Editor’s take: The week that was — June 22-26

We wrapped up a week without a late Friday or Saturday announcement from India’s Reliance Jio of having added another global investor to its cap table.

There were two important Jio-related developments this week, and they both had a Twitter angle. India’s Competition Commission of India (CCI) approved Facebook’s acquisition of a 9.99 per cent stake in Jio Platforms, announcing the decision via a tweet.

US secretary of state Mike Pompeo listed Reliance Jio among what he termed as ‘clean’ telcos while lashing out against China’s Huawei.

Closer home, Singapore has picked Ericsson and Nokia over Huawei for 5G networks.

Another company which has emerged as a clear winner during COVID-19 is Sea Limited.

Consider its stock price – it opened the year (January 2) at $40.04 and had risen to $43.17 on April 1. It finished this week at $105.20, translating to a market cap of $48.62 billion. This makes it the region’s most valuable startup, several notches ahead of second-placed Grab.

Its e-commerce arm Shopee’s success may have contributed to its competitor Alibaba-backed Lazada naming its third chief executive in three years. The company announced that Lazada Group CEO and co-founder Pierre Poignant will be replaced by Chun Li, a former Alibaba executive, who is currently Lazada co-president and head of its Indonesia operations.

Shopee’s other competitors have not been quiet either. Among our biggest newsbreaks this week, Indonesian e-commerce unicorn Tokopedia is learnt to have secured around $500 million from Singapore’s state investor Temasek Holdings as part of its latest funding round. The Indonesian firm continues to be in talks with its existing investors to raise additional funds.

Meanwhile, Bukalapak, under its new leadership, is also in the market to raise around $100 million.

The Indonesian unicorn had recently seen its co-founder and president Muhammad Fajrin Rasyid step down and join the country’s largest telecom operator, Telkom Indonesia. Earlier, its two other co-founders – former CEO Achmad Zaky and former CTO Nugroho Herucahyono – had also moved on from the Alibaba-backed firm.

Coronavirus winners and losers

A running theme across many of the stories we’ve been doing at DealStreetAsia is the impact of COVID-19, and the technological and digital winners the pandemic is creating. The crisis looks unlikely to pass soon, and experts now say that a vaccine may be available only next year.

Looking through our stories, let me begin with the positives and the opportunities the corona crisis has provided.

Several startups in Southeast Asia, especially those who’ve recently amassed sizable funding rounds or are operating in sectors seeing a surge in demand due to the virus outbreak, are hiring aggressively. Ardi Wirdana, in this detailed analysis, says companies are looking to pick up cheaper talent with long-term goals in mind.

Indian decacorn BYJU’s plans to hire at least 4000 people in business, content and product development roles over the next six months, as the company looks to expand its list of courses. The online tutoring startup also got the backing of Mary Meeker’s technology investment firm Bond, marking its first investment in India. Bond’s portfolio includes the likes of Twitter and Facebook.

Tonik Financial, the first pure-play digital bank in SEA which recently closed $21 million in Series A funding, expects some segments of digital services, including digital retail finance, to receive a significant demand boost due to COVID-19, its founder and CEO Greg Krasnov told our Philippines correspondent Mars W. Mosqueda Jr.

Sticking with digital banks, the disruptions caused by COVID-19 outbreak has forced Bank Negara Malaysia to extend the consultation period on the draft licensing framework until the end of this month. Our Malaysia reporter Yimie Yong has an analytical take on several players vying for digital banking licences in Malaysia and firming up their entry strategies.

The COVID-19 crisis may also present an opportunity for investors to look at the thriving gaming sector, said Irene Umar, managing partner at Jakarta-based early-stage technology venture fund Discovery Nusantara Capital (DNC) in an interview.

Despite the pandemic, Thailand-based fintech company SYNQA (formerly Omise Holdings) has gathered $80 million in a Series C funding round led by SCB 10X and SPARX Group.

Overall, on the job front, the picture is mixed.

