Issue 18

Malaysia’s Axiata sells digital ventures portfolio to Pegasus 7 Ventures

Axiata Digital, the digital services arm of telecommunications giant Axiata Group Bhd, has entered into an agreement to sell its digital ventures portfolio at a valuation of $140 million to Singapore investment fund Pegasus 7 Ventures, it said in a statement on Tuesday. 

Its portfolio companies include StoreKing, BIMA, FreedomPop, 11street and etobee with operations across Asia, US and Africa. These investments were made with co-investors that include Allianz X, Kinnevik, Millicom, LetterOne, Intel Capital, Atomico, Mangrove Capital Partners, LeapFrog Investments and Kejora Ventures. 

Managed by Gordian Capital, Pegasus 7 Ventures will drive the portfolio’s growth led by Gautum Saxena, a seasoned senior investment banker and former head of Asia for telecom and media at Bank of America Merrill Lynch. 

“These companies are poised to scale significantly and create value for their stakeholders while continuing to make positive impacts in underserved communities. The addition of these assets to the Pegasus 7 portfolio is synergistic with our thematic focus and will serve as an enabler for our future growth path,” said Saxena. 

Meanwhile, its exit from the digital ventures portfolio will enable Axiata Digital to continue to focus on its three core verticals — digital financial services (Boost), digital advertising (ada) and digital platform (Apigate). “The partners in Pegasus 7 understand our vision, our markets and our portfolio companies which we’ve built to focus on our ecosystem of telco and digital assets. We strongly believe this handover will ensure the assets continue to thrive through access to our customer base, joint marketing and other synergistic activities,” said Axiata Digital CEO Mohd Khairil Abdullah. 

Axiata Digital was started in 2013 to help the telco business undergo digital transformation via investments in new age businesses. It has since built a portfolio of 30 companies through minority investments and venture builder models. 

The firm also has a seat on the board of Axiata Digital Innovation Fund (ADIF) which is focused on investing in tech startups. ADIF has raised 80 million ringgit ($19.8 million) to date, including investments from state-owned investment arm Johor Corporation (JCorp) and government-owned Malaysia Venture Capital Management Bhd (Mavcap). 

Established in 2005, Singapore-based Gordian Capital is an independent and institutionally-focused fund platform specialist. It manages $2.4 billion in private equity, venture capital, real estate, private credit and hedge funds.


From – Deal Street Asia


Dymon Asia PE backs $45m offer to take Malaysia’s Yee Lee private

Dymon Asia Private Equity is backing a $45-million offer to take Malaysia-listed firm Yee Lee Corporation private. Founded in 1968, Yee Lee is engaged in the production and distribution of edible oil and has expanded into other food verticals as well as packaging, marketing and distribution of fast moving consumer products, plantation and eco-tourism. 

Under the unconditional takeover offer, Langit Makmur, a special purpose unit of Dymon Asia, will join Yee Lee’s founder and executive chairman Datuk Lim A Heng and other shareholders to acquire 79.7 million shares, equivalent to a 41.59 per cent stake, they don’t currently own in the firm at 2.33 ringgit apiece. 

The offer price represents a 20.1 per cent premium compared to Yee Lee’s last transacted price on April 25 and 22.6 per cent over a six-month volume weighted average market price. 

At the time of the announcement last Friday, Langit Makmur did not own any shares of the company. UOB Kay Hian Securities is the underwriter for the transaction. Yee Lee shares will be delisted from Bursa Securities upon completion of the takeover. 

“The joint offerors will not be taking any steps to address any shortfall in the public shareholding spread of Yee Lee in the event Yee Lee does not meet the Public Spread Requirement after the closing date,” it said. The company also announced a trading suspension on Friday. 

The last transacted price gave it a market capitalisation of 371.71 million ringgit ($90 million). Singapore-based Dymon Asia PE invests across Southeast Asia, focusing on the mid-market sector. 

The firm launched its maiden investment vehicle, Dymon Asia Private Equity (SE Asia) Fund, in 2012 with S$300 million in commitments from investors. Its second fund in 2017 secured $450 million in capital commitments.

From – Deal Street Asia

Tencent-backed Waterdrop seeks financing at over $1b valuation

Tencent Holdings Ltd. is gearing up to battle Jack Ma’s Ant Financial in Chinese health care. Beijing startup Waterdrop Inc., backed by the social media giant, is seeking new financing at a valuation of more than $1 billion to fend off its better-capitalized rival in the emerging field of health care crowdfunding. 

Three-year-old Waterdrop is the early leader among a raft of startups upstaging a conventional insurance industry dominated by state-run behemoths. The company will spend the money on automating reimbursements and developing blockchain technology with Tencent, founder and Chief Executive Officer Shen Peng said in an interview. 

So far, Peng said, Waterdrop has paid out 440 million yuan ($65.3 million) to more than 3,000 of its over 70 million active users. The product itself, Waterdrop Mutual, is a software platform that operates somewhat like a collective. 

The app’s basic principle will be familiar to the roughly 55 million users of Ant’s Xiang Hu Bao: People chip in small amounts of money to help those diagnosed with critical illness, with payouts capped at 300,000 yuan on each platform. 

The companies take commissions of 8 percent. Shen estimates that at least 50 companies, including ride-hailing giant Didi Chuxing, now offer similar services in China. The country is grappling with a rapidly graying population, soaring rates of critical illnesses, and a yawning gap in medical coverage—all pressing long-term threats to the world’s second-largest economy. “We see ourselves as a supplement to traditional commercial insurance,” said Shen. 

“It’s a good thing that more players are coming into the space. It cuts our cost and time for educating users.” Shen declined to disclose how much money he’s seeking to raise in Waterdrop’s new funding round, but said the company wants to look for strategic investors that are in the insurance industry or at least understand it. 

