Headline Asia Closes $145M Fund for Asia-Pacific Investments

Funding Landscape for Asian Startups

Recent economic instability and global political issues have made it increasingly challenging for startups in Asia to obtain funding. This difficulty extends to venture capital firms themselves, which are experiencing a slowdown in fund closures.

Current Market Conditions

The venture capital market is currently experiencing a period of contraction, characterized by elevated interest rates, reduced liquidity, and a more conservative outlook from Limited Partners (LPs). This assessment comes from Akio Tanaka, a partner at Headline Asia.

Headline Asia Fund V

Despite the challenging environment, Headline Asia has successfully closed its fifth fund, Headline Asia Fund V, raising $145 million. This fund will be utilized to invest in technology startups throughout the Asia-Pacific region.

Investment Focus

The fund’s investment strategy centers on supporting founders who are developing companies focused on digital transformation and international expansion. Key target markets include Japan, Taiwan, and Southeast Asia, with selective investments also planned for South Korea.

Headline typically invests in companies in the early stages – from seed funding through Series A – with investment amounts ranging from $1 million to $5 million. Areas of interest include e-commerce, logistics, fintech, intellectual property, and artificial intelligence.

Fund Backers

The investors in Headline Asia’s fifth fund represent a diverse group of both public and private organizations. These include the Japan Investment Corporation (JIC), the National Development Fund of Taiwan (NDF), Korea Venture Investment Corporation (KVIC), and SME Support Japan.

Portfolio Companies

The new fund has already made investments in 17 companies. These include Newmo, a Japanese taxi and ride-sharing service; Jenfi, a Singapore-based provider of revenue-based financing for digital businesses; and Pi-xcels, a startup offering NFC technology for digital receipts, operating from Tokyo and Singapore.

Investment Philosophy

While some investors in Southeast Asia are prioritizing safer, profit-generating investments, Headline is actively seeking opportunities that offer higher growth potential, even if they carry greater risk.

According to Tanaka, the greatest returns are still achievable through early-stage investments, particularly given the current market conditions where valuations for later-stage companies have decreased and liquidity is limited.

Opportunities in Japan

Headline is particularly optimistic about the potential within Japan. Historically, Japanese startups have largely concentrated on the domestic market.

Tanaka notes that many Japanese founders have found it relatively easy to launch initial public offerings (IPOs), albeit on a smaller scale. The firm is now focused on identifying Asian startups with global ambitions.

Global Network

Headline Asia is an integral part of the broader Headline global network, which also includes regional offices in the United States, Europe, and Latin America. The firm currently manages approximately $4 billion in assets.

Firm Overview

Established in 2008, Headline Asia has invested in over 100 startups and manages around $420 million in assets across its five funds. A team of 10 investment professionals operates from offices in Tokyo, Taipei, and Singapore.

Recent Fundraises in Asia

The successful closure of Headline’s latest fund follows other significant VC fundraises in the region.

• Antler closed a $72 million Southeast Asia fund in August.
• MindWorks Capital, based in Hong Kong, completed a $220 million Pan-Asia fund in October.
• Intudo, an Indonesian VC firm, secured $125 million across two funds in November, including $50 million dedicated to investments in natural resources and renewable energy.