Editor's take: The week that was—May 20-25

Editor's take: The week that was—May 20-25

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China’s loss seems to be Japan’s gain. The East Asian country is fast gaining ground as a private equity hotspot in Asia Pacific, as rising China-US geopolitical tensions prompt skittish investors to reconsider their market allocations.

Hiroshi Nishimuro, who leads Monument Group’s fundraising efforts and GP relationships in Japan, said the shakeup has prompted some international investors to waive their minimum commitment size to gain a foothold in the country.

Bain Capital is looking to double its investment in Japan in the next five years, with the country emerging from decades of stagnation as one of the hottest destinations for global investors.

US investment giant Carlyle Group has raised 430 billion yen ($2.8 billion) for its fifth Japan buyout fund, its largest investment vehicle for Japan.

Asia-Pacific investment firm PAG has raised $550 million for its first renewable energy fund, which focuses on investments in physical assets in Asia and includes solar power in Japan as its primary target.

Moving onto the other headlines of the week.

LP-GP news

Kuala Lumpur-headquartered private equity firm Creador is likely to reach the first close of its sixth fund in early July, DealStreetAsia has learnt. The fund, which was launched with a target to raise $750-800 million, is expected to amass about $700 million for the first close.

As part of its efforts to catalyse the private equity ecosystem in the country, Malaysia’s public service retirement fund KWAP is preparing to unveil its growth fund strategy, Dana Pemacu, multiple sources aware of the development told DealStreetAsia.

Finding general partners who have an impact lens and stringent reporting processes today is quite easy, according to Diane Jegam, Regional Director for South Asia at French development agency Proparco.

Saudi Arabia’s Hassana Investment Company will make a “substantial anchor commitment” to TPG Rise Climate’s new Transition Infrastructure fund under a recently announced $1.5-billion strategic partnership.

Private equity major KKR has agreed to invest in PHINMA Education, a higher education group based in the Philippines. It is investing from its Global Impact Fund II, a vehicle that targets companies that contribute to the United Nations Sustainable Development Goals.

US private equity firms KKR and TPG are reportedly exploring a buyout and other options for Singapore-based online real estate platform PropertyGuru, Bloomberg reported, citing sources.  PropertyGuru, which had reported a net profit in Q3 and Q4 2023, swung back into losses in the first quarter of 2024. However, it reduced its net losses year-on-year and posted higher revenues in the March quarter.

Abu Dhabi-based alternative investment manager Shorooq Partners announced that it has made the first close of its latest $100-million private credit fund.

Indian micro venture capital firm IVY Growth Associates, which has backed the likes of BluSmart and the National Stock Exchange (NSE), has launched an alternative investment fund with a target corpus of Rs 250 crore ($30 million).

Deal updates

Southeast Asian e-commerce major Lazada has received another $230 million in capital infusion from its parent company Alibaba, according to regulatory filings. This is the Chinese tech behemoth’s first capital injection in Lazada this year following its $1.8-billion total infusion in 2023, as the Singapore-listed e-commerce firm continues to face competition from rivals.

Alphabet’s Google will pick up a minority stake worth $350 million in Walmart-backed Flipkart, valuing the Indian e-commerce firm at $37 billion, a source with direct knowledge of the matter told Reuters. The tech giant will join in as an investor in the latest funding round for the Bengaluru-based company, Flipkart said in a statement.

Singapore’s sovereign wealth fund GIC is said to be considering an exit from its nearly eight-year-old investment PT Nusantara Sejahtera Raya Tbk, the operator of the IDX-listed movie chain Cinema XXI, according to multiple sources familiar with the matter.

Vietnamese edtech startup VUIHOC has made a strategic investment in English language teaching chain The IELTS Workshop in a seven-digit USD transaction, DealStreetAsia has learnt.

Vietnamese commercial lender Sacombank is targeting to finalise a 33% stake sale by the end of this year, DealStreetAsia has learnt. The bank plans to sell the shares at a target price of between 34,500 dong and 36,000 dong ($1.36-1.4) apiece, translating into a deal value of $840-880 million.

A Singapore-based entity controlled by Indonesian millionaire Nurdian Cuaca has acquired a majority stake in the Indonesian hospitality brand Potato Head Family after buying shares from private equity firm Falcon House Partners and other early backers.

Early-stage venture capital firm Sopoong Ventures is looking to raise its seventh fund to back climate-focused startups in its home country South Korea and Southeast Asia, DealStreetAsia has learnt. The VC firm is looking to raise up to $25 million for the vehicle.

Vietnamese education group Nguyen Hoang has initiated the sale of two of the largest universities under its platform, DealStreetAsia has learnt. Deloitte and Viet Capital are said to have been roped in as advisors to sell Hoa Sen University and Hong Bang University.

Humble Sustainability, a Philippines-based climate-tech startup, has raised a fresh funding round anchored by Asia-focused venture capital firm Gobi Partners through the Gobi-Core Philippine Fund.

BluMaiden, a Singapore-based biotechnology company that focuses on therapeutic solutions to microbiome-derived diseases, is seeking to raise up to $3.5 million in seed funding, according to regulatory filings.

