Alternative Investment

Editor’s take: The week that was – Sept 5

Deal activity has been slower but there have been a number of interesting transactions recently.

DSG Consumer Partners led a S$1.2-million seed funding round in Moom Health, a Singapore-based natural healthcare startup that focuses on female wellbeing.

Indian rural lending fintech SarvaGram is raising funds for expansion from investors said to include Singapore’s Temasek as well as existing backer Elevar Equity

Japan-based enterprise IT management platform Josys has raised $32 million in a Series A round led by Global Brain Corporation, among others. The company plans to build up its development operations in India and sales operations in Japan.

Revenue-based financing platform Klub has raised $10 million in new funds, according to regulatory filings. The startup, based in India and Singapore, is backed by Sequoia Surge and Roll Up Vehicles, an SPV for capital from individual operators and angels. 

Indonesian healthtech startup Zi.Care is raising a Series A round to grow its hospital information system service. Its backers so far include the investment arm of the country’s major Islamic organisation, Muhammadiyah.

Also in Indonesia, single family office Asiantrust Capital is to launch a new hybrid fund of as much as $30 million, to invest in a variety of deals in the private and public markets.

Interestingly, the first Indonesian state lender’s corporate venture capital arm, Mandiri Capital Indonesia (MCI), says it has recorded an MOIC of about 3.5 times, in the period since its inception in 2015, on about $94 million in investments. MCI has backed Indonesian champions GoTo and Bukalapak as well as fintech Amartha, insurtech Qoala, payments platform LinkAja and edtech Cakap

LP commitments

Taiwanese insurers Cathay Life Insurance and Fubon Hyundai Life Insurance have committed a total of $70 million to private equity funds of Blackstone and VOGO Fund Asset Management

DEG, the investment arm of German development bank KFW, is committing $40 million in a senior loan facility to Chinese commercial lender Bank of Qingdao, earmarked for ocean-friendly and clean water projects. Earlier, the same lender secured a $40 million similar facility from IFC.

Hong Kong-based alternative investment manager Abax Global Capital has recently raised at least $60 million from three US investors for its latest private credit fund. 

Dymon Asia PE has raised $593 million so far for its latest Southeast Asia vehicle, which has a target of $650 million. 

Insights and analysis

Indonesia has hiked domestic fuel prices, and its impact could be wide-ranging. Among areas of concern is the burgeoning digital lending sector, which is expected to see an uptick in demand from borrowers who could have trouble paying back loans.

In an environment of uncertainty, a growing Southeast Asia is seeing significant interest from global investors. They are eyeing varied opportunities from buyouts of family-owned enterprises to secondaries, and M&A, noted EQT managing director Wei Jian Tor in an interview with DealStreetAsia. But with that, sector-specialisation among GPs has become more important, to be better able to pick and assess the right opportunities. 

Chinese companies are looking to diversify their investor base and turning to global investors, note investment bank Taihecap, which has recently set up its first office outside of China, in Singapore. 

The bank’s director of deals across emerging markets, Chen Renchuan, told DealStreetAsia in an interview that Chinese companies are looking to have investors who bring international connections and expertise on regulations, and not least, a way to help the company be identified as a global, rather than Chinese business. 

And, the crypto industry continues to limp along: the value of crypto trading in Thailand has slumped to a new low, data shows, impacting the startups in the sector. 

Separately, the data team at DealStreetAsia is now looking into the financials of the biggest startups in Southeast Asia. This week, an analysis of used car marketplace Carsome, which has been on an acquisition spree as competition from its peers intensifies.

Trending: Climate tech

Environment-related businesses in Southeast Asia have been attracting growing investor interest, and the earliest-stage startups with niche solutions are now gaining traction as well.

Meanwhile, Indonesia is moving to turn its natural nickel reserves into an advantage in becoming a global hub for electric vehicle manufacturing and export. The country, which already has a robust domestic automotive production industry, is now incentivising EV companies and luring investors in the highly-competitive sector. 

Even as EV adoption in Indonesia remains low, there is significant potential driven by the predominance of motorbikes and a strong showing by regional ridehailing giants operating in the country. 

What to look out for

Fund managers we’ve spoken to are indicating a busier quarter ahead, even as investors remain cautious amid the uncertainty and chaos.  

Already, fundraising by Indian startups has rebounded from a low in July to hit $1.2 billion in August, according to DealStreetAsia data

In Southeast Asia, funding for startups hit $5.3 billion in August, a record for the year. 

In China, dealmaking hit $6.8 billion in August, also a record for the year, driven by mega-deals. 

Still, entrepreneurs are cognisant of the need to demonstrate their plans for sustainable, profitable growth. In the Philippines, startups coming out of the market correction have shifted gears to do so, a VC observed. And they are attracting the attention of regional funds, along with the domestic investment heavyweights. 

Restructuring or adjustments among VC and PE-backed businesses, even the biggest, most well-funded ones, have started. 

This week, there were reports that Shopee, Southeast Asia’s largest e-commerce business and a unit of New York-listed Sea, has rescinded job offers, some just as new hirees were to start work.

In Indonesia, grocery delivery startup HappyFresh has hired a restructuring professional, as it lays off staff and reviews its financial position. Sources earlier told DealStreetAsia that the company, backed by Naver Financial among others, had a diminishing runway and was in need of capital, amid mounting debts.  

And, consolidation in various sectors is afoot, as stronger companies are in a position to acquire for expansion.

For instance, Singapore-based real estate property portal 99 Group, which recently raised funding, is understood to be looking at as many as 16 potential acquisition targets in the region. One of them could be Vietnamese proptech startup Propzy, sources say.

Get the inside stories on these deals and other insights, at DealStreetAsia’s upcoming Asia PE-VC Summit 2022

Source link

Leave a Comment