Tushar Aggarwal on LuneX Ventures' Southeast Asia fund

0:00I'm Ashlyn Addison from a vincentio for investmentpitch media and FinTech news network and today on blockchain interviews we have Tushar Agarwal from loon X ventures an early-stage VC startup from Southeast Asia I'm really happy to have you on the show to char welcome Thank You Ashton fiving me thank you so much for being here if you would start out with a little bit of your

0:22background into how you got into the finance industry and then how you ventured into crypto as well absolutely so I moved to Singapore I'm originally from India moved to Singapore in 2010 for university I was majoring in banking and finance when I was graduating you know wanted to make the big bucks so I was looking at consulting or Investment Banking got into consulting so I was at

0:43PwC for a couple of years moved to a boutique consulting from a French consulting firm which was opening a Singapore office so I was one of the early employees kind of built out that for like about two and a half years end of 2016 I was working I was working as a consultant to the banking industry so banks were starting to kind of explore what blockchain is and if they could

1:04leverage that somehow internally for things like settlement and yeah so that's that's how I learned about Bitcoin started buying before researching I had a bit of cash to play around with and you know by November 2017 I'd quit my job and started a podcast I ran podcast it's called decrypt Asia through the podcast I write for checking in Asia quite a bit which

1:28is the equivalent of TechCrunch in this part of the world and then through that you know got connected with a bunch of VCS and that's how I line it up working and building out UNIX benches that's great sounds like quite the journey to get where you are today and it sounds to me like it's been a ride I'd love to hear a little bit more about loo next ventures and what you guys are doing

1:48right now sure so UNIX Ventures is a crypto venture capital fund we're backed by a parent company is a traditional VC called Golden Gate ventures so bowling adventures kind of built out the Southeast Asian startup ecosystem it was started in 2011 with a 10 million dollar fund and golden gear is on his third fund which is a hundred million dollar fund investing mostly in seed and seed

2:12easy startups in south Asia so Singapore Indonesia Philippines and a few other countries in this region they did an equity investment in oh me say could not participate in the oh me say go token sale because the fund mandate didn't allow golden year to invest in the token sale and that's how the idea of a dedicated crypto fund was born also because the skill sets

2:34required to run a crypto fund is a little bit different so they felt the needs to have a dedicated fund so that was how loan X was born that's awesome and that sounds like you guys are doing real with really well with them Issei so I see you've been in you know the finance industry for a while before the crypto as well do you think you could give your thoughts on the current

2:57environment of the cryptocurrency industry because in the past year or so a lot more into institutional investors have gotten involved in the industry more venture capitals and there's definitely been a progression of a lot more venture capitalist firms popping up all around the world so maybe your thoughts on where we're headed and where we've been to and where we're at right

3:18now so I mean I think so there were obviously people who got in you know and the mostly technologists who got in really really early so that was like the initial wave and then I think kind of 2016-2017 was the time when a lot of the other folks kind of got into the industry and you know 2017 was obviously the year when when it was all about retail investors is all about you know

3:40decentralization and giving the power back to the masses and obviously you know a lot of the token sales did super well lots of people made lots of money and the market got heated up a little bit and so that's what we've been seeing of like pretty much all of this year where the market sort of still cooling down sort of stable right now but you know still kind of on a downward trend

4:04but yeah I think what some of the VCS kind of understood was that the crypto and the blockchain ecosystem could potentially disrupt their business in terms of you know raising capital and instead of getting disrupted you know they've kind of taken it kind of heads on and you know tried to you know capitalize on the opportunity that this industry but again a lot of the VCS are trying to

4:30do it in a more sort of regulated manner and that's what we try to do at loon expenses as well as we spent like nine months working with four different law firms tax advisers auditors fund administrators cyber security experts Monetary Authority of Singapore to have a fully licensed script of fund so it's taken us a while but you know I think what the institution investors bring is

4:52a little bit more credibility into the ecosystem in general you know obviously Andreessen one of the leading pcs in the world has dedicated $300 crypto fund which is a huge validation for the industry in general definitely a huge validation and I'm glad that you guys set out the foundation properly you know that's really important in especially in this sort of self-regulated gray area

5:17zones and on the retail and utility side of these tokens and really this industry is so new that you it's always good to cover all the bases right a hundred percent 100% and you know I mean if you want to bring in institutions and if you want to bring an institutional money like we speak to a lot of family offices some high net worth individuals for them

5:38to be comfortable investing into a fund like ours we have to make sure that our documentation our licenses our custody is all in order and so you know it basically helps more in flow of capital into the industry if you kind of structured it the right way that's great so what are your guys current goals right now with lunettes ventures in Southeast Asia yeah so just from a

6:01timeline perspective so we started the process of setting up Luna expenses in November took us nine months until August to basically structure the fund and make sure that we were fully compliant we did like a friends-and-family fund raised in September and until middle of October so I just just did a first capital call so we're bringing in the first round of

6:19capital into the fund I think first of November onwards we're going to be able to start deploying that capital as well and so our goal is to kind of you know start backing some of the and some of the best deals that we see are on the equity side so we and we have a decent pipeline of companies that we want to kind of deploy capital to so you know while fundraising we've simultaneously

6:41in I been working on these deals and so we want to kind of you know make sure that those deals go through in sort of the first couple of weeks of November and so we'll be doing press releases around those investments that we make but yeah that's kind of what our focus is in parallel we keep fundraising so we're targeting somewhere between a 10 to 20

7:01million dollar fund and I think that's like a sweet spot for us it's not it's a small fund we can deploy a small fund better than a bigger fund that's awesome sounds like you guys are getting onto things you know in the next week or two so that's really exciting to hear you did mention equity investments what is this strictly your guys's investment strategy with loon X are you guys

