Kuan Hsu, general partner at Singapore-based KK Fund, is also a judge and mentor on Season Three of Channel News Asia TV show Start-UP. Previously a principal at GREE Ventures, the Taiwan-born regional superstar has been jumping from markets in Southeast Asia to filming episodes of Start-UP, and at the same time sourcing deals.
Kuan and fellow general partner Koichi Saito, formerly a partner at Japanese venture capital firm IMJ Investment Partners, launched KK Fund earlier this year to focus on seed and pre-seed round startups in the region. Both Kuan and Saito are Singapore-based, but travel frequently throughout Southeast Asia, North Asia, and at times the U.S. KK Fund is in the midst of raising its second fund.
Start-UP is an elimination show akin to the Apprentice, but involving teams of local startups who face tailored challenges (such as crowdfunding) across 8-10 episodes. Three boot camps to weed out the final eight teams -- who then compete for the grand prize -- are currently ongoing in Myanmar, Jakarta, and Singapore. In all, there are close to 60 teams participating.
Resisting thesis creep in Southeast Asia
But this isn't an interview about a TV show.
"I believe that the [Southeast Asia] startup ecosystem is becoming more well-known by the mainstream folks," Kuan told VentureBeat in an interview. "People who used to think that this kind of technological potential only happens in Silicon Valley are starting to realize that it is happening over here."
KK Fund's investment thesis is to target early-stage startups looking for their first institutional money. As these are early-stage startups, their business models are often less concrete (or will likely face pivots) and so the quality of the teams counts for a lot more. Investments per round tend to be between $100,000 and $250,000.
In some cases, KK Fund has been so compelled by a founder or team that they have invested at the ideation stage, though that certainly doesn't represent the majority of their deals. For Kuan, one of the best indicators of a startup’s investability at this early stage is the entrepreneur's previous experience and record.
"Serial entrepreneurs are usually the better ones. Usually," he said. One of KK Fund's portfolio companies, Malaysia-based Kaodim, recently went on to raise a $4 million Series A in November. Startups with a consumer angle are still preferred by KK Fund. Besides Southeast Asia, Taiwan and Hong Kong are also markets that they are excited about.
"KK Fund’s investment thesis is not going to change. We don't want to have investment thesis creep, [which] happens to many funds... especially when [they] get flooded with new funding. Some of the funds may think, Oh man I can't deploy capital fast enough and I need to show results to the LPs. Should we consider X, Y, and Z investment thesis that we haven't done before? Changing the bets midway in the game -- that is dangerous," he added.
Before his days as a venture capitalist at GREE Ventures' Southeast Asia operations, Kuan started out as a management consultant at McKinsey & Co. in the U.S., and also did time as a Tech, Media and Telecom merger and acquisition investment banker at Goldman Sachs New York. He eventually moved to Singapore, where he worked in private equity for Temasek Holdings.
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