We are back with the weekly recap of our top headlines, exclusive stories and analytical pieces.
From the unicorn quarter
Indonesian app giant GoTo, which is set to be created through the proposed merger of unicorns Gojek and Tokopedia, is busy chalking out its next phase of business as it gears up to take on Sea Group’s Shopee, according to Northstar Group founder and managing partner Patrick Walujo, who invested in Gojek in 2014. Going forward, Gojek’s early investor Walujo expects GoTo to focus on Indonesia as its core market.
Gojek has invested in the retail business of the Jakarta-based conglomerate Lippo Group. And, Indonesia’s leading digital telecom operator Telkomsel has invested an additional sum of $300 million in Gojek. Telkomsel had invested $150 million in Gojek in November 2020.
Moving over to Indonesian unicorn Bukalapak, which maintains it is not just an e-commerce play but an “all-commerce” company. In this feature, we look at the O20 growth strategy of the unicorn that is understood to be prepping for an imminent IPO.
Animoca Brands, a Hong Kong-based firm that develops digital property rights to games through non-fungible tokens, became a unicorn after raising nearly $88.9 in new funding.
Beijing-headquartered CR Capital Management has tied up with state-backed China Council for Brand Development to launch an industry fund with a total capital commitment of 50 billion yuan ($7.8 billion).
IFC has proposed an investment of $20 million into the new emerging markets fund of edtech-focused venture capital firm Learn Capital, whose Asia portfolio includes Tencent-backed online education startup Udemy Inc and India’s Springboard.
Nepal-based Dolma Fund Management has announced the first close of its second impact fund at $40 million. The Dolma Impact Fund II was backed by Dutch lender FMO, the UK’s CDC Group, Sweden’s Swedfund, and IFC.
Taiwan’s Cathay Life Insurance has agreed to invest $100 million in a secondaries-focused fund managed by Blackstone Strategic Partners.
LG Chem is investing $134 million in a new fund that will invest in companies focused on battery technologies and eco-friendly materials. LG Chem will be an anchor investor in Korea Battery & ESG Fund, which plans to raise $355 million. The fund is managed by IMM Credit Solution, a wholly-owned unit of IMM PE.
SPAC and IPO updates
Media billionaire James Murdoch’s investment company Lupa Systems and former Walt Disney Asia Pacific president Uday Shankar have launched Seven Islands Inc, a new blank-cheque company aiming to raise $300 million to invest in the South and Southeast Asian region. The SPAC will invest in the media, entertainment, consumer technology, healthcare, and education industries in Southeast and South Asia, with a particular focus on India.
After a frenetic quarter for SPACs, the fad around this listing alternative is coming to “a more normalised cadence” with stakeholders growing warier of its potential risks, according to international law firm Morrison & Foerster. IPOs of US SPACs plummeted to 13 in April, compared to record highs in the first three months of 2021 when it continued to trend upwards month-over-month to hit 110 in March. But, SPACs, currently still a US phenomenon, are poised to spread across other regions including Greater China.
Plus, a US autonomous truck startup backed by Sequoia Capital China, plans to go public by merging with blank cheque firm Hennessy Capital Investment Corp V in a deal that values it at about $3.3 billion.
Soulgate, a Tencent-backed social networking platform based in Shanghai, has filed to raise up to $100 million in an IPO in the US even as it continues to burn money since 2019.
Chinese startup Full Truck Alliance aims to raise around $1.5 billion from its IPO in New York which will value the company at more than $20 billion, Reuters reported. The company, described as China’s “Uber for trucks”, is backed by Tencent and SoftBank.
Shanghai ANE Logistics Ltd, a less-than-truckload (LTL) shipping operator, has filed for an IPO on the main board of the Hong Kong Stock Exchange. ANE Logistics was reportedly mulling a $500 million listing.
After two successful domestic listings of its subsidiaries, Vietnamese conglomerate Vingroup is possibly looking to score a hat-trick with the proposed public outing of its automobile unit, Vinfast. We look at how Vinfast is betting on the enormous appetite for electric vehicle stocks in the global markets as it prepares for the reported overseas IPO plan.
VNLIFE, the parent firm of Vietnam’s digital payments major VNPAY, is understood to near the completion of an over $200 million fundraising round. Global strategic and financial investors are said to be participating in the round, which could be closed within a month.
Indonesian venture-backed aquaculture and fishery startups eFishery and Aruna have hit the fundraising trail to raise fresh capital. eFishery and Aruna are said to be looking to raise a total of up to $90 million in their separate rounds.
Vietnam’s EQuest Education Group is said to be in the process of raising up to $100 million in a fresh funding round. The investment will pave the way for a partial exit for Singapore-based private equity firm TAEL Partners, which had invested an undisclosed amount in EQuest in 2018.
SoftBank Corp will invest $60 million in Malaysian telecom firm Axiata Group‘s digital analytics and artificial intelligence unit ADA for a 23% stake. Axiata Digital Services, a subsidiary of Axiata Group, remains the majority shareholder in ADA with a 63.47% stake.
Analysis and features
This week, we brought you a series of long-form articles covering the evolving PE and investment landscape in Myanmar, Indonesia and Malaysia.
Significant investments into the coup-hit economy of Myanmar are being put on hold as investors reassess risks in the country, including possible connections to the junta. Some of the major deals affected include Yoma Strategic‘s stake sale in its fintech unit Wave Money to Ant Group, and the Irrawaddy Green Towers sale to CVC Capital Partners at a reported $700 million value. While new investors and companies have put their Myanmar entry plans on hold, those who already have a presence in the frontier market are at a crossroads.
In Indonesia, meanwhile, private equity investment is a vastly different landscape today. In this in-depth feature, we take a look at how PE firms targeting Southeast Asia’s largest economy have drifted away from traditional sectors such as commodities to embrace technology, and consumer goods, among other emerging sectors — a sign of the changing face of the Indonesian economy.
In Malaysia, which is dominated by government-linked private equity funds, the middle-market continues to see increased interest from private investors seeking to capitalise on a steady flow of assets. The majority of the deals transacted in Malaysia in recent years are in the mid-market with ticket sizes ranging from $25 million to $80 million. Deal activity in the space has been spurred by asset divestment by Malaysian conglomerates.
The fall of the Philippines’s sole unicorn, Revolution Precrafted, has become somewhat of a cautionary tale in the country’s nascent startup ecosystem, Nikkei Asia reported. Having no successful unicorn puts the Philippines at a disadvantage in the quest for funding. The country is home to over 400 startups, 50-plus angel investors, 40 venture capital firms and around 35 incubators. Yet the combined value of venture capital deals in 2019 and 2020 stood at around $200 million, the smallest among the six largest Southeast Asian economies, according to Preqin.
Lastly, I leave you with this piece on Sequoia Surge, Sequoia’s seed programme, that has been operational in Southeast Asia and India since 2019. So far, it has backed 69 startups across four cohorts and closed two $195-million funds to support founders across the region. But almost three years on, Sequoia Surge’s impact on the Southeast Asian ecosystem continues to be met with mixed responses of praise, caution, and even envy. What seems clear, however, is that more seed funding — Sequoia or not — is always welcome.