14 Oct Investing for Impact – South East Asia- Asia Series
Written by: Alberto Cremonesi, Board of Directors, Impact Hub
We recently sat down with Nicholas Lazos, partner and Chief Investment Officer at Insitor Management, a Venture Capital Fund Management providing venture capital funding to social startups throughout emerging and frontier Asian markets.
While Nick is now based in Singapore – where Insitor is headquartered, we discussed the challenges of investing in South East Asia in general, and about his experience at the helm of the Fund.
AC: Nick, what do startups look like in South East Asia?
NL: Founding entrepreneurs have generally strong understanding of their product or service. They have spent time – sometimes years – trying, making mistakes and learning fast. What they normally lack is what we would define as “corporate skills” – finance, governance, policies and HR. But as well all know, these are important skills to grow a successful business, social or not.
AC: What are the issues startups tackle?
NL: Whenever there is a problem, most likely there is also an opportunity. The social startups we talk to address any sort of social challenges, from water scarcity to renewable energy, from health to job creation. Admittedly – and perhaps because Asia is home to a huge young population – solutions that address education and skills training are very common.
AC: What strategies does Insitor deploy?
NL: At Insitor we help build marketplaces for low-income consumers, producers, and workers. We do so in a variety of sectors, including healthcare, education, affordable housing, financial inclusion, water/sanitation, agriculture, and off-grid energy. We are present locally so that we have a clear understanding of the social and business environment that our companies operate in. But we also strive to be a practical, discerning, and patient pre and post-investment partner to our portfolio companies.
AC: What is the main factor you look at when deciding to invest?
NL: Believe it or not, it still people. The relationship with the entrepreneur and founding team is vital. It must be open, positive and trust is key. Obviously, we also look for skills and team complementarity. Gaps in skills are ok if they are acknowledged and there is a plan to fill them. And also for a sense of partnership – the entrepreneur needs to be open and transparent, and willing to work with us. In the end, we are all risking money!
AC: What kind of companies do you look for?
NL: We select and support pioneering companies whose success will spur the creation of new markets and whose performance will experience a multiplier effect. As our portfolio companies scale, we support their growth by mobilizing significant co-investment and facilitating further rounds of investment.
AC: The last question. How do you see the sector developing? Is there a strong pipeline?
NL: If you had asked this question even just a couple of years ago I would have said we were ahead of our time. But lately we see interesting initiatives coming out of everywhere, the quality and diversity of ventures are increasing fast. No doubt South East Asia is a market to watch when it comes to impactful and scalable social ventures.
About the author:
Alberto is a member of the Board of Directors of Impact Hub Global Network and the founder of Impact Hub Phnom Penh. His focus is on the field of social entrepreneurship and social innovation, non-for-profit management and corporate non-market strategies. He is particularly interested in understanding the processes through which entrepreneurs construct new models and markets, and the growth and scaling up processes of new ventures in order to maximize economic and social impact. Alberto has been living and working in Asia for over 15 years.
Alberto holds an executive MBA from IE Business School. In life, he continues his quest to find the perfect espresso coffee outside of Italy.