Ambition, Amplified.

We founded January Capital in 2019, leveraging our prior shared experiences of building first-generation technology-focused investment firms in the Asia-Pacific region. We did so with a sense of urgency – to build a next-generation investment firm that could amplify the success of the region.

Specifically, we set out to quietly build a data-led investment platform that could provide capital at critical points in a founder’s lifecycle. We chose to build in the shadows – until now, we have not released any formal announcements regarding January Capital. As we pass our fifth anniversary as a firm, and with a series of important milestones, we feel now is the right time to chart our ambition in a more public manner.

The Asia-Pacific region has a population of more than one billion people, made up of incredibly diverse ethnic, religious and language groups. Building an enduring investment firm in this region is inherently different than in a more mature markets like North America. From day-one, founders here are forced to think regionally and globally, as they navigate a myriad of cultural, regulatory and market-specific differences. The region’s diversity calls for a customized and thoughtful strategy, rather than a one-size-fits-all approach.

Although capital availability for technology-led companies in this region has greatly improved over the past decade, it is still underweight relative to other parts of the world. Much of this capital remains concentrated at specific points of a company’s lifecycle, creating gaps that inhibit the growth of companies in the region and the technology ecosystem as a whole.

Investment firms need to balance competing priorities (e.g., limited partner liquidity timelines) against the needs of founders (e.g., patience and time to build world-class businesses). We believe investing from a single pool of capital with a rigidly defined mandate may not be the right approach for this region, where company liquidity cycles may extend beyond what a limited partner in a particular fund vintage can accept.

Information asymmetry presents a challenge in private market investing, but, conversely, also creates a compelling opportunity. This is particularly the case in Asia Pacific given the nascency of private markets. We made the conscious decision early on to make data the foundation of January Capital. We have since spent years developing proprietary platforms and tooling to help us identify and connect with the region’s most compelling founding teams, at the earliest stage. With our technology, we are able to spend our time on the things that matter – maximizing the value we provide to our founders.

Even the best companies go through challenging periods – there needs to be capital for all seasons for an ecosystem to meet its full potential. For example, not every company remains on a vanilla, venture-backed path. We believe there is a dearth of situational capital today that truly helps founders reach their specific potential.

Over the past decade, the region has amplified – however, recent uncertainty threatens to slow the rate of change. Conviction capital is required now more than ever.

If we focus on the region’s digital economy, the numbers have been well reported and largely speak for themselves. In the decade from 2014 to 2024, the region’s digital economy grew from almost zero to more than US$100 billion in gross merchandising volume. This is expected to grow tenfold again to US$1.0 trillion over the next decade.

Many talented individuals have been inspired by and learnt from first and second-generation founders in the Asia-Pacific region, and are now setting out on their own. This talent base commonly has global experience and connectivity along with an increasing ambition to build regional and globally focused companies. Advancements in technology and increased access to information, particularly through the rise of smartphones, has dramatically changed the region’s entrepreneurial landscape and contributed to a vibrant and growing entrepreneurial ecosystem.

The problem statements that exist in the region are greater and more pressing than ever. While many obvious needs, such as ride hailing and general e-commerce may have been met, there remains much more work to do. There are growing opportunities for tenured founding teams to solve problems impeding the region’s growth potential particularly at the infrastructure layer. These problems require specialist capital who can help them meet their ambitions.

As we observe that the next innovation cycles will be centered around more technical solutions, it is important to highlight the continued development of higher education in the Asia-Pacific region, with universities in the region ascending rapidly in global rankings. This rise is not merely a statistical anomaly; it reflects a shift in talent dynamics, as more graduates opt to remain in the region, fostering local opportunities and mitigating brain drain. Currently, Asia Pacific as a region has increased its representation in global university rankings from just over a quarter (26%) of all ranked universities in 2016 to nearly a third (32%) today.
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Despite these factors, we today find ourselves at a cross-roads of sorts for technology company financing in the Asia-Pacific region – after a formative decade where capital density for technology companies grew at a rapid pace, our proprietary data tells us that the rate of capital deployment is currently at multi-year lows. While Asia Pacific as a region will continue its march forward, conviction and commitment by investment firms are required to ensure the region reaches its full potential in the next technology innovation cycles. If anything, right now represents the most compelling time in history to invest in this region, with tailwinds in place but competition at a cyclical low.

We aspire to provide capital across critical points of a company’s lifecycle, from seed to scale - when founders need it most – and often, when it’s least available.

By early 2022, having engaged with more than 10,000 firms in the past five years, we started to conceptualize a potential strategy based on what founders were consistently asking us to help them source: growth credit.

Structurally, density of institutional equity capital available to support technology firms tends to develop in a relatively consistent way across ecosystems. Typically, equity capital seeps into a venture ecosystem from the early (emerging managers) and late (private/growth equity firms moving downstream) stage. Over time, equity capital soaks through the whole lifecycle, providing the ability for a company to go from pre-product to pre-IPO.

Then comes credit - it is simply not possible for credit products to exist for companies without a balance sheet (i.e., equity). Structured credit products often take longer to develop and emerge, despite it often being lower risk in nature. Credit investors need substantive data and a time series of financial data to underwrite loans responsibly. In more mature ecosystems, this is well understood and credit as a financing solution for technology companies has existed for decades. It is estimated that 17.0% of all capital that goes into North American start-ups is credit, not equity. This asset class has consistently generated strong risk-adjusted returns over a 30-year horizon versus all other credit products,

In Asia Pacific however, credit products are generally far less available and understood. We know this because the number one request we receive across our portfolio of 60+ companies, is to help source credit for a range of use cases at various stages of a company’s lifecycle -  mostly because there is a lack of available institutional capital focused on this space today.

As we explored this opportunity, we quickly realized that the greatest and most urgent need was in what we term ‘growth credit’ – the provision of less dilutive or non-dilutive debt financing for growth-stage technology companies. At the time, there was no dedicated Asia-Pacific fund that could provide meaningful credit facilities to growth-stage technology firms, despite there being many providers of growth equity. This need has only accelerated in recent years, as valuations have moderated and round sizes have contracted (as highlighted empirically in our most recent State of the Technology Ecosystem Report).

With this knowledge, we embarked on a secondary investment strategy. Over the past two years, we have been quietly building one of the region’s most experienced growth credit team and financing foundational deals. In early 2024 we reached an initial close on a diversified credit fund with commitments from some of the region’s leading multi-family office and wealth management firms along with global development finance institutions who believe in the opportunity to deploy catalytic capital into credit given its need in the ecosystem.

We are formally hanging the shingle out as of today and encourage growth-stage technology firms in Southeast Asia and Australia to reach out to us.

As we grow our investment team and portfolio across equity and credit, we continue to identify parts of the company lifecycle and capital structure which remain underserviced today. We remain focused on providing financial solutions that can best support founders as they scale their businesses. To that end, we remain excited about the potential to establish new investment approaches and solutions that straddle asset classes.

Importantly, our ‘amplified ambition’ does not signify an intention to be a large accumulator of assets in the region. We intend to remain focused and boutique (when measured in total assets under management), allowing us to continue to be agile and focused on generating market-leading risk adjusted returns for the limited partners that we are privileged to work with. We want to continue to partner with founders and help them achieve their own ambition to build exceptional, enduring companies. 

We are steadfast that all we do must be aligned to the red thread of technology firm investing, which, with our proprietary data platforms and various strategies, allow us to make the right, informed decisions on how to best partner with founding teams.  We remain resolute in our support for the region’s ecosystem and are excited about January Capital, our portfolio of founders, and the possibilities that lie ahead over the coming decades.

Onwards,

January 2025