Issue 20
 

Malaysia bubble tea chain Tealive said to mull $72m via IPO next year


Loob Holding Sdn., which owns the Tealive bubble tea brand, is planning a Malaysian initial public offering that could raise as much as 300 million ringgit ($72 million), according to people with knowledge of the matter. 

The Kuala Lumpur-based company has hired advisers for the planned share sale, according to the people, asking not to be named as the information is private. The firm is considering seeking a valuation of as much as 1 billion ringgit and targets a listing next year, the people said. 

Bryan Loo, Loob Holding’s chief executive officer, confirmed the company is planning to list in the first half of next year. “We have engaged corporate advisers for this exercise,” Loo said in an emailed response to Bloomberg queries. 

“We cannot confirm the valuation sought nor the IPO portion, pending final recommendations from our advisers.” Malaysia has seen $9.4 million first-time share sales so far this year, far less than the $47.8 million in the same period in 2018, according to data compiled by Bloomberg. The country’s IPO market is expecting a boost this month from a $250 million offering by Leong Hup International Bhd. and some of its existing shareholders. 

Loob Holding will be joining companies like Malaysia KFC operator QSR Brands (M) Holdings Bhd. and home improvement chain Mr. D.I.Y. in seeking a listing in Kuala Lumpur. Deliberations of Loob Holding’s IPO plan are still in early stages and may not necessarily lead to a deal, said the people. 

Loob Holding, which owns other food and beverage brands such as Ko Ko Kai and Define Food, runs more than 200 outlets in Malaysia, according to a company statement in March. It also has stores in China, Vietnam and Australia.

 

From – Deal Street Asia

 

Indonesia’s Telkomsel launches $40m VC fund targeting early-growth stage startups


Indonesian mobile operator Telkomsel, a subsidiary of state-owned telecom firm Telkom Indonesia, has officially announced the launch of its VC fund with an initial corpus of $40 million as it looks to accelerate its digital transformation. 

DEALSTREETASIA first broke the story on the proposed venture fund in December last year. 

According to a statement from Telkomsel, the fund aims to find, strategically fund and work with early-growth stage tech businesses, and will look to co-invest with MDI Ventures and Singtel Innov8, which are the VC arms of the company’s two stakeholders, Telkom Indonesia and Singtel. The GP of the fund will be a fully owned subsidiary of Telkomsel called Telkomsel Mitra Inovasi (TMI). 

“Recognizing that Southeast Asia is fast-growing region, our partnership with Telkom’s MDI Ventures and Singtel’s Innov8 through TMI will allow Telkomsel to proclaim a more agile and reliable engagement model to startups seeking access to our strategic capital yet to offer better user experienceby forging lasting symbiotic alliance,” said Telkomsel president director Ririek Adriansyah. 

TMI will be responsible for investment activity along with synergy and collaboration in Telkomsel’s various business units to forge ahead with digital transformation aspects to accelerate the development of new services, improve customers’ experience and business process optimization. 

“We work closely with startups to establish strategic and operational plan to maximize long-term value. We always look for ways to leverage the scale and put Telkomsel assets to work in a different way. 

Many market insights we can provide from both enterprise and consumer perspectives in Indonesia. It also gives a leg-up in terms of corporate awareness in a digital business ecosystem,” said TMI CEO Andi Kristianto. 

The establishment of TMI follows the launch of an innovation centre called Telkomsel Innovation Center (TINC) last year to provide Internet of Things (IoT) laboratories, as well as mentoring and boot camp programmes for startups, developers and system integrators with related industry players. 

Founded in 1995, Telkomsel is a joint venture between telco giants Telkom Indonesia and Singapore’s Singtel, with the former owning 65% stake in the company, while the latter holding the remaining 35% stake. The Jakarta-headquartered company is Indonesia’s largest telecom operator with 172 million customers as of 2018. 

By setting up a VC arm, Telkomsel becomes the latest corporate in Indonesia to officially venture into tech investment through a dedicated fund and entity. The first to do so among state-owned companies is Telkomsel’s parent company Telkom Indonesia, which established MDI Ventures with a fund of $100 million in 2015. 

