We are happy to share that DealStreetAsia’s The Week That Was has won the Digital Media Asia 2023 award for the Best Newsletter.
This week, DealStreetAsia released its latest quarterly report, the SE Asia Deal Review: Q3 2023. The report revealed that dealmaking activity in the region hit a nearly three-year low as startups sealed just 151 deals in the quarter, down 27% from Q2 2023. The tepid show in the third quarter pulled down the total deal volume in Jan-Sept 2023 by 34% year-on-year, while deal value crashed 52%.
Moving onto the other important developments of the week.
LP-GP news
Asian healthcare-focused investment firm CBC Group announced that its healthcare infrastructure platform, CBC HIP, has made a second close of its first life science real assets venture, raising $875 million so far in total commitments.
The Asia Pacific is a region that global alternative investment managers cannot afford to miss. Ask Ares Management. The US-headquartered firm has built up its capabilities in this market over the years to capture the opportunities here. Read an in-depth interview with Edwin Wong, Head of Ares Asia.
Singapore’s Orion Capital Asia is likely to close its third private credit fund at at least $400 million in the next 12 months to take advantage of favourable macro conditions and rising interest from limited partners (LPs) in Asia’s private credit sector.
Japanese buyout firm Nippon Sangyo Suishin Kiko (NSSK) announced that it secured 100 billion yen (about $665 million) in total commitments for its third investment vehicle NSSK III.
OrbiMed, a US-based life sciences investment firm, has announced raising more than $4.3 billion in commitments for its latest private investment funds, which include its fifth Asia-focused healthcare vehicle OrbiMed Asia Partners V.
Ruud Smets, partner and chief investment officer at Amsterdam-based alternative investment specialist Theta Capital Management, is optimistic that the current downturn is a natural development. “In terms of the price cycle or the investment funding cycle, we are now at a low. So you have to make sure that you’re set up for the long term,” he said.
Queensland government-owned investment company Queensland Investment Corporation, which established a presence in Singapore last month, is seeking to forge capital connections and engagements with investors and partners in the Asia Pacific region.
Schroders Capital and Kasikornbank’s private banking business have launched a secondaries-focused China private equity fund to tap capital from private wealth investors in Thailand.
Fubon Life Insurance, the insurance unit of Taiwanese financial conglomerate Fubon Financial Holdings, has committed to invest $70 million in the latest strategic equity vehicle of alternative asset manager ICG.
Bain Capital and Chinese industrial real estate developer and operator DNE Group have formed a joint venture with a $250-million equity commitment, as the US firm looks for investment opportunities in manufacturing park assets in China.
Private equity major General Atlantic will acquire a minority stake in India-headquartered travel distribution platform TBO for an undisclosed amount.
Edelweiss Alternatives, a unit of India’s Edelweiss Group, said it has raised $1 billion (Rs 8,000 crore) for the third generation of its special situations strategy.
Invesco Real Estate, the property arm of US investment management firm Invesco, has sold a Seoul office tower to a REIT vehicle managed by Koramco for 520 billion won ($385 million).
Shanghai-based private equity firm Detong Capital has raised over 1.5 billion yuan ($205.2 million) for its latest RMB-denominated fund, as the firm targets a final close of up to 2 billion yuan ($273.6 million).
South Korea’s public pension fund, Public Officials Benefit Association, has made a $100-million capital commitment to a fund managed by US-based commercial real estate lender 3650 REIT.
Deal updates
Singapore-based digital wallet startup YouTrip has announced a $50-million fundraising led by Lightspeed Venture Partners, a US-based early-stage venture capital firm.
Kopital Ventures, the sector-agnostic VC firm launched by Kenangan Brands co-founder James Prananto; and Fandy Cendrajaya, who manages Kenangan Capital, received an overwhelming response from the market as it managed to raise $12 million in its first close. This, according to the firm’s statement, is more than double its initial target of $5 million.
The Bali Investment Club (BIC), an angel network that invests in impact-driven Indonesian businesses, is looking to launch a $25-million VC fund focused on sustainability early next year.
Indonesian B2B marketplace Ula is said to be making a comeback through new service offerings that will open its doors to Western markets like the US, according to multiple sources privy to the development. Ula’s new business avatar – Asian Delights – is said to be focused on food and beverage products, highlighting the culinary richness of Asia.
From This Island, a new skincare and personal care brand, is set to enter Indonesia’s multi-billion-dollar beauty care market this week after securing venture capital funding.
Biorithm, a Singapore-based healthtech company backed by SEEDS Capital, is looking at raising up to $8.5 million in a new funding round, according to its filings with the Accounting and Corporate Regulatory Authority.
Qosmosys, a Singapore-based lunar technology startup backed by investment firm Orient G, has announced raising $100 million in seed funding that will be allocated towards its lunar transportation vehicle ZeusX.
Dutch development bank FMO is considering extending a $90-million financing facility to Vietnamese agricultural manufacturer and supplier Loc Troi Group.
