Issue 48

Go-Jek pilots online food delivery service Go-Food in Vietnam

Go-Viet, the Vietnamese affiliate of Indonesian ride-hailing company Go-Jek, has started piloting its Go-Food food delivery services in the country. 

The pilot, launched on November 20, started in Ho Chi Minh City and is expected to be officially rolled out across major cities in the country soon, according to Nguyen Bao Linh, deputy head of business development at Go-Viet. 

Southeast Asia’s second ride-hailing unicorn expanded to Vietnam only a couple of months ago as part of a $500-million expansion plan to conquer international markets, including Vietnam, Thailand, Singapore, and the Philippines. 

Vietnam as its first market outside Indonesia has so far witnessed the foray of Go-Bike and Go-Send. Vietnam’s food delivery segment is estimated at $33 million, according to Euromonitor data, with an average growth rate of 11 per cent. 

The current major players are Delivery Now, which is backed by Singapore-based Sea Limited, and GrabFood, which launched its service in June 2018. Small operating startups include and Vietnammm. 

“Vietnamese customers are excited to try new things, and will choose a food delivery platform that offers the most dependable service providing the widest range of food offerings with best value-for-money and fastest speed of delivery,” Jerry Lim, country head of Grab in Vietnam, said at the GrabFood launch in Hanoi last month. 

“Transport inefficiencies have long hindered the growth of on-demand industries in Southeast Asia. If you get transport right, other on-demand services can then scale. This is an efficient and sustainable strategy, which has paid off tremendously well,” Lim told DEALSTREETASIA in an email interaction. 

Meanwhile, Go-Jek founder Nadiem Makarim has previously said that Vietnam was its door to Southeast Asia expansion, thanks to the country’s large mobile phone users, massive population and high motorbike ownership. 

After gaining a foothold in Vietnam, Go-Jek is working on the Thailand and Philippines markets and will kick off a beta launch in Singapore in December. 

According to the latest report on Southeast Asia’s internet economy by Google and Temasek, the online food delivery market is projected to reach over $8 billion by 2025.
From – Deal Street Asia


Factory Worker's Son Creates $7 Billion Startup

PT Tokopedia, Indonesia’s largest online marketplace, has become the country’s most valuable startup after raising $1 billion from existing investors including SoftBank, according to people familiar with the matter.

The e-commerce operator is valued at about $7 billion after the round, the people said, asking not to be identified as the details are private. That would top the valuations for startups in Indonesia, according to the research firm CB Insights. While it wasn’t clear if the backing comes from SoftBank Group Corp. or its Vision Fund, the Tokyo-based company transferred prior holdings in Tokopedia to the fund earlier this year.

William Tanuwijaya, the 37-year-old son of a factory worker, co-founded the company and has capitalized on the country’s rapid adoption of smartphones and increasing comfort in shopping online. Indonesia’s internet economy is the largest and fastest growing in Southeast Asia with e-commerce poised to be worth $53 billion by 2025, according to a recent report by Google and Temasek Holdings Pte.

A cashed-up Tokopedia, which was founded in 2009, will present more formidable competition for its rivals. China’s Alibaba Group Holding Ltd. is expanding its Lazada business in Southeast Asia, while PT is signing up hundreds of thousands of neighborhood stores as partners and Singapore’s Sea Ltd. is investing heavily to expand its e-commerce business.

“Tokopedia has emerged as a major force in recent times,” said Usman Akhtar, a Jakarta-based partner at Bain & Co. “It has made undoubted advances in scale and the fact that it is getting new and large funding suggests that some major investors see it as one of the potential leaders in future consolidated market.”

A Tokopedia representative declined to comment. SoftBank didn’t immediately respond to a request for comment.

Tokopedia was No. 1 in Indonesia in the third quarter, according to market researcher iPrice Group, which used monthly web visits based on SimilarWeb’s data. It was followed by Bukalapak, Shopee and Lazada.

Tanuwijaya has previously cited his first meeting with SoftBank’s billionaire founder Masayoshi Son as a turning point for the company. That came in 2014 after hetook 11 pitches to get funding for his idea to build Indonesia’s first online shopping hub.

“The people who rejected me only asked me about my past, which I couldn’t change,” Tanuwijaya said in an interview in 2016, recalling his early days when potential investors turned down his pitch. “But Masayoshi Son was there, asking me what I thought of the future. He didn’t care about my past.”

