The reverberations of the collapse of Silicon Valley Bank continued to be felt this week. In Southeast Asia, several regional general partners (GPs) were said to have banked with the embattled lender.
Stocks of several Indonesian digital banks suffered a significant drop in the aftermath of SVB’s sudden shutdown. Akulaku-backed digital lender Bank Neo Commerce was the biggest loser, with its share price declining 6.4% from Friday to 585 rupiah apiece on Monday.
Meanwhile, depositors and fund managers in Greater China tried to calm a startled market, saying the implosion will have a limited impact on the local market. Startups and GPs were also exploring alternatives, including bigger US banks and local lenders such as China Merchants Bank and the Industrial & Commercial Bank of China.
The Chinese joint venture of SVB Financial Group assured the public its operations were “sound” and that its balance sheet was independent of its American partner.
The collapse also rattled cross-border startups in India, signalling their need to diversify banking relationships quickly and adopt better risk mitigation strategies.
Indian startups had deposits worth about $1 billion with SVB, and the country’s deputy IT minister said he had suggested that local banks lend more to them going ahead.
The secondaries market in Asia is increasingly gaining favour among both GPs and limited partners (LPs) as valuations become more attractive amidst macroeconomic headwinds. “In the past, GPs were less willing to use secondaries as a tool to hold some of the high-quality assets, but today, that mindset has shifted,” Kerrine Koh, managing director and head of Southeast Asia at Hamilton Lane, said.
The Indonesian Investment Authority (INA), the country’s sovereign wealth fund, is targeting investments worth $1 billion this year, mainly across the energy, infrastructure, digital, and healthcare space, its deputy CEO Arief Budiman said.
Singapore state investor Temasek continues to follow a ‘bottom-up’ approach as it scouts for new investments in India amidst global macro headwinds, a top executive said in an interview.
Buyout giant BPEA EQT and pension fund CPP Investments have co-invested $40 million in Malaysia-headquartered entity engagement software provider Viewpoint Software. The investment was made from BPEA EQT’s Mid-Market Growth Fund.
Blackstone will offer a private credit fund in Japan next month through a partnership with Daiwa Securities Group, targeting wealthy investors seeking higher returns amid low interest rates in the country.
Singapore-based private equity firm Heritas Capital has secured the first close for its Asia Impact First Fund at $20 million after roping in lender DBS as an anchor investor.
Vertex Ventures Southeast Asia & India is holding fast to its mandate of investing in Thailand as it feels startups in the country have moderate capital burn and reasonable valuations.
Reefknot Investments, a joint venture between Temasek and Kuehne + Nagel, is considering a second fund as it targets to deploy most of the capital from its first vehicle by the end of this year, managing director Marc Dragon said.
International Finance Corporation (IFC) is considering a proposal to invest up to $10 million in the latest Pakistan-focused fund of Fatima Gobi Ventures. It is also mulling extending a loan of $25 million to Indonesian fintech firm Amartha Nusantara Raya‘s P2P lending platform.
Sustainability-focused investment manager Mirova has raised $171 million in the first close of its blended finance debt fund that will target clean energy projects primarily in emerging countries in Asia and Africa.
Rockstud Capital is targeting to raise about Rs 300 crore ($36.5 million) for its second vehicle as it looks to invest in the youth-focused consumption theme in India.
Y Combinator announced this week that it is pulling back from late-stage investing. The move will impact 17 employees or about 20% of the firm’s total staff.
Indian mid-market PE firm Xponentia Capital is learnt to have extended the window to close its second fund at around Rs 1,000 crore (about $122 million) by six months.
China’s Dajia Insurance Group has launched its first PE fund at 5 billion yuan ($728.1 million) to invest in healthcare and elderly care providers in the world’s second-biggest economy.
Insurtech company Bang Jamin is learnt to have finalised a seed funding round backed by Southeast Asian PE major Northstar Group and BRI Ventures.
Singapore-based metaverse platform Utown has secured $4.7 million in a fresh funding round from Northstar, East Ventures and other investors.
Startup fundraising in Southeast Asia plunged to $409 million in February, down 44% from that in January.
The Abu Dhabi Investment Authority (ADIA) will invest $500 million in Indian eyewear retailer Lenskart via a mix of primary and secondary transactions.
India’s PhonePe has raised another $200 million from majority shareholder Walmart at a pre-money valuation of $12 billion in an ongoing round that could be capped at $1 billion.
China’s United Aircraft Group, which is involved in the R&D and production of unmanned aerial vehicles, has bagged 2 billion yuan ($290.8 million) in a Series D round.
Pakistan-based edtech startup Maqsad raised $2.8 million in a seed funding round led by Europe-based Speedinvest and returning investor Indus Valley Capital.
The big deals
Vietnam Prosperity Joint Stock Commercial Bank (VPBank) is nearing a deal to sell a 15% stake to Sumitomo Mitsui Financial Group for $1.4 billion, according to a Bloomberg report.
Real estate giant CapitaLand is reportedly in talks to acquire assets worth roughly $1.5 billion from Vietnam’s biggest listed property firm Vinhomes.
Chinese PE firm DCP Capital is looking to sell its Singaporean portfolio firm MFS Technology, which makes flexible printed circuit boards, for at least $550 million, according to Reuters.
Frontier Towers, the KKR-backed subsidiary of telecom operator Pinnacle Towers, and Philippine telecom giant PLDT are reportedly finalising a deal that would see PLDT selling 1,000 telecom towers for more than $200 million.
Matrix Company Limited, an investment holding company managed by CVC Capital Partners, has acquired a minority stake worth $155 million in IDX-listed industrial gas producer PT Samator Indo Gas.
Indonesian insurtech firm Qoala reported a 2.6x surge in losses in the financial year ended Dec 31, 2021, shows a recent regulatory filing.
BukuWarung, an Indonesian startup that helps micro, small and medium enterprises (MSMEs) digitalise their businesses, racked up $19 million in losses in the financial year ended December 31, 2021.
IDX-listed investment firm PT Saratoga Sedaya Investama recorded an 81% decline in profit in the financial year ended December 31, 2022, despite booking an increase in net asset value.
Female founders in focus
We continued to feature interviews with female founders this week on the gender funding gap in Southeast Asia and India.
Investors often direct business-related questions to the male co-founders, even if the CEO is the female co-founder, said Stefanie Juergens, the co-founder and CEO of the Indonesian healthcare financing platform CareNow. Female-founded startups with a female CEO in SE Asia bagged 5.2% of all private funding in 2022, according to a recent DATA VANTAGE report.
Smita Deorah, co-founder & co-CEO of Indian edtech unicorn LEAD, said the funding gap is largely a supply issue as fewer women have traditionally pursued entrepreneurship. This, however, is set to change in the next few years, she added.
VCs should address the lack of diversity in their own teams to be able to understand female founders better, said Ayushi Gudwani, founder and CEO of FS Life (formerly known as Fablestreet).
The clock is ticking for TikTok
TikTok is considering separating from parent ByteDance to help address US concerns about national security risks, per a Bloomberg report.
The Biden administration has demanded that TikTok’s Chinese owners divest their stakes in the popular video app or face a possible US ban, the company told Reuters.
TikTok is no stranger to controversy and bans, but the US has done little to curb the app so far. This could well change in the next few weeks. It will be interesting to see how ByteDance, the world’s most valuable startup, deals with this latest threat and what this could mean for the already sour US-China relations.