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Editor’s take: The week that was — Oct 12

Last week marked the escalation of protests in Southeast Asia. Amidst the COVID-19 pandemic, thousands of youth in SE Asia’s largest economy, Indonesia, continued to rally against a government bill that is being pitched to boost jobs. The protesters want Indonesia’s “omnibus” law to be revoked and are of the opinion that the bill weakens labour rights.

The situation appeared a lot grimmer in SEA’s second-largest market. On Friday night, tens of thousands took to the streets again calling for the country’s prime minister, Prayuth Chan-ocha, to step down, its government implement reforms and curb the powers of King Maha Vajiralongkorn. The fact that Thais are challenging the monarchy and media outlets are reporting the same, shows we are in new territory.

This analysis by the FT on the Thai king is a great weekend read to understand why the youth are challenging the monarchy.

How do the protests impact the markets we cover at DealStreetAsia? Thai stocks continue to tank and its economy has seen equity outflows of $8.8 billion in this calendar year (as of September-end).

At the same time, our reporters have also been picking positives news from Thailand.

Two-year-old e-commerce logistics provider Flash Express has landed $200 million in its Series D funding round, bringing the total investment into the company to about $400 million. My colleague Nguyen Thi Bich Ngoc goes beyond the headlines in this interview with Flash Express CFO Richard Tang.

Ngoc also had another story on Bangkok-based multi-family investment firm Blueprint Forest allocating $120 million for investments into businesses across SE Asia. The investments will be managed by 9 Basil, a PE and distressed debt platform with a focus on Thailand.

Ngern Tid Lor Co., a  microfinance company controlled by Bank of Ayudhya Pcl, has picked banks to explore a potential initial public offering that could raise as much as $1 billion.

Our reporter Quynh Nguyen spoke with Cindy Kua, CEO of Thailand-based digital insurance startup Sunday, and learnt the company is planning to expand to Indonesia in the first quarter of 2021, and has secured all the necessary regulatory licences and approvals.

Coronavirus winners and losers

COVID-19 continues to have second-order and even longer-term effects on business models of several companies.

Malaysian private equity firm Navis Capital-backed cinema operator MCAT Box Office is facing liquidation after its outlets were shut down for months under the country’s Movement Control Order (MCO).

The pandemic turned out to be the final straw for troubled Singapore-based Zimplistic that makes the fully-automated flatbread maker Rotimatic. My colleague Leslie Shaffer reports that Zimplistic has been sold to special purpose vehicle Light Ray Holdings in a trade sale. Despite having an impressive set of backers including Credence Partners, EDBI, Robert Bosch Venture Capital, Openspace Ventures, Bosch, VIT, and Distinguished Gentlemen Group, and having raised around $48.5 million, the famed startup burned through cash at a rate far faster than it was able to raise capital.

The aviation space continues to bear the brunt of the pandemic.

The latest in a long list of negative news is Australian airline Qantas finalising an exit from pacific Airlines, its joint venture with Vietnam Airlines, in a “giveaway deal”.

While AirAsia has secured a $242-million loan from the Malaysian government to get through pandemic, the survival of the country’s national carrier – Malaysia Airlines – is in doubt as political support for additional bailouts has dimmed.

Japan’s biggest airline ANA Holdings Inc secured $3.8 billion in subordinated loans to bolster funds it needs to survive the ongoing slump in air travel.

Sticking to travel, SEA’s largest online travel app Traveloka is poised to break-even and potentially become profitable in 2021 if the travel industry (in its covered markets across SEA), could recover to about 50 per cent of pre-COVID levels by the end of this year, according to Willson Cuaca, co-founder and managing partner of East Ventures. Cuaca is an early investor in the Indonesian unicorn. The company got a massive lifeline recently as it raised an additional $250 million in funding.

The pandemic has also boosted the fortunes of several others.

For instance, in South Korea,  some of the world’s biggest food delivery firms are scrambling to surf an estimated $4-billion wave of new orders, contracting thousands of new riders in a boom triggered by Covid-19.

From Singapore, we reported that the restaurant booking app Chope, which is scouting for a buyer, has seen a rebound in its business after the COVID-induced lockdowns began to ease a few months ago. This uptick also means that Chope, which operates across 8 cities in Asia, is more attractive to potential buyers.

Fundraising milestones

Pennsylvania Public School Employees’ Retirement System has committed $100 million to a fund managed by the Japanese private equity firm Polaris Capital Group (Polaris Fund V). This marks PSERS’s first investment with Polaris.

US pension fund San Francisco Employees’ Retirement System has approved $125 million to funds managed by Hong Kong-based private equity firm Asia Alternatives Management and Asia-focused Hillhouse Capital Group.

Vietnamese brokerage SSI Securities Inc has partnered with Thailand’s largest private company CP Group and the Development Bank of Japan to launch a $150-million private equity fund to invest in the Vietnamese market.

FountainVest Partners, a PE firm led by former Goldman Sachs Group banker Frank Tang, has filed with the US SEC to raise a new USD-dominated PE fund. Its predecessor vehicle raised $2.1 billion in 2016.

In the VC space, our biggest story last week was China’s Sinovation Ventures – founded by former Google Inc executive Kai-Fu Lee – seeking $1 billion for a new vehicle. Sinovation Disrupt Fund will add to the firm’s $2 billion AUM.

Early-stage venture capital firm – China Creation Ventures – has made the final close of its second US dollar-denominated fund at $300 million. It  also plans to close an RMB fund soon.

AngelList-backed iSeed is launching a new micro fund for Southeast Asia, marking its entry into the region.