7:22investing strategically equity and blockchain companies or are their utility tokens or security tokens are you guys looking at security tokens as well so I mean the whole reason why loon X was born was to have a more flexible mandate so our parent company Golden Gate has a regional mandate because of the kind of companies that they invest in what is the nature of the industry

7:50that we are in is such that your investments need to be global in nature because innovation can happen anywhere and then you can kind of spread around the world in terms of investments we kind of look at three buckets so first is the equity bit that we spoke about the second is we can hold some of the larger cryptocurrencies and tokens of some of the protocols that we

8:08fundamentally believe in over a longer term horizon and the third is kind of IC OSS tos and everything else depending on how the market evolves so we don't kind of we don't define what the percentages of allocations are going to be within these three buckets in general the best deals that we see are on the equity side both in the region where we get access

8:27to seed stage deals and also globally where you know we make investments somewhat at a later stage and those are mostly Jake in nature in terms of companies from the US and Europe who want to expand to this part of the world and kind of see us as a strategic partner slash investor in Asia as far as security tokens are concerned I mean I think we're keeping an active lookout

8:47for those I think there's going to be some sort of regulation around those but I think it's still kind of early days right now the bats Jesus a VCR on queenside yeah good to know good to know and when you guys are looking at making equity investments you know what are the top things that you guys look for as a firm when you're looking at that investment yeah so I think it I mean

9:09equity investments I think in the space are kind of the easiest to make as well because it's relatively easier to I mean it's high-risk for sure because these are seed stage and West investments for the most part but yeah I mean I mean obviously you know the regular things things like you know what the market size is which becomes a little bit harder to define as well in this

9:29industry but I think the most important thing is definitely the team right what the background of the team has been what have they done in the past have they been found as before are the second time founders you know do they like if you know do they hold like a PhD in computer science and have been researching the crypto space for the past five years or you know they're

9:49they've been in the space for like one year and a kind of new and depends on the kind of business as well right so we're looking at like smart contract auditing services custodial solutions accounting solutions for the crypto industry and so those are the kind of companies that we think are the most fascinating at the moment so it's it's just I guess about execution I mean

10:09there's definitely a need for these companies it's about which team can you know you should I agree the team is totally key so that's that's definitely good to do your due diligence before making any investments and I'm sure you guys take quite amount of time before you close a deal right yeah yeah so what are your what's your sentiment on the market in the blockchain industry moving

10:35forward in 2019 are you optimistic neutral or pessimistic well I've a big part of my personal net worth is in crypto and I'm betting my career on the industry succeeding so I'm I'm relatively optimistic I think you know like we discussed I think the markets cool down a little bit there's lots of interesting developments happening which are not necessarily being reflected in

10:58the in the prices so there hasn't been too much price action but there's on the development side there's quite a bit of activity that's happening like we speak to a lot of the developers a lot of the working groups for different protocols so we kind of keep track of what's happening and you know a lot of the projects are shipping out good products we're trying to acquire more users

11:18trying to make sure that things get you know like some of the scalability projects for example are trying to make sure that you know the it is possible for applications that are built on top of these protocols to have massive user bases unlike something like aetherium but in general I think overall high level speaking very very optimistic personally speaking I think on the front

11:39side is like we don't mind if the market kind of continues to be a little bit bearish it kind of helped us to you know it gives us more time to kind of build relationships globally expand a network globally it gives us I mean we're all learning it as well so it gives us more time to kind of you know known as well and plant all the seeds globally for

12:01sort of the next sort of you know bull run that everyone keeps talking about for sure yeah there's no need to rush into it and you know the people that are working hard on these blockchain projects are not fazed by whether there's a bear market or a bull market they're working just as hard to achieve those goals out in the industry so and I'm sure you guys are doing the same so

12:22that's what we try to as long as you can put food on the table you got it so where do you picture Lou next ventures six months from now and one year from now yeah so Lou next ventures is the five-year closed-ended front so we're trying to take the VC approach so we lock in our investors for five years kind of helps us align better with the entrepreneurs helps us get access to

12:44better deals as well I think six months from now you know like I said we were just bringing the first set of capital and we're gonna start you know I mean hopefully in the next six months we would have done you know a good four to five six deals and like I said you know man it allows us to kind of invest in some of the tokens trading in the secondary markets as well so we will

13:04pick some of those as well because they're trading at relatively fair evaluations compared to Nastya and I think one year from now yeah I mean we obviously make six months from now hopefully we've closed out all our fundraising definitely one year from now we want to sort of we don't want to spend too much time fundraising you want to spend time researching and investing that's that's

13:24what we enjoy but yeah I mean the after we make those investments our goal will be add value to a portfolio companies help them out help them get clients have them secure partnerships help them expand to other reasons if they want to help them with their second round a third round of funding if that's what's required so I think that's what I'm gonna going to be our focus in the next

13:46sort of six months to a year that's awesome that's great to hear and if viewers are looking to get involved with Lunik ventures you know what's the best way to get get involved your contact to you yeah we do have a so the best place is Lou next RVC we just have a landing page at the moment we're working to kind of get our website up and running but if you go to Lou next

14:09VC there's links to our telegram and links to our email you can email me at the Shara Clio next up we see in case you're an entrepreneur in case you want exposure to this asset class awesome if you're an investor and if you want exposure to this asset class great thank you so much Tushar Agarwal from loon X ventures I appreciate you coming on the show today

14:32and I'm looking forward to following up you know in the next few months to see where you guys are at and what kind of deals you guys have closed so thank you for your time thanks action for having me I hope to see you at one of the conference's again soon in Asia yes likewise