We are back with our weekly wrap of significant deal developments and exclusives. Let us look at new funds and fundraising milestones first.
Indonesia is planning to roll out a new investment vehicle, Merah Putih Fund, in December to invest in homegrown mature startups. The fund will be set up in partnership with the venture capital units of top state-owned enterprises, including Telkom Group, Bank Mandiri and Bank BRI, among others. Merah Putih, which translates to red and white or the colours of the Indonesian national flag, plans to invest in revenue-generating startups that have a listing roadmap. In early 2021, Indonesia also introduced its first sovereign wealth fund, a separate initiative to focus on public infrastructure.
ChrysCapital is set to raise $1.26 billion for its ninth fund in one of the largest fundraisings by an Indian private equity fund manager to date. ChrysCapital has so far raised $4 billion across eight funds. It has made almost 100 investments and returned over $5.5 billion to investors through 70+ exits.
Temasek-backed Vertex Ventures China has launched its fifth fund. Founded in 2008, Vertex Ventures China, which manages US dollar and RMB funds, invests in early-stage startups in deep tech, the new digital economy and healthcare. The firm has invested in more than 100 companies since its inception, including unicorns such as 91, Mobike, Changba, Chipscreen, Horizon Robotics, Geek+ & IGG.
India’s Blume Ventures – the backer of edtech unicorn Unacademy, beauty marketplace Purplle and used car selling platform Spinny – has held the first close for its fourth fund at $105 million.
Malaysia’s state-backed MAVCAP has launched two new venture funds with a combined target size of $38.2 million to invest in tech startups in the country and in SE Asia.
The Asian Development Bank (ADB) is considering a $40 million equity investment in Northstar Group’s fifth fund. Northstar is targeting a close at about $600 million.
WaterBridge Ventures, which has backed Unacademy, Atlan, Magicpin, Bijnis and CityMall, has marked the final close of its second early-stage fund at $150 million.
The Maryland State Retirement and Pension System has committed $70 million to Hong Kong-based Baring Private Equity Asia’s eighth buyout fund. BPEA is seeking to raise $8.5 billion for the eighth fund, which would be $2 billion larger than its predecessor fund.
Sydney-based private equity firm Five V Capital has raised a new A$550 million ($398 million) fund to invest in small to mid-market firms.
Australia’s Morrison & Co has hit the first close for its latest open-ended global infrastructure fund with more than $3 billion in commitments and co-investment capital from anchor investors.
Shanghai-based ARC Group has launched a $20 million opportunity fund to invest in sponsors seeking to create new SPACs. The SPAC opportunity fund has made its first close at $12 million. The fund will invest in up to 10-15 selected SPACs.
Fubon Hyundai Life Insurance has committed $20 million to the third Asia fund of BlueRun Ventures. Its predecessor vehicle raised over $500 million.
From Indonesia, we had this exclusive on CLSA Capital Partners seeking to completely exit its over five-year-old investment in food and beverage chain Arena Gourmet. CLSA Capital had invested in Arena in 2015 through its pan-Asian PE strategy ARIA Investment Partners Fund IV. CLSA is understood to be holding around a 45% stake in Arena while the rest is held by the promoters.
Staying with the consumer theme, Mitsubishi-sponsored ASEAN Industrial Growth Fund has exited Malaysian supermarket brand Jaya Grocer, selling its stake back to the company’s founding family. AIGF invested in the firm in 2016.
In yet another major PE exit, Philippine snacks and beverage major Universal Robina Corporation has acquired Malaysia’s Munchy Food from CVC Capital Partners for $452.8 million. With this deal, CVC Capital has fully exited its over three-year-old investment in the Malaysian food company.
Indonesian courier startup J&T Express has raised $2.5 billion in a funding round at a valuation of $20 billion, ahead of its plan to list in Hong Kong as soon as the first quarter of next year, Reuters reported.
From our India desk
India continues to mint new unicorns at a frenzied pace. This week saw real estate platform NoBroker earning the tag. NoBroker raised $210 million as a part of its Series E funding round led by General Atlantic, Tiger Global Management, and Moore Strategic Ventures at a valuation of $1.01 billion.
Mumbai-based online stockbroking startup Upstox is said to have entered the unicorn club after a fresh $25 million fundraise from Tiger Global. The latest financing has reportedly valued Upstox at upwards of $3 billion. The transaction makes Upstox the 40th Indian startup to have turned unicorn this year.
Not surprising then that India is attracting interest from global venture capital firms who have made their first bets on the country’s tech startup ecosystem. Nearly 211 funds made debut investments in India this year, about 64 more than the previous year, Tracxn data shows. Andreessen Horowitz, TCV, Vitruvian Partners and GSV Ventures are among the new entrants backing the India story.
Analysis and deep dives
Thailand continued to top SE Asia’s IPO markets in 2021, with companies raising $4.2 billion via capital markets, out of the region’s $9.8 billion in total. This is the third consecutive year that Thailand has led the region’s capital markets. As venture-backed startups explore public offerings, the SET is gearing up for a series of tech IPOs in the coming year. Thai e-commerce enabler aCommerce and fashion commerce platform Pomelo are said to be exploring IPO options.
In Indonesia, several prominent fintech firms are planning to toss their hats in the ring to acquire a local bank. Those in the race include Funding Societies (Modalku), Investree, Xendit, Komunal, and PAYFAZZ. Indonesia’s banking sector is ripe for M&As given the looming deadline that the regulator has set for banks to meet revised capitalisation norms.
Indonesian wealth tech platform Stockbit is acquiring local securities firm PT Mahakarya Artha Sekuritas in order to provide stock trading services to its users. Ajaib, which became a unicorn recently, too, had acquired a small local brokerage, PT Primasia Unggul Sekuritas, in May 2020 to start stock trading services.
Grab has invested in OVO-backed wealth tech firm Bareksa as part of the latter’s Series C round. The development, which was first reported by DealStreetAsia, was confirmed by a company announcement on Thursday. Bareksa is Indonesia’s first investment marketplace and claims to have sold over 200 mutual funds products through its platform so far. OVO picked up a stake in Bareksa in 2020.
Meanwhile, Grab could list in the US by early December after the SPAC it plans to merge with said it will vote on the proposed deal next week.
Lastly, we take a look at the “flywheel effect” or “network effect” strategy oft-wielded by tech majors. Grab has mentioned the term numerous times in its prospectus and earnings calls. “As we add more offerings, consumer spending and engagement increases. We call this the “Grab ecosystem flywheel,” it wrote in its prospectus. The term was coined by author Jim Collins in 2001 and famously embraced by Jeff Bezos, who used it to form the basis of Amazon’s world domination strategy.