Inteluck, a Southeast Asian third-party logistics player, has raised $34 million in a Series C funding round led by Philippines-focused private equity firm Navegar. The company’s existing investor East Ventures participated in the funding round.
Indian financial services platform Neo is in talks to raise another $35 million from two global investors, weeks after closing a $35-million growth round from Peak XV Partners.
World Bank Group member International Finance Corporation (IFC) is considering an investment of up to $10 million in the second Southeast Asia-focused clean energy fund of Singapore-based venture capital and private equity firm Clime Capital.
Singapore-based investment and advisory firm CapitalSG has acquired a majority stake in global digital health and insurance company Bima Milvik to tap the vast potential in Southeast Asia for integrated healthcare insurance solutions.
Hong Kong-based private equity firm Templewater is acquiring Luye Medical Group’s IPO-LUEY.SI oncology and cardiology businesses in Singapore. Financial terms of the deal were not disclosed.
AEON Financial, the financial arm of Japanese retail major AEON, has agreed to buy a 100% stake in Post and Telecommunication Finance Company Limited from Vietnam-based Southeast Asia Commercial Joint Stock Bank for $175 million.
AirAsia parent Capital A has embraced partnerships with other carriers in a departure from its strategy of going it alone as CEO Tony Fernandes faces one of his biggest turnaround challenges yet.
Rever Automotive, headed by a member of the family that owns Thailand’s well-known Siam Motors Group, has become the exclusive dealer for BYD, giving the Chinese electric vehicle maker an edge to take over the lion’s share of the Thai EV market.
NEOM, the smart and sustainable regional development in northwest Saudi Arabia, has injected $100 million into autonomous driving firm Pony.ai via its strategic investment arm NEOM Investment Fund.
Venture capital investor Mandiri Capital Indonesia has agreed to launch a global climate tech fund with Australian early-stage investor Investible, according to an announcement.
TikTok and YouTube are considering joining Meta in applying for e-commerce licences in Indonesia after Southeast Asia’s largest economy banned online shopping on social media platforms, Reuters reported, citing people familiar with the discussions.
Stellantis said it is buying a 21% stake in EV maker Leapmotor in a $1.6 billion deal that will give it a fresh shot in China, the world’s biggest car market by sales, and the smaller Chinese carmaker a European foothold.
US-based investor Flourish Ventures has announced raising another $350 million for its early-stage, open-ended venture fund that invests globally, including in Southeast Asia.
J&T Global Express, a pan-Asian courier service unicorn with Indonesian roots, made a lacklustre debut on the Hong Kong Stock Exchange on Friday, closing unchanged from its initial public offering price of 12.0 Hong Kong dollars a share.
Deep dives
At a time when most venture capital firms have reportedly slashed the valuations of their portfolio firms, Sequoia Capital marked up the value of 15 of its funds for the year ended June 30, 2023, show financial statements available with the University of California Regents, a limited partner in about two dozen Sequoia funds. Of these, four are India-focused funds—Sequoia India Seed II, Sequoia India VI, Sequoia India Seed Fund I, and Sequoia India Growth III.
Shares of PT GoTo Gojek Tokopedia Tbk continued their free fall last week — down around 10% on the IDX between Oct 16 and Oct 20 — as policy uncertainty looms in the e-commerce sector following the halt of transactions on TikTok Shop and the move by major shareholders of the company to pare their stake. The shares tanked to 57 rupiah apiece on Oct 26 from 85 rupiah apiece on Oct 1.
Indonesia’s listed technology group, Bukalapak, has maintained its guidance to turn adjusted EBITDA positive this year on the back of increasing contribution margins despite concerns over uncertain macroeconomic conditions. The company reported losses of around 390 billion rupiah ($24.5 million) in Q3 2023 period compared with 4.97 trillion ($312 million) in the corresponding period last year.
An increasingly tough fundraising environment, coupled with the need for diversification both in terms of investment strategies and geographies, has spurred consolidation in the private equity industry across the globe. Investors in Asia Pacific, which has already witnessed a number of such deals, expect many more to come due to the region’s fragmented market.
Indonesia- and Australia-based Arkblu Capital, which calls itself a private investment firm, is going slow on investments in venture capital funds and tech startups as it believes the tech winter is not over yet.
Despite the ties that TikTok Shop and J&T Express have to China, other startups with Chinese founders or business ties to China seem unfazed by the developments and remain bullish on opportunities in Southeast Asia’s largest market. Several founders and investors said the latest social commerce regulations won’t deter foreign businesses, including those from China, from expanding in the archipelago.
In a sign of the muted startup fundraising scene prevailing in India, investors sealed only 23 megadeals — i.e. transactions valued at $100 million or more—in Jan-Sept 2023, down 60% from 57 in the year-ago period.
Private equity and venture capital firms encashed $17 billion from 203 exit deals in India in the first nine months of this year, raising hope that the country stacks up well for global limited partners eyeing investments outside their home market.
Southeast Asian fintech startups are extending credit to younger borrowers, many of whom have limited access to traditional financial services, even as some of the region’s largest lenders rush to digitise their businesses.
