Issue 42

Ant Financial-backed BAce leads Series A funding in Indonesian proptech startup RoomMe

Ant Financial-backed early-stage venture capital firm BAce Capital has led an unspecified Series A investment in Indonesian co-living provider RoomMe, the former announced in a release. DealStreetAsia had in May reported that RoomMe had received Series A funding from Singapore’s Vertex Ventures. In its statement on Wednesday, BAce confirmed Vertex’s participation in the round, along with that of existing backer KK Fund. 

Established in 2017, RoomMe looks to tap into the home boarding industry in Indonesia that provides tenants with co-living spaces, often with flexible stay durations. RoomMe manages and markets the properties for homeowners on its platform in return for a cut of the rental income. Its services are currently largely focused on Jakarta. 

BAce believes that Indonesia’s co-living industry is well positioned for development, given its economic growth and rapid urbanization. The opportunity around co-living has enticed a number of startups to provide solutions and services to serve the industry. RoomMe competes with YukStay, a marketplace for urban apartment rental, which is learnt to have recently raised a $1-million funding round from Singapore’s Insignia Ventures. The latest to join the party is Indian hotel chain major OYO, which last week launched a new co-living business line. 

Other players in the space mainly only offer rental accommodation listing platforms such as Mamikos, Infokost, as well as Urbanindo, which has been acquired by Singaporean counterpart 

The investment in RoomMe represents BAce’s first announced bet in Indonesia. The firm, which is led by veterans from Alibaba and Ant Financial, and has Paytm founder Vijay Shekhar Sharma and Zomato founder Deepinder Goyal on its advisory board, announced in April that it is eyeing to raise up to $150 million for its first early-stage India and Southeast Asia fund. The VC says the fund will target Series A to B opportunities with ticket sizes ranging from $500,000 to $15 million, with Indonesia and India set to be its biggest target markets, taking up about 70-80 per cent of the fund’s corpus.

From – Deal Street Asia

Indonesia’s healthcare startup Alodokter raises $33m in Series C financing

Healthcare startup Alodokter on Wednesday announced that it has raised $33 million in a Series C financing round led by Sequis Life. The company’s latest funding round was joined by Philips, Heritas Capital, Hera Capital and Dayli Partners as well as return backers SoftBank Ventures Asia and Golden Gate Ventures. “Indonesia is becoming one of the first digitally native medical systems in the world. That’s been one of the key factors for the hypergrowth we have been experiencing since our launch,” said Alodokter CEO Nathanael Faibis in a statement. 

The startup offers a host of healthcare-related services including telemedicine, doctor booking, medical content and health insurance services. Alodokter claims to work with a network of 20,000 doctors and 1,000 hospitals and clinics to serve over 20 million users monthly. It generates revenue from advertising on its website and takes a cut of doctor booking and telemedicine revenues. The Indonesian startup plans to use the fresh funding to grow its network of partner hospitals and boost its relatively new offering of health insurance services. 

The company launched its health insurance services in 2018. Policyholders can subscribe, pay and claim directly in the Alodokter app, and can also access other premium services, such as unlimited online consultations and premium access to hospitals. 

Indonesia’s private health insurance market remains largely untapped with a less than 2 per cent penetration, about 10 times lower than neighbouring Malaysia, per an Alodokter statement. Alodokter had last raised $9 million in a Series B round from SoftBank Ventures Asia and Golden Gate Ventures in 2017, which followed a $2.5 million financing led by Golden Gate in 2016.

From – Deal Street Asia

Budget 2020: Entrepreneurship, SMEs get major boost

Entrepreneurship, small and medium enterprises (SMEs) received a major boost with Budget 2020. 

Among the initiatives announced by Finance Minister Lim Guan Eng were the RM455mil earmarked for Bumiputra entrepreneurs. 

A total of RM100mil loans would also be provided for Chinese community entrepreneurs with 4% interest and RM20mil for Indian community entrepreneurs, also with 4% interest. 

The SME Bank will also introduce two new funds comprising RM200mil dedicated to women entrepreneurs and RM300mil to support Bumiputra SMEs with potential to become regional champions. The Market Development Grant (MDG) ceiling by the Malaysia External Trade Development Corporation (Matrade) was raised to RM300,000. 

