(Aug 21): Vulcan Capital, the investment house of late Microsoft Corp co-founder Paul Allen, has opened its first international office in Singapore. The multi-billion dollar fund intends to invest an initial US$100 million ($138.5 million) across Southeast Asian startups.
Vulcan Capital is an unusual addition to the city-state’s investment scene. It is part of Vulcan Inc., which oversees the billionaire’s holdings and supports his causes in everything from elephant conservation to artificial intelligence research. Chief Executive Officer Bill Hilf channeled his late boss’s methodical approach when Vulcan took almost three years to decide on Singapore as an Asian base.
Among Vulcan’s investments are Epic Games, creators of the online game Fortnite; Funko, a compant which creates pop culture products, and Sun Basket, a healthy cooking service that delivers to customers.
“Before we take a step into Singapore, we know everything about it; we know every university, we know every politician, the politician’s friends,” Hilf said, describing the cautious approach. “That’s because we hold Paul, his family name and the Vulcan reputation as a sterling brand.”
Allen died in 2018 and left a US$26.1 billion fortune behind, an estate that some experts predicted could take years to sort out. Hilf said the process of shifting Vulcan from a management company to an estate trust may take close to a decade to complete because of the complexity of businesses it oversees.
The Seattle-based company plans to use the nine-figure allocation in Singapore to back tech startups in Southeast Asia, making it one of the largest early-stage platforms in the region. The firm has hired financiers Tommy Teo and Minjie Yu as managing directors to lead the Singapore outfit. They will focus on seed, Series A and Series B investments in a broad range of areas including financial services, real estate technology and consumer internet, according to Teo. Their initial target markets will be Singapore, Indonesia and Vietnam.
“There is a great momentum right now,” said Teo, who formerly worked at Singapore-based private equity firm Northstar Group and Citigroup Inc among others. “It’s early enough for us to come in here in a meaningful way.”
Investors like Vulcan will help build the ecosystem in the region, said Wilton Chau, who teaches entrepreneurship, VC and PE in Hong Kong and Singapore. “International VCs will have the network, the expertise and the knowledge of different markets and they will be more attractive to ventures here,” he said.
Vulcan Capital takes an unusual approach to investing. Like any venture capital firm, it will aim to maximise returns from its investments. But the returns from those investments will go directly into Vulcan’s broad range of philanthropic projects, including climate change and wildlife conservation in Africa. The company is hoping its model will help attract young and mission-driven startup founders in the region.
Southeast Asia is drawing more attention from US investors. With deepening mobile penetration and an emergent middle class, the region has given birth to tech giants such as Grab, Gojek and Tokopedia in the past decade.
“There are some really powerful players here,’” Hilf said. With 5G and satellite telecommunications, “I think we are going to leapfrog in connectivity in a way that most people are not even predicting.”
