The business week ended with US President Donald Trump threatening imports from the EU – the bloc is the country’s largest trading partner – with 50% trade tariffs by June 1.
The US President also targeted smartphones made outside of the US, particularly iPhones and Samsung devices. It came as Apple goes ahead with plans to expand its manufacturing supply chain to India, with its Taiwanese contractor Foxconn building a $1.5 billion-factory in Chennai.
The trade tensions, beginning earlier this year, have stoked concerns of a recession.
This week, Singapore became the first country in Southeast Asia, a region where a number of countries serve as manufacturing centres for goods bound for the US, to warn of a technical recession.
Look out for trends in travel, dining out, and overall consumption, economists say. Dips in these activities could portend a downturn before official data.
Still, there are signs of optimism.
In Asia we saw two blockbuster IPOs. On May 20, Chinese electric vehicle battery maker Contemporary Amperex Technology Co Limited (CATL), the world’s biggest, raised nearly $4.5 billion in its Hong Kong stock market debut.
On May 23, Eco-Shop, a discount retailer backed by private equity firm Creador’s Fund IV, raised close to RM 975 million in its debut on Bursa Malaysia.
Creador had acquired a 10% share in the company in 2019; post-IPO the fund still retains just under 2% share. Another Creador-backed retailer Mr DIY raised RM1.5 billion in Malaysia in 2020; the firm fully exited the portfolio company in 2023.
Market watchers expect IPO momentum in Hong Kong in particular to continue, despite broader economic uncertainty, driven by Chinese regulators seeking listings of high tech companies, as well as issuers from the Middle East and Southeast Asia.
Must-read analyses:
The team has looked into a few key issues among the tech and PE-VC-backed companies.
The latest DealStreetAsia report, covering Southeast Asia’s deep tech sector, noted that funding raised by startups in the sector in 2024 was down 34% from the year before. There were 16% fewer deals made during the year.
The data shows a stark contrast to the period between 2021 and 2023, when deep tech outperformed the mainstream tech sectors in capital raising. This may be a reflection of the broader tightening in venture funding, and the data also shows an overwhelming focus in early-stage businesses. Looking ahead, how will the push in AI transform this sector?
Meanwhile, among Southeast Asia’s top three tech giants – Sea, Grab, and GoTo, our reporter found that fintech is finally growing as a key revenue generator. Now it remains to track how profitable the strategy will be for the respective businesses, operating as asset-light platforms.
Analysts note that GoTo’s fintech unit has turned profitable at the adjusted EBITDA level. But amid talks of a merger, Grab is also expanding aggressively in Indonesia in the battle for the upper hand.
Still in Indonesia, our reporter looks at the aquatech industry, already under strain from the eFishery fallout. Compounding their woes, and thin margins, is the US proposal for a 32% tariff on shrimp trade. Can they keep their businesses afloat?
Meanwhile, at least three high-profile India-focused startups have initiated insolvency proceedings: London-based Builder.ai, backed by Qatar Investment Authority (QIA), Microsoft, and Jungle Ventures; Gensol Engineering, backed by the co-founders of troubled EV ridehailing startup BluSmart; and ecommerce marketplace aggregator 10Club. It is a wake-up call for even apparently well-capitalised businesses, as our India editor writes.
In private equity, we look at the use of NAV financing amid the wider twin challenges of fundraising and distributions. Will this refinancing tactic take off among Asian GPs?
Also in PE, LP Pantheon’s Brian Lim highlights the proposition that Asia’s mid-market secondaries offer, particularly as family offices step into the fray as investors seek better visibility and quicker returns.
And, read how Warburg Pincus-backed insurance startup Oona is looking to fight the incumbent giants and scale up in Southeast Asia through M&A.
On the funding trail
Malaysian private equity (PE) firm Bintang Capital Partners is now focused on securing domestic closes for its next series of funds, CEO Johan Rozali-Wathooth said in an interview, noting that support from the Malaysian government is “a bright spot”.
Indian private credit fund manager Vivriti Asset Management, which recently secured an investment from the Development Bank of Austria for its latest fund, is doubling down on the country’s underserved MSME sector that faces a financing gap of $342 billion.
Headline Asia, an early-stage venture capital firm based in Tokyo, has closed its fifth and largest fund to date at $145 million to support Asia’s cross-border startups. LPs include top institutional investors, including Japan Investment Corporation (JIC), National Development Fund of Taiwan (NDF), Korea Venture Investment Corporation (KVIC), and SME Support Japan.
Investigative VC, a Singapore-based venture capital firm, has launched a global fund series that targets over $500 million across three vintages, for high-growth startups with defensible network effects.
Vertex Ventures China, part of Vertex Ventures’s network of global venture capital (VC) funds, has closed its second angel fund at over 500 million yuan ($69.4 million) to double down on deeptech and healthtech investments in China.
The Emerging Africa & Asia Infrastructure Fund (EAAIF)—a blended finance vehicle that provides debts to infrastructure projects in low-income countries across Africa and Asia—has raised $325 million in new debt facilities to bring its recent commitments to $620 million, exceeding the original $500-million target.
Singapore enterprise software startup Whale has secured $60 million in its combined Series C1 and C2 rounds, led by Temasek and Shanghai-based Linear Capital to help businesses drive sales with its artificial intelligence assistant.
Looking ahead
Tech entrepreneurs in greater China are set to get a boost in their development and expansion efforts, from the series of partnerships inked between the Hong Kong Investment Corporation (HKIC), an investment company wholly-owned by the Hong Kong government, and several GPs, including Gobi Partners, Lanchi Ventures, and Gaw Capital.
The agreements, details of which are yet to be released, were announced during the recent International Forum for Patient Capital, an event hosted by the HKIC.
The international business community is also likely keeping an eye on the potential opportunities arising from the development of the Gulf states’ economies.
This comes as the US president finished a tour of Saudi Arabia, Qatar, and the UAE, with the claim of securing more than $2 trillion in deals for the US, including arms deals and cross-border partnerships in A.I. and energy.
Meanwhile, significantly, Chinese regulators have given the green light to QIA to acquire a 10% stake in a Chinese mutual fund company. It is the first investment of its kind.
