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ISSUE 18


AI Group seeks listing on the NSX to accelerate growth in investment portfolio


Actcelerate International Group (AI Group), which is eyeing investment in SMEs and high-tech startup companies, has recently lodged a prospectus to raise up to A$2.25 million and list on the National Stock Exchange of Australia (NSX).


The listing on Sydney based NSX will allow AI Group to further its investment focus on four major sectors – Information and Communications Technology, New Age Retail, Financial Services and Green Technology.


With its headquarters strategically located in Kuala Lumpur, one of ASEAN’s most vibrant hubs of economic growth, AI Group aims to invest in high-growth companies and businesses that meet its investment criteria, and help them to expand their market penetration. The main focus will be on companies that possess the potential for continued growth in the Asia Pacific region and beyond. The target companies’ valuation range is proposed to be from A$1 million to A$10 million, with the flexibility of equity, debt or hybrid investments.


AI Group believes that with its focus on investments in technology companies across a wide range of sectors, coupled with an experienced management team and board, it can achieve a balance between return on investment and acceptable risk.


AI Group puts the global market in view as it sets foot in the Asia-Pacific region for higher capital gains to maximise shareholder value. The company aims to become a preferred partner for SMEs and high-tech startup companies in the procurement of their development financing.


AI Group offers a complete investment package that covers provision of funding, know-how, management, market strategy, and competent human resources.


Anyone wishing to acquire shares will need to complete the application form which accompanies AI Group’s prospectus. The prospectus can be obtained from http://actcelerategroup.com/


By –Reuters



T-Mobile to Buy Sprint for $26.5 Billion in Bet on Networks


T-Mobile US Inc. agreed to acquire Sprint Corp. for $26.5 billion in stock, a wager that the carriers can team up to build a next-generation wireless network and get a jump on industry leaders Verizon Communications Inc. and AT&T Inc.


The deal follows years of will-they-won’t-they deliberations between Deutsche Telekom AG, the German company that controls T-Mobile, and SoftBank Group Corp., the Japanese owner of Sprint, and comes about five months after an earlier merger attempt collapsed. The combination reduces the U.S. wireless industry to three major competitors from four, ensuring heavy scrutiny from regulators.


“We are going to have an impact on America,” John Legere, the T-Mobile boss who will serve as chief executive officer of the combined entity, said on a conference call Sunday. Rivals such as Verizon, AT&T and Comcast will have to respond, he said. “We are going to drag the rest of the players kicking and screaming to the prize, which is American leadership” in fifth-generation wireless networks.


Operating as T-Mobile, the company would have about $74 billion in annual revenue and 70 million wireless subscribers. Verizon is the largest U.S. carrier with $88 billion in 2017 wireless revenue and 111 million subscribers, and AT&T would be No. 2 with $71 billion in wireless revenue and have 78 million regular subscribers.


The combination values each Sprint share at 0.10256 of a T-Mobile share, the companies said in a statement Sunday, or about $6.62 a share based on T-Mobile’s Friday closing price of $64.52. The ratio was originally fixed based on T-Mobile’s share price at the close on April 9, before news of the renewed talks emerged, and would have valued Sprint at $6.13 a share based on that price, one of the people said. News of the talks sent both companies’ stocks surging, adding to the valuation of the deal. Sprint closed Friday at $6.50 a share.


Company’s Structure


The implied enterprise value is about $59 billion for Sprint and $146 billion for the combined companies, according to the statement.


Under terms of the deal, Deutsche Telekom will end up with a 42 percent ownership stake while SoftBank will have 27 percent. T-Mobile’s Mike Sievert will be president and chief operating officer. The German company’s chairman, Tim Hoettges, will serve in that role at the combined company, and the board will include SoftBank Chief Executive Officer Masayoshi Son.


Deutsche Telekom rose 1.3 percent to 14.74 euros at 9:22 a.m. in Frankfurt on Monday. SoftBank rose 4.1 percent, the steepest increase in almost four months, to close at 8,501 yen in Tokyo on Friday.


The companies said they expect synergies of about $43 billion based on net present value, with more than $6.5 billion on a run-rate basis, with most of the savings coming from network spending. Combining networks will eliminate future costs to upgrade and operate one of the networks, and by consolidating overlapping properties the new company can vacate unnecessary antenna towers. Neville Ray, T-Mobile’s chief technology officer, said the new company planned to decommission 35,000 cell sites.


