SiS Cloud Global Tech Fund 8

A huge new wave of ‘Born in the Cloud’ start-up technology companies in Cloud Computing, Cyber Security and Enterprise Cloud Software companies is driving technology transformations. This transformation has grown into a vast multi-billion dollar market. COVID-19 has led to an accelerated shift in consumer & business adoption of Cloud Computing. Enterprises of all sizes are accelerating their moves to the cloud, driving higher adoption and consumption of SaaS applications and Cloud products.

Enterprise cloud software itself has evolved into multiple types of Cloud Services – Software as a Service (SaaS), Infrastructure as a Service (IaaS), Platform as a Service (PaaS), Private Cloud, Public Cloud, Hybrid Cloud. The Market is Big and continues to expand. This has led to a new wave of Cloud base startup companies …

The Future is on Enterprise Cloud Computing and Software

A huge new wave of Born in the Enterprise Cloud Computing and Software companies is driving technology transformation. SiS intends to capitalize and capture this wave leveraging on its experience and knowledge in Software distribution in the Past decades.

The SiS Cloud Global Tech Fund 8 (“SiS Cloud Fund”) is set up to capitalize and capture this growing wave, leveraging on SiS experience, expertise and knowledge in Software distribution over past decades, SiS Cloud Fund is a technology fund focused on investing emerging, fast-growing technology companies and funds in area of Cloud Computing, Cyber Security, Enterprise SaaS primarily in USA, China, Japan & SE Asia

The Fund’s strategy is to invest or co-invest with top-tier early/growth-stage VC firms by providing growth capital to promising entrepreneurs and companies, possibly Follow-On funding round(s) and/or Pre-IPO round when the companies reach a state of maturity heading for exit and/or IPO.

The cloud computing market is huge. As big as the cloud market has become, there is massive scope for expansion.

Synergy Research Group shows that across the main public cloud service and infrastructure markets, operator, and vendor revenues for 2022 reached $544 billion, having grown by 21% from 2021. The biggest growth was seen in IaaS & PaaS. Annual revenue from these services grew by 29% to reach over $195 billion, despite some major headwinds from the strengthening US dollar and problems in the Chinese market. In the other main service segments, managed private cloud services, enterprise SaaS and CDN added another $229 billion in service revenues, having grown by an average 19% from 2021.

While cloud markets are growing strongly in all regions of the world, the United States remains a center of gravity. In 2022, the US accounted for 45% of all cloud service revenues and 53% of hyperscale data center capacity. Across all service and infrastructure markets, most leading players are US companies, followed by Chinese companies who account for 8% of all 2022 cloud service revenues and 16% of hyperscale data center capacity.

Market Information

IDC Market Forecast Asia/Pacific (excluding Japan) Public Cloud Services Forecast 2022–2026, the public cloud services market will reach US$165.2 Billion in 2026. IDC expects the Asia/Pacific* PCS market to grow at a higher year-over-year (YoY) rate in 2022 at 31.4% in comparison to 30.0% in 2021, as cloud migration continues to accelerate. Infrastructure as a service (IaaS) will achieve a market value of US$80.7 billion and make up 48.8% of the Asia/Pacific* PCS market in 2026. Platform as a service (PaaS) will reach a market value of US$27.4 billion, contributing to 16.6% of Asia/Pacific* PCS market in 2026. Growth is fueled by organizations that are gradually shifting application development in-house to have better control and those exploring ways to allocate development functions to non-IT staff using low-code/no-code platforms. Software as a service (SaaS) will grow almost three times from US$20.8 billion in 2021 to US$57.1 billion in 2026, contributing to 34.6% of the entire Asia/Pacific* PCS market. By then, SaaS growth is attributed to continual adoption of core enterprise applications, such as customer relationship management (CRM) and enterprise resource management (ERM).

Cloud Computing Overview

The shift to cloud computing has created new opportunities for investment and innovation, like the shift from centralized mainframe computers to the current distributed model with the advent of personal computers which both HH and myself were fortunate to witness and were part of the change. We believe and we are seeing the move to cloud computing has resulted in a significant wave of technological innovation in areas such as Cloud networking infrastructure, Cloud applications, Cloud storage, Cloud services, and Cyber security. The pandemic has accelerated the adoption of cloud computing, with an increasing number of companies and corporations shifting their IT infrastructure to the Cloud. We believe that the cloud business segment will continue to grow at a rapid pace. Over 98% of organizations use the cloud in some way, and cloud infrastructure spending is estimated to increase by 23% in 2023.

Cloud Computing Statistics for 2023

According to AAG IT services:

  • 12-month revenues between the start of 2021 and 2022 for cloud infrastructure services reached $191 billion.
  • Public cloud Platform-as-a-Service revenue in 2022 was $111 billion.
  • The cloud market is projected to be worth $376.36 billion by 2029.
  • It’s estimated that the world will store 200 zettabytes in the cloud by 2025.

Cyber Security In Business

Security is a critical consideration for businesses looking to enter the cloud. Up to 45% of data breaches occur in the cloud, with higher costs for those who hadn’t developed a proper cloud security plan. The global cloud security software market was valued at $29.5 billion in 2020. By 2026, the market is expected to be worth $37 billion.

Gartner has forecasted that end-user spending on public cloud services will grow by 20.7% to reach $591.8 billion in 2023, up from $490.3 billion in 2022. The forecast indicates that infrastructure-as-a-service (IaaS) will experience the highest growth rate of 29.8% in 2023. Other segments like platform-as-a-service (PaaS) and software-as-a-service (SaaS) are also expected to see growth, with Gartner forecasting growth rates of 23.2% and 16.8% respectively for 2023.

