The year started out with all of us circumspect, as the pandemic dragged on. But, as we tracked the deals and fundraising in the space, it became clear that both businesses and their investors, looking beyond the near-term challenges, have their eyes on the supercharged growth that Southeast Asia, India and Greater China promise.
Our most-read stories this year brought you the news, data and trends that showcased and underlined this growth story.
Sea Group in Indonesia
Singapore’s Sea has had a spectacular year. Its New York-listed share price rose steadily, allowing it to raise $6 billion in a rights issue, to hit a peak of $372.70 each in October.
The stock has fallen since then, likely in a broader tech sell-off. But the company, which started off as a game developer, has since established itself as an e-commerce force in Southeast Asia by gamifying the online shopping experience.
Shopee’s top backer, as you read in our deep dive into filings in January, is the family of Indonesian tycoon Martua Sitorus, who made his fortune in palm oil trading.
At the same time, Sea is building its ecosystem, a core part of which is digital payments. Also in January, our reporters in Indonesia found that Sea had acquired Indonesia’s Bank Kesejahteraan Ekonomi (BKE), with plans to transform it into a digital bank.
Tracking Grab’s journey
2021 has been seminal for the company, which was founded in 2012 as a taxi-hailing app along the lines of Uber in the US, and Gojek in Indonesia.
We spoke to Ming Maa, president at Grab, on his journey, and the company’s, through the years.
You’ve been able to track developments at Grab through our stories on whether its flywheel strategy will take off; and if there are fundamental issues behind its less-than-stellar Nasdaq debut early this month.
Another development readers paid attention to was how Grab, too, is looking to develop its digital banking chops and saw partnering banks in Indonesia as a key tactic.
Year of unicorns
Along with the record fundraising, the year also saw the minting of a record number of new unicorns in Southeast Asia, or companies whose valuations, at least on paper, have hit $1 billion.
Our story in October counted 19 companies reaching unicorn status by that time this year. They included e-commerce logistics companies J&T Express, Ninja Van, and Flash Express (as Thailand’s first unicorn); car marketplaces Carro and Carsome; and cryptocurrency investment platform Matrixport.
Since then, new unicorns include Vietnamese payments play Momo, which completed its Series E funding at a $2 billion valuation. The round in December comes within a year of its Series D round, led by Silicon Valley’s Goodwater Capital, and private equity firm Warburg Pincus.
The latest to join the club is Indonesian coffee chain Kopi Kenangan. It became the 25th unicorn to emerge from Southeast Asia this year after closing a $96 million Series C round.
Developments in China have been significant this year, as regulators tightened the screws on a broad range of industries – from gaming and tech platforms to after-school tutoring programmes.
Billions of dollars in value have been wiped off tech stocks, but investors DealStreetAsia spoke to were sanguine, pointing out that China remains a major growth market for investors, with the potential for “outsized returns.”
Indeed, Asia-focused alternative investment manager PAG is expecting to double down on its private equity investments in the country, as group chairman and CEO Weijian Shan told us.
And a bright spot for investors is the burgeoning electric vehicle market. China’s tech giants, including Alibaba, Baidu, and Xiaomi, are also turning to the sector.
PE and VC evolution
As the ecosystem in Asia evolves amid the challenges of the pandemic, fund managers are increasingly turning to continuation vehicles for liquidity.
In Southeast Asia, Malaysia-headquartered private equity firm Navis Capital Partners closed its Navis Asia Green Loop Fund to acquire companies from its 2010-vintage Navis Asia Fund VI portfolio.
Vertex Holdings got the backing of Liechtenstein-based financial group LGT for its Vertex Legacy Continuation Fund.
In China, too, continuation funds are gaining traction as LPs seek options to cash out from their investments.
The turmoil in Myanmar at the beginning of the year has been a major setback for investors, and businesses, in the country.
Payments company Wave Money, which provides myriad services to a severely underbanked population and had been set for takeoff, has seen users and investors fall off. Among them, Chinese financial services giant Ant Group, an affiliate of Alibaba, had been poised to acquire a significant minority stake for $73.5 million.
In any case, Alibaba is thought to be doubling down on payments in Southeast Asia through its e-commerce unit Lazada, which runs Lazada Wallet.