This week, India kickstarted the world’s largest democratic exercise as voting opened in the first of its seven-phase general elections. Polling will continue for another six weeks and only on June 4 will the world know if Prime Minister Narendra Modi will stay in office for a third consecutive term.
Meanwhile, venture investors focused on the country are holding their purse strings tight, especially when it comes to writing large-sized cheques, as our India Deal Review: Q1 2024 report showed.
Private equity and venture capital investments into Indian startups stood at a mere $2.61 billion in Q1 2024, registering a drop of 11% from $2.94 billion in the previous quarter, according to the report. On a year-on-year basis, fundraising value was down 22%.
Megadeals, or transactions worth at least $100 million, dropped almost 65% sequentially in value terms to touch $323 million in Q1. This is the lowest funding witnessed through megadeals in India in the past 13 quarters.
“India should see funding numbers bounce back in Q3 2024 after the election results and the annual budget. Deals are already being negotiated and many companies have filed or will file their IPO papers soon,” said Siddarth Pai, founding partner, 3one4 Capital.
This week we also released our monthly deal review of fundraising in Southeast Asia. Startups in the region garnered around $498 million in funding in March—a 28% increase from the previous month and the highest amount raised so far this year. Like in India, large cheques have been scarce and only one megadeal was registered in the month.
Moving on to the other top stories of the week.
Bitcoin halving
In the world of crypto, ‘bitcoin halving’ is an event that is as anticipated as, and occurring nearly as frequently as, general elections.
The world’s largest cryptocurrency completed its halving this week, a phenomenon that happens roughly every four years, according to CoinGecko. Halvings are a fundamental part of bitcoin’s design, where the issuance of new tokens are cut by half.
Hao Yang, head of financial products at Bybit, explained in an opinion piece for us how the 2024 halving is different from previous ones.
In another analytical piece this week, we noted how investors have been wading into the bitcoin-native ecosystem—firms and projects dedicated to levelling up the bitcoin blockchain network. “Our team is looking to deploy in several bitcoin infrastructure firms. It’s one of the hottest spaces,” said Newman Capital’s founder Adrian Lai.
Meanwhile, Hong Kong’s securities regulator has approved the first spot bitcoin and ethereum exchange traded funds (ETFs), a milestone on the way to becoming Asia’s first city to accept the cryptocurrencies as a mainstream investment tool.
LP-GP updates
Jebsen Capital, the growth equity investment team of Hong Kong-based Jebsen Group is scouting for more M&A opportunities this year. “There is a lot of privatisation of listed companies these days. And you probably also see a lot of buyouts or mega funds exiting some of their investments. These are all opportunities for us,” Victor Liu, Managing Director, Jebsen Capital, told DealStreetAsia in our weekly The LP View column.
South Korea-based Shinhan Venture Investment has secured the first close of its Shinhan-GB FutureFlow Fund, a Japan-focused vehicle launched in October last year in partnership with the Japanese VC firm Global Brain. The fund raised $30 million from LPs in the first close, said JinSoo Lee, Shinhan Venture Investment’s managing director.
Singapore-based multi-family office Kamet Capital has closed its first closed-end fund, Founders Fund I, at $70 million. This is slightly below its $100 million original target set in early 2022.
The $35.5-billion US pension fund Employees Retirement of Texas (ERS) has committed to invest $50 million in TPG Asia VIII, the latest iteration of TPG Capital‘s Asia-focused buyout funds.
India-focused private equity fund of funds Evolvence India has so far raised $226 million from US investors for its fourth vehicle, according to the company’s latest filings with the US Securities and Exchange Commission.
Germany’s DEG has committed to invest $15 million in the fifth Southeast Asia-focused fund of venture capital firm Wavemaker Partners.
Fubon Life Insurance, the insurance unit of Taiwanese financial conglomerate Fubon Financial Holdings, has committed to invest $70 million in the latest flagship fund of US private equity firm Veritas Capital.
Inviga, a healthcare fund co-founded by BS Ajaikumar, founder of HealthCare Global Enterprises Ltd, and Ajay Garg, the founder of Equirus Capital, has secured a first close of $20 million.
Deals counter
Among the top deals this week, Microsoft is planning to invest $1.5 billion in G42, an AI firm in the UAE, the New York Times reported.
US private equity major Warburg Pincus has announced its investment in Vietnam-based hospital group Xuyen A, confirming a DealStreetAsia report in November.
The sale process of Invictus International School, a Singapore-based education business owned by Chip Eng Seng Education’s Sing-Ed, is said to have stalled as interested buyers, including private equity firms, are taking time to examine certain deal terms linked to the entity’s only profitable campus, sources told DealStreetAsia.