Unlike other mergers that achieve cost savings by eliminating duplicate staff, the executives plan to keep dual headquarters in Bellevue, Washington, and Overland Park, Kansas. Sievert said the combined worldwide workforce of about 240,000 employees will increase once the merger is complete. Most of the new jobs will be network related, many in rural areas where network expansion is planned.


Previous Attempts


The deal marks the third time that SoftBank’s Son has acted on his long-held plan to combine Sprint and T-Mobile. Previous negotiations broke down after the two sides couldn’t agree on how to structure control of the combined entity, people familiar with the matter said at the time.


The two carriers have complementary wireless spectrum that may be a strategic advantage as the companies build a faster fifth generation or 5G network. T-Mobile controls a large portfolio of lower-band airwaves that can travel long distances and pass through walls and windows. Sprint has the largest U.S. holding of higher-band, 2.5 gigahertz spectrum that can handle more data capacity but over limited distances.


The transaction would be “good for consumers, good for the economy, good for the country,” Sprint CEO Marcelo Claure said on the conference call Sunday. Claure will serve as a board member of the combined company.

Washington Scrutiny


The companies dashed a previous plan to merge in 2014 after meeting resistance in Washington. Regulators said that a four-competitor wireless market fosters more choice, price competition and innovation, which proved to be largely true.


Consumers will be the losers if T-Mobile and Sprint are allowed to merge, said Gigi Sohn, a fellow at the Open Society Foundations and former aide for the Federal Communications Commission. “Both companies have been feisty competitors to the two biggest national mobile wireless carriers, Verizon and AT&T” and a combination will lead to less choice for consumers, Sohn said.


Sprint and T-Mobile will try to convince regulators and possibly President Donald Trump that the combination will lead to bigger investments in 5G networks and put pressure on larger rivals, even though consumer benefits aren’t obvious and heavy job cuts are expected. The Trump administration is currently trying to stop AT&T Inc.’s $85 billion takeover Time Warner Inc., saying the deal will lead to higher pay-TV prices.


“Like other companies, T-Mobile and Sprint are confident the merger will be approved and they are special and shouldn’t be judged like other mergers,” said Roger Entner, an analyst with Recon Analytics LLC. He’s skeptical that jobs won’t be cut, saying that “those kinds of synergies don’t happen without layoffs.”


Brian Hart, a spokesman for the FCC, declined to comment.


Sprint Life Raft


For Sprint, which hasn’t had a profitable year in more than a decade, the merger is a bailout. The company is four years into a go-for-broke turnaround effort launched when Claure took over as chief executive officer and started slashing prices on phones and offering half-off service plans to stop customer losses.


Sprint Cash Burn


But the price battles only further fueled the cash burn. The need for more and more financing took the company back to the junk-bond market in February after a three-year absence. In March, Sprint sold a second round of airwave-backed bonds.


Under Legere’s leadership T-Mobile became the fastest growing carrier gaining more than 6 million subscribers over the past three years, though the pace of that growth has steadily slowed. T-Mobile has forced the industry to try and match its sales techniques like offers including phone financing, free video streaming and unlimited data plans.


For SoftBank, the transaction puts the mobile-service empire that billionaire CEO Son built in a better position to compete with U.S. cable companies by offering high-speed wireless internet connections and streaming video. The combination also gives Deutsche Telekom a stronger vehicle to expand in the profitable U.S. market.


T-Mobile was advised by PJT Partners and Deutsche Bank, while Goldman Sachs advised the company and its controlling shareholder Deutsche Telekom. Morgan Stanley also helped Deutsche Telekom and Evercore advised T-Mobile’s committee of independent directors. Barclays, Credit Suisse, Deutsche Bank, Goldman Sachs, Morgan Stanley, and RBC are providing T-Mobile with committed debt financing.


Sprint was advised by Raine Group and JPMorgan, while Centerview Partners helped Sprint’s independent directors. Mizuho Securities and SMBC Nikko Securities provided financial advice to SoftBank.


By–Bloomberg



A new beginning for China-India relations could transform Asia


Although the most inescapable news recently was the historic summit between North and South Korea on April 27, a less covered “informal summit” across the Yellow Sea, and one likely to be of equal consequence, is the meeting between Chinese President Xi Jinping and Indian Prime Minister Narendra Modi. This summit could reset the Sino-Indian relationship, one that goes back centuries.


