Editor’s take: The week that was – June 10-14

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I begin with a big people story Tanu Pandey broke this week on global growth equity firm General Atlantic witnessing a reshuffle in its top deck with two of its executives Wai Hoong Fock and Piti Hongsaranagon said to be on their way out. Fock, a managing director at General Atlantic and head of Southeast Asia, is leaving the firm to join Singapore’s Temasek while Hongsaranagon, a vice president also focusing on the firm’s SE Asian investments, is likely to join a regional family office.

Former Sea president Nick Nash’s private equity debut is one story we have tracked extensively. We had this exclusive on Asia Partners, the new firm, securing an $80-million first close for its debut fund.  The firm also plans to raise over $300 million for the fund. An $80-million first close signals strong investor appetite for Southeast Asia’s burgeoning market for e-commerce, payments, mobile apps and other tech and internet startups.

Fundraising updates

Silicon Valley-based VC 500 Startups is raising its second South Korea-focused fund four years after it first collected $15 million for its first South Korea vehicle, Kimchi microfund. The predecessor has over 30 companies in its  portfolio.

Centurium Capital, a Greater China-focused private equity firm, has made another close for its debut China fund with $1.89 billion in commitments, exceeding the revised $1.5-billion target.

HK-based asset manager STI Financial Group is preparing to hit the market next year with an Asia-focused real estate debt fund, that may look at raising up to $400 million. The fund will focus on opportunities in developed Asian markets like Singapore, Hong Kong, and South Korea.

Hustle Fund, a pre-seed investor based in San Francisco and Singapore, has secured 20 per cent of capital commitments to reach the first close of its $50-million second fund. Chinese online gaming giant Shanda is also returning as an LP for the second vehicle, Kristie had this scoop.

Singapore-based banker UOB-backed private equity arm UOB Venture Management has mopped up about $300 million for its Asean China Investment Fund IV, that will invest in businesses in Southeast Asia and China. The fund is said to be targeting to raise $500 million in total, much larger than its predecessor that closed at $290 million.

US-based AEW Capital Management, one of the world’s largest real estate managers, has secured a commitment of $500 million from the Teacher Retirement System of Texas (TRS). The commitment is for the firm’s value-add fund AEW Global Investment Fund T, L.P. The vehicle will have a global mandate with an allocation for Asia.

South Korean venture capital firm DT&Investment (DTNI) has allocated 20 per cent of its nearly $200-million AUM for a Vietnam-dedicated VC fund amid growing investor interest in the south-east Asian country. That translates into a $40-million target for the vehicle, which would be just an initial start, reported Ngoc. Other Korean funds and corporations active in Vietnam’s startup space include Nextrans, Bon Angels, Korea Investment Partners, Hanwha, Lotte and Shinhan Financial.

Interviews and Analysis

Ctrip’s going global strategy:  “We are going through the startup phase for the third time,” Jane Jie Sun, CEO at Ctrip, told Krisie Neo in an interaction. “The first was when we started Ctrip as a company. The second was during the mobile revolution. Today, it is the third – Ctrip is going global,” she added, outlining the firm’s inorganic growth focus to stave off competition and expand its operations globally. It acquired Skyscanner for $1.7 billion in 2016 and US travel discovery app Trip.com in 2017 for an undisclosed amount.

Lalamove looks beyond the unicorn moniker: For many startups, achieving that $1-billion valuation or unicorn status might be the ultimate dream come true. Not for Hong Kong-based on-demand logistics startup Lalamove. “Entering the unicorn club is a nice milestone to achieve but, at the same time, it is very arbitrary,”  Lalamove head of international Blake Larson told Ka Kay Lum. Read more to know why he feels so.

Fabelio eyeing profitability: We also featured Indonesian online furniture e-commerce startup Fabelio, which is on the road to raise its Series C funding round. Riding on suitable demographics, the startup is looking at chasing an omnichannel strategy to mark its presence in every district of Indonesia.  Fabelio co-founder Christian Sutardi told Sarah Yuniarni that Fabelio was targeting to close the round this August. He also said, the startup was “very close to profitability.”

Axiata Digital to focus on core units: Axiata Digital, the arm of Malaysian telecom giant Axiata Group, is looking to further invest into its core businesses – e-wallet service Boost, regional digital agency ada and global API platform provider Apigate – after securing a strategic minority investment from Japanese conglomerate Mitsui & Co Ltd.  Axiata Digital CEO Mohd Khairil Abdullah told Ka Kay Lum that the funds will enable the firm’s core businesses to “scale up, be competitive and profitable”.

New ride-hailer in Vietnam:  Viettel Post, the delivery arm of Vietnam’s biggest telco Viettel Group, has developed its ride-hailing app, named MyGo, possibly posing the biggest competition to Grab – the leading player in the country.  The biggest advantages of Viettel Post are its nationwide presence and  ecosystem of payments and infrastructure. In this analytical piece, Ngoc writes about what the entry of this new player might mean for the ride-hailing business in Vietnam.

In another in depth article on Vietnam, Ngoc explores how the country has come under a spotlight attracting a lot of interest from PE investors.  PE firms invested as much as $1.6 billion in Vietnam in 2018 across 38 deals, a whopping 285 per cent jump from $418 million in 2017, per Grant Thornton. Ngoc speaks to several PE players in the ecosystem to get a sense of what is driving this trend.

The exit stories

Deviana Chuo has written a series of private equity exit and M&A stories on Indonesian firms, indicating some prolific deal-making activity in south-east Asia’s largest market this year.

To recap the top headlines, Singapore-based healthcare-focused private equity firm Quadria Capital is preparing to list its Indonesian pharmaceutical company Soho Global Health in the local stock exchange in 2019. Quadria had invested in Soho in March 2015, which was its first investment in Indonesia.  According to Quadria’s 2017 annual review, the PE firm distributed 10.9% of its total $350-million fund into Soho.

Singapore-based Northstar Group is said to be planning to sell its stake in listed telecom tower company Centratama Telekomunikasi Indonesia,  The PE firm holds 38.8% stake in Centratama Telekomunikasi through an SPV.

Indonesia-listed energy company Medco Energi International is said to be scouting for a strategic partner for its power subsidiary, Medco Power Indonesia. Some power companies from Thailand and China are said to have reached the pre-qualification stage so far.

Indonesia-focused private equity firm Falcon House Partners is looking to exit from food ingredients manufacturer Haldin Pacific Semesta. Falcon House Partners is known to own a significant minority stake in Haldin Pacific Semesta, in which it invested in 2013.

Lastly, I recommend this guest post that examines the Superapp strategy adopted by south-east Asian ride-hailing majors. Author Bernard Leong highlights how winning the payments piece and the Indonesian market would prove vital for the success of the strategy in the region.