we are able to open a lot of doors for our Indian
companies in SEA. The most efficient way to do this
is from Singapore.
We also see many cross-border companies that are
headquartered in Singapore but have the majority
of operations in India, and the founding team split
between the two countries. InstaRem is one such
example.
We have invested about $68mn in start-ups in India
since 2010. In the next few years, we expect our third
SEA & India fund to be very active in India to ride
these underlying trends. We are looking to invest
in early-stage and mid-stage ventures in enterprise
technology, consumer internet/mobile and fintech.
We like to invest in companies where we can bring
more to the table beyond just capital. For example,
companies that are looking for an SEA expansion
where we can leverage our significant network in the
region.
The fund will continue with the same investment
thesis across SEA and India, which primarily means
Series A deals with follow-on, and some capital
deployed first at Series B stage. In India, we will
continue to invest across three main themes:
a. Increasing consumer consumption over the
mobile internet;
b. The rapid transition of financial services onto
the digital IndiaStack;
c. Cutting-edge enterprise technology being built
in India for the global market.
You raised $210mn for your SEA & India Fund III;
how much of this will be deployed in India and
over what time?
Nothing is fixed so it will depend on the
opportunities we see. We will invest the fund over
the next three years and expect to stay in most
investments for a 5-7 year timeframe. Compared to
Fund I and Fund II, this fund will be much more active
in India. We now have a team on the ground in India
to source and support investments here. However,
we made several investments from Fund I and Fund
II which have scaled extremely well. For example,
we invested in FirstCry which has grown to be the
clear market leader in its category. We invested in
HouseJoy from Fund II, along with Amazon.
Have recent policy initiatives helped with
deal flow? Any domestic industries that are
The start-up momentum in India is so strong right
now that there is not a whole lot needed from the
government. I do think, however, that the state
governments need to find ways to encourage
entrepreneurs in sectors that may not attract
overseas venture capital but would have a high
impact domestically. For example, business in areas
like agritech and telehealth could be addressing
a large rural Indian market but will have longer
gestation periods than most venture capital funds
would look for.
There is no shortage of entrepreneurs in India,
and today, the venture capital ecosystem is well
established. The Indian Government should look
to Singapore as a model for how the government
should encourage entrepreneurship without being
interfering. Rather than investing on its own, the
government should sponsor venture capital funds
that have a focus on these priority sectors and allow
these investors to find the right entrepreneurs to
back.
It was easy to raise money as the [2015 Indian] market was hot, but
the music would soon stop, and at that time, you should not be caught
without a chair. – Chua Kee Lock, CEO of Vertex Holdings & Managing Partner of Vertex
Ventures Southeast Asia & India

19|
That said, India’s government has 56 active policies
that target and support the start-up ecosystem.
The “Startup India” initiative that provides funding
of $1.5bn over four years to aid start-up funding,
industry academia partnership (e.g. Atal Innovation
Mission) and policy simplification.
At the same time, there are increasing corporate
initiatives, both Indian and global, focused on
nurturing the start-up ecosystem (e.g. Microsoft and
Apple have accelerators in Bangalore).
Then there is the Digital India initiative that has
helped grow India’s internet population to over
450 million connected citizens and growing in
the mid-teens. The low smartphone penetration
remains a major attraction for all device vendors.
They are now making serious attempts to address
the problem of affordability in India with more
affordable products, resulting in initiatives such as
Android Oreo ‘Go edition’, telco bundling with low-
cost 4G smartphones and even the 4G feature phone
JioPhone.
Since 2014, the cost of a smartphone has dropped
and this caused internet growth to cross the tipping
point, leading to a lot of capital going into consumer
internet. Most Indians access the internet via mobile
devices. The rising use of mobile broadband is
speeding up the penetration rate. The cost of data
has been going down. Jio began charging data fees
for as little as 309 rupees ($5) for 1 GB per day for
three months in April 2017. It now accounts for a
leading 39% of all broadband subscribers, covering
over 80% of the country’s population.
By 2022, the number of Indian internet users is
expected to double to 850 million with a 90%
mobile phone penetration. Most of this growth
in smartphone usage is from rural areas, where
companies are now finding the job of accessing
previously untapped markets much easier and
extremely promising.
With mobile broadband user growth, we expect a
significant rise in the use of e-commerce services
offered by local startups. There are 1,700+ start-
ups, having raised $1.1bn in H1 2017.The three
key players are Walmart-Flipkart, Snapdeal and
Shopclues. Vertical aggregators (e.g. Swiggy, OYO,
Coverfox) form c.70% of the deals by funding value
and number of deals.
Government initiatives like “Make in India”
have incentivized companies to build top-notch
businesses in India. It is also geared towards
improvements in the country’s infrastructure and
increased domestic consumption. Logistics start-
ups gained their foothold with the advent of the
e-commerce industry. Even players like Flipkart,
PayTM and Amazon use third-party logistics services
in addition to in-house ones. A number of start-ups
have begun tapping other areas to support the
existing supply chain solutions or to fill the gaps in
the otherwise fragmented and unorganized Indian
logistics industry.
Fintech is another. Foundations are already in place
for a digitally inclusive economy including the [1]
financial inclusion of non-banked individuals (Jan
Dhan); [2] unique, universal digital identity for all
(Aadhaar); [3] smartphone and internet connectivity
(Mobile). There are 736 million Aadhaar-linked bank
accounts, 1.2 billion Aadhaar numbers registered
and 450+ million internet users in India.
India is moving towards a digital age powered by
smartphones and the nearly ‘free’ cost of internet
connections offered by telcos. Government efforts to
promote a “cashless economy” have shown positive
signs; with the implementation of Universal Payment
Interface (UPI) for fund transfers and transactions,
the demonetization move made millions experience
digital payments.
Combined, these moves have contributed to a
marked shift in consumer behaviour – Indians are