The two ancient civilisations intersected long before the Han dynasty (206BC-AD220) in China and the era of Emperor Ashoka the Great (273-232BC) in India. Through the trading networks of China’s maritime and silk routes, a wide range of goods, pilgrims and knowledge systems enriched each culture. Among them was the dissemination of Buddhism from India to China, which had a transformative effect on Confucian and Taoist culture.


Buddhist sutras were translated into Chinese by famous scholar-monk Kumarajiva, the son of a Hindu father from Kashmir in India and a princess of the ancient kingdom of Kucha, which lies in present-day Xinjiang. Indeed, if China and India want to reset their relationship, the starting point could well be Kumarajiva, whose biological, intellectual and spiritual connection bridges the two nations.


In recent years, Xi has used Buddhist diplomacy as a foreign policy innovation, especially with Sri Lanka. Modi has also invoked the Buddhist connection in his dealings with Sri Lanka and while visiting China’s Buddhist sites, including the Daxingshan Buddhist Temple and the Giant Wild Goose Pagoda.


The summit, organised at the request of Modi, took place in Wuhan, Hubei province, in central China, which is home to Mao Zedong’s summer villa. The timing and location of the meeting was critical, as the Chinese leadership sought not only to eclipse the American-led denuclearisation of the Korean peninsula but to highlight the significance of Wuhan, considered an intellectual mecca for communist leaders. There, Xi and Modi could draw inspiration from lines from a poem by Mao: “Great plans are afoot: A bridge will fly to span the north and south; Turning a deep chasm into a thoroughfare.”


Like US president Richard Nixon’s historic China visit to reset Sino-American relations after the Vietnam war and before his re-election, Modi had two reasons for wanting a summit.


First, India’s regional power has been somewhat weakened by China’s increasing economic engagement with India’s neighbours Bangladesh, the Maldives, Nepal, Pakistan and Sri Lanka. More importantly, the Chinese military threatened Indian forces in the disputed Doklam plateau on the Bhutan-China-India border last year as Beijing tried to extend a highway towards Bhutan, which has a “special relationship” with New Delhi.


Second, Modi is focusing on winning the national election in 2019 at a time when domestic issues and political protests have seemingly weakened his Hindu nationalist Bharatiya Janata Party. But Modi is a strategic leader, especially in the larger context of China’s transformative leadership in Asia and beyond.


China and India – the second and seventh largest economies in the world – represent almost 40 per cent of the world’s population and see each other as leaders of an “Asian century”, just as the United States and Europe are identified with the 20th century’s game of geopolitics involving Russia and the Middle East.


China has advanced an assertive foreign policy – with the Belt and Road Initiative, the Asian Infrastructure Investment Bank and the East and South China Sea disputes – while managing its relationships with the US and other European powers. China now rivals and sometimes surpasses the US on many economic and social development indices, according to Harvard professor Graham Allison.


In the face of China’s rising global influence, Washington has tried to revitalise its old Indo-Pacific region “quadrilateral” strategy, pitting the democracies of Australia, Japan, and India together against China’s rise. Yet, this strategy would only work if the US has the economic maturity to address the increased defence expenditures and the much-needed infrastructure development to “make America great again”.


For India, a real alliance with the distant US is problematic, especially with the unreliable Trump administration. China and India not only need each other for economic reasons, but the two countries have also traditionally adhered to the “non-alignment principle” of Jawaharlal Nehru, the first prime minister of India, and Mao Zedong, sharing a vision of national sovereignty free of colonial and cold-war mentalities.


The Wuhan summit between Xi and Modi is driven by national interest, the fear of external powers and pride in their respective civilisations. While India might consider the US a potential democratic ally to counter China’s assertive behaviour, at this point, being anti-China would not serve India well.


Instead, the two nations could cooperate on trade, commerce and investment as there are now an increasing number of Indian workers, tourists and students across Chinese universities. They also share common concerns on issues such as climate change, on which the US has disengaged itself.


China’s global vision is carefully guided and executed by the two pillars of Confucian bureaucracy and the Communist Party. The country’s rapid development and modernisation has proven that Beijing can govern its affairs locally and globally with confidence, more so than India.


China’s ruling mechanism is now favourably viewed in many quarters as more effective and efficient in serving its people than the chaotic nature of India’s democratic governance. Only time will tell whether India’s highly-decentralised governing system – with its diverse ethnic, linguistic and religious groups in a noisy democracy – or China’s form of governance will prove to be more effective.


Of course, China has similar diversity, albeit managed with a different governing model.