Earlier this week, Indonesia’s most valuable startup Gojek announced it was laying off about 430 employees, or 9 per cent of its total workforce, and also shuttering GoLife (which offers at-home massage and cleaning services) and GoFood Festivals, its physical food court concept.

This comes within a week of the region’s largest ride-hailing player, Grab, laying off about 360 employees, equivalent to about 5 per cent of its total workforce.

Hospitality unicorn Oyo, which had earlier furloughed its staff in the US, has now said that a large number of them will have to be laid off.

An analysis by our India correspondent Pramugdha Mamgain showed that Indian startups raised a mere $330 million in venture capital and private equity financing in May, down about 52 per cent from April. Fundraising has been on a decline in India since March this year as a result of the novel COVID-19 outbreak.

Nikkei Asian Review’s Wataru Suzuki, in this story, explains that Indian startups are also stepping up efforts to tap Japan Inc for investment as the coronavirus pandemic and souring ties with China squeeze the industry.

We’ve consistently documented the struggles of Malaysia-headquartered video streaming platform iflix.

For a company that was once touted as a potential unicorn, and had raised over $360 million from investors including Fidelity International and EDBI, the coronavirus crisis put an end to its listing plans, the lone option it had for survival. Chinese internet giant Tencent this week confirmed it had acquired the Southeast Asian streaming firm. While deal terms were not disclosed, several industry executives pegged the transaction at around $35 million.

There is also market buzz that iflix’s investors, who were reportedly not consulted on the sale, are gearing up to initiate legal action. We will continue tracking this development.

JD.com is unloading its entire 21 per cent stake in Chinese online travel website Tuniu for about $65 million, losing a $500 million bet as a recovery looks elusive for a sector decimated by the pandemic.

On the fundraising trail

KKR & Co. has raised more than $10 billion for its third Asian vehicle within seven months of its official launch, Bloomberg reported. The fund, which reportedly has a $12.5 billion target, could set a new Asia record.

My colleague Mars also had a story on the global investment powerhouse raising an initial $698 million for its new Asia-focused real estate vehicle. KKR is reportedly raising $1.5 billion for its maiden realty fund dedicated to Asia.

Singapore-based Axiom Asia has launched its sixth fund-of-funds, according to a filing with the US Securities and Exchange Commission. The new fund, Axiom Asia 6, is incorporated nearly two years after the firm reportedly closed its fifth fund with a corpus of $1.4 billion.

According to our China researcher Liya Su, the government there has launched a $5-billion fund-of-funds to support small and medium enterprises in what is the country’s first such vehicle to be set up outside Beijing.She also had this story on China Life Insurance teaming up with State Power Investment Corporation Limited (SPIC) to launch a $1.1 billion clean energy fund.

LP commitments we tracked include the University of Michigan proposing a $50-million follow-on investment in the latest fund of GSR Ventures, a Chinese venture capital firm that was an early backer of ride-hailing giant Didi Chuxing.

Global private equity firm The Riverside Company has made another close of its new Asia-Pacific vehicle – Riverside Australia Fund III – at A$261 million ($181 million).

Myanmar-focused private equity firm Ascent Capital Partners, which recently made its debut with an investment in internet service provider Frontiir, has collected over $80 million for its maiden fund.

Silicon Valley venture capital firm Sequoia Capital is in the market to raise a slew of venture capital funds. The firm did not specify the target amount for the new funds but is reportedly seeking to raise about $7 billion in total.

Our Hong Kong reporter Eudora Wang had this story on global venture accelerator firm Brinc and Lever VC launching a $28 million joint investment fund to support plant-based, cell-cultivated meat and dairy companies across China.

BRI Ventures, the venture capital arm of Indonesia’s largest state-owned bank Bank Rakyat Indonesia, has launched an early-stage investment fund and is seeking $21 million for its first close.

SEA-based VC firm East Ventures said it hit the first close of its latest seed fund that is targeting to raise $88 million. The new seed fund, its eighth vehicle to date, is designed for digital companies emerging from the post-lockdown aftermath of the COVID-19 pandemic.

