Venture capital agency Sequoia remains to be “quite optimistic” about long-term prospects for start-ups, regardless of the current market volatility.
“This is a particularly challenging market for founders to get started,” Abheek Anand, managing director of Sequoia Southeast Asia, instructed CNBC’s “Squawk Box Asia” on Wednesday.
When requested concerning the agency’s outlook for Southeast Asia’s start-ups, Anand mentioned its early-stage investments this and subsequent 12 months are “going to be playing [in] where the markets will be 10 years from now.”
“Pretty much every metric on technology continues to grow and secularly grow in the long term.”
On Tuesday, Sequoia introduced it raised $2.85 billion throughout a set of funds centered on India and Southeast Asia. That consists of its first devoted fund for Southeast Asia, with a pool of $850 million.
“This fundraise, which comes at a time when markets are starting to cool after a very long bull run, signals our deep commitment to the region,” the agency mentioned.
Emerging tendencies in Southeast Asia
Despite the shaky short-term outlook, Anand mentioned founders in Southeast Asia nonetheless have “growing ambitions.”
“For example, you’re starting to see a lot of companies get started in Southeast Asia, but … serving regional and global market.”
He added that “a new generation of founders” can also be rising, as the primary technology of tech firms like GoTo and Grab have gone public.
“Their [executives] are now starting new companies and these are seasoned operators … They’re frankly, aiming higher than the companies that they came from,” Anand defined.
However, what’s going to change for brand new start-ups and founders could be their “access to capital” and therefore, short-term technique.
“This period of free capital or very cheap capital that resulted in certain design choices that the big companies got built on, that’s going to likely not be present in the next year,” he mentioned.
“Founders just have to be more sensible, more focused on fundamentals, more focused on durable and enduring business models.”
Focus on ‘sturdy company governance’
Anand mentioned that Sequoia’s focus as long-term traders is constructing “strong corporate governance.”
“I would characterize our market as sort of through little bit of its teenage years … lots of companies are getting created and we’re all working together to get to a place where the market is more mature,” he added.
This consists of constructing “enduring business models” along with the founder and others within the ecosystem.
“I think what we’re seeing is some of the teething challenges in the market, which is understandable given the rate at which everything is going.”
Correction: This story was up to date to appropriate the spelling of Abheek Anand’s title in a single occasion.