Target Information

1982 Ventures, co-founded by Scott Krivokopich and Herston Powers in September 2019, is a venture capital firm based in Singapore that focuses on early-stage fintech projects in Southeast Asia. The firm was established to fill the gap in the venture capital landscape, particularly for seed-stage fintech companies, which have substantial investment potential yet remain underappreciated compared to companies in the e-commerce sector.

The co-founders believe that Southeast Asia's fintech landscape is not saturated, presenting numerous opportunities for growth. For instance, as of 2019, Indonesia's e-commerce sector reached $21 billion, yet a significant portion of its transactions was still conducted in cash. Furthermore, many urban residents in Southeast Asia, particularly the younger population, lack access to banking services, highlighting an untapped market for fintech innovations.

Industry Overview in Southeast Asia

The fintech industry in Southeast Asia has seen remarkable growth in recent years but faces distinct challenges across different markets. Countries like Indonesia experience a shortage of skilled fintech professionals, leading many firms to rely on outsourcing talent from neighboring countries such as Vietnam and India. Nevertheless, the emergence of local unicorns like Gojek and Tokopedia is beginning to change this dynamic as they foster local talent and entrepreneurship.

While Indonesia has historically attracted significant venture capital, markets like the Philippines and Vietnam are now receiving increased attention due to their burgeoning fintech demands. A substantial young population in these countries has not been adequately served by traditional banking systems, creating opportunities for innovative fintech solutions. Investors in the Philippines and Vietnam are growing increasingly active, aiming to nurture local unicorns and capitalize on the potential these markets offer.

The payment sector within fintech has been particularly attractive to capital over recent years, with companies aggressively pursuing market share through substantial funding and consumer incentives. However, the current economic climate has brought about a more rational approach to investment. Opportunities still exist, especially in streamlining payment processes in countries like Indonesia, where many businesses continue to rely on traditional banking methods.

As the fintech market evolves, the insurance sector remains largely underdeveloped. While insurance penetration is low, there is significant room for growth, especially as companies begin to invest more in technology and innovative business models. Startups have already started to disrupt traditional practices by creating user-friendly product designs and meeting policyholder demands more effectively.

Rationale Behind the Deal

1982 Ventures aims to invest in 40 to 50 fintech companies within the year, allocating $100,000 to $500,000 per transaction. The firm emphasizes scalability and sustainability in its investments, focusing on startups that not only drive impact but also have the potential for superior investment returns. The founders believe that by nurturing seed-stage fintech companies, they can support ecosystems that foster innovation and entrepreneurship.

In making investment decisions, 1982 Ventures evaluates the vision and resilience of founders, prioritizing partnerships that will support them in navigating challenges. By centering their investments around companies with sound business models and ethical practices, the firm seeks to mitigate risks while maximizing growth potential.

Information About the Investor

Scott Krivokopich is a co-founder and managing partner at 1982 Ventures. Before establishing the firm, he served as the investment director at tryb Group, another Singapore-based venture capital firm focused on the Southeast Asian fintech landscape. He has a background in consulting with a global accounting firm, where he held the position of national manager for China.

Herston Powers, co-founder of 1982 Ventures, also brings extensive experience and industry insights to the firm. Together, they strive to create meaningful investment opportunities that enhance the fintech ecosystem in Southeast Asia, aligning their expertise with the substantial growth potential of the region's startup landscape.

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The entrance of 1982 Ventures into the Southeast Asian fintech arena appears timely and strategic, particularly as seed-stage companies remain underfunded amidst a growing demand for innovative financial solutions. The firm’s focus on sustainable business practices and scalability positions it as a valuable investor in a flourishing industry. However, their focus on early-stage investments can be a double-edged sword, given that many startups may struggle to gain traction in a competitive market.

The founders' experience in the fintech sector provides a solid foundation for identifying promising opportunities and cultivating relationships with emerging startups. However, the volatility in the market during uncertain times, such as the recent pandemic, raises questions about the risk exposure associated with investing in early-stage fintech ventures.

In conclusion, while the investment strategy of 1982 Ventures is ambitious and well-founded, the inherent risks of supporting early-stage companies in an evolving landscape must be carefully managed. If the firm successfully navigates the potential pitfalls and aligns with resilient entrepreneurs, it could emerge as a significant player in Southeast Asia’s fintech future.

Ultimately, 1982 Ventures has positioned itself to make a considerable impact in the fintech sector in Southeast Asia, but success will largely depend on its ability to adapt and respond to market dynamics while identifying projects that align with its investment philosophy.

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