Reefknot Investments, a Singapore-based supply chain and logistics-focused fund, is planning to invest $50-100 million in early-stage startups globally.
The fund is backed by Temasek Holdings and global logistics firm Kuehne + Nagel, each contributing 50 per cent to the kitty.
According to Reefknot, it is the only known supply chain and logistics-focused venture fund in Asia, and one of the very few in the world. Other prominent supply chain and logistics-focused funds are mostly based in the US such as Prologis Ventures, the corporate venture capital arm of real estate logistics firm Prologis, and Miami-based PE firm Cambridge Capital.
In an interview with DEALSTREETASIA, Reefknot Investments managing director Marc Dragon said that the fund secured capital commitments last November and is now actively scouting for investments.
The fund targets Series A to B opportunities, with ticket sizes of $2-5 million. It will invest in about 6-8 startups and is looking across ASEAN, US (West Coast), London and elsewhere globally for opportunities.
“The logistics and supply chain industry has been undergoing a massive transformation since two years ago,” said Dragon. “We saw massive investments going into B2C businesses like mobile and payments but, all the while, B2B infrastructural capabilities have been lagging. This has led to major strains in the backend.”
Meanwhile, rising consumer demand across cities is also dramatically changing how distribution networks are structured and operate, many of which have barely evolved in recent years.
Southeast Asia, in particular, has seen an uptick in consumerism with e-commerce players like Tokopedia, Lazada and Shopee fuelling demand for all sorts of deliveries from women’s blouses to secondhand laptops.
Reefknot is looking for startups in three areas: artificial intelligence and deep tech startups in planning optimisation, data management, supply chain visibility or predictive capabilities; on-demand models in digital logistics; and trade finance.
Dragon said that there is plenty of room for Asian startups to adapt emerging US models for local applications.
“Various aspects like trucks, productivity, quality of service, and capacity percentage utilisation is completely different in the US versus many emerging markets in Asia. It may involve a combination of additional services, or people, or different models (asset-light or not), warehouses or transport. All these are tweaks that may be done on a local level,” said Dragon.
Dragon shared that deal flow is healthy, but the fund remains ‘very selective’ about investments. It has not begun deployment yet and has no deadline to deploy its capital.
Several Southeast Asian venture capital firms have expressed an interest to play in B2B sectors in recent months, after sensing a shift in a heavily capitalised ecosystem that has tended to favour B2C players in areas like e-commerce, ride-hailing and food delivery.
Singapore-based Wavemaker Partners allocates about 80 per cent of its portfolio in the B2B space, most of it in the seed stages. Qualgro Capital has expressed interest to invest in more B2B firms from its $100- million first fund.
Last year, Singapore-based Tin Men Capital launched its $100-million first fund, targeting pre-Series A deals in B2B tech in SEA.