From artwork and digital videos to Jack Dorsey’s 15-year-old autographed tweet, and a “digital home” set in what looks like Mars, the alternative, alternative asset, known as a non-fungible token (NFT), is making headlines and bewildering many.
Just this week, Dorsey, the founder of Twitter, sold his first tweet ever for the Ether equivalent of $2.9 million. ‘Mars House’ went for the value of $500,000; a picture of a New York Times column about NFTs went for the equivalent of $560,000, and sparked yet another article by the columnist about NFTs.
The surge in interest in digital assets has been attributed to various factors, including a rise in the price of cryptocurrencies, as we noted in last week’s newsletter.
It remains to be seen if these digital assets will hold or appreciate in value; are we going to see an accompanying rise in investment in blockchain or cryptocurrency companies by alternative asset investors?
For now, special purpose acquisition corporations (SPACs) have continued to draw investor interest.
One of China’s biggest private equity firms, Hony Capital, has filed to list a $300 million SPAC in New York. Hony Capital Acquisition Corp will seek tech-enabled companies in the healthcare and consumer sectors in China or a regional firm with growth potential in the mainland.
In Indonesia, pay-TV company MNC Vision Networks is merging its streaming business and other units with Malacca Straits SPAC, which raised $144 million in a July IPO.
Alt asset managers are back on the fundraising trail.
Temasek Holdings-backed Vertex Ventures has launched its third master fund earlier this year, to deploy into its network of six funds with investments spanning the globe. Vertex Master Fund III is targeting to raise $800 million; its predecessor raised $730 million in 2019.
Another Temasek-backed fund, Openspace Ventures, is set to hit the first close of its $300 million opportunities fund. This comes shortly after it raised $200 million for its third early-stage fund.
Separately, seed investor Wavemaker Partners is raising its fourth Southeast Asia-focused fund. The Singapore and LA-based VC is targeting to take in $120 million from LPs including International Finance Corporation, which is proposing to invest $10 million in Wavemaker SEA Fund IV, according to a disclosure.
In India, midmarket private equity firm Gaja Capital is set to rope in the International Finance Corporation (IFC) as an LP with a $25 million commitment. Gaja Capital is raising $400 million for its latest vehicle, which will invest in 12 to 15 companies in a range of sectors.
On the whole, private fundraising has been lacklustre in the pandemic year of 2020.
In its latest report on the private equity landscape, Bain & Co noted that Asia Pacific-focused funds raised a third less than in 2019, and more than half less than the prior five-year average.
In the VC sector, tech startups in Southeast Asia raised roughly $8.6 billion in 2020, down slightly from the year before. But what is of concern, according to DealStreetAsia’s research, is that just a paltry 16.5% went to companies led by women entrepreneurs.
All’s not lost – women founders say they are noticing more support from accelerator programmes and other parts of the ecosystem in the region. Indeed, amid fundraising challenges, the seed investor is often the most important one for the entrepreneurs, says theAsianparent founder Roshni Mahtani in an interview.
Deals in the works
Among the notable deals reported this week were Philippine live streaming app Kumu, which is understood to be raising $15 million in a Series B round, with participation from a strategic investor. That is significant progress from its earlier Series A round, which raised about $5 million, just a year ago in April 2020.
In a piece of tech alumni news, an edtech startup founded by former Gojek executives has raised seed funding from a clutch of VCs led by Singapore’s Teja Ventures. Binar Academy targets professionals in the digital sector.
Meanwhile, after a difficult year, some co-living startups are making a go of it.
In Indonesia, Flokq has acquired local rival Yukstay, marking the first consolidation in the sector in the country. Other VC-backed players include Mamikos, Rukita, and RoomMe, as well as budget hotels OYO and Reddoorz.
Meanwhile, Singapore-based Hmlet is believed to be raising a $25 million round led by EDB investment arm, sources tell DealStreetAsia. The funding will comprise mainly convertible notes and pegs the startup at a $200 million valuation.
Hmlet last raised $40 million in July 2019, but the company is believed to have burned through cash quickly. It laid off nearly 10% of its staff in February last year and has since adjusted its business model to be “asset-light”, involving revenue-sharing with landlords.
Finally, exits have been hard to come by for investors, as noted in Bain’s report.
This week, we reported that the owners of Vietnamese drug producer OPV Pharmaceuticals JSC have been seeking a 100% sale since the third quarter of 2020. The company is 65% owned by Malaysia-based private equity firm Navis Capital Partners, which invested in September 2012.
Elsewhere in healthcare, Quadria Capital Partners picked up a minority stake in Indonesia-listed hospital group Mediloka Hermina. The acquisition, made progressively through share purchases on the open market, was opportunistic, Quadria Capital’s Abrar Mir told DealStreetAsia. Mir said the company was ‘undervalued’, trading at a discount to its peers in the region.
Overall, however, asset prices remain high in a market flush with liquidity. Where are the opportunities for investors?