The ceiling of participation in export fairs was also revised upwards from RM15,000 to RM25,000, and RM50mil was allocated to encourage SMEs to participate in these promotional activities. SME Association of Malaysia president Datuk Michael Kang welcomed measure in the Budget 2020, saying it was set to benefit SMEs ahead of Malaysia’s journey towards Shared Prosperity Vision (SPV) 2030. 

"This is the best budget for SMEs as the nation nears the end of the 11th Malaysia Plan and gearing towards the 12th Malaysia Plan and the SPV 2030. They’re looking at how to boost SME contribution to the GDP from the present 38% to 50% by 2030," he said. 

Kang's wish to see the government coming up with a one-stop centre for SMEs has also come true with the government announcing that it was setting up the Digital Enhancement Centres in all states. 

"In the previous Budgets, there were a lot of support and incentives for SMEs but they were scattered everywhere. We needed a one-stop centre where everything is centralised so that SMEs would know where to go," he said. 

Kang, however, noted that the tax on SME had gone up, with the chargeable income subjected to 17% rate will be increased to RM600,000 from RM500,000. 

This is subject to the SME having paid-up capital of not more than RM2.5mil and annual sales of not more than RM50mil. Malaysian Associated Indian Chambers of Commerce and Industry (MAICCI) president Datuk N. Gobalakrishnan described the allocation for the Indian community as a good start and wished to see it increased in the future. 

The RM20mil loans under Tekun Nasional’s Indian community entrepreneur development scheme is expected to benefit 1,300 entrepreneurs. "We hope that Tekun Nasional will distribute the allocations accordingly. The Maicci will work with the government to pay attention to community development by engaging in business development for young entrepreneurs and those already running businesses," he said. 

Asean Chamber of Commerce (ACC) president Datuk Moehamad Izat Emir said it was important to support entrepreneurs by giving them loans, grants and lower interest rates. 

"There is a great opportunity now for Asean countries with the United States and China trade war. There is a gap. The banks must support the government and businesses by giving swift loans and proper loans with lower interest rates," he said. 

Other than such incentives, interest rates should also be decreased to enable businesses to increase their property value by buying premises, warehouses and cold rooms, said Moehamad Izat.

From – The Star Malaysia

Weak U.S. retail sales heighten fears over economy

U.S. retail sales fell for the first time in seven months in September, suggesting manufacturing-led weakness could be spreading to the broader economy, keeping the door open for the Federal Reserve to cut interest rates again later this month. 

The signs of a deceleration in consumer spending reported by the Commerce Department on Wednesday came on the heels of reports this month showing a moderation in job growth and services sector activity in September. The economy is being hamstrung by a 15-month trade war between the United States and China, which has soured business sentiment, leading to a decline in capital expenditure and a recession in manufacturing. 

"Weaker retail numbers provide further evidence that weakness in the manufacturing sector is spilling over into other areas of the economy," said Jim Baird, chief investment officer at Plante Moran Financial Advisors in Kalamazoo, Michigan. 

Retail sales dropped 0.3% last month as households cut back spending on motor vehicles, building materials, hobbies and online purchases. That was the first drop since February. Data for August was revised up to show retail sales gaining 0.6% instead of 0.4% as previously reported. Economists polled by Reuters had forecast retail sales would climb 0.3% in September. Compared to September last year, retail sales increased 4.1%. 

Excluding automobiles, gasoline, building materials and food services, retail sales were unchanged last month after advancing by an unrevised 0.3% in August. These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product. 

Last month's drop and August's unrevised gain in core retail sales suggested a much more significant slowdown in consumer spending in the third quarter than economists had been anticipating after a surge in the prior quarter. 

Consumer spending, which accounts for more than two-thirds of the economy, increased at a 4.6% annualized rate in the second quarter, the most in 1-1/2 years. After the release of the data, economists cut their third-quarter consumer spending growth estimates to around a 2.5% rate from a 3.0% pace. 

Signs the economy's growth engine was sputtering could further stoke financial market fears of a sharper slowdown in economic growth. Some economists speculated the cooling in hiring was probably making Americans more cautious about spending. 

"The slowdown in job growth is perhaps starting to influence spending habits, but we'll need more data to confirm that thought," said Jennifer Lee, a senior economist at BMO Capital Markets in Toronto. 

Major U.S. stock indexes were trading lower, while prices of U.S. Treasuries were mostly higher. The dollar was slightly weaker against a basket of currencies.

From – The Edge Market Malaysia
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