purchasing goods from e-commerce websites,
hailing cabs via aggregators, transferring money via
PayTM or Google Tez and using their smartphones to
control more elements of their lives. There has also
been an effort to make digital payments simpler and
easier using Quick Response Codes, as introduced by
Bharat QR code payments.
Today, there are over 360 fintech start-ups and
this number is growing at c.31%. Key sub-verticals
include P2P lending, wealth management, SME
lending, consumer credit, insurance tech and digital
payments. A case in point is Kissht, a financial
technology platform which enables instant, seamless
credit for consumers to make purchases at digital
points of sale.
Enterprise is another promising segment with 480+
start-ups. The cloud has made software flat and
Indian developers are doing a great job in building
products that have global relevance. Importantly,
a large number of Indian founders are developing
skills that enable a global sales mindset. We are
seeing more and more companies that originated
as Indian companies, but have evolved into global
enterprise technology companies.
These are in areas as diverse as AI, IOT, DevOps,
digital marketing and CRM. Data analytics/AI is the
largest segment and artificial intelligence (AI) is
viewed as one of the most exciting and profitable
ventures in the fintech space in India. AI applications
in data analytics and customer service create
opportunities for more personalized customer
experiences, significantly better insights and
automation of back-end workflows. A key reason
why we invested in Active.AI.
Which kind of tech start-ups are you looking to
invest in?
We are actively looking at three sectors: enterprise,
consumer and fintech. However, our criteria
to evaluate each of these is very different. For
enterprise, we look for companies that have a global
opportunity. The founders need to be capable of
selling the product globally and competing against
competitors outside India. Moreover, we should be
in a position to help them with our global network.
For consumer and fintech, we look for India-oriented
business models but they need to have good
unit economics. By this we mean low customer
acquisition costs, high gross margins and high repeat
rates.
Can you give us examples of investments within
these sectors?
We invested in HouseJoy a couple of years ago, along
with Amazon. This is a home services marketplace
where the consumer is able to use the app to book
services like beauty care, appliance repair, home
cleaning, AC maintenance etc. They are able to get
gross margins of 30-40% for their services. Moreover,
the average consumer repeats 4-5 times per year
because a household constantly has a need for these
service offerings.
On the enterprise front, we invested in CloudCherry
(SaaS for Customer Experience Management) earlier
this year. We recognized that the largest opportunity
for the company was in the US. Today, the company
has moved from an India-centric revenue model to a
US- and SEA-centric revenue model. Similarly, Flutura
(Industrial IOT Analytics) has built technology where
it can take on GE on a deal and still win. We recently
announced an investment in Hansel, a mobile-
first personalization and reconfiguration platform
focusing on the user experience (UX) stack. Their
technology enables business teams to orchestrate
personalized user experiences with enormous speed,
at scale, without disrupting tech roadmap, and they
have already got the who’s who of the mobile app
world in India as their customers.
In fintech, we invested in Active.AI, which builds
AI technology for conversational banking and
Virtual Personal Assistants for financial consumers
There is no shortage of entrepreneurs in India, and today, the venture
capital ecosystem is well established. The Indian Government should
look to Singapore as a model for how the government should encourage
entrepreneurship without being interfering.

21|
predominantly in the retail banking and wealth
management spaces. Its solution is in production
with several banks in India and SEA. The three
founders have deep domain expertise in banking
and are able to impress potential customers instantly
in the first meeting.
What similarities/differences have you seen
between founding teams in India in the last
decade?
When I first moved to India over 10 years ago, most
entrepreneurs came from business families and you
had to deal with a father-son founding team. Today,
most founding teams are first-time entrepreneurs
typically in their thirties. Most of them have already
had some work experience which they can leverage
for their start-ups. The founders of Flutura, for
example, each spent 10 years at MindTree and are
leveraging the customer relationships they built
there. One notable exception to this is Ashwin
Ramesh from Synup who is in his mid-twenties and
started the company almost immediately out of
college. He has built an incredible SaaS business with
50,000 customers in the US, with his entire team in
India.
Some firms feel that quality deals are few and
far between in Asia. Does Vertex share the same
sentiment and can the same be said for the
Indian market?
With regards to quality deals, India always has huge
potential given its market size. The main challenge
for us in India is to figure out what companies to
invest in and at sensible valuations. Most times,
valuations are excessive.
While sentiment was clearly overdone post-2015’s
euphoria, India is developing rapidly and will be a
good market over the longer term (e.g. Walmart’s
$16bn acquisition of Flipkart). That said, there are
challenges for India which will be resolved over
time – this is not different from China over a decade
ago. Many people today compare China with Silicon
Valley – it has so many start-ups, lots of companies
with unique models. Perhaps the same can be said
of India’s start-up ecosystem evolution in the decade
ahead.
Today, there are entrepreneurs doing exciting
things around sectors such as digital lending, IoT
(Internet of Things) and enterprise SaaS (software as
a service). New sectors will continue to emerge while
other sectors will mature. We are already seeing
many successful companies come out of India that
are fast becoming global leaders in their categories.
Globallogic, MuSigma, Zoho and Freshdesk for
example. The level of technology talent in India is so
tremendous, it is inevitable that we will eventually
produce world leaders.

ABOUT THE AUTHOR
Mr. Ben Mathias is Managing Partner of Vertex Ventures Southeast Asia & India, having joined Vertex in 2015.
While his key focus is in India, he is part of the Vertex team covering India and Southeast Asia. Prior to Vertex,
Ben was a partner at New Enterprise Associates (NEA).He held senior positions at E2open and i2 Technologies.
Previously, Ben spent a number of years at PwC Consulting. In his early career, he was at Open Environment
Corporation. Ben received his Master of Science in Engineering Sciences from Dartmouth College and his
Bachelor of Technology from the Indian Institute of Technology, Madras.
Comparison of Vertex Ventures SEA & India Funds vs. *ASEAN- and *South Asia-Focused Venture Capital Funds (Vintage
2007-2015)
23.7
32.5
0
5
10
15
20
25
30
35
Vertex Ventures SEA & India I (2010 Vintage) Vertex Ventures SEA & India II (2014 Vintage)
NetIRR(%)
Source: Preqin Pro
Top Quartile: 26.9
Median: 15.5
Bottom Quartile: 8.2
*Funds that have a focus on either ASEAN or South Asia, mutually exclusive, excluding Vertex Ventures SEA & India I and II which focus on
both ASEAN and India.

23|
IN FOCUS: SOUTH ASIA
Fig. 12: 10 Largest South Asia-Based Venture Capital Fund Managers by Aggregate Capital Raised in the Last 10 Years
(As at July 2018)
Nexus Venture Partners Mumbai, India 1.2
Kalaari Capital Bangalore, India 0.6
IDG Ventures India Bangalore, India 0.5
SIDBI Venture Capital Mumbai, India 0.4
Matrix Partners India Bangalore, India 0.4
Vertex Ventures Southeast Asia & India Singapore 0.4
Duke Industries New Delhi, India 0.3
Aavishkaar Venture Management Services Mumbai, India 0.3
Eight Roads Ventures India Mumbai, India 0.3
Ventureast Hyderabad, India 0.2
Source: Preqin Pro
Bangladesh, India, Nepal, Pakistan and Sri Lanka
Fig. 11: Annual South Asia-Based Venture Capital Fundraising, 2010 - 2018 YTD (As at July 2018)
8 10
14
9
14 16
9
23 13
0.7
0.3
1.0
0.4
0.8
1.3
0.6
0.7
0.7
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
0
5
10
15
20
25
2010 2011 2012 2013 2014 2015 2016 2017 2018 YTD
No.ofFundsClosed
Source: Preqin Pro