And, Indonesian venture firm AC Ventures has raised $56 million for the first close of its ACV III Capital LP Fund, which is targeting a total of $80 million.

Private equity deals corner

Singapore-headquartered private equity firm GLP and SEA Logistic Partners have entered into a JV to invest in, and develop, modern logistic real estate assets in Vietnam.

Blackstone Group, the largest owner of commercial real estate in India with a total investment of around $7.8 billion as of March 2020, is nearing a deal to buy Prestige Estates Projects Ltd.’s rent-yielding assets including offices and operating malls, for about $2 billion, Bloomberg reported.

Singapore’s GIC has increased its stake in Chinese used-car platform Uxin to 11.4 per cent. GIC was also among the investors that took a stake in US-based self-storage company StorageMart.

In Myanmar, Delta Capital Myanmar and Daiwa PI Partners have jointly invested $12.6 million in plastic bottles recycler Commercial Plastics Company.

Malaysia’s government-linked private equity firm Ekuinas has divested its entire 60% holding in homegrown desserts firm Coolblog to Singapore-based PE firm Archipelago Capital Partners.

Moving to India, PAG, along with CX Partners and Samara Capital, has reached an agreement to acquire a controlling stake in drug manufacturer Anjan Drug.

Finally, Australia’s Link Administration Holdings Ltd said it has received a conditional $2 billion takeover offer from  Carlyle Group and Pacific Equity Partners.

From Greater China 

DealStreetAsia’s Research and Analytics team released its latest China deals review (Q3, 2020), and the report notes that private companies recorded a quarter-on-quarter growth in both deal count and value in the three months ended September 30, continuing the momentum seen in the second quarter. An aggregate of 354 deals raised a total of $14.3 billion in the third quarter, a 51.0% jump in deal value from the second quarter, according to Greater China Deal Review: Q3 2020. To summarise, there were 37 mega deals – transactions worth $100 million and more – in the third quarter. Together, they garnered nearly $9.4 billion, representing 65.6% of the total funds raised in the quarter.  Download your free preview here.

On the listings front, Chinese companies continue to witness robust activity, offering exits and returns for their investors.

Playtika has filed confidentially for US IPO, while Xiamen Bank has kicked off its subscription exercise with a target to raise as much as $263 million in a Shanghai IPO. And, Tencent-backed Miniso Group made an impressive debut after raising $608 million in its US IPO.

Meanwhile, smart vehicles maker ENOVATE has raised over $742 million in a new round ahead of its planned IPO in 2021.

From the India desk

India has a new unicorn in Razorpay. The payments solutions company achieved this status after a $100-million Series D funding co-anchored by Singapore’s GIC and Sequoia India.

It is also interesting to note that VC-backed investments in India’s fintech sector outpaced those in China in the first quarter of this year both in terms of deal value and volume, according to data and analytics firm GlobalData.

Several other Indian unicorns were in the news too. Foodtech unicorn Zomato, which is in talks to raise almost $600 million, has added $52 million to its coffers from US-based Kora Investments.

Meanwhile, Tata Group has joined the conversations to pick up a minority stake in online grocer BigBasket, which has been looking to raise $200 million in growth capital.

US-based retailer Walmart Inc. and Flipkart Group have made an additional investment in Bengaluru-based fresh produce supply startup Ninjacart. Both the companies first funded Ninjacart in December 2019.

The biggest talking point in India’s startups and unicorns space, however, involved global internet giant Google. The US-headquartered tech behemoth has been facing an intense backlash from a group of companies led by Paytm, India’s most valuable startup. Last weekend, a group of 15 startup founders had held a virtual meeting with the Competition Commission of India to appraise the regulator about Google’s alleged anti-competitive policies in India. I recommend this comprehensive piece we carried on the subject. 

In other news

In Indonesia, VC firms are increasingly bullish on beauty, skincare startups, and this has led to several companies in this sector including BASE, Nusantics, and Social Bella, among others, snagging funding over the past two years. Check out our detailed take on this development.

Malaysian online classifieds operator Frontier Digital Ventures has completed the institutional component of a $67 million capital raising to fund three acquisitions from Norway’s Adevinta ASA.

Singapore-based online auto marketplace Carro has raised $110.5 million in debt financing and additional equity, and its new backers Japanese trading company Mitsubishi Corp. and MS&AD Ventures.

Summa Equity Fund II has acquired a majority stake in Singapore proteomics company Sengenics, paving the exit of SBI Islamic Fund II (Brunei).

Astroscale, the Japanese startup that develops satellites to remove space debris, has raised $191 million in a Series E funding round led by local investor aSTART Co Ltd.

The frenzy around SPACs or blank-check companies continues. ASMA Capital Partners has filed for a $200-million IPO on Nasdaq of Global SPAC Partners, which will seek acquisitions in the Middle East, North Africa and South and Southeast Asia.

Rajeev Misra, head of SoftBank’s Vision Fund has said the firm will outline plans for a blank-check company in the next two weeks.

Interviews and features

Among our most-read stories last week was an interaction with John Riady, CEO, Lippo Karawaci, the real estate group of one of Indonesia’s largest family empires. Riady is betting on budget housing in the country to remake Lippo.

We also carried an interaction with Gojek’s head of third-party platforms SonyRadhityo. Do check out the story on how the Indonesian super app is taking a leaf out of its prominent investor Tencent’s WeChat Mini program playbook.

Finally, we had this great read from Nikkei Asia on Malaysia’s AirAsia betting on its superapp strategy to counter some of the region’s leading digital players including Grab and Gojek.

Thank you for reading. Our team has a great lineup of stories coming your way this week, and I am excited about what we have in store for you.

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