Time is running out fast for ByteDance-owned short-video app TikTok in the US. The looming threat of a business ban in the country, where it sold nearly $1.2 billion of goods from September through December 2023, is driving millions of users and advertisers to seek alternatives, presenting a significant opportunity for rivals such as YouTube and Meta.
TikTok not only fears losing the world’s largest consumer market but also a domino effect that could see other countries imposing similar bans.
Its parent ByteDance, however, is steadfastly opposing a sale and desperately trying to turn things around.
Scroll down for the other headlines of the week.
LP-GP news
HQ Capital is looking to expand its fundraising and investment practices in Asia with the recent appointment of a new regional head, as the European private equity firm taps the region’s growing wealth with a buyout-centric strategy.
Mekong Capital, the Vietnam-focused private equity firm which has so far bet on traditional investment assets like retail and brick-and-mortar models, is eyeing new opportunities as it builds its future pipeline.
Copenhagen-based life sciences investor Novo Holdings is bolstering its focus on Asia by increasing its annual allocation for, and average ticket size in, the region. The firm plans to allocate $300-400 million annually to the region as part of its growth strategy.
As the Asia Pacific begins its energy transition journey, the region’s growth potential is luring investors looking to benefit from the shift to clean energy. That’s one of the tailwinds the $61.1-billion US infrastructure investor Stonepeak is betting on.
Trident Growth Partners, a new private equity firm in India, is currently on the road to raise about $250 million for its debut growth-stage equity fund.
Swiss investment company Partners Group has launched another private equity secondary strategy fund worth up to $12 billion, betting on growing deal flows in the secondary space, its chairman of Asia said.
TPG Inc is reportedly set to slash its China allocation by more than half from prior regional funds, as the US alternative asset management firm deploys capital from its eighth Asia buyout fund.
Private equity fundraising in Asia Pacific fell to a 10-year low in 2023, with dealmaking and exits also dropping sharply as investors pulled back amid the ongoing macroeconomic uncertainty, according to Bain & Co’s Asia-Pacific Private Equity Report 2024.
Abu Dhabi sovereign wealth fund Mubadala Investment Company has led a $120.6-million equity financing round in Warburg Pincus-backed Indian educational loan provider Avanse Financial Services.
British financial services group HSBC has set aside $1.15 billion across two new debt funds focused on “digitising” companies in Southeast Asia.
Taiwanese insurer Shin Kong Life has divested its stake in five private equity funds to Committed Advisors, FlowStone Partners, Golding Capital Partners, Montana Capital Partners, and Portfolio Advisors.
XYuan Capital, a Chinese investment firm focusing on technological innovations in the new energy vehicle sector, has expanded the size of its first blind pool fund to bring the firm’s total assets under management to almost 1 billion yuan ($138.4 million).
Global private equity major Blackstone reportedly plans to add $25 billion of Indian private equity assets over the next five years as the country continues to attract global investors.
Deal corner
Singapore-based venture capital firm Resolution Ventures is understood to have set a target of up to $50 million for its second fund as it looks to ramp up investments in the fintech sector.
Singapore-based digital wholesale lender ANEXT Bank has received another S$200 million (about $148 million) in capital infusion from its parent company, Chinese fintech giant Ant Group.
Walmart-owned Indian e-commerce major Flipkart has injected $140.6 million more into its marketplace business, Flipkart Marketplace, according to filings with Singapore’s Accounting Corporate and Regulatory Authority.
GGV Capital Asia has officially rebranded itself to Granite Asia. The announcement comes months after GGV Capital, a global venture capital firm with portfolio firms across the US, China, India, Southeast Asia and others, was forced to spin off its Asian arm due to growing pressure in the US to limit investments in Chinese technology.
Indian venture debt provider Alteria Capital Advisors, which has backed startups such as BharatPe and Dunzo, has closed the venture debt part of its third fund at an oversubscribed $195 million.
Indonesian insurtech platform Qoala has announced raising a total of $47 million in its Series C funding round anchored by PayPal Ventures, the corporate venture arm of payments giant PayPal; and US-based insurer MassMutual.
Bank of the Philippine Islands (BPI), the banking arm of the Zobel de Ayala family, is selling its entire stake in GoTyme Bank, the digital banking venture of conglomerate JG Summit Holdings and South Africa’s Tyme.
British International Investment and Japanese energy company Idemitsu Kosan have jointly invested an undisclosed amount in Skye Renewables Energy Pte Ltd., a Southeast Asia-focused renewable energy platform.
PATEO, a Chinese Internet of Vehicles technology service and product provider, has secured 1.5 billion yuan ($207.8 million) in an equity financing round.