Fig. 13: Number of Asia-Based Venture Capital Fund
Managers by Sub-Region
1,134
140 109 194
Greater China South Asia ASEAN Northeast Asia
Source: Preqin Pro
ASIAN VENTURE CAPITAL
FUND MANAGER ACTIVITY
A
sia-focused venture capital assets under
management have increased eight-fold
in 10 years, reaching a record $221bn in
December 2017 (Fig. 14), highlighting the
sheer impact of technological advancement
and innovation in Asia. Venture capital managers
based in China make up 67% of all Asia-based fund
managers (Fig. 13).
Fund Manager Location
Fig. 14: Asia-Focused Venture Capital Assets under Management, 2005 - 2017
5.7 9.1 15.1 17.6 16.3 17.3 24.1 25.3 23.6 23.7 29.4 44.3
71.1
6.0 8.2 12.5 13.5 17.0 33.1 29.8 38.6 51.8 64.4
82.4
109.6
149.8
0
50
100
150
200
250
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-10
Dec-11
Dec-12
Dec-13
Dec-14
Dec-15
Dec-16
Dec-17
Dry Powder ($bn) Unrealized Value ($bn)
AssetsunderManagement($bn)
Source: Preqin Pro
Fig. 15: Venture Capital Fund Managers by Number of Funds Raised Previously and Location
54% 49% 52%
26% 32% 34%
8% 10%
9%11% 9% 5%
0%
20%
40%
60%
80%
100%
Asia North America Europe
6 or More Funds Raised Previously
4-5 Funds Raised Previously
2-3 Funds Raised Previously
1 Fund Raised Previously
ProportionofFirms
Source: Preqin Pro

25|
Fig. 16: 10 Largest Asia-Based Venture Capital Fund Managers by Aggregate Capital Raised in the Last 10 Years
(As at August 2018)
SINO-IC Capital Beijing, China 22.6
CCT Fund Management Beijing, China 19.6
Inventis Investment Holdings (China) Hong Kong, Hong Kong 12.2
China Merchants Capital Shenzhen, China 12.0
CCCC lndustrial Fund Management Beijing, China 9.3
CMB International Capital Management Hong Kong, Hong Kong 8.6
CITIC Private Equity Funds Management Beijing, China 8.5
CDH Investments Beijing, China 7.9
Source: Preqin Pro
Fig. 17: 10 Largest Asia-Based Venture Capital Fund Managers by Estimated Dry Powder (As at August 2018)
Firm Headquarters Estimated Dry Powder ($bn)
CCT Fund Management Beijing, China 10.6
China Merchants Capital Shenzhen, China 8.2
CMB International Capital Management Hong Kong, Hong Kong 5.7
SINO-IC Capital Beijing, China 5.1
Inventis Investment Holdings (China) Hong Kong, Hong Kong 4.3
CCCC lndustrial Fund Management Beijing, China 4.0
Shandong Hi-speed Investment Fund Management Shandong, China 3.4
China Ministry of Finance Beijing, China 3.3
Source: Preqin Pro

CAN SOUTHEAST ASIA
EMULATE CHINA?
How have market conditions in Southeast Asia
changed over the years and how has Vertex
adapted to this changing environment?
Over the past decade, there have been three
buzzwords rocking the world: start-up, disruption
and innovation. Everyone wants to be Silicon Valley.
Southeast Asia has also become a hipster – but to
think we want to be like the Bay Area is misguided.
There is another model ecosystem closer to home.
In California’s shadow, China has slowly risen thanks
to the grand powers of Baidu, Alibaba and Tencent,
with the fledgling powers of Xiaomi, Didi, Ctrip and
more in tow. And in China’s shadow is Southeast
Asia. With this juxtaposition, it is no wonder the
founders and investors of the region are hoping
Southeast Asia will be the next China.
Although everyone knows we operate in a complex
region – with multiple political and cultural issues
along with economies that are oceans apart –
everyone is holding out hoping that Southeast Asia
will be the next China. Everyone wants us to produce
an Alibaba. And indeed, that is how investors and
founders are subconsciously behaving. Southeast
Asia certainly has potential, but does it have the
explosive multibillion-dollar juggernauts incoming
that justify the inflated valuations?
We are seeing similar exuberance in the start-up
market that we saw 6-7 years ago. Back then, there
was a spike in interest and excitement for start-ups.
As a result, valuations grew and promises were
made. But Southeast Asia does not operate like
Silicon Valley, where ballooning valuations lead to
further ballooning.
Inflation inevitably leads to down rounds when start-
ups are unable to produce the exits their exuberant
investors wanted. Once in a while, a resilient start-up
appears and can make an impressive exit or IPO.
The pattern is repeating itself today. Southeast Asia
is again going through another hype-cycle in which
young investors are chasing after deals rooted in
overwatched trends and founders are inflating their
prices because there are too many hot investors.
In tandem with this is the rise of accelerators, co-
working spaces and corporate innovation programs
that underline a fervour and desperation around
phraseology like start-up, disruption and innovation.
‘Start-up’ is overheating and it is creating hot air
balloons across the ecosystem. Of course, some of
the chasing is warranted. Some deals are just so
hot and the companies have such strong potential
that it is irresistible. But it is important to stick to the
fundamentals and be disciplined about investment.
But these are the basic boom-and-bust cycles of
venture capital. In every cycle we see the same
pattern repeating – investors rush to invest at high
valuations, then they get burnt because the market
becomes overheated and valuations plunge. The
younger and less experienced investors have a hard
time staying ‘sane’ when money is pouring into
deals at inflated valuations and they miss the signs
pointing to an oncoming bubble.
Unfortunately, it appears that being part of a high
profile deal (albeit at a potentially inflated valuation)
CHUA JOO HOCK
Managing Partner, Vertex Ventures
Southeast Asia & India