This was followed by state-owned lender Bank Mandiri, which set up Mandiri Capital Indonesia in 2016. Another state-owned lender is Bank BRI is in the process of setting up its venture capital unit named BRI Ventures.

 
From – Deal Street Asia
 


HK-based Hillhouse Capital backs $60m investment into US fintech firm Trumid

New York City-based fintech firm and electronic trading platform for corporate bonds Trumid has secured investments from HK-based private equity firm Hillhouse Capital as part of a $60-million funding round. 

With the investment, Hillhouse Capital will own a minority stake in Trumid. Trumid’s existing investors including Singapore Exchange (SGX) and Arbor Ventures also participated in the round. The growth capital from the transaction will be used to expand Trumid’s US corporate bond business and for protocol and product expansion. Hillhouse’s strategic partnership further supports Trumid’s existing relationship with Singapore Exchange (SGX) in Asia, the company said in the statement. 

Founded in 2014, Trumid claims to bring efficiency to credit trading through data, technology and innovative products. With a client network of over 425 buy-side and sell-side institutions, Trumid has experienced rapid growth in its US corporate bond business. Trumid Market Center, the company’s electronic trading platform, provides corporate bond market professionals with direct access to liquidity and market intelligence. 

“Hillhouse is a fantastic partner for Trumid at this stage of our life cycle,” said Mike Sobel, President of Trumid. “They have a stellar track record of supporting long-term growth and will help us improve and expand for years to come.” 

“We have been highly impressed with Trumid’s ability to use data and technology in developing an outstanding corporate bond trading platform,” said Lei Zhang, Founder and CEO of Hillhouse. 

“We look forward to leveraging our network and operational expertise to help Trumid build out its presence globally.” Hillhouse Capital, whose portfolio includes prominent firms like Airbnb, Uber, Meituan, Didi, Tencent, WuXi App, last year closed its fourth vehicle, Hillhouse Fund IV, at a record-breaking $10.6 billion. 

According to Hillhouse Capital, the oversubscribed vehicle will pursue global opportunities across healthcare, consumer, technology and services sector, with a focus on Asia.

From – Deal Street Asia
 


Uber IPO: What it means for its investors globally

In 2015, Uber Technologies Inc went on a fundraising spree in China, tapping venture capitalists and state-backed corporations for cash and connections to try and navigate the Chinese regulatory environment. 

Uber ultimately pulled out of China, but the investors it gained in the country became part of a gallery of far-flung Uber financiers that include U.S. geopolitical rivals under intense regulatory scrutiny by the U.S. government. 

Uber’s investors come in all stripes: state-owned banks and corporations from China and Russia; sovereign wealth funds from Qatar, Singapore and Saudi Arabia; a Russian businessman arrested last year on embezzlement charges; venture capital funds from across Europe and the United Arab Emirates; and Indian conglomerates and a Malaysian public pension fund. 

Many of these investors will likely have made a bundle this week in Uber’s long-awaited initial public offering. The company on Thursday priced its shares at $45 a piece, raising $8.1 billion in the largest U.S. IPO since 2014, and will begin trading on the New York Stock Exchange Friday. The ride-hailing company’s aggressive pursuit of capital and international presence from early on gave executives greater access to foreign investors compared to other U.S. startups. 

Uber was also seeking cash at a time of frenzied growth, with global investment into U.S. startups jumping 50 percent from 2013 to 2014, according to PitchBook Inc data. That helped it raise nearly $14 billion in venture capital, making it the fourth best-funded startup globally. Uber has also raised more than $6 billion in debt, according to PitchBook. 

Uber, more than almost any other Silicon Valley company, symbolizes the glut of foreign money that has helped fuel a tech investing frenzy. But replicating its feat today would be an improbable task in the current regulatory climate, analysts and legal experts say. In August, U.S. President Donald Trump signed a law to expand the powers of a government group known as the Committee on Foreign Investment in the United States (CFIUS), which is tasked with reviewing foreign investments for potential national security and competitive risks. 

