#Singapore #Southeast Asia #Fund III #Cocoon Capital

Cocoon Capital Fund III: Fueling Deep Tech Initiatives in Southeast Asia

Cocoon Capital, a leading venture capital firm known for its early-stage investments in Southeast Asia, recently celebrated a significant milestone by closing $30 million in the first round of fundraising for its third fund, which aims to reach a total of $50 million. This fund marks a continuation of Cocoon's commitment to nurturing high-performing startups in enterprise and deep technology sectors that are often overlooked but essential for future growth in the region.

Strategic Focus on Unsexy Yet Critical Sectors

Cocoon Capital’s strategy is marked by a hands-on approach that prioritizes creating resilient and transformational companies over merely expanding their investment portfolio. Targeting around 20 pre-seed and seed-stage investments, approximately 55% of the total capital is reserved to support follow-on investments in its most promising companies.

Michael Blakey, Managing Partner at Cocoon Capital, emphasized their philosophy: “We’re not chasing buzzwords. We back founders solving hard, often unsexy problems, whether it’s modernizing manufacturing, healthcare, or financial infrastructure.” This distinction sets Cocoon apart in a competitive venture landscape, where many seek merely to capitalize on trends.

Outstanding Performance and Return on Investment

In a region recognized for its challenging investor returns, Cocoon Capital’s performance history is particularly remarkable. The firm's first two funds are actively returning capital, with its second fund ranking among the top three VC funds in Southeast Asia based on Internal Rate of Return (IRR), as reported by Alternatives.pe. This solid track record highlights Cocoon’s strategic ability to build sustainable businesses while facilitating exits on a global scale for its investors.

Deep Engagement with Portfolio Companies

Cocoon Capital takes a proactive role in its investments, leading every seed round, securing board seats, and implementing a thorough due diligence process that evaluates governance, technical depth, and founder competency. Post-investment, founders benefit from the Cocoon Academy, a platform designed to enhance their governance expertise, understand financial fundamentals, and connect with a network of domain experts and potential follow-on investors.

With a goal of making only five investments annually, Cocoon commits deeply to each portfolio company, offering not just financial backing, but genuine partnership and mentorship.

Committing to Industrial Transformation

Carol Cheung, Partner at Cocoon, highlights the crucial role of innovation in Southeast Asia’s traditional sectors, which are ripe for digital transformation: “We’re backing founders modernizing sectors underserved by innovation—those solving long-term challenges that require long-term capital and commitment.”

Current portfolio companies exemplify this vision. For instance, Aprisium specializes in micron-level industrial contamination detection, while Augmentus offers a no-code robotics platform facilitating automation for manufacturers worldwide. Other notable startups include BuyMed, Vietnam’s premier B2B pharmaceutical distributor, TransTRACK, which optimizes fleet management, and Shomvob, a job-tech platform based in Bangladesh that integrates fintech solutions.

Strong Investor Backing

The initial closure of Fund III saw a robust foundation of returning limited partners, many of whom increased their investments, along with new contributors from Asia, Europe, and North America, including institutional investors and successful entrepreneurs. Gregoire Baudin, a returning LP, noted the rarity of a fund like Cocoon that focuses on deeply technical companies with transformative potential and has a proven track record of successful exits.

Building Lasting Impact

Ultimately, Cocoon Capital believes that their mission transcends financial returns. Blakey stated, “We’re helping build companies that survive downturns, redefine industries, and put Southeast Asia on the global innovation map.” Fund III remains open for new commitments, seeking to achieve its full target of $50 million to empower transformative startups that can lead the charge for change in Southeast Asia.

About Cocoon Capital

Founded in 2016 and based in Singapore, Cocoon Capital invests in early-stage software and technology startups across Southeast Asia. With over $90 million in assets under management and a commitment to the “Dare to Change™” ethos, Cocoon Capital remains dedicated to early engagement and fostering strong partnerships with founders. For more information, visit Cocoon Capital.