Center Back Capital, the new investment firm of private equity investor Bert Kwan, has invested in Vietnam-based clinic chain Heli Care’s seed round. Kwan said this is the first announced deal of his firm.
Abu Dhabi’s largest Islamic bank Abu Dhabi Islamic Bank (ADIB) is in talks to buy a minority stake valued at around $1.1 billion in Indonesia’s top Islamic lender, Bank Syariah Indonesia, Reuters reported.
Indonesia-listed laboratory chain PT Diagnos Laboratorium Utama (Diagnos) plans to acquire a 97% stake, worth $24 million, in the DNA testing platform ASA Ren through a rights issue.
Indonesian poultry tech player Chickin is understood to have finalised an $8-million extension round led by GGV Capital and joined by ADB Ventures and Integra along with existing investors.
Interviews
Ruchira Shukla and Karthik Chandrasekar, who founded the VC firm Synapses spoke to us this week about their platform’s plans. Synpases, which is targeting to raise up to $150 million for its debut investment vehicle, is bullish on Indian companies building products for the world. “That’s where the opportunity lies,” said Shukla, a former IFC executive.
We also spoke to EQT Private Capital Asia Partner Ashish Agrawal, who focuses on investment activities in India. The country’s healthcare sector is expected to deliver a robust deal flow buoyed by its ability to cater to global demand and supported by favourable policies, Agrawal noted.
Singapore-founded boutique skincare line Allies of Skin, which closed its first institutional funding from Meaningful Partners, a Los Angeles-based growth-stage investor focused on consumer brands is now drawing up plans to expand in the US, said its CEO and founder Nicolas Travis.
Indonesian mobile cafe startup Jago is looking to ramp up its service coverage and spruce up its fleet after raising $6 million in a Series A funding round led by existing investors Intudo Ventures and BEENEXT Accelerate. Riding on young Indonesians’ new-found craze for coffee, Jago is targeting to increase its fleet of carts to 1,500 from 300 now, said co-founder and CEO Yoshua Tanu.
Deep dives
The Hong Kong stock market has lost some of its lustre lately, but it may witness a resurgence soon thanks to candidates across the technology, healthcare, and retail industries. IPO aspirants submitted a total of 64 applications to the Hong Kong Stock Exchange in Q1, marking an increase of 23% year-on-year.
This week, we published a deep dive on Vietnamese EV maker VinFast’s plans for Indonesia. The company has set the ball rolling to establish a foothold in the country and take on rivals such as Hyundai, BYD, and Wuling. Affordable models and subscription schemes to reduce upfront costs are part of the plan.
Climate investments
Average global temperatures are rising and heatwaves are becoming more frequent as most of us have come to realise firsthand. The need to avert a climate catastrophe has also spurred several climate tech startups.
In Vietnam, for instance, several climate technology startups have been attracting venture funding aided by a clear government roadmap, and the country’s deeptech talent. Recent examples include Alterno, a startup that provides thermal energy storage solutions using sand battery technology, raising $1.5 million. Another green tech startup TômTex recently secured $4.15 million in seed funding. “Vietnam holds strategic importance and emerges as a key priority market for us,” said Zachary Lee, investment manager at The Radical Fund.
UK-based impact investor BII and FMO, the Dutch entrepreneurial development bank, have made a joint loan commitment of $50 million to BECIS, which offers rooftop solar, bio-energy, and energy efficiency solutions across Asia.
Swiss impact investment manager BlueOrchard also attracted a total commitment of $29.5 million from BII and the Nordic Development Fund (NDF) for its second climate insurance private equity fund.
Breakthrough Energy (BE), the climate-focused organisation founded by Bill Gates, is launching a programme in Singapore to help develop early-stage climate technologies in the region.
In India, GPS Renewables, a full-stack technology firm focused on clean fuels raised $50 million in debt financing from private and public sector banks and NBFCs, while the International Finance Corporation (IFC) is considering a $125-million equity investment in solar panel provider Fourth Partner Energy. Climate-focused deeptech company Ecozen, too, raised $30 million in debt-cum-equity financing.
Despite the flurry of dealmaking in the sector, Southeast Asia is “woefully off track” on green investments and needs new policies and financial mechanisms to bridge the gap, said an annual report compiled by Bain & Co., green investment group GenZero, Standard Chartered Bank and Temasek. While green investment grew 20% last year, it is way short of the $1.5 trillion required this decade.
And finally, join us for an exclusive event on May 3, at the 1880 in Singapore. In partnership with Marcum Asia, Cooley SG LLP, TOPPAN, Piacente Financial Communications, and Aon, DealStreetAsia is hosting a dynamic discussion titled “Road to IPO: What does it take?” If you’re eager to gain insights into the journey to a public listing, this event is tailor-made for you. Mark your calendars and secure your spot today!
