FILE PHOTO: View of the skyline in Singapore January 27, 2023. REUTERS/Caroline Chia/File Photo
Singapore-based multi-family office Kamet Capital has closed its first closed-end fund, Founders Fund I, at $70million, shared CEO and chief investment officer, Kerry Goh. This is slightly below its $100 million original target set in early 2022 when it started fundraising for the vehicle.
Most of the capital came from Kamet’s family office network comprising tech entrepreneurs who made their wealth in technology, consumer and health in mainland China. Several single-family offices with similar backgrounds also joined the fund, shared Goh in an interview with DealStreetAsia.
Kamet Capital launched the closed-ended fund to allow its network of high-net-worth clients to co-invest, and share deals and information on a single platform. The fund can conduct directs, co-directs and secondary deals and invests across the US, China, and Southeast Asia.
Since hitting the first close of Founders Fund I in May 2022, Kamet Capital has accelerated its deployments into secondaries. More than 70% of its allocation, so far, has been in direct secondaries in mid- to late-stage firms like Australia’s corporate training marketplace GO1 and Southeast Asian telehealth firm Doctor Anywhere.
Over 50% of Kamet’s deals have also been in the healthcare and healthtech space, where it continues to see value-driven opportunities. At the same time, Kamet has slowed its deployments into primary deals over the last two years due to high valuations in the market.
Kamet has slowed its deployments into primary deals due to high valuations.
“I don’t think (we’ve slowed primary deals) because we’re cautious. First of all, startup valuations didn’t come down (much) for all of 2022-23. Secondly, we also prefer category winners with a clear, groundbreaking business model showing a clear path to profitability,” explained Goh.
Such firms with solid fundamentals are currently commanding a price premium because they represent a small minority of investable deals in the market right now. At the same time, the still-elevated startup valuations signify that there’s still plenty of dry powder available in the market.
Goh predicts a grim market outlook for 2024-25.
“The key question is still interest rates. The rates will come down, but the question is how low, and when? The US needs to drive rates down, but unfortunately, geopolitics is making it difficult for them. If they were to kick the can down the road and do one rate cut this year…By this year, all those who raised equity in 2021 will die. Those who raised debt last year will start to feel the pressure next year…It’s going to be quite difficult,” said Goh.
At the same time, the universe of investable deals will continue to shrink, so investors will have to be highly selective, he added.
Kamet targets early- to late-stage opportunities in tech-enabled sectors like consumer and health. It also looks at artificial intelligence (AI) firms and believes there are opportunities for AI startups with an enterprise tool angle, leveraging AI to drive revenue, not cut costs.
Kamet has so far invested $6 million in Top View, a spinoff team from Alibaba that is positioning itself as the “Canva of short videos”, helping brands and influencers analyse and produce viral short video content on TikTok. The firm’s tech stack originated in China and has relocated its business to Singapore to help it fulfil its ambitions to take its product global.
Kamet Capital’s other portfolio companies include Singapore-based supply chain technology startup Tramés, big data company Advance.AI; logistics startups Flash Express and J&T Express; Singapore telehealth firm Doctor Anywhere and Chinese new retail company KK Group.