27|
Venture Capital Investments as a % of GDP
SEA (2014) SEA (2016) India (2016) China (2016) US (2016)
0.04%
0.18% 0.18%
0.30%
0.40%
Southeast Asia
Source: e-Conomy SEA Spotlight 2017 by Google and Temasek
brings lots of media attention. And some investors
crave the visibility amid all the media frenzy. We read
in the media about which firm has completed the
most deals and who are the most active investors. It
is the wrong focus.
Ultimately, a good VC is able to give real returns in
not one but several investments. Venture capitalism
is not about doing many deals in the quickest
possible time; it is about investing and building great
companies that can produce outstanding exits and
returns.
Currently, Southeast Asia is around 10 years behind
China. It is facing similar issues China faced a decade
ago like difficulties in finding talent and money,
with few players, exits and unicorns. But China is
advancing quickly and Southeast Asia is now an
emerging market at an inflexion point. The region
has raked in cumulative funding of almost $9.5bn
from 2010 to 2017. For VC investments, Southeast
Asia’s $3bn in 2017 looks similar to China’s in 2006.
The corresponding sum for the US then was $30bn.
Today, China’s investment stands at $40bn vs. $70bn
for the US.
Overall, VC investments in Southeast Asian
companies signal a strong confidence in the potential
of Southeast Asia’s digital economy by global and
regional investors. These investments stood at 0.18%
of Southeast Asia GDP in 2016, up from 0.04% in
2014. Southeast Asia is now on par with India (0.18%
of GDP in 2016) and narrowing the gap with China
(0.30% of GDP in 2016).
In the next decade, Southeast Asia is going to be one
of the most exciting regions to invest in. If you think
about it, it is kind of situated between the two giants
of China and India. Imagine Silicon Valley companies
that missed out on China and India looking at where
the last big markets are left. And that is right here.
This is an interesting moment in time for Southeast
Asia – essentially because investors are now realizing
that it is the only large market left to grow.
That said, Southeast Asia needs to be looked at in
conjunction with India. This is central to Vertex SEA
& India Fund’s strategy because there are many
cross-border collaboration opportunities (e.g. Flutura
offering IoT analytics solution to leading industrial
companies in Southeast Asia). There are also many
Indian entrepreneurs starting their business in
Southeast Asia (e.g. Socash – a mobile-first cash
circulation platform in Asia, leveraging an offline
merchant network. Active.AI, Validus and Instarem
are other notable Singapore-based fintech start-ups
with Indian founders). Today, other VCs are imitating
the Vertex model (i.e. India-specific VC funds
adopting Southeast Asia as part of their strategy or
Southeast Asia & India-focused funds).
Southeast Asian start-ups, especially those based in
Singapore, now have the most unicorns in Asia after
China. The region is rising and currently home to
seven unicorns: Grab, Go-Jek, Lazada, Razer, Sea Ltd.
(f.k.a. Garena), Traveloka and Tokopedia. Southeast
Asia’s decacorn, Grab, raised the region’s largest
round in 2017 with a $2bn Series G from SoftBank
Group, Didi Chuxing and Toyota, followed by another
$2bn from Toyota, OppenheimerFunds, Ping An
Capital and other investors in 2018.
Within Southeast Asia, Singapore and Indonesia
continue to figure prominently on investors’ radar,
with fintech ($3.2bn) and e-commerce ($2.9bn)
attracting the most investments.

From 2010 to 2017, of all countries in the Southeast
Asia region, Singapore has attracted the most
funding from investors. More than half of the total
investments have reached Singapore-based tech
start-ups.
Singapore will continue to be a key Southeast Asian
country, attractive to many companies. It has a clear
rule of law, with robust IP protection and significant
government support. The Singapore Government is
also willing to find ways to help start-ups.
The larger VC funds are focused on the two big
markets: China and India. That trend will not
stop and is expected to persist. In Singapore, the
government has done a good job for incubation and
start-up funding – these are well funded. But funding
is not just giving companies a one-off payment.
Several rounds of funding are required – maybe
three, four or even five rounds before companies can
be successful. When it comes to additional funding
or subsequent rounds of funding, be it in Singapore
or Southeast Asia, it is not as easy when compared
with India and China. More government support may
be needed here.
Compared to the US or even broader Asia in general,
Southeast Asia still lacks right-sized VC funds with the
experience and track record to invest in promising
start-ups with growth opportunities. The region’s
diversity (market, linguistic, cultural, religious) can
be a deterrent to some foreign investors but an
opportunity for home-grown companies able to
deftly manoeuvre in the region. There is a dearth of
experienced investors that know and understand
how to build “champions”. As a result, valuations
have been hyped up by over-zealous investors
and big money being thrown into young start-ups.
Southeast Asia needs funding from VCs with a global
perspective and scale, deep local experience and
networks, as well as a robust track record to help
them succeed.
On this front, we are seeing more funds being
established. But the key question for investors is
the quality of long-term returns. As a global network
of VC funds with four funds focusing on early stage
opportunities, Vertex has over 40 investment
professionals plugged into the key innovation
hubs of Southeast Asia/India, China, Israel and the
US. This unique network architecture enables our
Southeast Asia team to be better positioned to spot
the impactful trends, disruptive technologies and
promising entrepreneurs to support.
What are some of the emerging trends in
Southeast Asia? Any industries that are
While Southeast Asia often gets classified as a
single, homogenous region, it is really a collection
of different countries. The dynamics in each
country within the region are extremely varied.
Singapore is one of the world’s wealthiest country-
states. Indonesia, despite having the highest GDP
of countries in Southeast Asia, is home to a large
unbanked population, with many people still relying
heavily on cash. There is a need to recognize the
uniqueness of each country and adopt a customized
strategy.
There are many factors contributing to the surge
of interest in start-ups outside the established
hotbeds for technology and innovation. Southeast
Asia’s growing digital connectivity for one has made
the population addressable, with over 300 million
smartphone users in the region, compared to 225
Venture Capital Investments in Key SEA Countries (2010-2017)
Indonesia
67%
22%
5%
1%
3%
2%
0.2%
Malaysia
Philippines
Vietnam
Thailand
Others
Singapore
Total Invested
$14.9bn
(Cumulative)
Source: Preqin and Vertex database
Note: VC investments exclude start-ups with undisclosed funding information;
Deal stages include Angel, Grant, Growth Capital/Expansion, Seed, Series A-E

29|
million in the US. This translates to greater consumer
demand and purchasing power.
One of the key success factors in China is
urbanization. This is not unique to China, the same
trend is happening in Southeast Asia and India.
Other factors include consumerism with rising
incomes, deregulation and young demographics.
Most importantly, the market in Southeast Asia has a
lower competition intensity for start-up founders and
investors alike that provide a rational entry valuation.
Interesting sectors to investors include:
Social Media: With a massive boom in smartphone
usage, social media in Southeast Asia is a major
trend, with Indonesia leading the way. In 2017, M17
(Paktor’s merger with Taiwanese start-up 17Media)
added live-streaming and content production to its
list of offerings.
Fintech: StoreHub offers a revolutionary iPad POS
system that changes how retailers manage their
businesses and connect with their customers.
Turnkey Lender upgrades traditional lending
business with its cloud-based online lending
management and credit assessment platform.
InstaRem enables lower-cost remittances compared
to traditional services like Western Union and banks.
Indonesia has an attractive digital economy. Some
fintech start-ups are also serving the underbanked
population, e.g. PayFazz enables the “unreached”
population in Indonesia to transact, pay and
purchase through its network of banking agents.
Artificial Intelligence: With deregulation, enterprises
are adopting technology, e.g. Active.AI provides
technology for conversational banking and Virtual
Personal Assistants for financial consumers
predominantly in the retail banking and wealth
management spaces. Marketplace lenders like
Validus use AI and machine-learning to provide
supply-chain financing to SMEs while offering higher
risk-adjusted returns to investors.
Some firms feel that quality deals are few and
far between in Asia. Does Vertex share the same
sentiment and can the same be said for the
Southeast Asian market?
Southeast Asia is a relatively newer market and has
opportunities abound. However, unlike China, there
are occasional challenges like the political upheavals
in Thailand.
Investors were keen to put money into early-stage
start-ups in recent years, and those businesses that
managed to survive are now looking for growth
SoftBank
Sources: TechCrunch, TechInAsia, E27, VentureBeat, Preqin, Vertex
Seed & Micro (Pre-A) Early Stage (Series A & B) Expansion (Series C+)
Larger
Smaller
500
Startups TNF Venture
Openspace
Ventures
Golden Gate
Ventures
Jungle
Ventures
Monk's Hill
Axiata
Gobi
Ventures
Hillhouse
Active Fund Size
Sequoia
India
B Capital
SBI Capital
GSR Ventures
GGV Capital
Venture Capital Funding Landscape in Southeast Asia