It gives CFIUS a mandate to probe transactions previously excluded from its purview, including attempts by foreigners to purchase minority stakes in U.S. startups. It must approve deals between U.S. companies employing sensitive technology and foreign investors with influence over the startup, such as a board seat. CFIUS has so far approved only about 10 percent of the deals submitted under the new law, according to attorneys’ estimates. 

“What happened (with Uber) in 2015, you certainly could not do that again,” said an attorney who advises clients on CFIUS cases and who spoke on condition of anonymity because of the sensitivity of the matter. A spokesman for Uber declined to comment. 

Previously, Uber’s former chief executive Travis Kalanick spoke publicly about the need to raise large sums quickly to buy market share and find local investors who would help smooth the regulatory path in different countries. Cracking Down The lion’s share of Uber’s fundraising was completed prior to the new CFIUS law, and there is no indication any of these investments were in any way unlawful. Chinese state-backed funds have invested in dozens of Silicon Valley companies, from drones to self-driving cars and cyber security. But the challenge of a tech company replicating Uber’s fundraising today highlights just how much U.S. regulators have cracked down on foreign investment. 

Attorneys who work on CFIUS cases say a business like Uber’s would be highly scrutinized if fundraising today. The company has a trove of personal data on customers, including who they are and where they go, which CFIUS has indicated is a national security matter. “The Uber product is its users,” said the CFIUS attorney. 

“So when you look at it from that way you can see why CFIUS would be interested in it.” That’s not to say it is impossible to raise money from overseas, and investors from ally countries have an easier time getting clearance for their tech investments. But state-owned or state-backed investors from China and Russia in particular would be a no-go for CFIUS, say attorneys. 

CFIUS earlier this year unwound the acquisition by a Chinese gaming company of dating app Grindr, calling its ownership a national security risk. Grindr collects personal information on its users and data on their whereabouts. 

Uber’s autonomous driving business would also likely cause problems with CFIUS today. Autonomous driving is considered important technology for the military, making it a national security concern for CFIUS. Uber last month raised $1 billion for its autonomous vehicle unit from a consortium of investors including Japan-based SoftBank Group Corp and Toyota Motor Corp. It remains to be seen if that investment receives CFIUS’ blessing.

 
From – Deal Street Asia
 


JD.com pours $54m into Chinese logistics firm Jiangsu Xinning for 10% stake

China’s e-commerce giant JD.com Inc has invested 376 million yuan ($34.6 million) into listed logistics firm Jiangsu Xinning Modern Logistics, according to a stock filing by the latter on Monday. 

The investment will see JD.com taking up a 10 per cent stake in Xinning. In the filing, Xinning said it also formed a strategic partnership with JD.com’s logistic arm, JD Logistics, to develop a big data system that will boost efficiency and cut costs. 

The solution aims to reach 200,000 vehicles by 2020. Established in 1997 and listed in 2009, Xinning provides logistics and supply chain services for the electronic information sector in the Yangtze River Delta region, especially in bonded warehousing. 

As the second-largest Chinese e-commerce firm, JD.com had raised $2.5 billion for its logistics arm last February to further cement its position in online retail in China and other markets. Based on a Reuters report, the logistics arms will eventually be listed. 

JD Logistics was last valued at $10.9 billion prior to the round, which was led by Hillhouse Capital, Sequoia China, China Merchants Group and Tencent Holdings as well as others. 

The capital is used to expand its last-mile efficiencies through the development of automation, drones and robotics. Last year, it also invested about $114 million in Hong Kong-listed China Logistics Property Holdings (CLP) in exchange for a 10 per cent stake. 

In May 2018, it poured $306 million into ESR Cayman, a pan-Asia logistics real estate developer where both would explore collaboration in property development, fund management, and investments across the region. 

In a move to expand its healthcare business, JD.com’s healthcare business is raising over $1 billion for its healthcare unit JD Health from investors including CPEChina Fund, CICC Capital and Baring Private Equity Asia.

From – Deal Street Asia
 
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