Our investment thesis
Digital transformation is impacting every economic sector across the globe. It enables the creation of new companies that recalibrate established systems and scale rapidly across borders. Cento Ventures invests in carefully chosen startups in Southeast Asia, prioritising industries we believe are currently most susceptible to digital transformation.
In doing so, we are building a new playbook for venture capital – one that is highly applicable to smaller emerging markets. We turn industry insights into investable opportunities, widen domestic ambitions into regional ones, and augment the skills of entrepreneurs we partner with.
Our investment thesis is guided by these three principles:
Sectors ready for digital transformation
We believe that there is a great opportunity for technology to solve some of the inefficiencies present in emerging markets. However, technology alone does not digitise industries. Most of our investments apply innovative business models to industries that are set in their ways, using technology as an enabler. Our goal as an investor is to develop a sophisticated understanding of the industry verticals we invest in. We tend to meet all the teams that are pursuing a variation of a business idea and when we find the right team with the right technology and business model, approach them with an informed point of view.
Early stage, but with proof points
Cento Ventures aims to be the first institutional investor in most of our deals. We believe this helps us establish a solid relationship with the founder, and influence the strategic direction of the company. Our investments are most frequently at Series A and we usually lead the round. We maintain a realistic approach to investment and exit valuations, one that is driven by data we gather on venture capital deals in Southeast Asia.
We only invest once a company can show that a market exists for its product and that it is ready to use the extra capital to scale. Proof points come in many forms and vary by business. One ‘rule of thumb’ which has served us well is when a company can show past revenues that grow consistently each month and can explain how future growth is predictable.
Expansion to multiple countries
Cento Ventures seeks to help our founders build large digital companies that are leaders in their industry or category. In a fragmented region like Southeast Asia, operating across multiple countries is almost inevitable. We look for companies that have certain advantages when doing this. Our preference is for business models that are light on physical assets since they tend to be able to scale internationally more quickly.
We look for founding teams that share this ambition and focus our support on making their expansion easier. We have a suspicion that great companies born in one emerging market have an opportunity to replicate their success across many others. Each company’s growth path is unique, but most of our investments initially focus within ASEAN. Some of our portfolio companies have expanded as far afield as the Middle East, Africa and Latin America.
Some of the key risks to young companies stem from the complexity of expanding to new countries – building talent and upgrading operations; accessing necessary capital; and developing a strong ‘airgame’. We help our founders with each of those things. Cento Ventures has a long track record working with some of Southeast Asia’s most successful startups, and their founders will confirm that the support they get from Cento Ventures is highly valuable. We believe that close involvement with our portfolio companies drives better investment outcomes, and are constantly building and refining our capabilities.
Cento Ventures is convinced that the opportunity exists for Southeast Asian entrepreneurs to build transformational digital companies. We also appreciate that founders have options when choosing who to partner with and that picking the right investor is not always easy. We are transparent about our preferences and look forward to working with startup teams where we share a common vision.
In market value
Investors in the company had to fulfil three basic criteria - understand the business, trust in the team running it, and be able to help the company grow. It is very easy to judge whether a potential investor meets these criteria based on the questions they ask about the business and the terms they request
Siew Yuen Tuck, Jirnexu
Cento was my first institutional investor. They were forgiving and helpful throughout Series A. Cento has strong understanding and knowledge about Southeast Asia and helps us in matters important to us such as Singapore's ecosystem, financing, legal machinery etc.
Aung Kyaw Moe, 2C2P
Cento has been a strong partner to Ctrl/Shift’s leadership team. They are an entrepreneur-friendly VC team who is able to help a leadership team break down complex strategic and operating issues into smaller 'bite-size' tactics that can be addressed in a straightforward manner. Their understanding of the execution elements in the digital landscape - including ad-tech, big data, payments, etc. - is superb
Reza Behnam, Ctrl/Shift
Frequently asked questions
What does Cento Ventures invest in?
We specialise by stage and geography. We are interested in meeting entrepreneurs from Southeast Asia looking for a Series A investor. Companies we invest in have the following characteristics:
- At least 1-2 years operating experience in Southeast Asia’s emerging markets;
- Uses technology to transform an existing industry and has a business model that is defensible against global competition;
- Has achieved product-market fit, and is generating repeatable, real revenue from its customers (we typically look out for >US$50K monthly net revenue as a sign of this);
- Is ready to take in US$1-2M to scale their business development, marketing, operations, or product/technology processes, and in due course expand to 1 or 2 other markets in the region.
We do like to develop a strong relationship with entrepreneurs before we are ready to invest, so feel free to get in touch with us; but please be aware that we may not be able to invest or engage immediately.
Can you sign an NDA?
We do not sign NDAs as a general rule. There is a good deal of discussion on the internet about why VCs tend not to sign NDAs, such as here. In summary, we look at many deals, some of which overlap – so it would be impossibly hard to have NDAs with each company we interacted with.
Cento Ventures will treat any information provided as confidential. A good way of verifying whether we behave responsibly is to investigate our reputation amongst the startup/investment community.
How do you help your investments?
We help founders accelerate the growth of their company. We have supported our founders with fundraising (e.g. raising later-stage financing); making strategic decisions; attracting great talent; expanding their operations to new countries; and building successful corporate partnerships.
What should I prepare to pitch my company?
It’s important to hear the story of how a company has evolved from the founding team members. It helps if you have relevant research on your market ready to share with us. We would like to see your company’s dashboards – to see how you track the financial and operational parts of your business and their growth. We ask that you are prepared with the definitions of said metrics and that you are honest about them. And finally, a business plan that shows us how you view your company’s development in the next 2-3 years – based on a set of assumptions that can be understood and explained
I'm seeking funding for a global enterprise software solution
We would potentially be interested in your product; however, if you intend to focus your business on global clients from the start, it would likely end up outside our geographical scope. We tend to look for companies that have a solution designed for a specific business case in Southeast Asia.
I'm seeking funding to develop a bricks-and-mortar business.
Cento typically invests in companies that are working to digitise a certain industry in Southeast Asia. If you look at our portfolio, you will see that they are all using technology to transform the business sectors they operate in.
I'm looking expand or relocate to Southeast Asia from an India / Australia / US / Europe / China base and domestic market.
Our expertise is in Southeast Asia and we focus on companies born and built in the emerging markets here. We believe that venture firms based in India / Australia / US / Europe / China would be better suited to support your startup.
I'm seeking US$10-20M Series A funding as it is a high-growth startup.
Our investments typically range from US$ 1M to US$2M which is normal for Series A rounds in the emerging markets of Southeast Asia. We consider larger Series B investments on an occasional basis.
I'm seeking US$100-300K seed funding.
Unfortunately, we are unable to fund pre-launch and pre-revenue companies. There is a community of smart angel investors and incubators that are able to support companies at this stage much better than we can. Specifically, we are focused on funding companies that have moved beyond the initial stage of product development, have gained some initial traction in their market and are considering expansion into another Southeast Asian country.