It would be disingenuous to suggest that the global pandemic is anything but bad news for all, but it’s also important in these times to remember that it is not all doom and gloom out there.
Deals are getting done, funds are being raised, and folks everywhere are finding ways to keep on keeping on despite the challenges. To quote the late Freddie Mercury, “The show must go on.”
Princes of the universe
In our search for bright spots, investors told us that the COVID-19 outbreak could unearth some hidden gems in productivity platforms and digital healthcare businesses. Startups in artificial intelligence, software as a service and education technology are drawing interest from customers and investors. Healthtech seems like an obvious play, but sharp minds are also looking at supporting players in the bigger healthcare ecosystem.
Golden Gate Ventures managing partner Vinnie Lauria expects a wave of mergers and acquisitions, with deep-pocketed unicorns on the prowl for opportunistic targets among a growing pool of funding-starved companies.
Indian food delivery platform Zomato is chasing after new business opportunities through tie-ups with online grocery startups Grofers and BigBasket. Education startups are filling virtual classrooms as people are forced to stay indoors.
Don’t stop them now
Amid the crisis, it is notable that deals are still being done and fundraising is continuing, especially in China where a number of large transactions were announced.
In the private equity space, sources told us that private equity firm KKR is looking to raise at least $750 million for its first Asia-focused technology, media and telecommunications fund. Earlier reports had placed the target closer to $300 million. China’s Gaocheng Capital raised $235.1 million for its debut fund, while Shanghai-headquartered Bojiang Capital raised more than 800 million yuan ($113 million) for a tech private equity fund.
Singapore’s Elite Partners announced the first close for its Elite Logistics Fund, which has a target of 150 million euros ($236.2 million).
In the venture space, our sources say that Singapore-based Majuven is in talks to raise up to $50 million for its second fund. Also in Singapore, Vickers Venture Partners has raised $200 million for its $500 million sixth fund to invest in deep tech startups.
Indonesia’s Kargo Technologies scored a strategic investment from Amatil X, the venture arm of Coca Cola Amatil, giving the trucking marketplace startup valuable capital to help tide over the pandemic and to improve its technology.
Singapore government-owned investment firm Temasek led a $109 million Series D2 round into India’s Cure Fit Healthcare and a $70 million Series C round into Chinese biopharma firm Abbisko.
Singapore-based waste management firm Blue Planet Environmental Solutions raised $25 million from Japan’s Nomura, and cybersecurity firm Horangi raised $20 million through a Series B round led by Provident Growth.
Of course, not everyone is so fortunate.
The exit market for Indonesia’s venture capital players has dried up, putting pressure on funds with vintages from around 2015 and 2016, industry players told us.
Singapore Press Holdings has called off a C$232.9 million ($175.4 million) purchase of six senior housing properties in Canada, citing market instabilities caused by the pandemic. In India, private equity firm Apis Partners will no longer make a $110 million investment into L&T Finance Holdings’ infrastructure debt fund.
Singapore-based robo-advisor Smartly is being wound down. The startup is controlled by Vietnam’s VinaCapital. Also in Singapore, grocery delivery company Honestbee lost court protection from creditors who are owed $230 million, pushing the troubled startup closer to liquidation.
Hang in there, folks, and stay safe.
Features Editor, DealStreetAsia