Editor's take: The week that was—May 13-18

Editor's take: The week that was—May 13-18

Subscribe to our newsletter

This week saw a flurry of earnings reports as several major companies announced their latest financial updates. In China, it was a mixed bag of updates from tech giants Alibaba, Tencent, Baidu and JD.com.

Rounding out the week, we examined earnings reports from Southeast Asian majors Sea Ltd and Grab.

NYSE-listed Sea reported a net loss of $23 million in the quarter ended March 31, 2024, in contrast with a positive net income of $87.3 million in Q1 2023. However, public investors found a reason to cheer in its 23% year-on-year revenue growth that beat analyst expectations. Shopee, Sea’s e-commerce arm, posted record revenue in Q1 on the back of its strengths in logistics and live streaming.

Super app Grab’s revenue grew 24% during the first quarter to $653 million, driven by growth in its on-demand gross merchandise value (GMV). On the back of strong growth across the board, the company has revised its full-year adjusted EBITDA guidance upward to $250-270 million from $180-200 million earlier.

On to the other major developments of the week.

LP-GP updates

Abu Dhabi sovereign wealth fund Mubadala’s assets under management rose 9.5% in 2023 to 1.11 trillion dirhams ($302.2 billion). Its portfolio mix remained broadly similar year on year, with 38% direct and indirect in private equity (PE), 25% in public markets and 16% in real estate and infrastructure.

Singapore’s S$134-billion fund manager CapitaLand Investment sees 2025 as a promising vintage for real asset investments in the Asia Pacific amid an anticipated market recovery and marginal cap rate compression.

For our LP View column, we spoke with Waterfield Fund of Funds managing director Siddharth Jhunjhunwala who shared how subdued dealmaking in the country could slow down the flow of capital from limited partners (LPs) to fund managers in India.

Asian PE player ShawKwei is more actively weighing investment opportunities in the secondary space amid a favourable valuation landscape for such transactions, said its newly appointed managing director, Luyi Zheng.

Saudi Venture Capital has announced a $30 million investment in a PE fund managed by US-based General Atlantic.

China Life Insurance has set up an RMB-denominated equity investment fund that will deploy 10 billion yuan ($1.4 billion) in the country’s silver economy.

Global non-profit Accion has launched a $152.5 million fund to invest in financial institutions serving small businesses worldwide. The fund will back companies across South and Southeast Asia, Latin America, and Africa.

Vertex Ventures Japan (VVJ) has launched its 10 billion yen ($64 million) debut fund, which is anchored by Singapore-based Vertex Holdings. VVJ is part of the Vertex family of venture funds that operate in China, Israel, Southeast Asia, India, and the US.

Venture capital (VC) firm Golden Gate Ventures has hit the first close for its $100-million debut Middle East and North Africa (MENA) fund after securing $20 million from Qatari family-controlled conglomerates Al Khor Holding and Al Attiya Group.

The Hong Kong University of Science and Technology (HKUST) has set up the Redbird Innovation Fund to collaborate with investment partners and create a pool of venture investment funds that will provide up to HK$2 billion ($256 million) in startup financing. The university has made an initial commitment of HK$200 million ($25.6 million) to the fund.

India-based early-stage accelerator 9Unicorns, which has rebranded as 100Unicorns, has launched its second investment vehicle. The target corpus is $200 million, including a $100 million green-shoe option.

SE Asia and Greater China deals

Uber has announced a $1.25 billion deal to take over Delivery Hero’s foodpanda business in Taiwan and buy new shares in the German firm.

A consortium led by Malaysia’s sovereign wealth fund Khazanah Nasional and pension fund provider Employees Provident Fund (EPF) has made a conditional offer to acquire all remaining shares in Malaysia Airports Holdings Berhad (MAHB) that it did not already own.

PE firm CVC Capital Partners has reached an agreement with Indonesia’s Lippo Karawaci to acquire a 10.4% interest in Siloam International Hospitals for 3.86 trillion IDR ($240 million).

IDX-listed investment firm PT Saratoga Investama Sedaya is understood to have finalised its exit from herbal product firm PT Deltomed Laboratories, the maker of the popular Antangin syrup.

Indonesia’s healthy instant noodle maker Lemonilo is said to be exploring multiple options, including a fresh fundraising round, which may lead to a partial exit for some of its existing investors, according to several sources familiar with the matter.

Southeast Asian startups continued to see a subdued funding environment in April, as the total private capital raised during the month plunged to $227 million, the lowest this year and down 54% month on month.

Osome, a Singapore-based finance admin platform for founders and small and medium businesses, has raised $17 million in equity and debt financing in a Series B extension round.

Singapore-headquartered biotech startup Allozymes, which specialises in enzyme discovery and engineering, has closed a $15 million Series A round co-led by Seventure Partners and Temasek-backed Xora Innovation.

Kasagi Labo, an anime-focused venture studio based in Singapore and Japan, has raised $12 million in a pre-series A round led by Burda Principal Investments.

Malaysian government-linked PE company Ekuiti Nasional Berhad (Ekuinas) is investing 37 million ringgit ($7.9 million) in Mizou Holdings, a local company specialising in agricultural machinery for the upstream palm oil sector.

Vietnam-focused PE firm Mekong Capital has announced a $5 million investment in Cambodia-based biochar and biofertiliser company HUSK.

