SINGAPORE--The economic climate is pushing wary investors away from financial institutions into the arms of venture capital (VC) firms, according to a venture capitalist based here.
As a result of the financial meltdown, investors are "quite distrustful" of investment funds managed by banking institutions and are looking for alternative investment avenues, said Dennis Phua, senior associate at Azione Capital, a Singapore-based VC company.
Speaking on the sidelines of the Open Jive Regional Challenge '09 organized by Sun Microsystems, of which he was a judge, Phua cited Malaysia as an example. Investors there, he noted, are not familiar with VC funds but the interest in this option is high.
Investment sentiment across the region remains high for areas such as technology and water resources, said Phua.
At the same time, there are fewer but better-quality startups, he added. Startups during uncertain times are more "hungry" as it becomes a case of make or break. Entrepreneurs who decide to take time off to start up a business also want to make sure their time is well-spent, he explained.
According to Phua, Azione Capital is currently evaluating four proposals for funding. The company has invested in between 15 and 25 startups since it was established in 2006; around 80 percent of these are technology businesses.
Dollars going to mobiles, augmented reality
Some of the promising technology niches for Asian-geared investors are mobile communications, augmented reality and intelligent marketing, said Phua.
Mobile phones are Azione's "hinterland" for Asia, he explained. One mobile communications initiative the VC firm has funded is LocAsian Networks, which rolled out a services platform harnessing location-based technology called MyWobile.
Augmented reality, on the other hand, has been in existence for a number of years but adoption has been insignificant. The technology typically refers to the combination of real-world information and data overlays. At last year's Intel Developer Forum, Intel Fellow and director of tera-scale computing research Jim Held noted that mobile augmented reality was becoming more compelling.
Augmented reality was part of the fabric of this year's winning application in the regional Open Jive challenge. Smart Shop, submitted by CDSTrio of local education institute Temasek Polytechnic, is essentially an application built on Java that complements online shopping experiences of Web users. It taps on augmented reality to assist shoppers in "trying out" the items they intend to purchase, and does not require additional hardware to be installed.
The Open Jive Regional Challenge '09 was held in conjunction with Sun Developer Days.