The week that was — Jan 23-28

We are back with the weekly roundup of our top headlines and analytical pieces from India, SE Asia, and Greater China.

In a significant development this week, Singapore’s B2B fashion marketplace Zilingo spun off its technology, product, and intellectual property (IP) units to Swiss startup Buyogo as the firm nears a settlement with its creditors. Buyogo AG is a Zurich-based SaaS startup focused on digital e-commerce solutions for small and medium-sized businesses.

The deal comes days after Zilingo appointed EY as provisional liquidator to wind up the firm. The move to liquidate came nearly a year after the Zilingo board launched an internal probe and sacked its CEO, Ankiti Bose, over alleged mishandling of finances. Since then, Zilingo’s operations and team have whittled away as the board struggled to align competing interests over the firm’s fate.

Once hailed as a rising star from Southeast Asia, Zilingo had raised over $310 million in venture money from institutional investors such as Sequoia Capital India, Temasek Holdings, and Burda Principal Investments.

In a possible move to streamline its operations amid a challenging global environment, OLX Group is downsizing its Indonesia office and has put its automotive business on the market for sale. Some 300 out of 1,000 staff members have been affected by the layoffs, which will see OLX Indonesia roll back its consumer-to-business (C2B) and business-to-business (B2B) auto units while leaving it with a much smaller B2C operation in the country.

In fundraising updates this week, we reported that Indonesia-based dental clinic chain Satu Dental is said to be closing up to $7 million in fresh funding from existing backer Alpha JWC Ventures and new investor Susquehanna Venture Capital (SIG) as it aims to expand its footprint in the archipelago.

Indonesian e-commerce enabler startup Desty has raised $4.35 million in new funding, show regulatory filings. The extended pre-Series A financing round was led by East Ventures (Growth Fund).

Meanwhile, Vietnam-based earned wage access startup GIMO has raised $4.6 million in a Series A funding round led by Southeast Asia-focused venture capital firm TNB Aura, according to regulatory filings.

From LP-GP quarters

Several fund managers managed to hit fundraising milestones in a challenging landscape.

Temasek-backed venture capital firm Vertex Ventures China has raised at least $375 million so far for its fifth China-focused fund. The firm is reportedly raising nearly $500 million for the new vehicle.

Impact-focused Elevar Equity Advisors, which is currently on the road to raising its fifth India-focused fund, has garnered as much as $125.65 million so far from US investors.

Singapore- and Paris-based impact fund Shift4Good has raised $4.35 million from the SGX-listed transportation firm ComfortDelGro.

Riverhead Capital, the PE arm of Chinese insurance provider Sunshine Insurance Group, has closed its second RMB fund at 2 billion yuan ($295 million). Riverhead focuses on investments in medical care, emerging technology, new consumption, and real estate sectors.

Värde Partners has so far raised $105.5 million for its latest Asia credit vehicle and sidecar funds. Värde Partners, an active investor in the Asia-Pacific region, launched the fund a year earlier.

Dutch development bank FMO is likely to invest $10 million in the latest close-ended debt fund of non-profit impact investor MCE Social Capital.

Swiss impact investor responsAbility Investments has reached the first close of its South and Southeast Asia-focused sustainable food private equity fund at $173 million.

India desk

In a data-based story, we find that even as the number of unicorns in the world’s third-largest startup ecosystem has been growing steadily, only a handful have turned profitable. Of the total 107 unicorns that India has produced so far, only 13 are making profits, Tracxn data shows. 

These include health-tech platform Molbio Diagnostics, online payment gateway BillDesk, B2B commerce business OfBusiness, to name a few.

We released the DealStreetAsia DATA VANTAGE’s quarterly report India Deal Review: Q4 2022 this week. Indian startups raised $3.8 billion in funding in Q4 2022, registering a QoQ growth of 20% despite the ongoing funding winter. The increase came despite an 8% fall in deal volume — 317 in Q4 vs 345 in Q3 — suggesting big-ticket megadeals and late-stage deals shored up fundraising.

In a potential deal in the co-working space, Smartworks, an Indian enterprise-focused workspace platform, is in advanced talks to raise funding from Baring Private Equity Asia. If the deal goes through, it would mark the second investment for the PE major in the co-working space, coming close on the heels of its funding in WeWork India in December 2022.

IPO updates

New Ruipeng Pet Group, a Chinese pet clinic operator backed by Tencent and Hillhouse Capital, has filed to raise $100 million in an initial public offering in the US. The Shenzhen-based operator of a network of over 1,900 pet hospitals in China plans to list its ADSs on the Nasdaq. New Ruipeng was created in 2019 after Hillhouse consolidated its animal healthcare assets in China. 

Meanwhile, Qiming Venture Partners-backed QuantaSing Group, a Chinese online learning service provider, raised about $41 million in its IPO in the US.  

Interviews and analysis

In The LP view this week, we featured Singapore-based insurer Singlife group deputy chief investment officer Allen Kuo who noted that while the private equity sector boomed in the last decade thanks to a low interest rate environment, it remains to be seen if the strategy offers the best risk-return ratios in the current environment.

US- and Thailand-based venture capital firm SeaX Ventures, which is eyeing more opportunities in the deep tech space in Southeast Asia, says more funding deals are being sealed by startups in the sector. “Many of them are raising Series A rounds with the potential to advance to Series B,” said Kid Parchariyanon, Founder and Managing Partner, SeaX Ventures. In April 2022, Yield Guild Games-backer SeaX secured $60 million in the final close of its second fund.

Thai startups are witnessing unprecedented interest from SE Asian venture capitalists, according to Pahrada Sapprasert, a partner at 500 Global Thailand. These venture firms are betting on Thai-headquartered companies with a presence or expansion plans in the region, he noted.

Japan’s MUFG Bank, a unit of Mitsubishi UFJ Financial Group, is doubling down on Southeast Asia. The bank is said to have internally committed $500 million or more of equity investments to Asia, including India and Southeast Asia.

As part of our earnings analysis, we looked at the financial numbers filed by Indonesian beauty tech startup Social Bella International, which operates the e-commerce brand Sociolla. Per its recent regulatory filings, the startup saw net losses shoot up by 130% for the financial year ended Dec 31, 2021, amid rising costs and operating expenses. However, its gross profit jumped 30% to $21.22 million in 2021 as revenue surged 44% to $62.76 million. 

Lastly, I leave you with this piece on Singapore-based direct-to-consumer fashion platform Love, Bonito’s plans to go global to cash in on the growing demand for affordable and trendy clothes among Asian women. It has set its sights on new markets such as the Philippines and the US East Coast, where there is a sizable Asian population, CEO Dione Song said. The Primavera Capital-backed firm is especially keen on foraying into the ultimate fashion hub, New York City. “There is a culture of style discovery and streetwear, which I think Love, Bonito can possibly fit into,” added Song.

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