IPOs

When it comes to listings, this space continues to be dominated by Chinese firms.

Beike Zhaofang, a Chinese online property brokerage backed by Tencent Holdings and SoftBank Group, has filed to go public in New York in an offering that could be worth as much as $2 billion, Nikkei Asian Review reported.

Other Chinese firms that plan to list include orthopaedic robots maker Beijing Tinavi Medical Technology that is seeking to raise $71 million on STAR Market, smart apparel supplier Qingdao Kutesmart which wants to raise $50 million on the ChiNext board, and AI chip unicorn Cambricon Technologies, which has filed to raise up to $400 million.

When it comes to SEA companies, riding on the demand for personal protective equipment, Thailand’s largest maker of medical gloves – Sri Trang Gloves Thailand – raked in $482 million through its listing.

Top deals

Among our most interesting stories this week, Ardi and Aastha Maheshwari tracked Indonesia’s last mile-delivery startup SiCepat Ekspres being in the market to raise more than $100 million in fresh funding. It is also learnt to have raised over $15 million from Indies Capital Partners.

Ngoc had an exclusive on Singapore-headquartered credit scoring startup Trusting Social raising $19 million in its Series B financing round from new and existing investors including Tanglin Venture Partners and Sequoia Capital.

Other deal developments include Japan’s Mitsubishi UFJ Lease & Finance acquiring a 49 per cent equity interest in VietinBank Leasing, Temasek-backed Clifford Capital picking up a 50 per cent stake in Pierfront Capital, and Singapore-based insurer Great Eastern paying $70 million for a 22% stake in Boost, the Malaysian fintech owned by the Axiata Group.

Another deal we covered was Singapore-listed Yoma Strategic Holdings agreeing to buy Telenor Group’s 51 per cent stake in Myanmar’s mobile financial services provider Wave Money for $76.5 million.

As usual, many of the other big deals we were tracking came from China, and they include:

  • B2B automotive aftermarket platform CassTime securing $50 million for its second tranche of Series C funding round, roughly eight months after the startup closed the first tranche at $80 million.
  • Goldman Sachs-backed Chinese pet products and services platform Boqii.com garnering over $60 million in new funding.
  • Biopharmaceutical company Hutchinson China MediTech entering into a definitive agreement to sell shares worth $100 million to General Atlantic.
  • Fosun International being in talks with Alibaba and others to sell a stake worth $1.3 billion in the e-commerce giant’s logistics arm Cainiao.

The most riveting read this week was the unravelling of German fintech major Wirecard after it revealed that 1.9 billion euros of cash on its balance sheet had gone missing. Even as the company filed for insolvency, its fallout in this region saw Singapore ride-hailing and payments company Grab putting its partnership with the scandal-hit company on hold, and Philippine regulators investigating Wirecard’s local partners.

The latest in the Luckin Coffee scandal is the company delisting from the Nasdaq on Monday. “Luckin Coffee will suspend trading on the Nasdaq on Jun 29 and file for delisting,” it said in a statement. It has also abandoned plans to appeal the Nasdaq order to delist.

Separately, at DealStreetAsia too, we’ve faced our share of problems with Chinese companies. Last year, we had Nasdaq listed Chinese media and data company 36kr lifting several of our paywalled stories and illegally running it on their website. 36kr also ran some of our paywalled content on their website claiming it was produced by their subsidiary here in Southeast Asia – KrAsia.

Techcrunch in this November 2019 story on 36Kr’s market debut had said: “36Kr began as “TC Chinese” even though it had no affiliation with TechCrunch and plagiarized a number of TechCrunch articles”

Coming soon

In a webinar on June 18, OYO founder and CEO Ritesh Agarwal spoke with me on how the SoftBank-backed budget hotel player will weather the COVID-19 storm that has severely impacted the travel and hospitality related sectors. If you missed the session, the entire transcript is now available on our website.

DealStreetAsia will announce details of its next webinar in the coming week. Stay tuned.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.