Merchant commerce platform Pine Labs has received approval from a Singapore court to move its operations to India, joining a host of several companies that have either relocated or are in the process of relocating to India, regulatory filings showed.

SEWA Grih Rin Ltd has signed an agreement with buyout-focused private equity firm Arpwood Partners and some existing investors to raise Rs 705 crore ($84.65 million) in equity for financing its business growth.

World Bank Group member International Finance Corporation (IFC) has proposed a $60-million financing to Zhengzhou Wote Energy-efficiency Technology Co Ltd, according to a disclosure.

US private equity major Warburg Pincus and Singapore state investor Temasek Holdings Pte have agreed to acquire London-based independent insurance intermediary Specialist Risk Group.

Philippine mobile wallet GCash, which boasts over 90 million customers, looks to become a broader financial app by adding products such as investments, insurance and consumer loans through collaborations with local and foreign partners.

International Finance Corporation, a member of the World Bank Group, is considering a $250-million loan to Singapore-based real estate asset manager Mapletree Investments, according to a disclosure.

TE Asia Healthcare Partners, a TPG Capital-backed private specialty healthcare group based in Singapore, has agreed to sell its stake in Hong Kong Integrated Oncology Centre Limited to NF Nestor Investment Holding Limited.

Singapore-based warehouse automation solutions provider XSQUARE has announced raising S$10.5 million (about $7.8 million) in its Series A funding round anchored by early-stage venture investor Wavemaker Partners.

Alibaba Group Holding will sell convertible bonds to raise about $4.5 billion and plans to use some of the proceeds to repurchase American Depositary Shares. It also revealed that its overall investment in Chinese artificial intelligence startup Moonshot AI in the latest fiscal year has reached $800 million.

Digital fitness firm Portl, which enables at-home workouts through its smart mirror, said it had raised $3 million in a funding round led by Bharat Innovation Fund.

UnifyApps, an artificial intelligence startup focused on enterprise integration, said it has raised $11 million in a seed funding round led by Elevation Capital.

Saudi Aramco’s venture capital arm, Prosperity7 Ventures, is planning to set up offices in India and Europe as part of its global expansion plans, according to a top executive at the firm.

BluSmart, an EV ride-hailing service and EV charging infrastructure network, is raising about $25 million in its pre-Series B funding round, according to its co-founder Punit Goyal.

Korea-based B2B SaaS cyber security platform CHEQUER Inc. is planning to venture into the Southeast Asian market by 2025 following the completion of its latest strategic round worth $8 million.

Deep dives

Thai e-commerce enabler aCommerce Group, which laid off workers and streamlined its regional team last June, has reported higher revenues and narrower losses for 2023. The group, which is backed by MDI Ventures and Indies Capital, reported revenues of 7.3 billion baht ($202.6 million) in 2023, up 17.91% from 2022.

Despite its predominantly Muslim population, Sharia finance has been unable to make significant inroads into Indonesia, with a less than 10% market share, mostly due to a lack of trust, absence of a payment ecosystem, and a dearth of sophisticated offerings.

“Value-add” is a term often used as a selling point by Asian fund managers, but how many are actually equipped to deliver it? It’s a question that has become more pertinent as they grapple with inflationary fuel and labour pressures, volatile emerging market currencies, and an overall slower growth environment.

China’s top securities watchdog has warned domestic companies traded on over-the-counter markets overseas that if they seek an uplisting to a stock exchange, they must file a record with the regulator shortly after an application is submitted.

Public funding is critically important in startup incubation, especially in the healthcare industry, where advancing cutting-edge diagnostic solutions and novel drugs requires massive capital input before they become “more investible” to the private sector.

Crypto startup funding rose for a second straight quarter to hit $2.4 billion in the first three months of 2024, PitchBook data showed, as expectations of lower interest rates and the debut of the first US bitcoin spot ETF whetted investor appetite.

Fatima Gobi Ventures, a joint venture between Pakistani conglomerate Fatima Group and Asia-focused venture capital firm Gobi Partners, is planning to double down on its investments in early-stage startups in the South Asian country after fully deploying its $20-million maiden fund.

India’s stock trading industry, which has seen robust growth in recent times driven by faster settlements, the emergence of user-friendly apps, and a rise in initial public offerings, looks ripe for consolidation, according to industry experts.

Sun Art Retail Group, a major mainland Chinese hypermarket and supermarket chain controlled by Alibaba Group Holding, sank deep into red ink in the full year ended in March, presenting further evidence of weak nationwide consumer demand.

The release three months ago of Sora, a program developed by OpenAI to convert text prompts into computer-generated videos, has placed significant pressure on Chinese firms in the space. But weighing the high costs, immense computing resources required and the nation’s dwindling stocks of advanced hardware, most see little business case to justify a generative video arms race.

A partner at IDG Capital with knowledge of insider information about a Shenzhen-listed company was linked to a bank employee who was fined earlier this month for insider trading, according to an official notice.

With India aiming to achieve net zero emissions by 2070, investors have now woken up to the rising opportunities in India’s climate-tech sector, readying pools of capital to invest in green energy areas promoting sustainable development.

Indonesian wealth tech startup Bareksa, which is backed by SE Asian tech giant Grab, is eyeing a super app transition by diversifying into multiple investment products either through M&As or partnerships.

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