XA Network, an angel investment circle made up of executives from global tech firms, has struck up a strategic partnership with Vertex Ventures and invested in Vertex's fourth South-east Asia and India fund, which closed at a record US$305 million.
XA will provide support to Vertex's portfolio companies through its deep-tech expertise and networks. In return, the partnership will allow XA to gain insights from an experienced investor.
The limited partner commitment by XA marks the first time the network is investing in a venture capital (VC) fund, said Marek Dawidowicz, an XA member and head of creator marketing at YouTube Asia-Pacific. More recently, XA has begun to selectively invest in top-tier VC funds.
The Vertex investment, which was done via a special purpose vehicle, is a way to give members the opportunity to diversify their investments outside of the angel and seed stages. Vertex Southeast Asia and India invests in Series A and B rounds.
XA was founded in 2018 and initially comprised current and former Google employees. The network has since expanded to include over 60 executives either currently or formerly from tech firms such as LinkedIn, Apple, Netflix and Grab.
Members include Gautam Anand, managing director of YouTube Asia-Pacific; Maya Hari, managing director of Twitter Asia-Pacific; and Parmindher Singh, chief commercial officer of Mediacorp.
In recent years, the startup wave in South-east Asia has fuelled the rise of angel investment networks. These organisations cater to wealthy individuals and help source for deals, conduct due diligence and allow members to tap one another's expertise.
Angel networks in Singapore include AngelCentral, female-focused she1K, Investible from Australia and the Business Angel Network of South-east Asia, better known as BANSEA.
XA invests in South-east Asia-based startups that typically have a valuation of less than US$5 million and are targeting an investment of US$50,000 to US$300,000. To date, the network has invested about US$3 million in over 20 startups.
Portfolio companies include networking and mentorship startup Tigerhall, adtech firm Pencil and e-scooter startup Neuron Mobility.
In looking for founders to back, XA assesses whether the team has given full dedication to the project and whether they are open to taking feedback and tough questions, said Mr Dawidowicz. It also looks at the startup's analytical capabilities and how quickly it iterates its products and services, and how well it is managing its cash runway and budgets.
XA does not set a requirement for minimum investments and does not take a membership fee. Potential deals typically come its way through referrals by members, who have extensive industry networks.
Partners that XA has co-invested with include talent incubators Entrepreneur First and Antler, and VC firms 500 Startups and Sequoia Capital.