An AI frenzy is sweeping across the startup world. While there are several hurdles that stand in the way of building the next big bot that can compose essays or paint a portrait, money is not one of them.
In Asia, China is at the centre of the AI boom, minting startups such as MiniMax, which is close to completing a $250 million fundraising at a valuation of about $1.2 billion, Reuters reported this week.
Search giant Baidu said it will set up a venture capital fund of 1 billion yuan ($145 million) to back startups focused on content generated by AI applications.
Meanwhile, Google-backed Chinese AI company Mobvoi Information Technology filed for an IPO on the Hong Kong Stock Exchange.
Chinese organisations launched 79 large-language models (LLMs) in the country over the past three years as they doubled down on efforts to develop AI algorithms, a report by state-run research institutes said.
Generative AI bears the potential to level the playing field in terms of accessing knowledge on the internet, much of which is currently in English. “With generative AI’s language skills, capable of accepting and producing output in an array of tongues, the big top of global knowledge may finally be open to all,” wrote Dave Richards, Managing Partner, Capria Ventures, in a guest post on our site this week.
All said and done, there’s still no broad consensus on how regulation around technologies like AI should look like. Japan’s privacy watchdog this week warned Microsoft-backed OpenAI against collecting sensitive data without individuals’ permission, adding it may take action if there are concerns.
Moving on to other major headlines of the week.
From the India desk
At least three Indian startups were in the news this week for deep cuts in their valuations. Asset management firm BlackRock, which holds a minority stake in BYJU’S, marked down the edtech giant’s valuation to $8.4 billion. Separately, Fidelity Investments slashed the fair value of SoftBank-backed social e-commerce startup Meesho by 10%.
In a similar vein, home rental startup NestAway, which was once valued at $220 million, was sold to Aurum PropTech for $11 million this week. NestAway counts Sequoia, Flipkart, Goldman Sachs, Yuri Milner and Chiratae Ventures among its investors.
In another setback for BYJU’s, lenders have pulled out of negotiations to restructure its $1.2-billion loan, DealStreetAsia learnt.
Amid the gloom surrounding the startup giants, a host of micro VCs, which generally have a corpus of less than $30 million, are making a beeline to invest in India’s early-stage deals. Among them are Speciale Invest, which launched its first, $24 million growth fund to focus on deep science and enterprise technologies; BoldCap, which has launched its second fund with a corpus of $25 million to invest in 15-20 early-stage startups; and Chanakya Fund Trust, which closed its maiden $12.5 million sector-agnostic fund.
Interviews
This week, we interviewed Adrian Lai, founder of Newman Capital, a Hong Kong-based VC that injects capital into Web3-focused general partners (GPs). Newman Capital, which launched a $50 million fund in April last year, believes Hong Kong is rising as a prime venue for Web3 investors.
Hong Kong- and Singapore-based Raffles Family Office is doubling down on PE deals in Southeast Asia as part of its portfolio diversification strategy amid geopolitical tensions and regulatory risks in China, Jo Huang, head of private equity at the multi-family office, told DealStreetAsia in our weekly LP View column this week.
Vietnam-focused PE firm Mekong Capital is targeting to clock one exit from its Mekong Enterprise Fund III (MEF III) portfolio this year, said founder and partner Chris Freund. Launched in 2015, MEF III has invested in a total of nine companies in the retail, restaurant, consumer products and logistics sectors.
Ten-year-old Indonesian B2B e-commerce marketplace Ralali is focusing on profitability as it has set its sight on going public in the next few years, its founder and CEO Joseph Aditya said. Ralali is backed by BEENEXT, SBI Ventures, ICMG Partners, and Arbor Ventures, among others.
LP-GP news
Indies Capital Partners is said to be in the market to raise $250 million for its fourth credit fund for Southeast Asia, sources told DealStreetAsia.
The Canada Pension Plan Investment Board (CPP Investments) committed over $3.77 billion to direct and indirect investments in Asia in the fiscal ended March 31, 2023, according to a recent disclosure.
Telkom Indonesia is in talks with external LPs, including Patamar Capital, to back its corporate venture capital arm MDI Ventures.
Shanghai-based VC firm HighLight Capital is targeting to raise $650-700 million for its fourth USD fund after closing its fourth RMB fund at 3.1 billion yuan ($437 million) last month.
Chinese PE firm Primavera has closed its fourth dollar fund at $4 billion.
Another Chinese firm, Oceanpine Capital, plans to “kick off marketing” for its third USD-denominated fund in September as it aims to raise $600 million.
Fubon Life Insurance has committed to invest up to $70 million in the latest flagship fund of PSG, a US-based PE firm.
Meanwhile, Singapore-based Southeast Asia Women’s Economic Empowerment Fund (Sweef Capital) is targeting to hold the final close for its $80-million debut vehicle in Q3 2023.
Startup funding news
India’s Atomberg Technologies, known for its eponymous ceiling fans, raised $86 million in a funding round led by Temasek Holdings and Steadview Capital.
Indonesian agritech startup Semaai is close to raising a fresh funding round of $3-5 million as it prepares to launch a supply chain financing product, sources told DealStreetAsia.
India-focused PE firm Kedaara Capital is in early talks to acquire a majority stake in Paras Healthcare for about $100 million.
Space tech startup Pixxel raised $36 million in a Series B funding round from Google and other existing investors.
Indonesian movie chain Cinema XXI‘s operator is eyeing up to $300 million in an IPO by early 2024. Singapore state fund GIC invested about $260 million in the theatre chain back in December 2016.
And finally…
DealStreetAsia – DATA VANTAGE released a report this week titled ‘Indonesia Healthcare: Primed for Private Capital’. In the aftermath of COVID-19, Indonesia’s healthcare sector is set to undergo significant changes. The environment is opportune for disruption by the private sector and offers private capital investors the potential to generate attractive returns over the medium-to-long term. Our latest report explores which are the key companies to watch and what are the challenges and opportunities in play.
