Announcing Iterative Fund 1
Announcements

Announcing Iterative Fund 1

By
Hsu Ken Ooi
December 8, 2021

18 months ago, we started Iterative and shared our belief in Southeast Asia as the next big opportunity. Since then, Iterative has invested $3.6M in 26 companies over 3 batches. Those companies have gone on to raise $45M in follow-on capital (here, here, here) from the likes of Monk's Hill, Wavemaker, Insight Partners and more.

Although we've been investing from the fund already. Today, we're happy to announce the close of our $10M Iterative Fund I to invest in early-stage startups in Southeast Asia. Fund I was led by Village Global and Cendana with participation from experienced investors and operators like Andrew Chen (Partner at a16z), Qasar Younis (Co-Founder of Applied Intuition and Former COO of Y-Combinator), Chi-Hua Chien (Managing Partner of Goodwater Capital), Tushar Garg (CEO of Flyhomes), Moses Lo (Co-Founder of Xendit), Kum Hong Siew (COO of Airbnb China) and more.

For most, this is their first investment in the region, an indicator of how far the ecosystem has come and excitement around where it's going.

Learnings

Our initial thesis was founders in Southeast Asia had all the right raw materials (intelligence, grit, etc.) but lacked the right mental frameworks (growth, fundraising, etc.) and support (empathy, safe space, etc.) to maximize their potential. After investing in 26 companies, working with 55 founders and talking to a thousands more, we believe in our thesis even more strongly now than when we started.

A few things we've learned about our initial thesis in the last 18 months.

Raw Materials

The materials are there but are often unrefined, making them harder to identify. For example, sometimes we meet founders who execute well but communicate the potential of their startup poorly. We also meet the reverse, founders who don't execute well but communicate the potential of their startup well. We're finding we like the first case more than the second. It's easier to help a founder communicate their startup well than a founder who doesn't execute well.

Mental Frameworks

Related to the above, often founders are weak in some area (growth, fundraising, etc.) because they don't have a framework for how to think about the set of problems related to that area. It normally takes a few weeks to teach but once founders get how to think about it, their startups tend to take off. It's like fixing a bug in the startup that kept it from growing fast.

Support

We knew this was important but even then we underestimated how important. The first Office Hours session we have with founders, often feels like a founder therapy session. For many, it's the first time they're able to be (1) honest about how they are doing, the problems they're facing and how overwhelmed they feel and (2) with someone who's been there and gotten to the other side. By creating this safe space, we've found founders perform better and are more resilient.

Step Function Growth

As a byproduct of learning the right mental frameworks and getting the right support, we’ve been consistently surprised by how quickly founders, and by extension their startups, grow. It’s not uncommon for a startup to grow slowly during the first few weeks of the program, while they’re digesting new ways to think about their startup, then suddenly grow 10x in the last few weeks before Demo Day.

What's Next?

Iterative's mission is to increase the GDP of Southeast Asia through entrepreneurship. To do that, we need to (1) make entrepreneurship more accessible to more people and (2) give founders the tools and support to be successful.

Our initial focus was to help a small number of early-stage founders be successful through our accelerator program. In the coming months, we'll be expanding to work with a larger set of founders. Initially through new programs and content targeted at even earlier founders or future founders. We'll also be looking into creating a program, similar to our existing accelerator program, focused on later stage companies.

In order to succeed in our mission, we believe Iterative needs to be helpful to founders at every stage. This is the first of many steps in that direction.

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