Even as you glean through this weekly roundup of private equity and venture capital developments from Asia, your mind may drift, inevitably, to the 2024 Paris Olympics. Interestingly, there’s a connection.
Much like an athlete’s journey, victory in the world of finance involves the relentless pursuit of a goal, calculated risks, rigorous execution and, of course, keeping an eye on the competition.
Citius, Altius, Fortius—or Faster, Higher, Stronger—is a motto that also resonates with businesses. Just ask GoTo, or Blibli, whose persistent pursuit of profitability appears to be bearing fruit as their quarterly earnings announced this week suggest.
Two Olympic performances that stood out for me this week: nineteen-year-old Chinese swimmer Pan Zhanle smashed his own previous world record in the men’s 100-metre freestyle, and 27-year-old Katie Ledecky of the USA became the most decorated female swimmer in the history of the Games.
These tales of perseverance by the athletes (and their experienced coaches) will surely strike a chord with young entrepreneurs (and their seasoned investors).
Moving on to the main headlines of the week:
Earnings and results
As mentioned earlier, Indonesian tech giant GoTo narrowed its losses by 61% year-on-year (YoY) in H1 2024, making significant progress on its profitability target. Meanwhile, its losses in Q2 2024 fell 42% YoY thanks to higher revenues and lower recurring cash fixed costs. The IDX-listed company has maintained its target of achieving EBITDA breakeven in 2024. GoTo’s confidence resonated with analysts but concerns remain over heightening competition and market uncertainties.
Investment firm PT Saratoga Sedaya Investama Tbk’s net loss decreased by over 96% in H1 2024 due to lower losses on investment returns.
Global Digital Niaga—the parent company of Indonesian e-commerce player Blibli, online travel agency Tiket.com, and supermarket chain Ranch Market—continued to trim its losses in Q2 2024 on the back of higher revenue and improved cost structure.
In contrast, Bukalapak swung back to a loss in Q2 2024 after hitting a positive adjusted EBITDA for the first time in the previous quarter. The company stated that it was hard to replicate the performance of the first quarter given the seasonal impact of Ramadan. In 2024, the Eid festival—a time to celebrate with family—fell in Q1.
We also reported this week on the earnings of private companies based on their regulatory filings.
Singapore co-working space company JustCo continued to record double-digit growth in revenues and trimmed its losses further in 2023.
Plant-based food maker TiNDLE Foods, formerly known as Next Gen Foods, recorded a 26.1% revenue drop in the financial year ended December 31, 2023, even as it managed to curtail losses by 17.1%.
TurtleTree Labs, a Singapore-based manufacturer of lab-grown dairy products, posted wider losses in 2023 as it failed to generate any revenue and expenses widened.
LP-GP updates
For our LP View Column this week, we interviewed Zhe Yin, the co-founder of Shanghai-based Noah Holdings, which is planning to expand its fund partner network and investment offerings outside of China for its main private market business. The plan will see Noah prepare a new USD-denominated fund-of-funds (FoF) to back global fund managers. “Our strategic goal is to replicate our domestic [private market] expertise in the overseas market,” said Zhe Yin.
In India, a raft of PE and VC firms are hitting the road to raise capital, which could lead to a demand-supply gap as LPs become selective. “Even as GPs are raising new funds, the key question LPs are asking today is the lack of DPI [Distributions to Paid In Capital] and realised IRR [Internal Rate of Return] from previous investments,” said Deepak Padaki, president at the family office Catamaran India.
Work on our flagship event, the Asia PE-VC Summit 2024 on Sept 17 & 18 in Singapore, is underway. Join us to get insights from over 45 top leaders well-versed in operating in diverse markets of Asia. We have published a list of 13 LP-GP sessions from the Summit that you should not miss.
Malaysia’s public service retirement fund Kumpulan Wang Persaraan (KWAP) aims to launch its second Dana Perintis fund in Q4 next year, a senior executive told DealStreetAsia. “The commitment for Dana Perintis II may remain the same as the first at 500 million ringgit ($108 million),” said Hazman Hilmi Sallahuddin, Chief Investment Officer at KWAP. Meanwhile, KWAP] sees its new Dana Pemacu initiative playing a key role in developing the local private market ecosystem.
