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Mistletoe founder Taizo Son (L) with John Sharp (M) and Dan Hoogterp (R), partners at Hatcher+. Photo credit: Hatcher+.
Singapore-based venture capital investment platform Hatcher+ has closed a funding round worth US$3.5 million, it announced today. The round was led by Mistletoe, the firm owned by Taizo Son – billionaire tech investor and brother of SoftBank founder Masayoshi. A number of family offices from Southeast Asia, Japan, and Australia were among the other investors to participate.
Hatcher+ is a new project from the team behind Hatcher, a VC fund-cum-incubator that launched in Singapore back in 2015. Hatcher+ was spun out of its namesake in July this year, with Hatcher’s shareholders providing it with its first funding of US$367,000.
Like its forerunner, Hatcher+ will take a novel approach to investing, using artificial intelligence and machine-learning technology developed in-house to comb through masses of data and inform its investment decisions.
However, the new entity is adopting a somewhat different structure to Hatcher. While the latter was operated as an investment holding company under Singaporean law, the Hatcher+ vehicle – named H2 – is being structured as a fund, and will be run by a management company licensed by the Monetary Authority of Singapore.
Top decile worldwide
John Sharp, co-founder and partner at Hatcher+, tells Tech in Asia that the first Hatcher raised over US$20 million from 49 individual investors, which was pumped into 13 startups. “That entity has returned over 40 percent to the investor base in just over three years, which places it in the top decile of funds worldwide, in terms of realized returns,” he says.
The team is upping their game for the new Hatcher+ H2 Fund. They are intending to raise a total of US$125 million, which will be used to make co-investments into more than 1,000 early-stage companies over the next two years in partnership with leading accelerators, angel groups, and other investors from around the world.
This will make funding more achievable on the basis of merit for new entrepreneurs.
Sharp says that his company’s AI-assisted analysis of 300,000 early-stage investment events involving 745 VC firms and accelerators has helped shape the Hatcher+ investment strategy, which is built around the idea that there are significant untapped opportunities to make big bucks on undervalued startups.
“Hatcher+ has spent two years studying returns of early-stage investment rounds,” he explains. “We are convinced, assuming sufficient data availability, that many early rounds can be invested in at a significant discount to true value.”
Taizo Son onstage at Tech in Asia’s Startup Asia conference in Tokyo back in 2014. Photo credit: tech in Asia.
Son said in a statement that this data-driven approach helped convince him to bring Mistletoe on board. “Mistletoe is on a mission to improve the startup ecosystem and make the system that funds entrepreneurs more transparent,” he said. “We believe that the Hatcher+ data-driven system will help us achieve that goal and going forward, this will make funding more achievable on the basis of merit for new entrepreneurs.”
The US$3.5 million funding announced today is for Hatcher+ itself, rather than the upcoming H2 Fund. Sharp says Hatcher+ will use the investment to fund R&D activity around its investment management platform – which it already provides to several VC firms and other investors – and to expand its global co-investment network. The capital will also go towards hiring developers and researchers in Singapore and the US.
Converted from Singapore dollar. Rate: US$1 = S$1.36.
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