Group builds $100M fund for start-up tech companies

A group of Filipino venture capitalists is set to build a new fund worth as much as $100 million that will invest in start-up technology companies powered by local engineers that can become global “game-changers.”

Global Gateway Venture Capital (G2VC), founded by “technopreneurs” Winston Damarillo and Martin Lichauco, earlier set up a $10-million local fund that invested in four start-up IT companies that have now grown and ready for acquisition by the big players.

“We build companies for sale where at some point in the future, the likes of IBM will say I like that company. That has been our mantra. These big companies will buy them while they are small because when they get bigger, they will be more expensive,” Lichauco told reporters in a recent briefing.

Lichauco, managing partner at G2VC, was recently appointed managing director for Asia of global boutique investment bank Siemer & Associates LLC.

The Filipino technopreneur agreed to take the post concurrent to his responsibilities at G2VC, which is now in the process of evaluating offers to buy its investee companies.

Lichauco brings to Siemer his expertise in assisting global-facing start-ups and his ability to recognize “disruptive” technologies emerging from Asia. He has more than 15 years of cross-border private equity and venture investing experience, having worked at American Orient Capital Partners Ltd.; H&Q Asia Pacific (H&QAP), a division of the US investment bank Hambrecht & Quist; and Walden International.

Like his counterparts in the Los Angeles office of Siemer, Lichauco has in-house technology experience, having worked in corporate and business development at a number of cloud computing and open source software engineering firms based in Asia and the United States.

G2VC’s principal fund, Global Gateway Investment Group, has four portfolio companies powered by Filipino engineers: software engineering firm Exist; Philippine cloud computing pioneer Morphlabs; software tooling company Maestro Dev; and social media performance and monitoring solution provider Infinite.ly. The fund started with a seed capital of $10 million.

Given that some of the investee companies of this fund had grown from incubation phase under the auspices of G2VC, Lichauco said they were ripe for the picking and the group was now making plans for a second fund that will have a bigger size of $50 million to $100 million. It will also be locally incorporated and will look at a three-year investment horizon.

The second fund, like the first one, will be on the look-out for “disruptive” Philippine technology start-ups which can unlock greater values for investors in the future.

Prior to incorporating G2VC in partnership with Lichauco, the other founding partner Damarillo has been building his own start-up companies since 2001. With a special focus on open source technologies, Gluecode, his first successful project, made waves as IBM’s first open source acquisition and was eventually integrated with the IBM websphere suite of products. Similar exit deals were made with two other companies he had built—Logicblaze and Webtide.

The US-based Damarillo, who is in his 30s, was cited as one of the prestigious Young Global Leader honorees for 2010 of the World Economic Forum. Prior to G2VC, the technopreneur had sold one of his companies to IBM for $50 million.