Announcing Iterative Fund II

Announcing Iterative Fund II

Hsu Ken Ooi
November 29, 2022

Iterative has raised a $55M Fund II. Half will be applied to follow-on investments.

Since Iterative started in March 2020, we have raised $65M across two funds, invested in 65+ companies, 120+ founders and the total value of Iterative companies is now worth $1.2 billion.

Fund II was led by Cendana, K5 Global, Village Global, Goodwater Capital with participation from a large network of Silicon Valley founders and execs including Arash Ferdowsi (Dropbox), Achmad Zaky (Bukalapak), Andrew Chen (General partner a16z, Uber), Qasar Younis (Former COO YC, Applied Intuition), David Shim (Foursquare), Kum Hong Siew (Head of Airbnb Asia), Moses Lo (Founder, Xendit), and many more.

We would also like to thank all of the Iterative founders who are the reason we exist and give us the privilege of doing what we do. They bet on Iterative as much as we bet on them.

What We've Learned

If I were to boil down our many, many learnings over the last 2 and a half years, it would be the following 2 things.

First, we think most founders in Southeast Asia are undervalued. It’s easy to invest in founders that went to famous schools or worked at famous companies and there’s nothing wrong with doing that. However, I’d like to remind everyone that things like where you went to school, where you worked, etc. are just proxies for the thing that really matters. Is this founder formidable? It’s not an easy thing to assess, that’s why people use proxies, but if you can, you can invest in founders that others might overlook.

We think having been founders ourselves gives us a competitive advantage here and are happy to continue investing in founders others overlook.

Second, we now spend much more time thinking about the magnitude of the outcome if a startup is successful than the probability they are successful. If you’re familiar with Expected Valued, you will recognise these terms. It’s difficult to 10x the probability a startup will be successful and mathematically impossible to 100x. It is however relatively easy for the magnitude of the outcome if a startup is successful to be 100x or even 100,000x what it is today.

The startups that look like this are the long shots, the crazy ideas. They probably won’t work (most startups don’t) but if they do - those are the ideas we want to invest in.

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.

Although our mission remains the same, this fund gives Iterative more resources to provide more help to more founders.

  1. Larger Batches – We’ve always wanted to invest in more founders. With this fund, an internal team to support it and an exponential increase in applications, we can now do so.
  2. Invest in Community – Although the Iterative Community is already vibrant, mainly because of the people involved and the shared experiences of being a founder, we want to take a more active role in bringing our community together. That means starting each batch with having all founders meet in a specific city and having an annual event for all of our founders.
  3. Follow On Investments – We made a conscious decision in the first fund to not do follow on investments. Instead to use the capital to invest in more startups. Although that was the right decision for the first fund, we are now in a position to do both and our founders would like us too.
  4. Support Services – In addition to running the company, early stage founders also often are the HR, legal and finance departments. We want to build these services internally at Iterative so they can be used by our companies as needed.
  5. More Programs – We had 10x the number of startups sign up for our Fundraising Bootcamp than we were able to accommodate. Our upcoming Validation Program has had so many sign ups that we had to change the format to accommodate more people. These programs give us the opportunity to work more deeply with founders outside of the program. We’re excited to work with more of you.
  6. More Content – While programs give us the opportunity to work more deeply with founders, content is what reaches the most number of people. I’m consistently surprised by the number of people that send me emails asking about something they read, listened to or watched. There’s so much more we want to make widely accessible to everyone.

If we do these 6 things, we believe we will have made significant progress towards our goal. These are things we’ve always wanted to do but just like a startup, order of operations matter and we wanted to make sure we didn’t take on too much before we are ready.

We’re ready now.

Apply to Iterative

If you’re working on a startup, we would love to learn more about what you are working on. There’s a common misconception that we only invest in (1) very early stage companies or (2) companies with significant traction. In reality, we like investing in both and our program is designed to help startups with their specific problems. That’s why there are no classes or a curriculum. You book time with our partners, and they help you with your biggest problem.

You should apply.

Work at Iterative

If our mission resonates with you, we are hiring for a wide variety of positions here.

There’s also a number of positions we are thinking about but haven’t posted about. If you’re interested but don’t see a job that fits you, email me with who you are and what you would like to do.

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