Singapore state investor Temasek plans to invest up to $30 billion over the next five years in the US in sectors such as healthcare, financial services and technology. Its exposure to the Americas surpassed China in 2023 for the first time in a decade.
Swiss private equity firm Partners Group has joined the rush to tap China’s wealthy individuals and family offices with its evergreen products, looking to attract an increasing number of individual and retail investors in the region, said Henry Chui, the firm’s head of private wealth in APAC in an interview.
Trifecta Capital, which has backed Indian unicorns Zepto and BharatPe, has launched its fourth venture debt fund of Rs 2,000 crore ($239 million). Including a greenshoe option of Rs 500 crore, the fund is its biggest so far, as venture debt becomes a viable alternative to equity funding amid the prolonged funding winter.
Deals and startup updates
In India, bike-taxi platform Rapido announced raising $120 million in a fresh funding round led by WestBridge Capital, which catapulted it to the unicorn club. Rapido, which competes with Uber and Ola, last raised $180 million in a round led by food delivery giant Swiggy in 2022.
Indonesian taxi operator Blue Bird is open to roping in new investors as it spruces up its technology and services to stay afloat amid intensifying competition from online ride-hailing firms. CEO Adrianto Djokosoetono told DealStreetAsia that he is open to new external investors for investments or collaborations as long as they can add value to the company.
Philippine fintech startup First Circle has raised $8.6 million in fresh equity funding as part of a Series B round, we reported based on regulatory filings.
Indonesia-based B2B trucking company Kargo Technologies has secured fresh funding from investors, including AC Ventures and Silicon Valley-based Tenaya Capital.
Philippines-listed conglomerate Ayala Corporation acquired an additional 8% stake in Global Fintech Innovations Inc (Mynt), the parent company of the country’s major finance super app GCash. Ayala said it is paying about $393 million to raise its ownership stake in Mynt to 13%. The deal values Mynt at approximately $5 billion.
Ayala Corp is also exploring selling a minority stake in Ayala Healthcare Holdings (AC Health) in a potential deal that could value its healthcare arm at up to $500 million.
The long reads
Temu, a cross-border e-commerce platform owned by PDD Holdings, has quietly made its way into Thailand, marking its third market entry in Southeast Asia after the Philippines and Malaysia. PDD Holdings also operates Pinduoduo. The expansion comes as hundreds of Chinese sellers on Temu have been protesting against what they call unbearably high penalties imposed by the firm.
With Southeast Asia’s e-commerce sector continuing to show robust growth, Chinese tech giants such as PDD Holdings, ByteDance, and Alibaba are slugging it out for a bigger share of the lucrative market. But despite significant investments and strategic moves, it has not been an easy ride given the regulatory hurdles, intense competition, and diverse consumer behaviour.
We also analysed spacetech investments in India this week. Buoyed by the success of India’s recent space missions, the country’s nascent spacetech sector proved to be an outlier in 2023, garnering record high investments. Spacetech startups garnered $126 million in funding last year, a 7% increase from the $118 million raised in 2022.
In another deep dive, we looked at the trend of global private asset managers scouring Southeast Asia for infra projects as rising energy consumption and the need for decarbonisation boost spending in the region over the next decades. Despite sectoral tailwinds for the asset class, many money managers are still underallocated in Southeast Asia’s infrastructure due to the dearth of bankable projects.
Meanwhile, Chinese deep tech VCs are looking to tap niches in GenAI despite the funding crunch. Following the advent of ChatGPT in November 2022, the generative AI frenzy has taken China by storm with local upstarts and big tech giants launching their large language models (LLMs) in 2023.
Recent political developments in Bangladesh have been a cause of concern for VCs. What began as protests over a controversial job quota system in the country has now boiled over into full-blown civil unrest. The situation does not bode well for its nascent startup ecosystem that had only recently started to catch the eye of Southeast Asian investors such as Cocoon Capital, 1982 Ventures, and Wavemaker Partners.
Also, take a look at our latest report on The Evolution of Digital Payments in SE Asia, which is available to DATA VANTAGE subscribers.
Thank you for reading. Until next week, stay informed, inspired, and strive for excellence in the true spirit of sport.
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