capital. As those companies get to the next stage,
you start seeing the B and C rounds getting done. It
does not necessarily mean that funding for the early
stages has dried up.
The last few years have witnessed a “funding
barbell”, with money gravitating towards early-
stage deals or late, big-ticket rounds, giving the
critical Series B and C phases a miss. Yet there is no
shortage of companies to invest in; the issue is lack
of institutional funding. That is why growth-stage
funding will be crucial.
But there is also a view that many start-ups here
are kept alive due to government funding beyond
their normal lifespan. In the traditional sense, like in
Silicon Valley, if their business model was suspect,
they would have folded up quickly, as the market
would have determined they cannot continue.
That is always a concern – when you have too
much money chasing too few companies, even the
bad companies get funded. This is something that
we cannot help. In a market like this, it is bound
to happen. It is not good to have either too much
money chasing start-ups or too little money. A right
balance is needed.
ABOUT THE AUTHOR
Mr. Chua Joo Hock is based in Singapore and heads the investment activities in Southeast Asia and India. Mr.
Joo Hock joined the former Singapore Technologies Group in 1987 where he was involved in the early phase of
Singapore Technologies’ venture capital investments which later became Vertex in 1988. Throughout his career
in Vertex, he has been involved in VC investments globally particularly in the US, Singapore, Taiwan, India,
China and Israel. He spent several years in the US from 1989 to 1992 and later from 1998 to 2004 where he was
responsible for Vertex US investments and operation. Mr. Joo Hock graduated from the University of Singapore
in 1979 with a Bachelor of Engineering (Mechanical). He also has a MBA from National University of Singapore.
Comparison of Vertex Ventures SEA & India Funds vs. *ASEAN- and *South Asia-Focused Venture Capital Funds (Vintage
2007-2015)
23.7
32.5
0
5
10
15
20
25
30
35
Vertex Ventures SEA & India I (2010 Vintage) Vertex Ventures SEA & India II (2014 Vintage)
NetIRR(%)
Source: Preqin Pro
Top Quartile: 26.9
Median: 15.5
*Funds that have a focus on either ASEAN or South Asia, mutually exclusive, excluding Vertex Ventures SEA & India I and II which focus on
both ASEAN and India.

31|
IN FOCUS: ASEAN
Fig. 18: Annual ASEAN-Based Venture Capital Fundraising, 2012 - 2018 YTD (As at July 2018)
6
10
6
10 10
13
4
2
1
1
3
5
2
1
0
200
400
600
800
1,000
0
2
4
6
8
10
12
14
16
2012 2013 2014 2015 2016 2017 2018 YTD
No. of Funds Closed (Singapore) No. of Funds Closed (Rest of ASEAN) Aggregate Capital Raised ($mn)
No.ofFundsClosed
AggregateCapitalRaised($mn)
Fig. 19: 10 Largest ASEAN-Based Venture Capital Fund Managers by Aggregate Capital Raised in the Last 10 Years
(As at July 2018)
Firm Headquarters Total Funds Raised in Last 10 Years ($mn)
UOB Venture Management Singapore 509
Vertex Ventures Southeast Asia & India Singapore 390
Vickers Venture Partners Singapore 367
Abundance Venture Capital Petaling Jaya, Malaysia 250
Venstar Investments Singapore 178
F&H Fund Management Singapore 174
Openspace Ventures Singapore 165
East Ventures Singapore 163
Venturra Capital Jakarta, Indonesia 150
Xeraya Capital Kuala Lumpur, Malaysia 150
Source: Preqin Pro
Year of Final Close
Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam
Source: Preqin Pro

PERFORMANCE
N
et cash flow has been falling in the Asian
venture capital industry since 2014,
with a sharp decline between 2016 and
2017, and stands at -$21bn at the end
of 2017 (Fig. 20). A reason behind this
is the plethora of new funds that have emerged
in Asia, and more capital will have been called
than distributed in this period of heightened fund
formation. Asia-focused funds with vintage years
between 2005 and 2015 have a higher associated
risk when compared to Europe- and North America-
focused funds, but also higher returns in terms of
median net IRR (Fig. 21). With Asia still considered
a developing region overall, the associated risk of
investment is logical compared to more developed
parts of the world.
Return - Median Net IRR
Fig. 20: Asia-Focused Venture Capital Funds: Annual Capital Called up, Distributed and Net Cash Flow, 2005 - 2017
-30
-20
-10
0
10
20
30
40
50
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Capital Called up ($bn) Capital Distributed ($bn) Net Cash Flow ($bn)
Source: Preqin Pro
Fig. 21: Venture Capital: Risk/Return by Geographic Focus (Vintages 2005-2015)
0%
5%
10%
15%
20%
25%
30%
6% 8% 10% 12% 14% 16%
Asia
North America
Europe
Risk-StandardDeviationofNetIRR
Source: Preqin Pro
Return - Median Net IRR

33|
IN FOCUS: NORTHEAST ASIA
Fig. 22: Annual Northeast Asia-Based Venture Capital Fundraising, 2010 - 2018 YTD (As at July 2018)
11 11
18 20 17
28 22 20
5
40
47 30
36 41
37
24 26
8
1.2
2.4
1.7
2.2 2.2
1.8 1.9
2.1
1.3
0.0
0.5
1.0
1.5
2.0
2.5
0
10
20
30
40
50
60
70
2010 2011 2012 2013 2014 2015 2016 2017 2018 YTD
No. of Funds Closed (Japan) No. of Funds Closed (South Korea) Aggregate Capital Raised ($bn)
No.ofFundsClosed
Fig. 23: 10 Largest Northeast Asia-Based Venture Capital Fund Managers by Aggregate Capital Raised in the Last 10
Years (As at July 2018)
Samsung Venture Investment Corporation Seoul, South Korea 1.4
Korea Investment Partners Seoul, South Korea 1.1
JAFCO (Japan) Tokyo, Japan 1.0
SBI Investment Tokyo, Japan 0.8
SV Investment Seoul, South Korea 0.8
Atinum Investment Seoul, South Korea 0.8
InterVest Seoul, South Korea 0.5
UTEC Tokyo, Japan 0.5
KTB Network Seoul, South Korea 0.4
AJU IB Investment Seoul, South Korea 0.4
Source: Preqin Pro
Year of Final Close
Source: Preqin Pro
Japan and South Korea

