Editor's take: The week that was — May 23-28

This week brought more sobering news of layoffs and rationalisation at startups and a slowing deal momentum across markets.

Although companies and private market investors continue to raise capital, the shift in the environment – as evidenced by an increased focus on fundamentals – seems to have only begun to unfold.

Signs of change

Indian startups pocketed $12 billion in private investments in the first three months of 2022 as fundraising fell for the second consecutive quarter.

Meanwhile, private companies in Greater China raised $12.3 billion in the first quarter, down 47% from the previous quarter (Q4 2021), and 50% from Q1 2021.

Several Indonesian technology companies, including LinkAja and Zenius, have laid off staff in a bid to rein in costs amid unfavourable global economic conditions. More could follow suit, say industry watchers.

Indian workers appear to have maintained their appetite for startup jobs so far despite a flurry of layoffs this year. But how long will the optimism last?

SoftBank-backed Indian edtech unicorn Unacademy, which has reportedly laid off over 1,000 people in the last few months, has cautioned its employees about a potential cash crunch and hard times ahead.

Meanwhile, digital health startup MFine laid off more than half of its total workforce, multiple sources told DealStreetAsia.

In neighbouring Pakistan, a startup that raised the country’s largest private funding round ever in 2021 is pulling out of several markets and slashing headcount due to adverse global market events.

Taking a step away from late-stage deals, US investment firm Tiger Global made its first seed investment ever to back Indian e-commerce enablement startup Shopflo earlier this month. The move is seen as part of a calculated shift to diversify its bets in the face of macroeconomic headwinds and a sharp fall in the value of its listed portfolio entities.

Staying optimistic

Private equity firm General Atlantic plans to invest $2 billion in India and Southeast Asia over the next two years, a top executive said, as falling valuations have rendered the region’s startups more attractive.

Carlyle Group, too, sees enough promising opportunities in Asia, its CEO Kewsong Lee told Nikkei Asia in an interview. “It’s really important to appreciate that these types of uncertainties and the volatility, it creates opportunities,” he said.

Hong Kong-based multi-asset investment firm Silverhorn appears to be in agreement. “If the tide is going out, that means this vintage and next year’s vintage might be very good vintages to deploy because there’ll be probably less capital chasing the opportunities that we find attractive,” said its newly appointed private equity head Bert Kwan in an interview.

Switzerland-based pre-seed and seed-stage venture capital (VC) Seedstars International is set to commit more capital to investments in Asia this year. “We aim to increase the exposure in Asia to 25-30% of our portfolio,” Patricia Sosrodjojo, newly appointed partner at Seedstars, said.

Deal news

Indonesian tech-enabled logistics services provider Shipper has received fresh commitments worth around $65 million in an ongoing fundraising round, as it attempts to raise a total of $100 million to fuel expansion, DealStreetAsia has learnt.

Indonesian digital investment platform Bibit announced raising more than $80 million in a funding round led by Singapore sovereign wealth fund GIC. According to regulatory filings, the round included primary and secondary transactions.

Singapore-based private market exchange ADDX raised $58 million in pre-Series B funding from the Stock Exchange of Thailand (SET), United Overseas Bank (UOB), Hamilton Lane and Krungsri Bank.

Singapore-headquartered digital pharmacy firm SwipeRx, formerly known as mClinica, raised $27 million in equity and debt in a Series B round led by Indonesia’s MDI Ventures.

Singapore-based NextBillion.ai announced a $21 million Series B round led by global investment firm Mirae Asset.

Vietnam-based Educa Corporation, which operates edtech startup Edupia, is understood to be raising a new funding round backed by venture capital firm Jungle Ventures.

Singapore-based fintech firm MatchMove announced the acquisition of e-commerce enabler Shopmatic in a $200 million deal, which is understood to be a share swap.

Babel Finance, a Hong Kong-based crypto financial services provider, secured $80 million in a Series B funding round backed by Jeneration Capital and growth equity fund 10T Holdings.

Indian direct-to-home food essentials brand Country Delight raised $108 million in a Series D funding round led by Venturi Partners and Temasek Holdings.

LP-GP news

Delaware Public Employees’ Retirement System committed up to $65 million to two latest Asia funds managed by alternative investment giant Carlyle Group and China-focused venture capital firm IDG Capital.

Taiwan’s Fubon Life Insurance committed $50 million to the latest fund of Dyal Capital Partners, a division of US-based alternative asset manager Blue Owl Capital.

Impact fund manager LeapFrog Investments, which received a commitment of $500 million from Temasek last year, is raising a $1-billion growth-stage fund that will invest in healthcare and financial services businesses in Africa, South Asia, and Southeast Asia.

French fund-of-funds Eurazeo is in the process of raising 2.5 billion euros ($2.68 billion) across two major funds as it looks to ramp up its investment in the Asia Pacific region.

Global alternative asset manager ICG announced the final close for its latest Asia Pacific Fund at $1.1 billion, exceeding its target of $1 billion. The fund invests in debt and equity of mid-market businesses across Japan, South Korea, Hong Kong, Southeast Asia, Australia, and New Zealand.

KKR announced the final close of its inaugural Asia-focused credit fund at $1.1 billion. KKR Credit has been active in markets including Australia, Greater China, India, Korea, Malaysia, New Zealand, Singapore, and Vietnam.

Global investment firm Cathay Capital has set up Cathay Health, a 500 million euro ($533.4 million) global fund to invest in companies at the convergence of healthcare, life sciences, and technology.

1982 Ventures, a Singapore-based venture capital firm that invests in fintech startups across Southeast Asia, Pakistan, and Bangladesh, announced the close of its maiden fund at $20 million.

NGC Ventures, a crypto-focused venture capital firm, announced the final close of its third blockchain fund at $100 million.

Early-stage venture capital firm Inventus India launched its fourth fund with a target corpus of $120 million (Rs 900 crore) and rebranded itself as Athera Venture Partners.

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