Venture capital firm Sequoia is still “pretty optimistic” about the long-term prospects for startups, despite recent market volatility.
“This is a particularly challenging market for founders to get started with,” Abheek Anand, Sequoia’s managing director in Southeast Asia, told CNBC’s “Squawk Box Asia” on Wednesday.
Asked about the company’s outlook for Southeast Asian startups, Anand said its early-stage investments this year and next “are going to play [in] Where will the markets be in 10 years?
“Almost every metric on technology continues to grow and grow secularly in the long term.”
On Tuesday, Sequoia announced it had raised $2.85 billion in a set of funds focused on India and Southeast Asia. That includes its first dedicated fund for Southeast Asia, with a pool of $850 million.
“This fundraiser, which comes at a time when markets are starting to cool off after a very long bull run, signals our deep commitment to the region,” the firm said.
Emerging Trends in Southeast Asia
Despite the shaky short-term outlook, Anand said founders in Southeast Asia still have “growing ambitions.”
“For example, you’re starting to see a lot of companies starting up in Southeast Asia, but… serving the regional and global market.”
He added that “a new generation of founders” is also emerging, as the first generation of tech companies like GoTo and Grab have gone public.
“Their [executives] now they are starting new companies and these are experienced operators…Frankly, they are aiming higher than the companies they came from,” Anand explained.
However, what will change for startups and founders would be their “access to capital” and therefore their short-term strategy.
“This period of free capital or very cheap capital that resulted in certain design choices that big companies relied on probably won’t be around next year,” he said.
“Founders just have to be more level-headed, more focused on fundamentals, more focused on long-lasting, long-lasting business models.”
Focus on ‘strong corporate governance’
Anand said Sequoia’s focus as long-term investors is on building “strong corporate governance.”
“I would characterize our market as being a little bit out of its adolescence…many companies are being created and we are all working together to get to a place where the market is more mature,” he added.
This includes building “enduring business models” together with the founder and others in the ecosystem.
“I think what we’re seeing are some of the early challenges in the market, which is understandable given the pace at which everything is going.”
Correction: This story has been updated to correct the spelling of Abheek Anand’s name in one case.