DEALS
Fig. 24: 10 Largest Venture Capital Deals* in Asia, 2016 - 2018 YTD (As at July 2018)
Portfolio Company Deal Date
Investment
Stage
Deal Size
(mn) Investor(s) Industry Location
Ant Financial Services
Group
Jun-18
Series C/
Round 3
14,000 USD
Baillie Gifford, Carlyle Group, CPP
Investment Board, Discovery Capital
Management, General Atlantic, GIC**,
Janchor Partners, Khazanah Nasional,
Primavera Capital, Sequoia Capital,
Silver Lake, T Rowe Price, Temasek
Holdings**, Warburg Pincus
Internet China
Didi Chuxing Apr-17
Unspecified
Round
5,500 USD
Bank of Communications, China
Merchants Bank, Silver Lake, SoftBank
Telecoms China
Group
Apr-16
Series B/
Round 2
4,500 USD
CCB Trust Co., Ltd.** , China
Development Bank Capital, China
Investment Corporation**, China
Life Insurance Company, China Post
Capital, Primavera Capital
Internet China
Didi Chuxing Dec-17
Unspecified
Round
4,000 USD Mubadala Capital, SoftBank Telecoms China
Grab Holdings Jul-17
Series G/
Round 7
4,000 USD
Didi Chuxing**, SoftBank**, Toyota,
OppenheimerFunds, Ping An Capital
and others
Telecoms Singapore
Meituan-Dianping Oct-17
Series C/
Round 3
4,000 USD
Coatue Management, CPP Investment
Board, GIC, IDG Capital, Mubadala
Capital, Sequoia Capital, Tencent**,
The Priceline Group, Tiger Global
Management, Trustbridge Partners
Internet China
Meituan-Dianping Jan-16
Unspecified
Round
3,300 USD
Baillie Gifford, Capital Today, China
Development Bank Capital, CPP
Investment Board, DST Global**,
Hillhouse Capital Management,
Sequoia Capital, Temasek Holdings,
Tencent**, Trustbridge Partners**
Internet China
Pinduoduo Apr-18
Unspecified
Round
3,000 USD Sequoia Capital, Tencent** Telecoms China
Didi Chuxing Jun-16
Unspecified
Round
2,800 USD
Alibaba Group, Ant Financial Service
Group, BlackRock, Oppenheimer
Alternative Investment Management,
SoftBank, Tencent
Telecoms China
Toutiao Aug-17
Unspecified
Round
2,000 USD General Atlantic** Telecoms China
Source: Preqin Pro
*Figures exclude add-ons, grants, mergers, venture debt and secondary stock purchases.
**Denotes lead investor(s).

35|
Fig. 25: 10 Largest Venture Capital Deals* in Asia, 2018 YTD (As at July 2018)
Portfolio Company Deal Date
Investment
Stage
Deal Size
(mn) Investor(s) Industry Location
Group
Jun-18
Series C/
Round 3
14,000 USD
Baillie Gifford, Carlyle Group, CPP
Investment Board, Discovery Capital
Management, General Atlantic, GIC**,
Janchor Partners, Khazanah Nasional,
Primavera Capital, Sequoia Capital,
Silver Lake, T Rowe Price, Temasek
Holdings**, Warburg Pincus
Internet China
Pinduoduo Apr-18
Unspecified
Round
3,000 USD Sequoia Capital, Tencent** Telecoms China
JD Finance*** Jul-18
Series B/
Round 2
13,000 CNY
Bank of China Group Investment,
China International Capital
Corporation Private Equity, China
Securities International, CITIC Capital
Internet China
Manbang Group Apr-18
Unspecified
Round
1,900 USD
Baillie Gifford, CapitalG, China
Reform Fund Management**,
Farallon Capital Management,
Hillhouse Capital Management, IDG
Capital, SB Investment Advisers**,
Sequoia Capital, Tencent
Internet China
China Media Capital Inc. Jul-18
Series A/
Round 1
10,000 CNY
Alibaba Group**, China Vanke Co.
Ltd.**, CMB International Capital
Management, Tencent**
Telecoms China
Go-Jek Indonesia Feb-18
Series E/
Round 5
1,500 USD
Astra International, BlackRock, Google
Inc., JD.com, KKR, Meituan-Dianping,
Samsung Venture Investment
Corporation, Temasek Holdings,
Tencent**, Warburg Pincus
Telecoms Indonesia
Ping An Healthcare
Administration Co., Ltd.
Feb-18
Series A/
Round 1
1,150 USD
IDG Capital, SB Investment Advisers,
SBI Holdings
Software
& Related
China
Grab Holdings Jun-18
Unspecified
Round
1,000 USD Toyota Motor Corporation** Telecoms Singapore
Mobike Ltd. Jan-18
Unspecified
Round
1,000 USD - Telecoms China
Ofo Bicycle Mar-18
Series E/
Round 5
866 USD
Alibaba Group**, Ant Financial Service
Group, Haofeng Group, Junli Capital,
Tianhe Capital
Telecoms China
Source: Preqin Pro
**Denotes lead investor(s).
***Financing round is set to be completed in Q3 2018.

