Building the Future: Vynn Capital’s Victor Chua’s Vision for Southeast Asian Startups

Through his leadership, he has not only guided portfolio companies like Carsome to success but has also successfully lead the role of corporate venture capital in shaping the future of the Southeast Asian startup ecosystem. We are talking about Victor Chua, a prominent venture capitalist with experience in Southeast Asia’s investment space. 

Beginning his career in asset management advisory, Chua quickly transitioned into venture capital, holding key roles at MAVCAP and Gobi Partners before founding Vynn Capital. His focus has been on sectors like mobility and supply chain, where he has applied deep industry insights to drive successful investments. 

We recently conducted an interview with the esteemed investor. As AsiaTechDaily’s “Investor of the Month” for July, Chua shares his expertise and perspectives on the evolving role of venture capital in the region, offering a unique look into the future of startup funding and corporate partnerships.

For entrepreneurs, investors, and anyone interested in the evolving dynamics of venture capital, this interview offers valuable insights into the strategic partnership between VCs and startups, the future of mobility and supply chain sectors, and the crucial role of corporate venture capital in Southeast Asia. 

What were some of the key lessons you learned during your time at MAVCAP and Gobi Partners that you have brought into your work at Vynn Capital?

VC: Both firms were pivotal in forming my investment beliefs and etiquette. Given how nascent the venture industry was when I first started, you could say that I have seen some of the earlier growth of the industries in Southeast Asia. A few main takeaways:

1) It pays to specialize and go deep – the ability of a venture investor in articulating his or her thoughts and opinion, with sophistication, on a subject matter is an indication of how much value you can provide to your LPs and portfolio companies. Having an area of expertise can create the additional alpha as you are more likely to be able to support your investment portfolio.

2) It is important to have a broad view with attention to details – as a venture capitalist, one important thing we need to do is to connect the dots i.e. being able to see trends and understand how different mechanisms work or can be integrated. Managing a venture portfolio could also be a process of putting a big piece of the puzzle together.

3) It is always rule number one to be humble – despite how knowledgeable or smart you think you are, you will realize that you are always learning from founders who are smarter. The humility you possess will dictate how much more you can learn.

Vynn Capital has a strong focus on sectors like mobility and supply chain. What factors led you to concentrate on these industries, and how do you see them evolving in the next few years?

VC: Our investment focus is a result of two things – (1) our experience, observation and research through working with our portfolio companies like Carsome, Borong and others, as well as (2) our long-term view of the industry’s willingness to adapt to long-term changes. The mobility and supply chain industries have gone through many disruptions and changes; the largest conglomerates are becoming more open to working with startups, and the trend is irreversible. You don’t expect everyone to suddenly give up on electric vehicles and new energy to go back to fossil fuels!

In what ways do you think the relationship dynamics between VCs and startups have evolved over the years, and how do you see them changing in the future?

VC: The partnership between startups and VCs has become more strategic. What that means is that VCs have to demonstrate a better fit to what the startups aspire to achieve. It means that VCs can no longer just be a financial partner, but have to be able to make strategic efforts in supporting their startups. Startups have to understand what each VC can do in order to achieve the most out of any collaboration.

How did your experience with Carsome shape your understanding of the used car market in Southeast Asia, and what insights did you gain that you apply to other investments?

VC: Two key learnings from my investment into Carsome are (1) the importance of investing in a scalable business model that allows vertical expansion and (2) the best founders are the type that is willing to go down doing the dirty work. In the early days of the company, Carsome was mostly just a platform where used cars were traded. What we saw as an opportunity was the possibility of integrating with the rest of the used car industry, e.g., the ones who finance, manage, and eventually purchase the vehicles. The company eventually became a one-stop shop for the automotive industry because the team learned through being hands-on and open to collaboration.

What future opportunities do you see for Carsome, and how do you think the company is positioned to capitalize on them?

VC: Carsome, being the largest automotive ecosystem as it is now, will further expand into markets and industries where the automotive industry is still at its early stages of digitalisation. The company’s ability to adapt into different environments and also willingness to partner with incumbent players will allow the company to be a greater integral part of the markets.

How do you see the venture capital landscape in Southeast Asia evolving, particularly in terms of corporate and institutional LPs’ involvement?

VC: Venture capital is gradually becoming a mainstream asset class. Investors will allocate a higher percentage of their strategic asset allocation to venture capital as public markets become more volatile and short-term in nature. Venture as an asset class provides a longer return potential that is not as sensitive to short-term market movements. As such, I predict that more institutional LPs will allocate capital to GPs who are able to show a differentiated strategy. The same market volatility and industry evolution will also drive more corporates to take part as LPs. Corporations will take part as both LP and direct investors. Most corporations will be doing both and perhaps spend a bit more time learning how to be an effective direct investor through partnership with VCs. 

You mentioned that Southeast Asia needs more professional Corporate Venture Capital (CVCs). How do you envision the role of CVCs in stabilizing and growing the venture ecosystem in the region?

VC: I wouldn’t think that CVCs’ role is to stabilize the venture ecosystem. In fact, I think CVCs’ role is to make sure that the ecosystem is always vibrant and to be open to adopting new technologies and innovations. Vynn Capital is modeled to operate like a CVC by being a strategic investor who can provide industry-specific support to startups but still able to run as an independent financial investor that is not bogged down by existing business unit machineries that sometimes CVCs find themselves being split between what internal operating business units are looking for versus what is really helpful towards for the startups. In other words, managing conflict of interest and aligning strategic visions between startups and corporations is the main focus of most CVCs. To address this, CVCs will play a larger role in being able to loop in the right VCs to support their overall corporate strategy while being fair and independent enough to their portfolio companies.

You mentioned that Vynn Capital aims to create an ecosystem within its portfolio. Can you elaborate on how you facilitate collaboration and synergies between your portfolio companies?

VC: By being industry-focused and building a strategic external network of partnerships that provide value to our portfolio companies. Case in point: we work with Sime Darby Berhad, Marubeni Malaysia, and other corporations that are interested in the startup world.

With the focus on providing “VC as a service,” how does Vynn Capital educate and engage corporates in venture activities? What are the benefits you see from such collaborations?

VC: A few things we do for our corporate LPs: (1) Knowledge sharing, (2) framework building and (3) deal sharing. As a research-driven venture firm, we consistently share our observations and findings with our LPs. Our corporate LPs also engage us in formulating their CVC investment strategy and learning about the best practices for running a venture portfolio. Of course, we always explore potential co-investment with our LPs. As such, we are an effective deal-sourcing partner for corporate LPs who are interested in seeing more opportunities.

Victor Chua envisions a future where Vynn Capital plays an even bigger role in supporting high-quality startups across Southeast Asia. He is also focused on aiding corporations in launching and managing their own Corporate Venture Capitals (CVCs), thereby strengthening the venture capital ecosystem in the region. By supporting professional participation from corporations and maintaining a pipeline of exceptional startups, Chua aims to create a stronger and sustainable investment landscape.

As a parting note, Chua advises startup founders to approach fundraising with strategic intent, emphasizing that not every startup is a fit for every VC. At Vynn Capital, the focus remains on working with founders and startups where they can truly add value, ensuring that their investments are not just financially beneficial but also strategically sound.

As AsiaTechDaily’s “Investor of the Month,” Victor Chua’s journey and insights provide invaluable lessons for emerging entrepreneurs and investors. We invite you to join our upcoming Innovation Exchange Program, where Chua will delve deeper into his experiences, share his views on the future of venture capital, and engage in discussions on the industry’s evolving dynamics. Don’t miss this opportunity to learn from one of Southeast Asia’s leading venture capitalists.

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