Southeast Asia has drawn increasing interest from global venture capital (VC) firms wanting a slice of the emerging market growth story. A total of $4.08 billion was raised by nine global funds in 2020 with significant allocations for private companies in the region, a massive jump from $867 million bagged by five funds in 2019, per our latest report, SE Asia’s VC Funds: Q4 2020 Review.
On the other hand, Southeast Asia’s venture capital firms suffered a significant 39% drop in fundraising at $1.96 billion in 2020, as travel restrictions in the wake of the COVID-19 pandemic and increased limited partner caution affected fundraising.
Staying with data-led stories, we captured deal-making activity in Greater China where private equity and venture capital firms took a breather in January after the hectic deal flow witnessed towards the end of 2020. Chinese startups collected almost $7.5 billion in January 2021, down 17.6% from December, according to our data. The downturn, usually transitory, is seen in the first two months of every year ahead of the week-long Lunar New Year holiday.
Meanwhile, Sequoia Capital China was the most active investor in the country’s startups last year, with 83 deals in its kitty. Of these, it was the lead investor in at least 36 deals, per DealStreetAsia’s China Deal Review: Q4 2020. In fact, Sequoia Capital China’s deal activity was head and shoulders above that of Matrix Partners China — the second most active investor that sealed 46 deals in the year.
As always, our teams have put out India, China and SE Asia weekly deal tables that capture prominent VC transactions in the region.
Interviews and analysis
Former L Catterton Asia head Ravi Thakran will launch his second special purpose acquisition company (SPAC) this month. The second SPAC will be larger in size and will target the same lifestyle-linked sectors. “Many SPACs have been raised globally and in Asia – but now many have been able to find a world-class asset in a few months’ time. And we now understand what clicks and what is the right target for us,” Thakran, who is the chairman and CEO of Aspirational Consumer Lifestyle Corp, told us in an interview.
Barely two weeks ago, private jet charter firm Wheels Up Partners Holdings LLC, whose early investors include sports stars such as Serena Williams, Lance Armstrong and Tom Brady, announced that it would merge with Aspirational to go public at a valuation of more than $2 billion.
We had this long-feature on how digital payments space in SE Asia could see the region’s next wave of unicorns. With demand for digital payment services seeing a significant spike across the region, all eyes are on the payment startups that are attracting substantial capital. In January, three major payment firms in Southeast Asia — Singapore’s Grab Financial, Vietnam’s MoMo, and Philippine mobile wallet GCash — announced funding worth hundreds of millions of US dollars.
In the fintech space, we tracked this emerging trend from Indonesia where venture-backed peer-to-peer (P2P) lenders such as Investree and Akseleran have seen a growing appetite for working capital loans from new quarters – tech startups such as themselves.
Moving on to Malaysia, we captured this evolving story on how the country’s higher education sector, where private equity-backed institutes have mushroomed in recent years, is now ripe for consolidation, thanks to COVID-induced disruptions that have pushed the sector to the brink.
In one of the most significant top-level changes, Singapore state-owned investor Temasek Holdings announced that its chief executive officer Ho Ching will step down from the helm from October 1, 2021. She will be succeeded by Dilhan Pillay Sandrasegara, who is currently CEO of Temasek International. Pillay, a corporate lawyer by training, joined Temasek 10 years ago.
From Indonesia, we had this scoop on the top contender to lead the country’s new sovereign wealth fund. Ridha Dm Wirakusumah, the president director of local lender Bank Permata, is expected to be appointed as the CEO of Indonesia’s sovereign wealth fund, called Lembaga Pengelola Investasi.
Meanwhile, Malaysia’s state pension fund Employees Provident Fund has appointed Amir Hamzah Azizan as its new CEO, effective March 1, 2021.
In people-related news from the region’s unicorns, Gojek co-CEO Andre Soelistyo joined the board of Singapore-based fashion retail company Zilingo on 1 August 2020, according to ACRA filings reviewed by DealStreetAsia. A Gojek representative told us that neither Soelistyo nor Gojek own any shares in Zilingo.
Meanwhile, ride-hailing rival Grab saw a couple of exits with Chandrima Das, the head of wealth management, leaving the Southeast Asian company, per a Reuters report. Huey Tyng, the head of Grab’s payments business, is also stepping down from her role.
Indonesian early-stage investor East Ventures has appointed Koh Wai Kit as a venture partner. Koh Wai Kit was a founding member of Pavilion Capital, a Temasek subsidiary focused on Asia private equity and venture capital.
On the fundraising trail
We start with this scoop from India. Padmanabh (Paddy) Sinha, the former managing partner at Tata Capital-led Tata Opportunities Fund, has launched a private equity fund, Launchbay Capital Advisors, to invest in growth-stage companies with digital being one of the focal areas.
India’s homegrown early-stage venture capital investor, India Quotient, has launched its fourth fund with a target to raise at least $80 million. This will make it the firm’s largest fund so far.
Moving to SE Asia, we reported the fundraising progress of Eurazeo-backed Idinvest Partners that has reached the 80 million euro ($96.9 million) first close of its Smart City Fund II to invest in mobility, property and energy startups in Asia and around the world. Idinvest’s first Southeast Asian investment was in Grab in March 2019. It also invested in Singaporean co-living startup Cove in December 2020.
Meanwhile, US-based fund-of-funds Capria Ventures is betting on the Vietnam story and is looking to close its first commitment in the country this year as the Southeast Asian nation continues to build a venture capital track record.
Finch Capital, a Netherlands-based fintech-focused VC, is targeting the first close of its second Southeast Asia fund, with a target corpus of $50 million, in the coming months following the first close of its $182-million Europe fund.
Cathay Life Insurance, a Taiwan-based life insurance subsidiary of conglomerate Cathay Financial Holdings, has committed a total of $146.2 million to two investment vehicles managed by Blackstone and EQT.
US pension fund San Francisco Employees’ Retirement System has approved a capital commitment of up to $48 million to two investment vehicles launched by China-based biomedical venture capital firm Lilly Asia Ventures.
Indonesian venture fund Gayo Capital has raised half of its latest fund’s $10 million target corpus. Launched early last year as an investment vehicle under the local VC firm Ideosource, Gayo Capital provides a mix of equity investment and venture debt financing to tech and non-tech companies.
Hong Kong-based secondary venture capital fund manager Ion Pacific has secured the first close of its second structured secondaries fund, Ion Pacific Stonecutter II LP, at more than $40 million. The fund will make structured investments in secondary opportunities in venture-backed tech companies and VC funds across the US, Asia, and Europe.