The week that was — Jan 17-22

In 2021, Southeast Asia welcomed 25 new startups that had surpassed $1 billion in valuation and earned the coveted unicorn tag. This is more than the total number of unicorns minted in all previous years combined.

Private investments in homegrown companies reached $25.75 billion last year, with the 25 new unicorns accounting for over $9 billion in funding, according to DealStreetAsia – DATA VANTAGE‘s SE Asia Deal Review: Q4 2021 report.

Our latest report further breaks down sectoral trends to reveal that decentralised finance (DeFi) emerged as the largest category within the fintech space in terms of deal count. The combined value of equity funding into DeFi also grew five times compared to the year before.

While venture capital funding in the region is largely predicted to continue its momentum in 2022, fund managers have raised concerns over lofty valuations, given the ample liquidity in the market.

Top deals

Startups in Indonesia, SE Asia’s largest market, continued to grab headlines this week.

Indonesia’s BukuKas, which has changed its name to Lummo, raised $80 million in its Series C funding round led by new investor Tiger Global Management and existing backer Sequoia Capital India.

Indonesian user car and motorbike platform Moladin announced its $42 million Series A funding round, a day after DealStreetAsia broke the story. The round was co-led by Northstar Group and Sequoia Capital India.

Indonesian P2P lending platform Julo is understood to be in talks to rope in Credit Saison as the lead investor in a new round that could go up to $100 million. The company last raised around $10 million in its Series A2 round in 2019.

Investors are spotting a big promise in the fragmented parenting and mom-and-baby verticals driven by Indonesia’s young demographics as well as the growing wallet spend on childcare. Indonesian mom-and-baby app Tentang Anak, parenting app PrimaKu, and social commerce startup Grupin have closed early-stage funding rounds as they seek to tap the growing demand for their services in the SE Asian market.

Singtel Alpha Investments, a unit of Singapore Telecom, has acquired a minority stake in PT Bank Fama International to pursue banking opportunities in Indonesia. Emtek Group had acquired a majority stake b Bank Fama last year to tap into the country’s digital banking industry.

Singapore-based voice artificial intelligence startup WIZ.AI has raised $20 million in a Series A round led by Asian private equity giant Hillhouse Capital. Other investors in the latest round include China’s Gaorong Capital and Yunqi Partners, and Singapore-based Singtel Innov8.

In another significant funding round, metaverse gaming company Animoca Brands raised nearly $360 million led by Liberty City Ventures, valuing the firm at more than $5 billion. Animoca Brands has invested in more than 150 NFT and metaverse-related companies.

Meanwhile, US-based e-commerce roll-up giant Thrasio Holdings has entered the Indian market with the acquisition of consumer durables brand Lifelong Online. Thrasio, which acquires and scales up private brands globally, will further invest about $500 million in acquiring digital-first brands in India.

On the fundraising trail

Singapore-based Vertex Ventures is likely to raise larger-than-expected sums for two of its funds — Vertex SEA and India Fund V and Vertex Growth Fund II — we reported this week. Vertex Growth Fund II has already exceeded its $330-million target to hit its hard cap of $400 million.

Singapore-based Axiom Asia has raised $211.7 million so far for its latest PE vehicle. Axiom invests in Asia Pacific funds across different strategies of buyout, growth, and venture capital, along with doing co-investments.

From the real estate fund quarters, Singapore-based asset manager Keppel Capital Holdings hit the final close of its Keppel Data Centre Fund II with an aggregate of $1.1 billion in total commitments. It has secured Asian Infrastructure Investment Bank as an investor.

Logistics real estate investor GLP has secured the final close of its GLP Japan Development Partners IV fund with 412 billion yen ($3.7 billion) in total commitments. The fund has been touted as the largest-ever Japan-focused private real estate fund.

GLP has also launched its first logistics development fund in Vietnam with an investment capacity of $1.1 billion.

In a host of new fundraising milestones from Greater China, Hong Kong-based Ion Pacific has closed its second structured secondaries fund at $133.6 million, managing partner and co-CEO Michael Joseph told DealStreetAsia.

Sequoia Capital China has set up a new vehicle – Sequoia China Infrastructure Fund – to bet on the country’s new economy infrastructure businesses. Global alternative asset manager Brookfield has come in as the largest LP in the fund.

BAI Capital, formerly Bertelsmann Asia Investments, a China-focused fund manager, has raised $333.5 million so far for its latest PE fund.

Chuxin Capital has reached the first close of its third RMB-denominated fund at 500 million yuan ($78.8 million) as the early-stage VC continues to focus on China’s enterprise software space.

Riverhead Capital Investment Management, the private equity arm of the Sunshine Insurance Group, has made the first close of its second RMB-denominated fund. It has secured 70% of the targeted corpus of $315 million.

From India, early-stage venture firm pi Ventures, which invests in AI and deep tech startups, has reached the first close of its second fund at $40 million.

EverSource Capital, a JV between Everstone Capital and Lightsource BP, has held the final close for India’s largest climate impact fund, Green Growth Equity Fund, at $741 million.

Avendus PE Investment Advisors has raised $58 million for the first close of Avendus Structured Credit Fund II.

SPACside story

Singapore has seen a flurry of activity this week related to its first batch of SPACs.

Vertex’s Vertex Technology Acquisition Corporation began trading on the SGX last Thursday after raising S$200 million in an IPO that attracted strong demand from institutional and retail investors.

Pegasus Asia, the SPAC of French asset management group Tikehau Capital, has announced raising S$170 million ($120 million) in its initial public offering (IPO) in Singapore, exceeding its $110-million target.

Novo Tellus Alpha Acquisition (NTAA), the S$150 million blank cheque firm launched by Singapore-based private equity firm Novo Tellus, will only merge with companies with “free cash flow,” said Loke Wai San, CEO and executive chairman of NTAA. Its shares will begin trading on SGX on January 27.

Lastly, a SPAC co-sponsored by the Singapore-based asset management firm Aura Group will apply to list on the Nasdaq soon. The $100-million vehicle — Aura FAT Projects Acquisition Corporation, sponsored by Aura along with Fat Projects — will target companies in Southeast Asia and Australia. It will be the second SPAC for Fat Projects, a Singapore-based investment firm.

Analysis and interviews

Indonesia had a record 2021 with seven unicorns and a local IPO of homegrown e-commerce firm Bukalapak — a sign that exits are visible and feasible in this market. Moving into 2022, Indonesia-focused VCs say they remain bullish thanks to the country’s digital infrastructure and its handling of the pandemic, among other things. However, they also warned that ample liquidity and limited targets for investments have created exorbitant valuations.

Eddy Chan, founding partner, Intudo Ventures told us that the Indonesian VC plans to deploy its capital selectively in 2022. Intudo Ventures closed its third fund at $115 million in September last year. It has backed unicorn payment gateway Xendit, telemedicine firm Halodoc, agritech startup TaniHub, crypto exchange Pintu, among others.

Moving on to China where state-linked investors have emerged as frontrunners in backing the country’s top tech startups. They participated in nearly 30% of the 100 biggest startup investments in 2021, marking a three-fold growth, compared with a decade ago. Rachel Mei, a partner at investment bank Taihecap, said, “Starting from 2019, we have seen a significant increase in dealmaking activity by government-backed investors.”

Lastly, I leave you with this piece on how the startup ecosystem in Pakistan has come of age with entrepreneurs raising a record $350 million in 2021, more than what they garnered in the previous six years combined, indicating growing interest from global investors. In this data-driven analysis, we explore how 2021 proved to be a landmark year for the Pakistani tech startup ecosystem.