Singapore-based family offices turning to tech ventures

The valuations of listed technology stocks and expectations of further market corrections are making technology-focused venture capital (VC) investments more appealing to some family offices.

Singapore-based family offices Kamet Capital Partners and AJ Capital, for instance, are investing in technology start-ups targeting the education, healthcare and insurance sectors, among others.

‘Given where we are in the equity market cycle, I see slightly further room for correction in listed equities going forward in technology, with more and more capital chasing VC and PE [private equity] type deals going forward in fintech,’ said Siraj Ali, COO at AJ Capital.

‘We don’t see that trend slowing down in 2019,’ he told Citywire Asia.

AJ Capital has made a direct investment in Symbo, an insurance technology firm. Symbo obtained an insurance brokerage licence in Singapore last week, allowing it to operate a digital insurance platform in the city-state.

Ali said that in fintech VC investing, certain concepts and cutting edge business models are still at a very nascent stage. ‘However, having the ability to allocate relatively smaller amounts of capital to these private ventures allows us to participate in the next wave of financial innovation with great upside in sectors such as payment services, insurance and banking,’ he added.

In 2018, global investments in fintech ventures more than doubled to US$55.3 billion, led by a surge in funding in China, Accenture research showed. China accounted for US$25.5 billion, with more than half of the investments coming from the US$14 billion funding round of Ant Financial, best known for its Alipay mobile payments service.

It is precisely because the fintech space is dominated by Ant Financial and Goldman Sachs-owned Marcus that Kamet Capital is not investing in it, said CEO and CIO Kerry Goh.

‘We have seen that other technology like e-commerce and ride hailing apps are also very well invested. Growth is expected to come off generally,’ he added.

Instead, Goh is looking for opportunities in education, healthcare and human resources technology.

Last year, Kamet Capital led a funding round of SGD 5.6 million (US$4.1 million) for Doctor Anywhere. The Singapore-based telehealth start-up offers a suite of medical services, including online consultations, physical hybrid clinics, mobile health screening and an online marketplace for prescription drugs.

Kamet Capital has also invested in China-based VIPKid, an online classroom where more than 500,000 Chinese students learn English from 65,000 teachers who are mostly American.

In 2018, family offices in Asia poured millions into new technologies and technology-backed companies such as StashAway, Bambu and Klook.

By Ishika Mookerjee, 11 March 2019

Further reading from Kamet capital