Cocoon Capital Announces First Close of USD 50 Million Fund III to Accelerate Southeast Asia's Enterprise and Deep Tech Startups
SINGAPORE and NEW YORK, April 30, 2025 /PRNewswire/ -- Cocoon Capital, one of Southeast Asia's top-performing early-stage venture capital firms, today announced the first close of its third fund, Cocoon Capital Fund III, securing USD 30 million in commitments towards a target of USD 50 million. The new fund will continue the firm's high-conviction strategy of backing the region's most promising enterprise and deep tech startups from the earliest stages, combining capital with intensive hands-on support to help them scale globally.
In a region where investor returns are hard to come by, Cocoon Capital's performance stands out. Fund I and Fund II are actively returning capital to investors and achieving a leading Distributed to Paid-In Capital (DPI) in the region. According to data insights firm Alternatives.pe, the second fund ranks among the top three performing VC funds in Southeast Asia by Internal Rate of Return (IRR). Cocoon's track record of achieving DPI across all of its funds, clearly demonstrates its winning strategy of building businesses from Southeast Asia and exiting them globally.
"We chose to avoid chasing the hype around consumer tech and the latest buzzwords like AI and blockchain," said Michael Blakey, Managing Partner at Cocoon Capital. "Instead, we are focusing on overlooked opportunities - founders solving hard, unsexy problems in enterprise infrastructure, advanced manufacturing, robotics, and healthcare. Fund III doubles down on that strategy. We're not looking to build the biggest portfolio, we're looking to build the most resilient and transformational one."
Cocoon quietly built a track record of backing exceptional founders in overlooked markets across Southeast Asia, always leading seed rounds before others took notice. This disciplined approach has enabled the firm to invest in companies that are now setting the pace for Southeast Asia's enterprise and deep tech ecosystem.
Cocoon's model is distinct from traditional early-stage investors. The firm leads every deal, takes a board seat, and implements a comprehensive 10-step diligence process that evaluates governance, technical depth, founder aptitude, and product potential even at the seed stage. Its post-investment platform, known as Cocoon Academy, provides founders with access to governance playbooks, financial fundamentals, personal coaching, and a network of domain experts and follow-on investors. With a disciplined pace of up to five investments a year, the team remains deeply engaged with every portfolio company.
The fund will continue to target pre-seed and seed-stage investments in B2B software and deep tech startups across Southeast Asia, while selectively exploring opportunities across broader Asia and Australia. Cocoon plans to invest in 20 companies over the next four to five years. Roughly 55% of the fund is reserved for follow-on investments up to Series A, allowing the firm to maintain support for its strongest companies as they scale.
"The digital transformation of traditional industries in Southeast Asia is still in its infancy," said Carol Cheung, Partner at Cocoon Capital. "We are especially excited about backing founders using technology to modernise sectors long underserved by innovation - whether that's to optimise industrial processes, combat climate change, improve healthcare outcomes, or reshape financial infrastructure. These are long-term problems that require long-term partnerships, and that's what Cocoon is built for."
With its portfolio companies now emerging as leaders in enterprise and deep tech, Cocoon's investment continues to validate its thesis. Deep tech companies, such as Aprisium, which enables micron-level industrial contamination detection, and Augmentus, an industrial no-code robotics reprogramming platform now being used by leading manufacturers worldwide, exemplify how local startups are building globally competitive solutions. Other investments include TransTRACK, a fleet optimisation and logistics platform; BuyMed, one of Vietnam's leading digital pharmaceutical distributors; and Shomvob, a Bangladesh-based job-tech platform improving access to employment and embedded financial services.
"These founders aren't just building regional plays," said Zongxi Sia, Investment Director. "They're solving universal problems with Southeast Asia as their launchpad. Whether it's reducing emissions from manufacturing or improving access to healthcare, these companies are positioning themselves to scale globally from day one."
Fund III's first close of more than half of the target includes a significant number of returning limited partners (LPs), many of whom have increased their commitments, as well as new LPs from across Asia, Europe, and North America. Investors include institutional capital providers, successful founders, and family offices. The strong number of returning investors underscores continued confidence in Cocoon's disciplined, high-engagement model and its track record of generating both returns and impact.
"In today's challenging fundraising environment, it's rare to find a firm like Cocoon," said Gregoire Baudin, a returning investor. "Their ability to identify and nurture deeply technical companies solving critical challenges, and to actually deliver real cash returns, makes it an easy decision to continue supporting them. LPs have seen Cocoon's exit strategy work, with DPI achieved across multiple funds."
"We're building a fund that delivers more than returns," added Blakey. "We're helping build companies that matter - companies that survive downturns, reshape industries, and set new standards for what innovation in this region can achieve."
Cocoon Capital Fund III will remain open to new commitments until its final close, targeting USD 50 million in total capital.
ABOUT COCOON CAPITAL®
Cocoon Capital® is a Singapore-based venture capital firm focused on early-stage investments in enterprise software and deep tech across Southeast Asia. Founded in 2016, Cocoon has more than USD 90 million assets under management and has made over 30 investments to date. The firm backs companies building transformative solutions in sectors including medtech, advanced manufacturing, logistics, diagnostics, and climate tech. With its slogan "Dare to Change™", Cocoon stands apart by leading early, taking concentrated positions, and working hands-on with founders from Seed through Series A. Portfolio companies include Aprisium, TransTRACK, Shomvob, Augmentus, BuyMed, See-Mode Technologies, and Volt14. Learn more at www.cocooncap.com
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