Vaccine developer Varnotech has secured 600 million yuan ($84 million) in a Series B funding round co-led by Beijing Pharmaceutical and Healthcare Industry Investment Fund.
WeWork co-founder Adam Neumann is said to have submitted a bid to buy back the bankrupt office-sharing company for more than $500 million.
Indonesian digital wallet LinkAja has raised funds from Japanese trading and investment company Mitsui & Co Ltd, confirming a DealStreetAsia report in June last year.
Singapore-based growth equity firm Venturi Partners has invested $25 million in the Philippines-focused discount grocery store chain DALI Stores.
Alibaba Group has offered to buy the 36% of Cainiao it does not already own for up to $3.75 billion, abandoning plans for an initial public offering of the logistics business in Hong Kong.
Ambit Finvest Pvt. Ltd., a non-banking financial company under the Ambit Group, has raised Rs 690 crore ($83 million) from Japanese brokerage and investment bank Daiwa Securities Group, its parent company, and existing investors.
Sterlite Power, which is backed by metals magnate Anil Agarwal’s Vedanta Group, has formed a joint venture with Singapore’s sovereign wealth fund GIC to set up a new platform to develop and operate power transmission projects in India.
Chinese autonomous delivery vehicle maker Neolix Technologies has announced the completion of a Series C funding round of 600 million yuan ($83 million) to speed up R&D and nationwide product deliveries.
GDS Holdings Ltd has agreed to sell a stake in its data centre business outside of mainland China to a group of private equity investors for $587 million.
Indonesia-focused private equity firm Capsquare Asia Partners is eyeing a full exit from PT Champ Resto Indonesia (Champ Group), an IDX-listed restaurant chain operator it acquired from the now-defunct Abraaj Group in 2014.
The holding company of ChangXin Memory Technologies is in the process of raising nearly 10.8 billion yuan ($1.5 billion) in a new round of equity financing even as the Chinese memory chipmaker faces potential sanctions by the Biden administration amid China’s intensifying tech rivalry with the US.
Social media platform ShareChat has raised $48.8-million funding via convertible debentures from its existing investors Temasek and Lightspeed.
Earning updates
Indonesian-listed e-commerce major firm Bukalapak swung to a loss in FY2023 mainly driven by investment losses in digital lender PT Allo Bank Tbk. Though the firm failed to turn Ebitda-positive in Q4 2023, it is inching closer to its profitability target.
Singapore-based car marketplace and lender Carro’s losses widened more than six-fold year on year in the financial year ended March 31, 2023, outstripping revenue generated over the same period, according to recent regulatory filings.
Google-backed Indian smartphone lock-screen content company Glance’s losses doubled during the financial year ended March 2022 despite a 2.7x jump in revenue, regulatory filings showed.
Deep dives
Last-mile delivery has emerged as the latest battleground in Indonesia’s dynamic e-commerce ecosystem, with big players such as Shopee and Lazada ramping up their logistics capabilities.
The Hong Kong stock market — one of the biggest and most crucial financial centres in the world at one point in time — seems to be losing some of its appeal, with a handful of firms listed on the bourse planning to go private as stock prices run low.
China’s market downturn has spelt trouble for many IPO hopefuls and created a rift between them and their PE/VC investors that is increasingly leading to arbitration or litigation when companies fail to follow an agreed timetable to go public and allow funds to exit.
Even as India has added two startups to its unicorn club in the first quarter of 2024, compared with just two in the whole of 2023, it’s a far cry from the heady years of 2021-22. With valuations stabilising, the frenzy to enter the unicorn club also seems to have mellowed.
Blame it on the VC funding winter, but milking every dollar has been the single-most important preoccupation for founders of late. In Southeast Asia, this is paving the way for novel hiring concepts to emerge—like that of “fractional” chief marketing officer (CMOs), now fronted by a new Singapore-based firm, aptly named, Fractional.
The Philippines’ new sovereign wealth fund is set to launch in the third quarter of this year with “proper” corporate governance to avoid the fate of scandal-ridden 1Malaysia Development Berhad, according to its CEO.
And finally…
After a slow start to the year, Southeast Asia-focused private equity funds made a strong comeback in the second half of 2023, ending the year with six fund closes raising $2 billion in new capital, finds DealStreetAsia’s latest report. The 2023 performance was on a par with the previous year’s tally of six fund closes and a $2.1 billion haul.
According to Private Equity in SE Asia: H2 2023 Review, the second half saw three funds holding final closes after bagging $1.55 billion – more than triple the amount raised in the first six months of the year.
