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Pictured above: managing partners Eric Manlunas and David Siemer
Siemer Ventures has just announced a $45 million dollar fund to be invested with a focus on ad tech startups and ecommerce startups. Along with this announcement, Siemer is rebranding to Wavemaker Partners.
"Overall our thesis isn't changing," said David Siemer, co-founder and managing partner of Siemer Ventures. "About half our portfolio is in Los Angeles and that will continue."
And 20 percent of the company's portfolio focuses on Southeast Asia; Siemer said that will increase slightly.
"Southeast Asia has a huge amount of opportunity and their are very few other VCs there," said Siemer. Siemer said they found themselves being increasingly priced out of deals in the Valley and to a lesser extent in Los Angeles. With their regional expertise, the fund may be a way to find deals on more favorable terms in Southeast Asia. The VC also has a Singaporean incubator fund called Wavemaker Labs.
Back in Los Angeles, the company has invested in a number of companies including The Bouqs, Amplify LA, Card.com, RadPad, Nativo, Playsino, P4rc, Science and Ranker. Given LA’s recent history as a hub for ad tech and e-commerce startups, and Siemer Venture’s involvement in many of those startups, the company will again be investing in these sectors.
"We are very bullish on ad tech," said Siemer. "It's a difficult space because it changes so rapidly. As an investor you have to have a short-term mindset because everything is commoditized in three to four years. First-movers matter a lot."
Siemer has invested in a number of first-movers in ad tech including Simplereach, Nativo and Adomic. On the other hand, e-commerce, the fund's other focus, will require more of a long-term focus.
"The challenge with ecommerce is there hasn't been a lot of exits and they haven't performed real well," said Siemer. "They historically haven't had any value the only one is Amazon and they have massive scale."
"The ecommerce space long ago shifted away from reselling something," said Siemer. Amazon's willingness to operate at 5 percent margins or none-at-all makes competing in that space difficult.
Yet, Siemer sees a lot of long term opportunity in ecommerce. In the coming years he expects ecommerce to take up at least 50 percent of sales.
"The consumer shift will force a lot of value out of this category," said Siemer. That value will tend to unique selling points. Items not fit for resale or easily commoditized will be key to ecommerce success. For example, Siemer has invested in The Bouqs, an ecommerce site for fresh flowers.
Siemer primarily invests in early-stage companies that are too advanced for angel investments but not quite mature enough for typical VC money. That means companies that are not pre-launch but rather are on the verge of launching a product or service. Typically, Siemer’s investments are up to $750,000 per company, with initial investment size ranging from $150,000 to $350,000.
This is Siemer Venture’s third fund. It had raised its second fund in 2011 at $28 million. Siemer Ventures’ sister company Siemer Associates is an investment bank that sometimes guides their portfolio companies through financing and exits.
The new fund was announced at the same time as the firm is hosting its 4th annual invite-only Siemer Summit in Santa Monica this week. Taking place today and tomorrow, the summit attracts over 500 entrepreneurs from all over the world, 20 percent of which are from outside the US.