Fig. 26: 10 Largest Venture Capital Exits in Asia, 2016 - 2018 YTD (As at July 2018)
Portfolio Company
Date of First
Investment Investor(s)
Flipkart Internet Private Limited* Oct-09
Accel, Axis Bank, Baillie Gifford, Dragoneer Investment Group, DST Global, eBay Inc., GIC,
Greenoaks Capital, HDFC Bank, Helion Venture Partners, Iconiq Capital, IDG Ventures
India, Kalaari Capital, Microsoft, Morgan Stanley, Morgan Stanley Alternative Investment
Partners, Naspers, Qatar Investment Authority, SB Investment Advisers, Schroder Adveq,
Sofina, Steadview Capital Management, T Rowe Price, Tencent, Tiger Global Management,
TR Capital, Vulcan Capital
Xiaomi Inc.* Jun-09
All-Stars Investment, Bank of China (Hong Kong), Deutsche Bank, DST Global, GIC, Hopu
Investment Management, IDG Capital, Morgan Stanley, Morningside Venture Capital,
Qiming Venture Partners, Qualcomm Ventures, Shunwei Capital Partners, Temasek
Holdings, Wing Lung Bank, YF Capital
Ofo Bicycle* Mar-15
Alibaba Group, Ant Financial Service Group, Atomico, Beijing Dongfang Hongdao, CITIC
Private Equity Funds Management, Coatue Management, Didi Chuxing, DST Global, GSR
Ventures, Haofeng Group, Hony Capital, Junli Capital, Macrolink Group, Matrix Partners
China, Shunwei Capital Partners, Tianhe Capital, Vision+, Will Hunting Capital, Xiaomi Inc.,
ZhenFund
Mobike Ltd. Oct-15
BAI Fund, BOCOM International Asset Management, Ctrip/Qunar, Farallon Capital
Management, Foxconn Technology Group, Hanting Hotels, Hillhouse Capital Management,
ICBC International, Joy Capital, Line Corporation, Panda Capital, Qiming Venture Partners,
Qualcomm, Sequoia Capital, Sinovation Ventures, Temasek Holdings, Tencent, TPG, Vertex
Ventures China, Warburg Pincus, Yung Park Capital
YTO Express* May-15 Alibaba Group, YF Capital
iQiyi.com Inc.* Feb-10
Baidu, Boyu Capital, Hillhouse Capital Management, IDG Capital, Providence Equity
Partners, Sequoia Capital, Shunwei Capital Partners, Xiaomi Ventures
ZhongAn Online P & C Insurance
Co., Ltd*
Jun-15
CDH Investments, China International Capital Corporation, Keywise Capital Management,
Morgan Stanley, SAIF Partners
Mango TV Jun-15
CITIC Private Equity Funds Management, Happigo, Hony Capital, New Alliance Capital,
Sequoia Capital, Shanghai Guohe Capital, Xiamen C&D Corporation
Mercari, Inc.* Jul-13
Development Bank of Japan, East Ventures, Global Brain Corporation, Globis Capital
Partners, GMO VenturePartners, ITOCHU Technology Ventures, Mitsui & Co., Sumitomo
Mitsui Trust Bank, United, Inc., World Innovation Lab (WiL)
Ping An Health Cloud Co., Ltd.* May-16 IDG Capital, SB Investment Advisers, SBI Holdings
*Denotes a partial exit.

37|
Total Known
Funding (mn) Exit Type Exit Date Acquiror (Exit) Exit Value (mn) Industry Location
6,454 USD Trade Sale May-18 Walmart 16,000 USD Internet India
2,457 USD IPO Jun-18 - 4,720 USD Retail China
2,433 USD Trade Sale Jan-18 Alibaba Group 3,000 USD Telecoms China
1,980 USD Trade Sale Apr-18 Meituan-Dianping 2,700 USD Telecoms China
- Merger Mar-16 Dayang Group 17,500 CNY Business Services China
1,890 USD IPO Mar-18 - 2,250 USD Telecoms China
934 USD IPO Sep-17 - 11,898 HKD Internet China
390 USD Trade Sale Sep-17 Happigo 9,500 CNY Telecoms China
113 USD IPO Jun-18 - 130,500 JPY Telecoms Japan
900 USD IPO Apr-18 - 8,770 HKD Telecoms China
Source: Preqin Pro

Fig. 27: 10 Largest Venture Capital Exits in Asia, 2018 YTD (As at July 2018)
Portfolio Company
Date of First
Investment Investor(s)
Flipkart Internet Private Limited* Oct-09
Accel, Axis Bank, Baillie Gifford, Dragoneer Investment Group, DST Global, eBay Inc., GIC,
Greenoaks Capital, HDFC Bank, Helion Venture Partners, Iconiq Capital, IDG Ventures
India, Kalaari Capital, Microsoft, Morgan Stanley, Morgan Stanley Alternative Investment
Partners, Naspers, Qatar Investment Authority, SB Investment Advisers, Schroder Adveq,
Sofina, Steadview Capital Management, T Rowe Price, Tencent, Tiger Global Management,
TR Capital, Vulcan Capital
Xiaomi Inc.* Jun-09
All-Stars Investment, Bank of China (Hong Kong), Deutsche Bank, DST Global, GIC, Hopu
Investment Management, IDG Capital, Morgan Stanley, Morningside Venture Capital,
Qiming Venture Partners, Qualcomm Ventures, Shunwei Capital Partners, Temasek
Holdings, Wing Lung Bank, YF Capital
Ofo Bicycle* Mar-15
Alibaba Group, Ant Financial Service Group, Atomico, Beijing Dongfang Hongdao, CITIC
Private Equity Funds Management, Coatue Management, Didi Chuxing, DST Global, GSR
Ventures, Haofeng Group, Hony Capital, Junli Capital, Macrolink Group, Matrix Partners
China, Shunwei Capital Partners, Tianhe Capital, Vision+, Will Hunting Capital, Xiaomi Inc.,
ZhenFund
Mobike Ltd. Oct-15
BAI Fund, BOCOM International Asset Management, Ctrip/Qunar, Farallon Capital
Management, Foxconn Technology Group, Hanting Hotels, Hillhouse Capital Management,
ICBC International, Joy Capital, Line Corporation, Panda Capital, Qiming Venture Partners,
Qualcomm, Sequoia Capital, Sinovation Ventures, Temasek Holdings, Tencent, TPG, Vertex
Ventures China, Warburg Pincus, Yung Park Capital
iQiyi.com Inc.* Feb-10
Baidu, Boyu Capital, Hillhouse Capital Management, IDG Capital, Providence Equity
Partners, Sequoia Capital, Shunwei Capital Partners, Xiaomi Ventures
Mercari, Inc.* Jul-13
Development Bank of Japan, East Ventures, Global Brain Corporation, Globis Capital
Partners, GMO VenturePartners, ITOCHU Technology Ventures, Mitsui & Co., Sumitomo
Mitsui Trust Bank, United, Inc., World Innovation Lab (WiL)
Ping An Health Cloud Co., Ltd.* May-16 IDG Capital, SB Investment Advisers, SBI Holdings
eHi Auto Services Limited Mar-08
CDH Investments, China CITIC Bank, China Development Bank Capital, China Merchants
Bank, CTBC Bank, Ctrip.com International, Ltd., DCM, Deutsche Bank, East West Bank,
Enterprise Holdings, Goldman Sachs Merchant Banking Division, Ignition Venture
Partners, JAFCO Investment (Asia Pacific), New Access Capital, Qiming Venture Partners,
Shanghai Pudong Development Bank
Tantan Culture Development
(Beijing) Co., Ltd.
Jan-15
58.com, Alibaba Group, BAI Fund, DCM, DST Global, Genesis Capital, Gothic Corporation,
GX Capital, Kleiner Perkins Caufield & Byers, LB Investment, Matrix Partners China, Momo
Inc., SAIF Partners, Sequoia Capital, Tenzing, Tiger Global Management, Vision Plus
Capital, YF Capital, YY, Zhongwei Capital
Bilibili Group* May-14 Ourpalm Games, Qiming Venture Partners
*Denotes a partial exit.

