Venture Capitalist to Set Sail for Overseas StartupsINVESTMENT: One-third of Wavemaker’s new fund to go to Southeast Asian firms. Monday, July 21, 2014
In announcing its third fund last week, a $45 million raise to focus on e-commerce and ad tech startups, Siemer Ventures acknowledged the importance of its hometown market and the growing competition for deals here.
The Santa Monica firm, which has rebranded as Wavemaker Partners, plans to expand its presence across the Pacific, allocating a third of the latest fund to Southeast Asian startups.
David Siemer, co-founder and managing partner, said stiff competition in high-interest startup regions, such as Silicon Valley and Los Angeles, has pushed the VC to look elsewhere. Its ventures in Silicon Valley have dropped from almost a third of all its investments to roughly 5 percent.
“A lot of companies out there in Southeast Asia, we’re the first VC they’ve ever met,” Siemer said.
Wavemaker Pacific, the company’s Singapore branch, also announced it would join the DFJ Global Network, which connects independent venture funds across the world.
Scott Lenet, co-founder and managing partner of the network’s L.A.-based American arm, said Wavemaker’s global investments would still help the local tech scene.
“When you look at the amount of capital here in Los Angeles, it’s still relatively small for the number of entrepreneurs we have,” he said. “The more money – the more specific relationships with different partners in the world – the better.”
One of the most active seed-stage investors in Southern California, Wavemaker has invested in more than 130 companies in the last 12 years, including tech studio Science Inc. and membership airline SurfAir. In 2011, the group closed a $28 million fund, a quarter of which went toward Southeast Asian businesses.
Part of Wavemaker’s strategy is to make smaller investments of up to $1 million in late seed or early stage rounds, typically co-investing rather than leading the investment.
“Our goal is not to necessarily find the next Twitter or Snapchat,” Siemer said. “We’re much more of a grind-it-out, blue-collar mentality. We’ve done a great job of having good returns overall than having one unicorn that carries everything.”
Alongside Wavemaker’s commitment to Asia, Siemer said the firm would continue to invest locally. Nearly half of its current funds are invested in L.A. companies.
“Los Angeles is still a great market,” he said. “A lot of companies that are here aren’t unicorns. They’re not companies that are going to be worth a huge multiple of revenue, but they’re still building great companies that are valuable.”