Just as Nixon triggered a domino effect that changed Sino-American relations, a reset of the China-India relationship could well be a new beginning that transforms the region, as it enters a peaceful Asian century in which power shifts from West to East.


From – South China Morning Post


Airbnb, Instacart and 8 more companies that sprinted to $1B valuation


T-1. Desktop Metal


Time from launch to unicorn status: One year, nine months


The Burlington, MA-based Desktop Metal was founded in 2015. Less than two years later, NEA led a $115 million Series D financing that gave the maker of office-friendly 3D printers a billion-dollar valuation. NEA also co-led Desktop Metal's first raise, a $14 million round in 2015. At the time, the company had no website and no prototype. But it did have a seasoned 11-person team, including multiple MIT engineering professors and a co-founder, Ric Fulop, who'd just come from a five-year stint as a general partner at North Bridge Venture Partners.


T-1. Grail



Time from launch to unicorn status: One year, nine months


Spun out of Illumina in January 2016,Grail is an early-stage cancer detection company focused on blood-based cancer screenings. Jeff Bezos and Bill Gates are both backers, as are GV and ARCH Venture Partners, among other heavyweights. Jeff Huber, a former Illumina board member who also helped form the Google X lab and R&D facility, led the company until August 2017. He was replaced a few months later by Jennifer Cook—who, unlike Huber, had decades of prior experience in the biotech sector. Grail raised a reported $900 million Series B last year and is now said to be seeking an additional $1 billion ahead of a potential Hong Kong IPO.


3. Essential


Time from launch to unicorn status: One year, 11 months


Because of well-known founder Andy Rubin, the co-founder and former CEO of Android, it was no surprise when Essential garnered a billion-dollar valuation less than two years after its founding. In 2016, before the company came out of stealth, Essential raised $30 million. The following year, it raised $300 million at a unicorn valuation and officially launched. At that point, Essential had yet to ship a single phone, according to The Verge. It helped that Rubin is also an investor at Redpoint Ventures and a founder of Playground Global—two of Essential's backers. The Amazon Alexa Fund, Foxconn, Tencent and Altimeter Capital have also bet on the Palo Alto-based company.


T-4. Letgo


Time from launch to unicorn status: Two years


New York-based online marketplace operator Letgo kicked off its VC fundraising with a $100 million Series A from Naspers in September 2015. Letgo founder Alec Oxenford was pretty familiar with the investor—five years earlier Naspers had acquired his previous startup, OLX, a classifieds platform popular in India, Brazil and Poland. Naspers sang Oxenford's praises in a press release announcing Letgo's Series A, calling him "an expert with an extraordinary track record in mobile ecommerce." Last year, Letgo raised a total of $275 million and entered the unicorn club. This year, it added housing sales and other real estate offerings to its platform, further cementing itself as a competitor to Craigslist.


T-4. Zoox


Time from launch to unicorn status: Two years


Autonomous vehicle startupZoox was founded in 2014 but didn't raise its first round of venture capital—which also happened to be a unicorn round—until 2016. Zoox's founders were first-timers, though one of them, Jesse Levinson, had previously led Stanford's self-driving car program. That experience probably came in handy during pitch meetings with investors like DFJ, Lux Capital and Blackbird Ventures, who are all now Zoox backers. Reports emerged last September that the company is in talks to complete a new round of funding from SoftBank at a valuation of up to $4 billion.


6. Katerra


Time from launch to unicorn status: Two years, one month


In 2015, Katerra set out to disrupt the construction industry. Its first round of VC was a $75 million funding from Foxconn and others in 2016. The Menlo Park-based startup raised another $160 million at an estimated $1 billion valuation last year and followed it up in January with an $865 million SoftBank-led round at a reported $3 billion valuation. How'd the company manage to raise so much so fast? All three Katerra founders have strong private equity ties: Michael Marks is a founding partner at Riverwood Capital and a former partner at KKR, while Jim Davidson is a managing director at Silver Lake and Fritz Wolff is the executive chairman of The Wolff Company, a real estate PE firm.


7. Illumio


Time from launch to unicorn status: Two years, three months


First-time founders, don't give up hope. Like Katerra, cybersecurity startupIllumio was launched by first-timers, in this case PJ Kirner and Andrew Rubin (not to be confused with Andy Rubin). The two did, though, have decades of combined experience when they launched the company in 2013. Both were executives at Cymtec before starting Illumio, which prevents the spread of cyber threats in the cloud and inside data centers. While still in stealth mode, the pair raised more than $40 million from the likes of General Catalyst and Andreessen Horowitz in 2013. Three years later, BlackRock and Accel co-led a $100 million financing that valued the company at $1 billion.


