" class="no-js "lang="en-US"> Kaya Founders raises US$12 million in first close to support Philippine founders from start-up to scale-up
Friday, April 19, 2024

Kaya Founders raises US$12 million in first close to support Philippine founders from start-up to scale-up

Kaya Founders, a Philippines-based venture capital firm, is today announcing the first close at US$12 million in funding across two new funds to back the next generation of tech-enabled, industry-shaping start-ups across Southeast Asia. The funding round was anchored by the Gokongwei family with participation from institutional investors, family offices, high-net-worth individuals, and prominent entrepreneurs. This brings the total committed capital managed by the firm to $16.5 million.

Kaya Founders will be particularly focused on nurturing start-ups in its home country, the Philippines, which has been at the centre of attention for startup investing in the wider region. With a growing internet economy, a young and increasingly affluent population, a talented English-speaking population, the Philippines represents a significant opportunity.

Amidst the global slowdown in VC investment activity, Southeast Asia has remained a relatively bright spot. The Philippines, in particular, is shaping up to be one of the region’s rising stars, as an emerging middle class, increasing digitization driven by growing internet penetration and smartphone usage, and new consumer and business behaviours spurred by the pandemic sustain opportunities for value creation. Funding closed by Philippine start-ups exceeded a record US$1 billion for two years in a row between 2021 and 2022, in stark contrast to the drop in funding faced by markets such as the US and Europe last year. Furthermore, in terms of dry powder, at least US$4 billion in capital has been closed by local and regional funds over the past two years. This creates an ideal environment for Kaya as an early-stage investor, providing existing and future portfolio companies with ample opportunities to raise follow-on funding.

Founded in 2021 by veteran entrepreneurs and angel investors Paulo Campos (former CEO, ZALORA Philippines), Lisa Gokongwei-Cheng (President, Summit Media; Senior Vice President, JG Summit), and Constantin Robertz (CEO, Locad; former CEO, Entrego), Kaya Founders has established itself as the leading early-stage investor in the Philippines. To date, it has 31 companies in its portfolio, spanning eCommerce, digital health, fintech, B2B SaaS, agritech, proptech, and more. Some of its most notable portfolio companies include eCommerce enabler, Etaily, salary-on-demand start-up, Advance, and MSME point of sale (POS) app, Peddlr.

Managing General Partner Paulo Campos commented: “The burgeoning tech scene in the Philippines is reminiscent of previous growth narratives seen in markets such as India in the 2000s and Indonesia over the past decade. The surge in these countries’ technology sectors were propelled by a confluence of factors, including favourable demographics and supportive government policies, but arguably no other factor played a more pivotal role than the critical mass of tech talent. The same is proving to be true for the Philippines, as new breeds of founders begin to emerge. These founder profiles range from homegrown talent such as corporate executives and second generation tech talent from tech giants such as Grab, Lazada and ZALORA looking to strike it out on their own; as well as adopted Filipinos and Filipino returnees educated or trained abroad looking to make the Philippines their stronghold or make a difference in their motherland, respectively.”

Over the past two years, Kaya has primarily made its mark operating in the pre-seed stage, which it will continue to do through the upcoming Zero to One Fund. As its name suggests, this pre-seed vehicle will focus on accelerating ventures as early as Day 0, partnering with founders even before they go to market. Grounded in the belief that there remain a multitude of other problems to be solved even as start-ups abound, and the mission to convince more talented individuals to throw their hats into the entrepreneurial ring, the pre-seed fund will follow a two-pronged investment approach: making high conviction bets in existing teams in search of its first institutional backer as well as generating a pipeline of high quality business ideas and scouting strong founder profiles to partner with to bring them to life.

The One to Ten Fund, meanwhile, will invest in more mature opportunities ranging from Seed to Series A that show strong signs of product-market fit and a path to profitability. In addition to scouring for the best deals across the region, the larger fund will also back the top-performing companies from the Kaya Zero to One Fund—what is anticipated to be a robust source of dealflow—equipping them with the firepower to scale to new heights.

Kaya Founders anticipates their investments to range from $150k to $500k. While both will remain sector-agnostic, new investment themes, in addition to the aforementioned focus sectors, include D2C eCommerce, B2B marketplaces, future of work, climate tech, and generative AI.

“The Zero to One and One to Ten funds are the culmination of what each of us have individually been doing for years as some of the most active angel investors in the Philippines, and collectively over the course of the past year through our first joint investment vehicle. The early momentum we have seen with our first fund is what has given us confidence to take our partnership to the next level,” said Paulo Campos.

Indeed, Campos, Gokongwei and Robertz are among the most prolific angels in the country, having been some of the earliest backers in now formidable start-ups like the Good Glamm Group, Kumu, Dali, and Edamama.

Central to taking the partnership to the next level is further bolstering the leadership team. The first close announcement coincides with the appointment of Ray Alimurung, former CEO of Lazada Philippines and another notable entrepreneur-turned-angel investor, as General Partner of the Zero to One Fund.

After a successful local fundraising campaign, the Kaya team will embark on a global roadshow starting this month. The firm seeks to tap foreign pools of LP capital searching for more enticing investment opportunities in emerging markets.

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