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Israeli’s Red Dot Capital Raises $200M For Southeast Asia-Focused Tech Startups

Red Dot Capital Partners has raised close to $200 million to invest in tech companies seeking to expand into Southeast Asia and Japan, Bloomberg reported Monday (Nov. 9).

Based in Israel, Red Dot Capital Partners focuses on growth-stage tech companies. The venture capital group is funded by Singapore’s Temasek, according to Red Dot’s website.

In an interview with Bloomberg, Red Dot Managing Partner Yaniv Stern said the new fund is backed by Temasek Holdings, along with investors from the U.S. and Japan. Nearly 95 percent of the money has been raised and the fund has already made investments in three companies.

Stern said the firm has been trying to steer its companies toward doing business in Southeast Asian nations such as Singapore and Vietnam.

“Asian countries are months ahead in terms of dealing with COVID,” Stern told the news outlet. “We expect their economic recovery trajectories to be quite different than countries that have demonstrated less discipline.”

The VC firm’s previous fund raised $150 million and invested in companies engaged in such subsectors as eCommerce and cybersecurity. The group typically invests in Israeli startups with financing rounds of $10 million to $15 million, according to Bloomberg.

Red Dot’s portfolio includes Coralogix, EverC, Codefresh, Trigo, CTERA, Celeno, Claroty, Armis, Puls and Global-e, according to its website.

Despite the pandemic, VC firms have been actively investing in Asia. According to recent report by Deal Street Asia, the number of fundraising deals in Southeast Asia was 60 percent higher in the second quarter 2020 than during the same period in 2019.

In a recent interview with Karen Webster, Craig Dixon, general partner and CEO of Accelerating Asia, an independent startup accelerator based in Singapore, said helping startups scale and navigate the VC realm requires a focus on telling the right story — and generating more than top line growth.

Meanwhile, the Israeli technology sector has also been booming. In 2019, the sector raised $8.3 billion through 522 deals, representing a 30 percent spike over 2018, according to a report by Israeli law firm ZAG in early 2020.

“2019 marked a record year, capping a decade of successive increases in capital invested in the Israeli high-tech industry,” said Shmulik Zysman, ZAG founding partner, told PYMNTS in January. “This growth is partly due to the growing foreign capital invested in the Israeli high-tech industry.”

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