Editor’s take: The week that was — May 9-14

You’ve probably already got the memo that digital coins have been bleeding for a while. This week, fresh market mayhem triggered fears that a crypto winter is here as the so-called ‘stablecoins’ belied their name.

The collapse of TerraUSD (UST), a stablecoin whose 1:1 peg to the US dollar broke on Tuesday, and its sister token Luna sent ripples through the market, bringing down more high-profile digital assets such as bitcoin. The US Federal Reserve has flagged stablecoins — digital tokens pegged to the value of traditional assets — as a potential threat to financial stability.

Around $800 billion was shaved off from the market value of crypto assets in the past month as risk assets have lost their charm given that the era of easy monetary policy seems near.

Bitcoin fell below $30,000 levels this week from its Nov. 10 record high of $69,000.

Ominously, the fall comes after blockchain funding had touched a record $9.2 billion in Q1 2022, compared with $3.6 billion a year ago, and $800 million in Q1 2020, showed data from CB Insights.

And the funding continues. This week, Dragonfly Capital, a crypto-focused investment firm, made the final close for its third venture fund and a feeder vehicle with capital commitments of $650 million.

Cryptocurrency exchange KuCoin raised $150 million in a Series B round led by Jump Crypto, giving it a valuation of $10 billion. Meanwhile, Nomura said it has begun offering bitcoin over-the-counter derivatives to clients.

Whether investors will continue to keep their faith amid the ongoing market spasm, remains to be seen.

Moving on to other news of the week.

Top headlines

Indonesian digital identity network VIDA raised at least $47.67 million in a Series A round, according to regulatory filings. London-based venture capital firm Hedosophia led the round, while Jakarta-based Alpha JWC Ventures put in $10 million.

Our monitoring of ACRA data also showed that Southeast Asian e-commerce site Lazada has issued new shares worth $378.5 million to its parent company Alibaba. This is the largest capital injection by Alibaba in Lazada since June 2020, when it had pumped $1.3 billion.

Lazada was also caught in a controversy over a promotional video that allegedly mocked the royal family of Thailand.

Our reporters got wind this week that Indonesian online brokerage and unicorn Ajaib plans to increase its stake in the country’s small-sized lender Bank Bumi Arta to more than 50%, while P2P lender Investree is set to acquire up to a 19% stake in PT Bank Amar Indonesia.

Also in Indonesia, insurtech startup Qoala snagged $65 million in a Series B round led by Eurazeo, while Mekari, an SME-focused SaaS startup, raised $50 million in a funding round led by Money Forward Inc.

Meanwhile, Sea Ltd is said to be launching its digital bank in the Philippines in June. The launch of SeaBank Philippines comes after the group launched Bank SeaBank Indonesia in the latter half of 2021.

Singapore-based multi-family office Kamet Capital Partners raised $50 million — half its target corpus — for the first close of its debut closed-end fund.

In India, meanwhile, Life Insurance Corporation (LIC) concluded the country’s largest-ever public issue. The insurance behemoth’s IPO was oversubscribed 2.95 times at the end of six days of bidding on Monday.

Also, edtech decacorn BYJU’s is in talks to raise $1 billion in fresh financing as it looks to further expand its operations inorganically.

Elsewhere in Asia, SoftBank Group chairman and CEO Masayoshi Son laid out a defensive strategy to help the company weather its biggest-ever quarterly loss of $16.2 billion. Son vowed to scale back new investments in the face of a sell-off in tech stocks.

Data-led stories

This week, we released data on startup fundraising in the month of April in three of the regions we cover —Southeast Asia, China, and India.

In Southeast Asia, PE-VC investments rose to $2 billion in April, the highest so far this year. Three mega deals — $690 million raised by Coda Payments, $210 million raised by Voyager Innovations, and Sky Mavis’s $150 million Series C — accounted for nearly half the fundraising.

In India, though, fundraising was the lowest in a month so far this year. Startups raised $2.9 billion across 129 transactions in April.

Greater China clocked a busy month of dealmaking in April with the completion of 170 venture deals, but the total funding value was down 41.9% from the previous month as smaller-sized, early-stage deals took the bulk of the investments.

Deep dives and analysis

With ride-hailing and e-commerce gaining popularity over the past decade, the so-called ‘gig worker’ has become omnipresent. The rise of a new class of workers who are seen as “partners” instead of “employees” by the tech companies has raised numerous questions regarding their basic rights. Unsatisfied with company policies, and seeing incentives shrink, protests and strikes by gig workers are on the rise.

Taking cognizance of these issues, governments in Indonesia and Singapore are warming up to the rights of gig workers, we reported this week.

In another analysis, we examined corporate governance issues at venture-backed private companies against the backdrop of the probe at Singapore-based fashion marketplace Zilingo. Experts noted that investors and directors on the board have oversight responsibilities.

Indonesia’s Telkomsel is transforming into a digital telecom firm. Earlier this year, the company launched a new subsidiary Telkomsel Ekosistem Digital — known by its brand Indico — that serves as a holding company overseeing several digital startups. We interviewed Andi Kristianto, the CEO of Indico, this week.

In another interview, Eko Kurniadi, partner at Alpha JWC Ventures said the VC firm expects delays in the IPOs of its portfolio firms amid market uncertainties. At least 4-5 of the VC’s portfolio companies were looking to list on the bourse over the next few months. “We might be looking at one or one-and-a-half years for the market to stabilise and then begin to prepare the companies for a public listing.”

We also took a look at tokenization —the digitisation of an asset using blockchain and smart contract technology — and how Singapore-based private market exchange ADDX is cashing in on the trend.

In another deep dive, we examined how the Indonesian agritech startup TaniHub Group’s move to double down on its P2P lending platform, TaniFund, does not seem to be going as per plan. In recent months, bad loans — measured by TKB90 levels —have increased on the platform.

And finally

A new twist has emerged in Elon Musk’s plan to take over Twitter. On Friday, the Tesla boss tweeted that his $44 billion cash deal was “temporarily on hold” while he waits for data on the share of fake accounts on the platform. This sent Twitter shares on a free fall — the scrip was down 20%, but regained some ground after Musk tweeted again saying he remains committed to the deal.

Clearly, this saga will not fit into 280 characters!

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