Editor’s take: The week that was — Jul 20-25

It has been relatively eventful in the private capital space. There were a number of fundraisings, indicating where growth is.

Singapore-based fintech startup Percipient raised $5 million from Silicon Valley-based impact fund Stat Zero, while AwanTunai, a Jakarta-based peer-to-peer (P2P) lending startup, raised up to $20 million in a debt facility led by investor Accial Capital.

Also in Singapore, tech startup Insider announced a $32 million Series C funding round led by US-based Riverwood Capital and backed by existing investor Sequoia India. The round, which brought the company’s total funding to date to $47 million, also saw participation from Wamda Capital and Endeavor Catalyst.

US-headquartered agricultural intelligence startup Taranis announced the close of a $30 million Series C funding round led by Vertex Growth and Orion Fund, a venture fund backed by Southeast Asian conglomerate Kuok Group.

Indeed, DealStreetAsia data show that startups in Southeast Asia raised $2.8 billion across 184 deals, in the second quarter of this year. Details on the fundraising are in our latest report.

Sighting more unicorns

We started off the week with an analysis of how Indonesian ride-hailing platform and decacorn Gojek has spawned its own unicorn. Based on our reading of corporate filings, its payments arm GoPay has a valuation of at least $1.2 billion.

GoPay has been raising funds on a standalone basis since March 2020, show its filings. In May, Facebook, PayPal, Pearl Valley Investments and Altair Investments joined its cap table. Combined, these investors own 27.8 per cent of the fintech business, per a June 26 filing.

Indeed, more tech unicorns could emerge as a result of the current global health crisis, says Teruhide Sato, founder and managing partner of Singapore-based VC firm BEENEXT. In his view, the crisis has highlighted the value of mobile internet connectivity and pushed companies to be more cost-efficient and value-driven. These two factors, he says, will help mould newly formed startups in the region.

Meanwhile, the world’s most valuable tech unicorn has confirmed that it is filing for an initial public offering concurrently in Shanghai and Hong Kong. Ant Group, the financial services arm of Chinese internet giant Alibaba, said it started the IPO processes, though it did not specify a timeline or size of the offering.

COVID-19 impact

Still, the ongoing crisis has scuttled many a plan.

For one, the widely-anticipated merger between Vietnam’s two homegrown e-commerce platforms – Tiki and Sendomay be falling through. Sources tell us key shareholders have objected to the merger terms, which were agreed before the coronavirus pandemic broke out. One of the investors unhappy with the proposed merger terms is understood to be Chinese e-commerce major JD.com.

We had reported earlier that the Tiki-Sendo merger could be critical for the Vietnamese companies’ battle for dominance against regional, well-funded rivals.

Also, amid a fall in discretionary consumption and tightening cashflow, Indonesia’s fashion e-commerce startup Sorabel is shutting down its operations by the end of July. A source close to the company said it ran out of options after a planned financing round was scuttled by the COVID-19 outbreak.

We also ran this analysis of AirAsia and its non-airline businesses. Ostensibly Asia’s largest and highest-flying budget airline, the group had diversified its businesses and started its own venture arm. Among its successes are its logistics arm Teleport. Yet, the rest of the ventures – from payments to food – are still losing money, and therefore unlikely to provide any real lift for AirAsia out of this crisis.

Follow the money

Nevertheless, investors continue to see pockets of growth opportunities.

Cisco Investments, for one, is not slowing down its pace of investments in the Asia Pacific despite fears of a second wave of COVID-19 infections in markets such as Thailand and South Korea. The venture capital arm of tech giant Cisco targets Series A to B stage startups across sectors such as software-as-a-service (SaaS), cybersecurity, data and artificial intelligence with a ticket size of $1-9 million.

Cisco Investments is also an active limited partner and has backed funds managed by Singapore’s Jungle Ventures, Australia’s Blackbird Ventures and India’s Aavishkaar.

Meanwhile, Singapore and Thailand-headquartered digital payments firm 2C2P is set to deploy $15 million from its newly-established VC arm in opportunities in Southeast Asia.

In an interview, founder and CEO Aung Kyaw Moe pointed out that e-commerce in Southeast Asia is not a luxury but a necessity, like in China. He expects e-commerce to continue to grow at a rate of 20-30 per cent year-on-year. And 2C2P’s strategy: follow the merchants.

There are those who are more circumspect though.

In the view of one American venture capitalist, the VC scene in Southeast Asia is still comparatively immature. In an interview, Dave Richards, managing partner of Capria Ventures, likened the region to the American Wild West.

Capria Ventures operates a $100-million Capria Emerging Managers Fund with up to $20 million set aside for Southeast Asia. The firm made its first investment in Southeast Asia this year in venture debt firm Genesis Alternative Ventures, two years after signalling plans to come in. 

Whatever the case, the team at DealStreetAsia is looking out for signs that Southeast Asia is coming out of the doldrums, provided countries can hold the so-called second wave of coronavirus infections at bay.

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.