The fund we started raising isn't the fund we're closing

Hello John,

Fund 2 closes at the end of this year, and reaching final close has made us look back at what we were asking investors to support when we started.

Before Accelerating Asia existed, we wrote about why the accelerator model wasn't working in Southeast Asia. Most of the independent accelerators we had watched lasted about three cohorts, while strong corporate programmes could disappear when priorities changed.

Accelerating Asia was our attempt to build an independent accelerator that could last. We designed the business around the exact reasons we had watched other programmes close. A year later, we published Holy Sh!t, We Did It! because Cohort 1 had started with ten companies from seven markets. We said we hoped we would eventually be able to write Holy Sh!t, It's Still Working!

Well, it looks like it's still working.

Eight years later, we have completed 13 cohorts and backed more than 100 startups across 16 markets. For an independent accelerator, eight years and 13 cohorts is a big deal. It didn't happen by accident, and the model has worked far better than we imagined when we started.

Fund 2 has followed a similar path. Every Fund 1 LP with the liquidity to invest again came into Fund 2. In other words, 100% of those LPs renewed. They had seen what we were building, understood the value of the model and decided to back us again.

Today, Fund 2 holds 71 companies across nine cohorts. Approximately US$7.3 million has been deployed and 61 of those companies, or 86%, are active. Across the wider portfolio, companies have raised more than US$174 million in follow-on capital, and every company accepted into the accelerator has attracted external investment during or after the programme.

The earliest companies are also reaching the stage where exits are becoming a real part of our work. Earlier this year, we identified at least ten portfolio companies where we expect exit opportunities within 18 months. We are actively working on those opportunities now. At our stage, an exit can be a secondary transaction, a strategic acquisition or a later financing round that creates liquidity for our original position. The timing depends on each transaction, but this work is already happening.

There is also an eight-year network working around those companies. Two founders we first met as applicants are now investors in our funds. PriyoShop (Cohort 2) is helping Thyaga (Cohort 11) enter Bangladesh, while the founders of DIGIBOX (Cohort 13) have invested in meed (Cohort 13) and are helping the company build in the same market. Others are writing angel cheques, referring companies and helping us assess founders. Capital, deal flow, operating experience and trust are now moving back through the portfolio in a way that would be extremely difficult to recreate from scratch.

There is another important difference for somebody joining now. Under the Fund 2 terms, a new LP at final close participates in the portfolio already built, with capital contribution and equalisation handled through the fund mechanics. Our earliest LPs backed the thesis. A new LP can examine the 71 companies in Fund 2, see how the portfolio has developed and then decide whether to join it.

We've written about how Accelerating Asia and Fund 2 developed, the traction across the portfolio and why the fund available today is so different from the one we started raising.

> Read the full piece here: "The Fund We Started Raising Isn't the Fund We're Closing"

Fund 2 is in final close.

If you're considering early-stage exposure across Southeast Asia and South Asia, you can start with the fund deck at https://acceleratingasia.com/investors, or reply to this email with your questions.

See the portfolio. Check out acceleratingasia.com/portfolio. Filter by country, sector, or fundraising status. Request an introduction directly to any CEO.

Craig & Amra

General Partners | Accelerating Asia Ventures

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