Troubled PH tech firm Xurpas approves takeover of Wavemaker US

Photo: REUTERS/Beawiharta

Philippine-listed consumer technology company Xurpas announced that its board has approved the eventual take-over of Los Angeles-based early-stage venture capital firm Wavemaker Partners US.

The new announcement did not specify the amount that Xurpas will pay in cash to acquire the US VC firm but an earlier report by DealStreetAsia noted that the transaction is valued at 170 million pesos ($3.3 million).

The transaction follows a reverse-takeover scheme as the general partners of Wavemaker US – Frederick Manlunas, Benjamin Paul Santos, and James Jordan – have been approved to acquire some 1.7 billion in new common shares of Xurpas, or approximately 48 per cent stake in the listed tech firm.

The deal is expected to be completed by the fourth quarter of 2020, pending satisfaction of certain conditions and securing shareholders’ approval.

“This acquisition significantly expands Xurpas’ technology base and gives Filipino shareholders and investors access to an entire portfolio of promising venture-backed early-stage companies in the United States,” Nico Jose S. Nolledo, the company’s chairman, said in the disclosure.

Wavemaker US will appoint Eric Manlunas and Buck Jordan to the Xurpas Board after closing. The transaction does not include Wavemaker’s Southeast Asia practice, which will remain independent and wholly owned by its management.

Wavemaker US has been operating for almost 17 years as a top-rated US technology fund and has a track record of successful exits via both public offering of shares and acquisitions. It has over $210 million in assets under management.

The transaction comes even as Xurpas has been financially bleeding heavily since 2018. According to the financial reports it submitted to the Philippine Stock Exchange, the company incurred 2.64 billion pesos ($54 million) in losses for the entire 2019 and 48.6 million ($1 million) in the first quarter of this year so far.

This means Xurpas’ total losses since 2018 had already surpassed 3.5 billion ($72 million), or nearly five times the combined profits that the company booked from 2014 to 2017, which was at 787 million pesos ($16.2 million).

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. 
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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.