Angel investors join forces with sights on Southeast Asia, India
By Digital News Asia December 8, 2016
- Seed venture firm with focus on early-stage investments ranging from S$350,000 to S$1 million
- Boasts a new ‘hands-on engagement’ approach to early-stage investing
TWO experienced angel investors – Michael Blakey and William Klippgen – have joined forces to set up a new S$10 million (US$7.1 million) seed venture firm in Singapore.
Cocoon Capital will focus on early-stage investments ranging from S$350,000 (US$247,131) to S$1 million (US$706,090). It boasts a new approach to early-stage investing to fill the pre-series A funding gap in Southeast Asia and India, thanks to its network of close to 30 investors from around the world.
Blakey and Klippgen have a combined 30 years of experience in investing and supporting startups in both Southeast Asia and Europe.
They have both achieved multiple successful exits owing to their ‘hands-on engagement model’ and currently have companies-to-watch like Nugit, Tickled Media and PropertyGuru in their portfolio.
After co-investing in a number of deals together, Blakey and Klippgen have now set up Cocoon Capital applying the same model – one that has yielded a 75% success rate with financial returns comparable to those of the top quartile of Silicon Valley-based venture funds.
Said Blakey: “We created Cocoon Capital to turn local startups into successful global businesses and Founders into CEOs. We will achieve this by providing business support first, then financing – not the other way around.”
Blakey and Klippgen deliberately chose to stay away from the model of a traditional fund and plan to invest in no more than five founding teams and their companies per year. This will leave them with enough time and resources to help founders and their teams build their businesses through intensive business support and mentorship.
Added Klippgen: “We don’t only coach founders on how to build solid business models, but on how to become good managers and build strong teams, too. These are often overlooked aspects of building a successful company. We also want to proactively help Founders avoid common early-stage pitfalls instead of troubleshooting afterwards.”
Founding teams can tap into Cocoon Capital’s investor and mentor network for local market knowledge and sector expertise even before an investment is made. This, in turn, enables a seamless transition to post-investment support where founders can also access the network for potential customers, talent and even local investors for subsequent rounds of funding post-internationalisation.
Founding teams under Blakey and Klippgen’s wings can look forward to having access to some of the most experienced and successful investors in their joint global network – a network built over 15 years, stretching from the USA to Russia and the rest of Asia.
This includes 28 family offices and active angel investors such as Magnus Grimeland, co-founder of Zalora; Karan Thakral, chairman of the Singapore Angel Network; and Salman Niaz, Portfolio Manager at Goldman Sachs Asset Management.
Given their experience and past successes, Blakey and Klippgen are seeking to support B2B or B2B2C digital businesses with a main focus on SaaS, e-commerce and fintech.
“It’s what we know best,” said Klippgen, “and not many venture funds currently support companies in these sectors at an early stage.”
The sector of a company is not the main driver behind a decision to support a young startup, insist the Founders of Cocoon Capital. Instead, it is the ability and drive of the founding team.
“We’re on the lookout for extraordinary founders,” said Blakey. “We’re looking for anyone who’s enough of a visionary to be able to make the tough decisions, who’s confident without being arrogant and who can show us that he or she can achieve a lot with very little or nothing.”
Cocoon Capital has no plans to rest on its laurels and wait for such ‘extraordinary founders’ to show up at its door. Instead, it actively seeks out high potential founders at the accelerator programmes and other startup platforms both Blakey and Klippgen are actively involved in as mentors and advisors.
Founders are then invited to apply for support through an efficient, structured process. “No application is ignored,” declare Blakey and Klippgen.
Blakey and Klippgen met each other as mentors at technology startup accelerator JFDI Asia in Singapore in 2013. Over a span of 24 months afterwards, the two co-invested in four companies.
Said Klippgen: “We have complementary skills and experience and hold a similar view on the amount of work and time it really takes to build a company – very few investors in the region have a similar level of knowledge, experience and understanding. Most importantly perhaps, we really just enjoy working together and have a huge amount of trust in each other.” there.”
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