Shenyang Siasun Microelectronics Equipment, a subsidiary of China’s state-owned robotics manufacturer Siasun Robot & Automation, is raising 400 million yuan ($55.3 million) in its first external equity fundraising.

Updates from India

PE firm EQT Private Capital Asia, formerly known as BPEA EQT, is understood to be in talks to invest in QBurst, a full-service software development company with a significant presence in India.

Indian PE major ChrysCapital has announced an investment of up to $100 million in New Delhi-headquartered eye care provider Centre for Sight.

PE firm Multiples Asset Management (Multiples PE) is in advanced talks to acquire a majority stake in furniture hardware company Ebco, DealStreetAsia has learnt.

A consortium comprising PE firm Blackstone, Abu Dhabi Investment Authority (ADIA), and Singapore wealth fund GIC, has submitted a non-binding bid to acquire a controlling stake in India’s largest snacks and convenience foods maker, Haldiram, according to an Economic Times report.

Non-banking finance company Shriram Finance will sell its entire stake in its housing finance unit to PE giant Warburg Pincus.

International Finance Corporation (IFC) has extended up to $500 million in debt financing to HDFC Bank, India’s largest private sector lender, to support women, especially microloan borrowers in semi-urban and rural areas.

Indian social commerce player Meesho has raised $275 million in a new funding round, according to its filing with the US Securities and Exchange Commission (SEC).

Piramal Alternatives, a unit of the Ajay Piramal-controlled Piramal Group, has invested $75 million in microfinance lender Annapurna Finance.

Kotak Investment Advisors, the alternative assets arm of the Kotak Mahindra Group, has committed to invest up to Rs 400 crore ($47.9 million) in medical device manufacturer Biorad Medisys.

IFC is mulling an investment of up to $40 million in Indian waste management and circularity company Abellon Waste Management, according to a disclosure.

Earnings reports

Japan’s SoftBank Group booked a profit of 328.9 billion yen ($2.11 billion) in the January-March period, compared to a loss of 32 billion yen a year earlier. However, an investment loss at its Vision Fund arm underscores the challenges the technology investor faces, including realising its big AI ambitions.

Vietnam-based tech unicorn VNG Corporation logged net revenue of VND 7,593 billion ($298.3 million) in the financial year 2023 and a net loss of VND 2,317 billion ($91 million). The company said its 2023 financials are not comparable with the 2022 numbers due to a change in its accounting policy.

Southeast Asian digital parenting platform The Parentinc became profitable at the group level in January after achieving adjusted EBITDA breakeven in August 2023, its founder and CEO Roshni Mahtani-Cheung told DealStreetAsia. The firm’s recent regulatory filings in Singapore showed that it recorded a 48.8% surge in losses for the financial year ended December 31, 2022, despite a 19% jump in revenues.

Advanced Micro Foundry, a Singapore-based fabricator of semiconductor wafers, saw its losses swell 53% on a year-on-year basis in 2023 as its revenue dropped 12%, regulatory filings showed.

Indian food delivery platform Zomato posted a consolidated net profit of Rs 175 crore ($20.96 million) for the quarter ended March 31, 2024, on the back of margin expansion in its food delivery and quick commerce businesses. The company had reported a loss of Rs 188 crore in the same quarter of the preceding year.

From the public markets

Hong Kong-listed real estate fund manager ESR Group said it has received a take-private proposal from a group of investors. It said that its backer, Warburg Pincus, and its founders believe the proposal is in the best interest of its shareholders and are in discussions with the consortium.

Super Hi International, the operator of Chinese hotpot restaurant chain Haidilao, jumped 38% in its debut on the Nasdaq, giving it a valuation of about $1.74 billion. The Chinese restaurant brand had raised $52.7 million in its initial public offering (IPO).

Chinese art marketplace Tyfon Culture has agreed to list its shares on the Nasdaq by merging with a special purpose acquisition company (SPAC) in a deal that values the combined entity at $434 million. The company is among a number of Chinese firms looking to list in the US as the market for new share sales thaws after nearly two years.

Chinese electric vehicle maker Aiways has also chosen the SPAC route to go public in a deal that would value the company at around $400 million. The deal is a lifeline for the firm, which halted production at its Shangrao plant last summer as a fierce EV price war in China squeezed automakers’ margins.

Shares of gold miner OceanaGold Philippines Inc ended 6.16% lower on its trading debut after a 6.1 billion pesos ($105.10 million) IPO, the first in the Philippines this year.

Indian insurer Go Digit has raised Rs 1,176 crore ($141 million) from anchor investors, including Fidelity Funds, Goldman Sachs and ADIA, before its IPO was opened for subscription by retail investors.

Analysis

PE fund managers are increasingly exploring alternative exit routes to provide liquidity to their LPs. However, LPs, particularly Asia-focused ones, face a steep learning curve as they are less familiar with unconventional exit paths such as GP-led secondaries, NAV financing, GP stakes, or dividend recapitalisation than their peers in the West.

A coffee war is brewing in Southeast Asia as expansion-focused Chinese entrants such as Luckin and Cotti Coffee jostle for market share with local chains, who are fast expanding their footprint and widening their user base.

Bring stories like this into your inbox every day.

Sign up for our newsletter - The Daily Brief
Subscribe to Newsletter

This is your last free story for the month. Register to continue reading our content