Investor Spotlight: Mark Sng of Gentree Fund in leading the Philippine market through investments

Investor Spotlight: Mark Sng of Gentree Fund in leading the Philippine market through investments

The startup ecosystem in Southeast Asia has been steadily growing in the last few years. With the rising innovation of businesses and participation of more players in the ecosystem, investors and venture capital vehicles are working together with the startups in building sustainable businesses that will provide opportunities on hand. Committed to seeking beneficial relationships and providing strong financial support, Gentree Fund, one of the leading venture capital firms in Southeast Asia, is making waves in the investment scene.

Gentree Fund is the venture capital vehicle of the family behind the SM Group, a leading retail, banking, and property development group in the Philippines. Working actively with high-growth companies, Gentree seeks to support startups and founders across South East Asia who are interested in exploring the Philippine market.

Techshake sat down with Vice President Mark Sng, the Vice President of Gentree Fund, in an interview to learn more about their efforts in supporting the startup ecosystem scene in the Philippines. 

You’ve been in the investment industry since the start of your career. Can you share with us a bit of yourself?

I graduated about 9 years ago and started my career in a small investment boutique in London. Then, I had a chance to come back to Southeast Asia to work in Jakarta at a growth PE fund which focused on investments into regional family-run businesses, to cover Indonesia. After that, I had a chance to move to Kuala Lumpur, covering Vietnam and the Philippines. 

I was thereafter headhunted to join the Corporate Development Team of GOJEK Corporate Development. Where I was part of the team that led the acquisition of coins.ph, a milestone for the Philippines startup ecosystem. Following this, I had the opportunity to join the founding team of Go-Ventures, a Gojek backed independent VC fund which also operated under a financial mandate.

In 2020 I was recruited from Go-Ventures by the Sy family office to launch Gentree for them. Gentree is very similar in structure to Go-Ventures because we are not a corporate VC fund and likewise operate on a financial mandate. We seek to maximise financial returns by investing in the most competitive regional startups and are not bound by a mandate to maximise synergies our portfolio may have with SM Group.

How did you become interested in the investment space? Do you have specific influences that made you start in this career?

I think I’m quite lucky because I have an initiation into the industry at quite a young age. I guess it started with my parents. My dad is a fund manager himself. He runs the PE fund I was previously at before GOJEK, so I guess I kinda grew up in the industry.

I think spending time in the United Kingdom, during my studies, was also important in shaping my interest. I did my undergraduate in Economics at Warwick University and a Master’s in Finance and Private Equity at the London School of Economics. As part of my Masters course, we also enjoyed the privilege of having several leading GPs conduct lectures and tutorials.

The influencing factors from my family, and my studies I think, led me to the point where it was kind of more natural to be part of the investment scene. My subsequent transition from PE into Venture Capital was lubricated by the experience I gained at GOJEK. 

When it comes to Gentree Fund, can you share with us how the Gentree Fund started?

Gentree, is a bit unique since it is not a corporate VC fund but sits under the Sy Family Office. We have third generation Sy family members as IC Committee, representing each branch of the family. I think what’s unique about the structure is that we are also able to support our founders through our IC’s extensive experience and business networks in the country, which includes SM Group. This has become a key competitive advantage for founders keen on working with Gentree Fund, as they often gain the ability to leverage our IC’s network, hyperscaling their growth.

Having witnessed the budding growth of the Philippines startup ecosystem, the third generation of the family provided the impetus and the driving force behind setting up Gentree Fund. Gentree seeks to both expand the local liquidity pool available to Philippines based founders while supporting them with as a reliable long-term financial partner 

Since you have mentioned that you do a lot of funding, what makes you interested in investing in a startup? Do you have specific criteria?

Every startup is a little bit different if you operate in different industries, so there’s no one key northstar metric that crosses various sectors. Because we are financially driven as a Venture Capital fund, the ultimate goal here and the ultimate criterion is: “can it make a financial return.” 

The first factor is where the company sits with the market, the pain point they are tackling with their product flywheel, how will this play in the competitive landscape, what is the market structure, and how would they approach it.

The second factor is quite linked to the first one because as a startup, you would think about the market being driven by the founder, followed by the strength of the founding team. Can they actually execute the ideas well? 

The third factor is connected to the first two aspects. Once you have a strong founder connection, who has found a market gap and can execute, you would naturally expect to see strong key metric traction.

All those factors come to weigh, as what we are doing is finding the best startups—the most competitive startups we can find.

Can you share about Gentree Fund’s portfolio?

Gentree is geographically focused on the Philippines but are sector agnostic as a fund. When we invest regionally, we are helping the founders access the Philippine market. 

In the Philippines, the most notable is Kumu which raised a series C by General Atlantic a couple of months back. We are also heavily focused on Fintech and have two investments in the vertical, namely - NextPay which is a YC company, growing very fast in terms of supporting Filipino SMBs with business banking tools, and AQWire which enables large property developers to offer native remittance tools for their overseas buyers.

We also have a company in the mom-and-baby e-commerce space Edamama, which has grown into a well-loved platform centred around the needs of their community of moms. As well as an exciting B2B startup Mosaic which operates in the underpenetrated Filipino F&B SaaS market, offering F&B merchants an ecosystem of partner tools built around their core cost optimisation solution. 

What advice would you give to entrepreneurs fundraising in these trying times?

We do see some founders get really frustrated sometimes. They pitch to the investors, but everyone says no. As a founder, trying to scale their business, I can see and sense their frustrations.

Historically the Philippines has lacked deep local liquidity pools catering to early-stage startup founders. However, what we’ve seen is that local pools have expanded in the last three months. There are a lot of new accelerators and seed stage investors. Several good friends of Gentree like Kaya Founders, Buko Ventures, Foxmont and Gobi Core have done great things in this space. This has created more options for founders, especially in the early stages. However later stage startups are still very much dependent on regional funds given the lack of later stage financing options in the Philippines.

I guess my biggest advice to have to founders is to really understand the regional investors you are pitching to, understand what they are actually looking for. Investors are often looking for founders who can grasp regional digitalization trends and localize it to the Philippines market. 

What’s next for the Gentree fund, and in the next few years and beyond?

Gentree currently has coverage in both Singapore and Manila. Gentree does not intend on recycling capital in Fund 1 and are actively exploring the potential of a new fund vintage for Fund 2. This aligns with our goal of developing Gentree into an institution capable capable of supporting our founders and the ecosystem over the long-term.

To learn more about Gentree Fund, you may visit their website here.