8. Instacart


Time from launch to unicorn status: Two years, four months


Apoorva Mehta, the founder of grocery delivery service Instacart, is the dictionary definition of a serial entrepreneur—though not necessarily a successful one. That is, until Instacart. Mehta reportedly launched 20 failed ventures before creating Instacart. The San Francisco-based company was founded in 2012, just before it was admitted into Y Combinator's Summer 2012 cohort. At the time, TechCrunch described the startup as "Uber for grocery delivery," with hopes of competing with Amazon. After Amazon's acquisition of Whole Foods, one of Instacart's partners, that may not be as likely. Instacart was valued at about $4.4 billion in early April with a $350 million funding.



9. Opendoor


Time from launch to unicorn status: Two years, eight months


Opendoor is another classic example of a group of serial entrepreneurs starting a company and seemingly entering the unicorn club with ease. Founded in 2014, the platform for buying and selling homes pushed its way to unicorn status with the close of a $210 million round in November 2016. The company's founders include former PayPal exec Keith Rabois, RentAdvisor.com and Movity.com co-founder Eric Wu, and former VP of product at Addepar JD Ross. Rabois came up with the idea for Opendoor in 2003, but waited more than a decade to start the company. He's also a managing director at Khosla Ventures, one of the company's key investors.


10. Airbnb


Time from launch to unicorn status:Two years, 11 months


Brian Chesky, Joe Gebbia and Nathan Blecharczyk started Airbnb in 2008. Graduates of the Rhode Island School of Deisgn, neither Chesky nor Gebbia had tech backgrounds, unlike many other founders. And both Chesky and Blecharczyk were first-time founders. Perhaps those factors contributed to the housing-rental company's unique and creative beginning. After failing to land venture funding, the company designed boxes of cereal labeled as "Obama O's" and "Cap'n McCain's" during the 2008 presidential election. Airbnb later entered Y Combinator's seed funding program and today has a $31 billion valuation as the second most valuable venture-backed company in the US, per the PitchBook Platform.


From - PitchBook



TPG adds John Kerry to $2B Rise Fund


First, TPG Growth tapped Bono to help launch The Rise Fund. Now, the firm has brought on former US Secretary of State John Kerry as a senior advisor for the $2 billion vehicle.


Kerry, the former Massachusetts senator and 2004 presidential nominee, becomes the latest politician to join the PE ranks. He will reportedly be responsible for helping find and advise the firm's portfolio companies, with a specific focus on the renewable energy sector.


"We hope that we can write a new playbook and demonstrate that impact investing can be scalable, profitable and truly measurable," Kerry wrote in a Medium post about his new role. "If we succeed, we can open the door for institutional investors to deploy capital toward investments that drive positive social and environmental change without compromising returns."


TPG closed The Rise Fund on $2 billion this past October, surpassing a $1.5 billion target. Formed by TPG managing partner Bill McGlashan, Bono and billionaire film producer Jeff Skoll, the vehicle aims to promote social and environmental good by investing across several industries, which reportedly include the food & agriculture, education, energy, financial services, healthcare, technology and infrastructure sectors. With a star-laden board of directors that includes Richard Branson and Laurene Powell Jobs, the fund has made 11 investments so far, per PitchBook data.


Kerry likened TPG's efforts to a privately funded version of the Marshall Plan, a $13 billion government initiative to help the European economy recover in the aftermath of World War II. "What do you do in an age that demands one hundred Marshall Plans but few constituencies anywhere stepping up to provide them? The answer is, you think differently — and you think creatively," Kerry wrote in the Medium post.


TPG isn't the only firm focused on impact investing. In 2017, PE and VC firms devoted about $4 billion to impact funds around the world, per the PitchBook Platform. The Rise Fund is among the largest: Of the 270 PE and VC vehicles included in a recent PitchBook analyst note, about 59% of the PE funds totaled less that $100 million in equity commitments.


The sector looks poised to grow, with Goldman Sachs, UBS and US Bank having already added impact investing divisions. Bain Capital, meanwhile, closed its Double Impact fund on a reported $390 million last year, with a focus on health & wellness, sustainability and community building. In a bit of a coincidence, the vehicle is led by Deval Patrick, the former Massachusetts governor who's been rumored as a possible 2020 presidential candidate.


From –PitchBook




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