To boost enterprise and deep tech startups in Southeast Asia, Cocoon Capital announced first close of $50 M Fund III

With commitments totalling $30 million toward a goal of $50 million, early-stage venture capital firm Cocoon Capital, based in Singapore, announced the first close of its third fund, Cocoon Capital Fund III.

According to a statement released by the firm on Wednesday, the new fund will carry on its high-conviction strategy of supporting the most promising enterprise and deep tech startups in the region from the very beginning, combining funding with intensive on-the-ground assistance to help them grow internationally.

While carefully examining prospects in Australia and wider Asia, the fund will continue to focus on pre-seed and seed-stage investments in deep tech and business-to-business (B2B) software startups throughout Southeast Asia.

Cocoon intends to make 20 investments over the course of the following four to five years.

To enable the firm to continue supporting its strongest companies as they grow, about 55% of the fund is set aside for follow-on investments up to Series A.

“We chose to avoid chasing the hype around consumer tech and the latest buzzwords like AI and blockchain,” said Michael Blakey, Managing Partner at Cocoon Capital.

“Instead, we are focusing on overlooked opportunities – founders solving hard, unsexy problems in enterprise infrastructure, advanced manufacturing, robotics, and healthcare,

“Fund III doubles down on that strategy. We’re not looking to build the biggest portfolio, we’re looking to build the most resilient and transformational one,” he added.

The statement claims that Cocoon has quietly established a reputation for supporting outstanding founders in underserved Southeast Asian markets, consistently leading seed rounds before others noticed.

The firm has been able to invest in businesses that are currently leading the way in Southeast Asia’s deep tech and enterprise ecosystems thanks to this methodical approach.

The business strategy differs from that of conventional early-stage investors. It oversees all transactions, serves on the board, and employs a thorough 10-step diligence procedure that assesses governance, technical proficiency, founder skill, and product potential even in the seed stage.

The company’s post-investment platform, Cocoon Academy, gives founders access to financial fundamentals, governance playbooks, follow-on investors, and personal coaching.

The team stays closely involved with each company in the portfolio while maintaining a disciplined pace of up to five investments annually.

In addition to actively returning capital to investors, the company’s Fund I and Fund II are leading the region in distributed to paid-in capital (DPI).

“The digital transformation of traditional industries in Southeast Asia is still in its infancy,” said Carol Cheung, Partner at Cocoon Capital.

“We are especially excited about backing founders using technology to modernize sectors long underserved by innovation – whether that’s to optimize industrial processes, combat climate change, improve healthcare outcomes, or reshape financial infrastructure,

“These are long-term problems that require long-term partnerships, and that’s what Cocoon is built for,” she added.