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AirAsia launches a $60M fund to help startups get into Southeast Asia

Budget airline AirAsia is getting into the VC game after it unveiled a venture capital fund that aims to invest in startups across the world.
The airline today announced Redbeat Capital, a $60 million fund that it says will operate independently and seek deals with startups worldwide in areas such as travel, lifestyle, fintech and logistics startups worldwide. The big selling point to prospective companies is the opportunity to tap into AirAsia’s business in Southeast Asia, which claims to cater to 90 million flyers each year.
The fund is targeting a $60 million close, although AirAsia didn’t reveal how much it has secured so far. It will be run out San Francisco and Southeast Asia, and it is working with 500 Startups to source deal flow and exchange ideas.
AirAsia has suffered a stock tumble on financial concerns but is still valued at over $2 billion. Redbeat Capital is part of an ambitious strategy to widen AirAsia’s focus and take it beyond simply being an airline, according to group CEO Tony Fernandes.
“I’m determined to change AirAsia from just moving people into something different in five years time. This is a serious step in the whole transformation piece [that’s] no different to when I set up the airline,” Fernandes told TechCrunch in an interview. ”
“Our first transformation was being a low-cost carrier that uses the web, so our culture has always been in tech,” he added.” We’re now going for our second sage with our platforms” — those include its BigPay payment service, BigLife app and logistics business.
But a corporate fund this isn’t, at least according to Fernandes.
Redbeat Capital has raised its money from LPs — though it declined to provide details on them — and Fernandes said it will balance both making investments for financial return and boosting AirAsia, too. The company already has a corporate vehicle — Redbeat Ventures — but that will switch to being an incubator and company-aligned investment vehicle, while its portfolio will transition to Redbeat Capital, Fernandes said.
“We wanted to give it a bit more independence, as opposed to just being an arm of AirAsia… it’s to be seen whether we can execute,” he added.
In terms of deals, Fernandes was fairly coy about precise details other than that it is “post-seed.” He said the fund could write checks as high as $5 million or around $1 million as needed.
AirAsia launches a $60M fund to help startups get into Southeast Asia
Tony Fernandes has set a goal of five years for broadening AirAsia’s business beyond air travel (Photo: Paul Miller/Bloomberg)
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