Worldwide Public Cloud Services End-User Spending Forecast (Millions of U.S. Dollars)

  2021 2022 2023
Cloud Business Process Services (BPaaS) 54,952 60,127 65,145
Cloud Application Infrastructure Services (PaaS) 89,910 110,677 136,408
Cloud Application Services (SaaS) 146,326 167,107 195,208
Cloud Management and Security Services 28,489 34,143 41,675
Cloud System Infrastructure Services (IaaS) 90,894 115,740 150,254
Desktop-as-a-Service (DaaS) 2,059 2,539 3,104
Total Market 412,632 490,333 591,794

Source: Gartner (October 2022) BPaaS = business process as a service; IaaS = Infrastructure as a service; PaaS = platform as a service; SaaS = software as a service Note: Totals may not add up due to rounding.

Like previous Industrial Revolutions, early investors and opportunistic entrepreneurs who seize the opportunity to ride the crest of this digital technology revolution could stand to profit handsomely.

FAQ

About the Fund

The purpose of this fund is to invest, collaborate, co invest with other Top Tier VC into emerging leading, fast growing Cloud computing, Enterprise SaaS software and selected early stage technology companies and Funds in USA, China, Japan & SE Asia with entrepreneurs with the passion and commitment to build legendary enterprise that have a competitive advantage, and tackle large address able market opportunities

What will the Fund invest in?

The Fund will primarily spot, invest in early or growth stage private unlisted companies in cloud computing segments that have potential to be leader in their segment:

  • Cloud Computing and storage
  • Software as a Service (SaaS)
  • Infrastructure as a Service (IaaS)
  • Platform as a Service (PaaS)
  • Cyber Security
  • Network Computing

The fund selectively in other promising technology companies

Each investment is structured with various planned exit strategies which will be actively reviewed to capture the most optimal returns

Strategy

The fund will make initial investment in early stage companies with focus on the Follow On round  or Pre IPO round where partner VC  fund increase or double down on successive round on their best perform portfolio companies

Partner

SiS Partner, Invest, Collaborate, Co-invest with a selected top tier, seed, early  and mid-stage VC firm in USA, Japan, China and SE Asia whom we have strong relationship with to providing growth capital to their high-performing portfolio companies

Track Record

SiS has a good track record of sourcing and investing in software and IT product and companies being one of the first distribution companies in Asia to distribute software. SiS group has successfully help many software and Network companies establish their channel in Asia in the last 30 years

Experienced General Partner

Since its founding in 1983, SiS group has successfully built up several companies spanning various industries: of which 4 have been listed on the stock exchange in Hong Kong, Thailand, Bangladesh. The group’s strong business acumen with strengths in business transformation, growth management, and value creation. General Partners are serial entrepreneurs and the founders of SiS Group.

Stage

We invest in B,C,D+ pre IPO rounds where companies can continue to scale and selectively invest in seed and early stage technology companies

Geographical Focus

Primary focus in USA, China, Japan & SE Asia

Market Leader & Large TAM

We invest primarily in technology companies that have potential to be in leadership position in their segment with a large total addressable market (TAM)

What are the risks of the Fund and how is it mitigated?

The gestation period of specific investment varies and some investment may take longer than others till fruition.

There is also no guarantee that every investment made by the Fund will result in marketable technology or will be listed.

The Fund mitigates such risks by:

  • Investing in companies that are at different growth stages including Seed, Early, Mid Stage and Follow-On round of funding
  • Investing in and co-invest with top-tier VCs
  • Spreading risk through investing in 15 to 25 companies
  • Investing in potential market leaders in their digital technology segment
  • Investing in companies that have clear path to profitability

An independent fund administrator will be appointed to protect the interests of investors and ensure good governance. The Fund will be audited annually by a reputable independent audit firm.

Alignment of Interest

Investors’ interest aligned through participation by General Partner

About the Fund Manager

Who is the Fund Manager?

The Manager of the Fund is SiS Asset Management Pte Ltd (“SiSAM”)

(http://www.sisasset.com/), a fully-owned subsidiary of SiS International Holdings Limited and one of four key pillars of growth of SiS International Holdings Limited.

SiS International Holdings Limited (https://sis.com.hk/) was founded in 1983 and is listed on the Main Board of the Hong Kong Stock Exchange since 1992. Its Management Team comprises highly experienced professionals with a strong track record in IT, financial, investment and real estate industries.

Is the Fund manager licensed and regulated?

The Manager of the Fund – SiS Asset Management Pte Ltd  is a Registered Fund Management Company (“RFMC”) regulated by the Monetary Authority of Singapore (“MAS”) and is required to uphold robust internal controls, compliance and risk management standards.

What is the Fund’s manager investment philosophy?

We know that Enterprise Cloud Software has grown into a vast multi-billion dollar market. Today Enterprise Cloud has evolved to multiple types of Cloud Services and we are confident that it will continue growing.

We believe that strategic investing in early and growth company with potential to develop marketable IT innovations that caters to Enterprise Cloud business will create immense value for our investors.

We believe that with our in-depth knowledge, long and proven track record and strong global network with both titans and emerging players in the IT industry, we have access and ability to selectively spot potential winners, invest early and reap the rewards when the companies we invest in reach maturity.

What is the Fund manager’s investment track record?

SiS Track Record in Technology & Software

SiS management team has a history of successes in spotting right industry trends and investing in technologies companies.  A pioneer in IT distribution, SiS successfully established strong channel and branding for many renowned IT vendors in Asia especially in software and networking products distribution over the past decades.

With their experience, network and connections, they offer immerse value to investee companies or partner VC in expanding their channel presences in Asia and possess good track record of investments .