The company said in March it had completed a B round led by Tencent that raised close to 500 million yuan. Other backers include Meituan Dianping, IDG Capital, Gaorong Capital, Sinovation Ventures and DST Global founder Yuri Milner. Ant, best known for the PayPal-like Alipay service that underpins Alibaba Group Holding Ltd.’s online shopping platform, said in April it hopes to sign up 300 million Xiang Hu Bao users, meaning more than 20 percent of China’s population, within two years. 

Unlike Xiang Hu Bao, which requires no payment upfront to join, Waterdrop asks users to have at least 1 yuan in deposit. It gives people the option to top up 3 or 10 yuan at a time. Shen said the deposit is meant to make users take the system’s terms seriously. 

There are restrictions. Infants younger than 28 days won’t be allowed to participate, nor will anyone older than 65. Beneficiaries can’t have any medical history of critical illness, can’t make any claims in their first 180 days, and receive payouts pro rated based on their age and condition. 

An adult under 30 years old with malignant cancer is eligible for the full 300,000 yuan, whereas a 62-year-old with less severe cancer might receive just 20,000 yuan. Shen said Waterdrop adjusts the rules yearly, based on member suggestions and voting, and that half the startup’s more than 2,000 employees focus on approving and inspecting claims. 

“The challenge for this model is it needs a large number of people to help each other,” said Steven Lam, a Hong Kong-based analyst with Bloomberg Intelligence. “The moment the pool of people is shrinking is where problems and bad customer experience could come up.” Waterdrop Inc. said it has also expanded into selling traditional insurance products provided by more than 50 third-party financial institutions. 

Shen said that while Waterdrop Mutual cannot call itself an insurance product and the Chinese insurance regulator doesn’t supervise its operations, the company makes sure to keep government officials updated on its activities. 

Meituan was among the earliest to back Shen. “We invested immediately after he left Meituan,” CEO Wang Xing said.

From – Deal Street Asia

Krungsri Finnovate backs Series A+ for Thai startup Choco CRM

Krungsri Finnovate, the venture capital arm of Thailand’s Krungsri Bank, Monday announced that it has invested an undisclosed sum in an extended Series A round for Choco CRM, a Thai startup which offers customer relation management and point of sales (POS) services. 

This marks its fifth direct investment in startups, following funding for blockchain and online payment unicorn Omise, fintech firm Finnomena, proptech startup Baania and AI-driven banking system developer Silot. 

Choco provides small and medium enterprises (SMEs) with marketing tools to retain customers by offering personalised rewards and promotions. 

It offers CRM and POS solutions for businesses, who can connect with the end-users through a physical card, mobile phone number and a mobile application. 

“The goal of this investment is to strengthen SME operators by means of delivering superior financial services and; to facilitate them to achieve business management efficiency and to have access to enhanced financial services, including Information-based Lending platform of Krungsri,” said Krungsri Finnovate managing director Sam Tanskul. 

Choco’s founder and CEO Sirasit Suriyapattanapong said this collaboration has opened up Choco’s access to the financial services market, in addition to its current customers such as restaurants, gadgets and fashion stores. 

Moreover, Krungsri will also be a key driver in the development of a payment gateway for Choco’s POS users. 

Choco had previously secured 40 million baht ($1.25 million) in funding from InVent, the corporate venture capital arm of Thailand’s telecommunication firm INTOUCH Holdings, in September 2018.

From – Deal Street Asia

East Ventures invests in Indonesian logistics startup Triplogic

Indonesia-based logistics startup Triplogic has secured an undisclosed amount of seed funding from early stage VC firm East Ventures. In an official statement, the startup said, it will use the fresh capital to push product development, tech enhancement, as well as to expand its logistics network by partnering with SMEs. 

Based in Bandung, Triplogic offers an on-demand logistics service that provides inter- and intra-city last mile delivery services within Indonesia by making use of latent commercial spaces. The company is able to fulfill instant delivery by establishing drop shipping points in SMEs and local shops. 

These come in the form of smart lockers and drop boxes for parcels to be designated. As the company gains more deliveries, it is able to conduct predictive analyses to strategically select the next location for its drop shipping points. 

The company, which caters to retail users, SMEs, and corporate clients, is adding more partners to grow the network, as it is planning to scale operations to fulfill instant delivery across Indonesia. 

This will enable them to serve more customers quickly with an extensive network, instead of adding resources slowly as they grow. The startup is currently operating in 61 cities across Indonesia, including major urban areas like Jakarta, Bandung, Surabaya, Yogyakarta, and Palembang while partnering with over 1,600 SMEs. For East Ventures, the funding for Triplogic is the latest in the e-commerce and supply chain ecosystem. 

The VC has previously invested in warehouse company Waresix, micro-retail startup Warung Pintar and SME website builder Sirclo. 

“All the e-commerce platforms we have invested in create value by helping customers obtain their products easily, creating a seamless online-to-offline experience; the recent example, Fore Coffee. We realized that Triplogic, as the last mile player, is the missing piece in the puzzle of our core supply chain ecosystem, and it fits perfectly,” East Ventures Partner Melisa Irene. 

Apart from deploying capital from its early stage fund, East Ventures also co-manages a growth stage fund with SMDV and Yahoo! Japan Capital called EV Growth, which it has used to top up its investments in portfolio companies. 

Among the East Ventures-backed startups that have received investment from EV Growth are Warung Pintar and IDN Media.

From – Deal Street Asia
 All Rights Reserved 2019.

9 Temasek Boulevard Suntec Tower 2
#09-01 Singapore 038989
+65 6407 1344

[References] [Disclosure]