Square Peg Capital, one of Australia’s largest venture capital firms with assets under management of around US$3 billion, is digging deeper into Southeast Asia. The company is currently raising $550 million in new funding, and if its recent investment history is any indication, a good portion of that will be invested in Southeast Asian startups.

Tushar Roy, a partner at Square Capital, told TechCrunch that Southeast Asia is the firm’s fastest-growing geographic footprint (it’s also known for its investments in Israel). Half of the company’s latest $275 million fund, called Fund 3, was invested in Southeast Asia. Across all of its funds, Square Peg has now invested a total of around $250 million in Southeast Asia. It now has 18 companies in its portfolio from the region.

Those that have been made public are: Cialfo; Busted; DoctorAnywhere; EndAccel; Kaodim; Neuron; Endlessly ; Pluang; PropertyGuru; StashAway; Timo; and we go.

The new $550 million in funding, which Roy said is expected to close in the next quarter, will be split across two funds. One is a seed venture capital fund that will invest in Series B stage tech companies in Southeast Asia, Australia and Israel. The second, called Opportunities Fund 2, will be for subsequent follow-on investments in Square Peg’s top performing companies from its previous funds.

Over the company’s history, it has deployed $900 million and has a net IRR of 37%.

Square Peg’s first investment in Southeast Asia was about eight years ago, in WeGo. Since then, his interest in the region has increased considerably, especially in the last two years.

“I joined Square Peg seven years ago and almost from day one I focused on the Southeast Asia region,” says Roy. “The first five years, we went from the to a curiosity for us, basically looking deeper into the region to now double down, and that’s a key driver of our business strategy.” In 2020, as COVID ramped up, he moved to Singapore to establish Square Peg’s office.

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The pandemic accelerated investment in the region as deals were made on Zoom, opening it up to investors without traveling. “It’s really during the period of COVID 2020, 2021 that you’ve seen a massive acceleration in the interest of some international funds in this region, as more and more international funds set up offices in the region”, Piruze Sabuncu, partner and fellow Square member said Peg’s office in Singapore.

COVID and remote work have also opened up new workers to help businesses grow. For example, Indonesian companies have started working with employees in Vietnam, Singapore or India. “It really brought in the right level of talent to take the next step as well,” Sabuncu said.

Regarding the slowdown in funding in the first quarter, Roy said, “I think founders’ expectations for valuations are a bit more subdued than they were at the end of last year,” but there are still a small number of companies “that everyone wants to invest in and so the valuations hold up, they keep going up in those cases.

Upcoming Square Peg funds will focus on Software as a Service, Consumer Internet, Fintech, Healthcare, Education and the Future of Work, along with an increasing focus on Web3 or Web3 business models. crypto-enabled.

Roy said Square Peg wants to work with founders for 5-10 years or more to help them build “iconic businesses.”

“You might see many funds that have 30, 40, 50 investments. In our funds, it is much more common to have between 15 and 20 and that in three geographies,” Roy said. “It leads to a much more concentrated portfolio, not only in terms of capital, but also in terms of relationships. We really invest a lot of energy on a smaller group of people.