39|
Total Known
Funding (mn) Exit Type Exit Date Acquiror (Exit) Exit Value (mn) Industry Location
6,454 USD Trade Sale May-18 Walmart 16,000 USD Internet India
2,457 USD IPO Jun-18 - 4,720 USD Retail China
2,433 USD Trade Sale Jan-18 Alibaba Group 3,000 USD Telecoms China
1,980 USD Trade Sale Apr-18 Meituan-Dianping 2,700 USD Telecoms China
1,890 USD IPO Mar-18 - 2,250 USD Telecoms China
113 USD IPO Jun-18 - 130,500 JPY Telecoms Japan
900 USD IPO Apr-18 - 8,770 HKD Telecoms China
487 USD Sale to GP Apr-18
Baring Private Equity Asia,
Crawford Capital, MBK
Partners, Redstone Capital
938 USD Industrials China
120 USD Trade Sale Feb-18 Momo Inc. 601 USD Telecoms China
22 USD IPO Mar-18 - 483 USD Internet China
Source: Preqin Pro

Fig. 29: Venture Capital Deals* in Greater China,
2007 - 2018 YTD (As at July 2018)
0
10
20
30
40
50
60
70
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018YTD
No. of Deals Aggregate Deal Value ($bn)
No.ofDeals
AggregateDealValue($bn)
Fig. 30: Venture Capital Deals* in Northeast Asia,
2007 - 2018 YTD (As at July 2018)
0.0
0.5
1.0
1.5
2.0
2.5
0
50
100
150
200
250
300
350
400
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018YTD
No.ofDeals
Fig. 31: Venture Capital Deals* in ASEAN,
2007 - 2018 YTD (As at July 2018)
0
1
2
3
4
5
6
7
0
100
200
300
400
500
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018YTD
No.ofDeals
Fig. 32: Venture Capital Deals* in South Asia,
2007 - 2018 YTD (As at July 2018)
0
2
4
6
8
10
12
0
200
400
600
800
1,000
1,200
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018YTD
No.ofDeals
Fig. 28: Venture Capital Deals* in Asia, 2007 - 2018 YTD (As at July 2018)
0
20
40
60
80
100
0
1,000
2,000
3,000
4,000
5,000
6,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 YTD
Greater China Northeast Asia ASEAN South Asia Aggregate Deal Value ($bn)
No.ofDeals
Source: Preqin Pro
Source: Preqin ProSource: Preqin Pro

41|
Fig. 34: Venture Capital Exits in Greater China,
2007 - 2018 YTD (As at July 2018)
0
10
20
30
40
50
0
50
100
150
200
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018YTD
No. of Exits Aggregate Exit Value ($bn)
No.ofExits
AggregateExitValue($bn)
Fig. 33: Venture Capital Exits in Asia, 2007 - 2018 YTD (As at July 2018)
0
10
20
30
40
50
0
50
100
150
200
250
300
350
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 YTD
Greater China Northeast Asia ASEAN South Asia Aggregate Exit Value ($bn)
No.ofExits
Fig. 35: Venture Capital Exits in Northeast Asia,
2007 - 2018 YTD (As at July 2018)
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
0
5
10
15
20
25
30
35
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018YTD
No.ofExits
Fig. 36: Venture Capital Exits in ASEAN, 2007 - 2018 YTD
(As at July 2018)
0.0
0.2
0.4
0.6
0.8
1.0
1.2
0
5
10
15
20
25
30
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018YTD
No.ofExits
Fig. 37: Venture Capital Exits in South Asia,
2007 - 2018 YTD (As at July 2018)
0
5
10
15
20
0
20
40
60
80
100
120
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018YTD
No.ofExits
Source: Preqin Pro

INVESTORS
Fig. 39: Asia-Based Venture Capital Investors by Type
31%
12%
12%
8%
7%
7%
5%
4%
4%
3%
2%
4%
Corporate Investor
Investment Company
Bank/Investment Bank
Family Oﬃce
Government Agency
Insurance Company
Private Equity Fund of
Funds Manager
Asset Manager
Wealth Manager
Public Pension Fund
Private Sector Pension
Fund
Other
Fig. 40: ASEAN-, China- and India-Based Venture Capital
Investors by Type
30%
17%
10%
7%
6%
6%
6%
6%
8%
4%
Corporate Investor
Investment Company
Government Agency
Insurance Company
Bank
Wealth Manager
Private Equity Fund of
Funds Manager
Asset Manager
Family Oﬃce
Other
Fig. 41: Global Venture Capital Investors by Location
52%
11%
5% 4% 4% 3% 2% 2% 2% 2%
0%
10%
20%
30%
40%
50%
60%
US China Japan South Korea UK India Australia Switzerland Germany Canada
ProportionofInvestors
Fig. 38: Global Investors Seeking Asia-Focused Venture Capital Funds in the Next 12 Months by Investor Location
53%
15%
28%
5%
North America Asia
Europe
Rest of World
Source: Preqin Pro
Source: Preqin Pro
Investor Location

43|
Fig. 43: Asia- vs. North America & Europe-Based Venture
Capital Investors by AUM
16%
34%10%
12%32%
35%
20%
13%10%
3%12%
4%
0%
20%
40%
60%
80%
100%
Asia North America &
Europe
$100bn or More
$50-99bn
$10-49bn
$1-9.9bn
$500-999mn
Less than $500mn
Fig. 44: Asia- vs. China & India-Based Venture Capital
Investors by AUM
16% 19%
10%
13%
32%
37%
20%
18%
10%
6%
12% 7%
0%
20%
40%
60%
80%
100%
Asia China & India
$100bn or More
$50-99bn
$10-49bn
$1-9.9bn
$500-999mn
Less than $500mn
Fig. 42: Number of Asia-Based Venture Capital Investors over Time, 2013 - 2018
803
638576553
403368
Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Jun-18
Source: Preqin Pro
Investor Location Investor Location
ABOUT VERTEX VENTURES
Vertex Ventures is a global network of operator-investors who manage portfolios in the U.S., China, Israel, India
and Southeast Asia.
Vertex teams combine firsthand experience in transformational technologies; on-the-ground knowledge in the
world’s major innovation centers; and global context, connections and customers.
For more information on Vertex and our publications, please feel free to contact us at
partnerships@vertexholdings.com.

info@preqin.com
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