Digital Horizon charts new vistas in Southeast Asia

London-based investor Digital Horizon plans to allocate more of its investment resources to Southeast Asia following the launch of its second fundraise.

Digital Horizon announced its second fund earlier this month with a target of $200 million. Its first fund, launched in 2019, has returned 40 percent to investors through a portfolio that includes such investments as e-commerce company Klarna, workplace productivity platform Monday.com and API software provider Ably, according to the firm.

Alan Vaksman, founder and managing partner at Digital Horizon, said the success of its first fund allowed Digital Horizon to look at where it could expand its reach from Europe and the US.

“We tried a little bit with Asia [in the first fund], but we didn’t focus on that, so we’ll have a sizeable allocation in Southeast Asia for this second fund,” Vaksman said.

He added that the venture firm has already made a key hire in that expansion, including a new partner with a background in working with Southeast Asian firms. The new partner worked in Barclays in London before joining Digital Horizon.

Southeast Asia, a region of 11 countries including Singapore, Vietnam, the Philippines, Malaysia and Indonesia, has begun attracting many investors thanks to a booming $1 trillion tech economy. Venture Capital Journal reported that Singapore-based Monk’s Hill Ventures launched a scout’s program in another sign of the market’s growing maturity.

Digital Horizon sees proven business models, such as mobile delivery and digital banking, that have worked in more established regions of the US and Europe and are poised to take off in Southeast Asia. Vaksman noted that the area is very much ripe for disruption.

“We believe Southeast Asia is going to catch up extremely fast to everybody,” Vaksman said. “The speed of adoption of the digital business model in this economy is huge.”

Even with the additional focus on Asia, Digital Horizon will continue to invest in start-ups in the US, Europe and Israel.

Multi-stage investor Digital Horizon works with start-ups within the fintech and corporate software sectors. Its portfolio of 20 companies has an international bent. Aside from Klarna, Monday.com and Ably, investments include digital insurance provider Lemonade and payments firm Bolt.

Aside from focusing more attention on Southeast Asia, Digital Horizon also wants to increase the number of immigrant founders in its portfolio. The firm said 70 percent of its holdings were founded by someone outside of their country of origin.

Vaksman said this directive applies not just to Europe and the US but also to Asia. He shared that one of the firm’s more recent investments was in a Vietnamese company led by an expat. They believe the best founders are those who offer a unique perspective on solving many issues.