Editor’s take: The week that was—Oct 30-Nov 4

Editor’s take: The week that was—Oct 30-Nov 4

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Welcome to The Week That Was, DealStreetAsia’s digest of the top news from the world of private capital investing, which, we humbly submit, was the recent recipient of the Digital Media Asia 2023 award for the Best Newsletter.

It’s been a busy week—several companies, including a celebrated Indonesian tech giant, announced quarterly earnings; a former crypto king was convicted of fraud in the US; and there was some good news from China on the startup fundraising front.

Let’s dive in.

It’s earnings season

Four months may be too short a time to assess the performance of a CEO, but investors are already scrutinising Patrick Walujo’s leadership of the Indonesian tech conglomerate GoTo. The IDX-listed giant announced its third-quarter earnings this week.

GoTo more than halved its net loss for the nine months (9M) ended Sep 30, 2023, showing progress in meeting its target of clocking positive adjusted EBITDA this year. Its losses in July-Sep 2023 were down 65% compared with the same period last year.

Walujo’s stint so far has been marked by the introduction of several new features, including GoRide Transit, which seamlessly integrates public transport and ride-hailing, and Hemat to entice budget users of GoCar and GoFood. The company is also piloting GoRide Nego, which allows consumers and drivers to negotiate on a trip fare. GoTo also launched new fintech products and features, including the GoPay App, cash loans on Tokopedia, and GoPay Tabungan by Jago.

Investors are of the opinion that the company should be given more time to reap the benefits of these new initiatives.

Among other companies that announced earnings, Indonesia-listed investment firm Saratoga slipped into the red in the first nine months of this year, driven by a significant loss on investments. In 9M 2023, it posted a net loss of 10.6 trillion rupiah, compared with a net profit of 7.15 trillion rupiah in 9M 2022.

Saratoga is planning to double down on the renewable energy, healthcare, technology, and consumer sectors as it looks to build a more sustainable and stable portfolio, Devin Wirawan, Investment Director of the firm, said in an interview with DealStreetAsia.

In India, meanwhile, food delivery platform Zomato posted its second consecutive quarterly profit, driven by an uptick in food orders on the platform and increased demand for its quick commerce business Blinkit.

Reports and data-led stories

This week, we released our quarterly update on startup fundraising in Greater China. Dealmaking by private market investors in the region remained elevated in Q3, according to the Greater China Deal Review: Q3 2023 report.

The third quarter of 2023 saw startups in Greater China seal 670 venture deals—the second highest on record. Capital raised in the three months rose 28.5% QoQ to $14.1 billion. At this run rate, dealmaking in full-year 2023 is poised to exceed last year’s levels. However, China’s IPO market is in a slump.

This is in sharp contrast to other emerging Asian markets, including India, where funding has slowed even at the early stages, and Southeast Asia, where the digital economy is expected to grow at a slower pace than last year, according to the e-Conomy SEA 2023 report by Google, Temasek, and Bain & Co.

Fundraising news and deals

Indonesian daycare operator Kindercastle is said to be in talks to raise funding from several venture capital investors, including Golden Gate Ventures. This investment could be the first for GGV in the early education and parenting segment.

PT Telkom Indonesia is considering selling a stake in its subsidiary PT Swadharma Sarana Informatika (SSI), which could value the cash management firm at mid-double-digit millions.

SPH Media has acquired technology media startup Tech in Asia. We learnt from sources that the transaction pegs Tech in Asia’s valuation at $30 million.

Singapore-based enterprise tech company VE Technology Group has raised $22 million in a new funding round led by Mox Capital.

Singapore’s Health Management International (HMI) is purchasing a majority stake in Harley Street Heart & Vascular Centre.

Singapore’s sovereign wealth fund GIC has picked up a 35% stake in Hotel Investment Partners (HIP). GIC also sold back its 49% interest in a Sydney-based shopping centre to its owner Vicinity Centres for about $194.5 million.

Singapore-based biotech company Engine Biosciences raised $27 million in its Series A extension round led by Polaris Partners.

In China, Chengshi, which designs and manufactures electric vans and trucks catered to last-mile delivery in China, secured $136.6 million in a Series B funding round led by Hidden Hill Capital.

LP-GP news

In this week’s LP View column, our India team reported that more and more first-time fund managers are coming forward to invest in the country’s private companies. Venture Intelligence data show first-time fund managers mopped up $963 million from LPs in 9M 2023, an almost 3x jump over the same period last year.

Despite macroeconomic headwinds and a slowdown in deal activity, the pick-up in exits this year shows how India continues to stack up well for global LPs eyeing investments outside their home market. PE-VC firms encashed $17.09 billion in the first three quarters of this year, recording a 24% jump.

In other news, Navis Capital Partners plans to launch its ninth vehicle early next year and is targeting to raise around $1 billion, DealStreetAsia learnt. Navis’s current fund, which closed at $900 million in 2021, had reportedly targeted to raise $1.9 billion.

Northstar Group is said to be targeting $600 million for its sixth fund and plans to launch this vehicle in early 2024. Furthermore, the PE giant is on track to hit the final close of its first venture capital fund, Northstar Ventures I, L.P. (NSV I), at around $150 million.

Singapore-based agrifood-focused venture investor VisVires New Protein has rebranded as Clay Capital and announced the close of its $145-million second fund.

US private credit giant Ares Management Corporation has secured the final close for its sixth flagship Asia special situations fund at $2.4 billion, including a sidecar vehicle, after around 22 months of fundraising.

Canadian alternative investment firm Brookfield Asset Management announced that it secured $1.5 billion in commitments from APAC investors for its latest global infrastructure debt fund, Brookfield Infrastructure Debt Fund III.

Deep dives and interviews

Tech-enabled B2B commerce firms that digitised small traditional retailers had a lot of potential in Southeast Asia at one point in time. Recent developments, however, show that the sector is at a crossroads. While Lummo has entered into voluntary liquidation, Ula has pivoted to a new business model.

Singapore government-backed deep tech investor and ecosystem builder SGInnovate is actively looking for investment opportunities in Vietnam, its CEO Jui Lim told DealStreetAsia. AI, semiconductors, and the green economy sectors are big opportunities that Vietnamese startups can explore, said experts at the Vietnam Venture Summit 2023.

Aquila Clean Energy, part of German investment and asset development company Aquila Group, is ramping up its investments and operations in Asia Pacific’s clean energy sector, said its Asia Pacific CEO Alexander Lenz.

Malaysia Debt Ventures (MDV), a technology financier set up by the country in 2002, is preparing a blueprint to help early-stage startups access funding more easily. MDV is working on a simple agreement for future equity (SAFE) programme for young startups to raise funding quickly, said its CEO Nizam Mohamed Nadzri in an interview.

Even as crypto VC firms worldwide are staring at one of the chilliest fundraising times, Hong Kong-based CMCC Global has launched its $100 million fund. Co-founders Martin Baumann and Charlie Morris and managing partner Yen Shiau Sin told DealStreetAsia that the new Titan Fund has already hit its target corpus in the first close earlier this month.

And finally…

The fortunes of Sam Bankman-Fried have more or less resembled the trajectory of the cryptocurrencies he bet on—a wild rise and then a crash. The founder of collapsed crypto bourse FTX was convicted of stealing from customers in one of the biggest financial frauds on record. The fall from grace of the wunderkind is sure to shake investors’ faith in crypto assets.

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