Tokopedia’s gross merchandise value, which refers to the total value of goods sold on is platform, has more than tripled this year, according to the people familiar with the matter. The company matches customers with merchants instead of selling products from its own shelves and offers electronics, clothing and health-care items. It also operates websites for buying train tickets and topping up mobile-phone plans.

From – Bloomberg

Singapore’s GIC partners Australia REIT Dexus to set up $1.45b trust

Singapore’s sovereign wealth fund GIC has partnered with Australian Real Estate Investment Trust Dexus to establish a A$2-billion ($1.45 billion) unlisted trust that will invest in Australian logistics properties. 

In a disclosure to the Australian Securities Exchange, Dexus said, the joint venture, named Dexus Australian Logistics Trust (DALT), will be seeded with assets from Dexus’ existing industrial portfolio. 

The said portfolio comprises A$1.4 billion ($1.01 billion) of core logistics properties and a A$138-million ($100 million) development landbank, which will be valued A$500 million ($363 million) on completion. 

The new unlisted vehicle is open-ended with an indefinite term and an active acquisition and development mandate, Dexus said. 

GIC will be DALT’s foundation investor, taking an initial 25 per cent investment in the core portfolio, with put and call rights to acquire an additional 24 per cent by June 2020. Dexus will hold the remaining 75 per cent initially. 

The Singapore fund will also take a 49-per cent interest in the development land bank and fund its share of development spend, according to the disclosure. Other investors may be added to the joint venture in the future, potentially reducing Dexus’s ownership stake over time, the Australian REIT said. 

The joint venture’s core portfolio will have a weighted average lease expiry of 5.3 years and average occupancy by income of 98 per cent. It features a 97-per cent exposure to the strong performing Sydney and Melbourne markets and is weighted to traditional logistics facilities. 

“We see further opportunities within the logistics sector as businesses seek to drive supply chain efficiencies and preferences for online retail continue to rise,” Dexus CEO Darren Steinberg said. 

The establishment of the joint venture raises Dexus’s third-party assets under management to A$14.3 billion, encompassing a range of investment vehicles including diversified funds. 

The establishment of the $1.45-billion trust that invests in Australian logistics properties came less than three months after GIC announced plans to sell a 50-per cent stake in Chifley Tower, a 53-storey Sydney office skyscraper, for A$900 million (about $650 million). 

In 2017, GIC, through an Australian affiliate, has acquired a pair of Sydney student blocks from Frasers Property Australia and Sekisui House Australia in a deal worth A$400 million ($302.3 million).

From – Deal Street Asia.


Tencent Music said to launch US IPO early December

Tencent Music Entertainment Group, the online-music arm of China’s largest social-media company, tentatively plans to start taking investor orders on Dec. 4 for its planned U.S. initial public offering, according to people with knowledge of the matter. 

The music-streaming firm aims to begin trading Dec. 12 in New York, the people said, asking not to be identified because the information is private. 

Timing of the offering hasn’t been finalized and could change depending on market conditions, the people said. 

A deal from the Tencent Holdings Ltd. unit would add to the $7.9 billion of first-time share sales from Chinese companies in the U.S. this year, more than double the same period in 2017, data compiled by Bloomberg show. The year’s biggest China IPO in New York came from Netflix-style video streaming service iQiyi Inc., which raised $2.4 billion in March, the data show.

 Tencent Music declined to comment in an emailed statement. 

The company listed its IPO size as $1 billion in a filing with the U.S. Securities and Exchange Commission in early October. 

The amount is a placeholder and may change. Bank of America Corp., Deutsche Bank AG, Goldman Sachs Group Inc., JPMorgan Chase & Co. and Morgan Stanley are arranging the share sale.

From –Deal Street Asia

Blackberry still exists, buys Cylance from heavyweights for $1.4B

Blackberry, the Canadian tech company behind the coolest phone of 2009, has agreed to acquire AI and cybersecurity specialist Cylance from a host of VC and PE backers for $1.4 billion in cash. The deal comes just five months after Cylance raised upwards of $120 million in new funding, and nearly two-and-a-half years after it brought in $100 million at a $1 billion valuation. 

Both of those fundings were led in part by Blackstone, marking rare forays into venture capital for the private equity-focused firm. Since the start of 2008, Blackstone has made VC investments in just 21 different companies, according to the PitchBook Platform, an average of less than two per year. Nearly 69% of those VC deals over the past decade have been in the IT sector, demonstrating a clear focus when the firm does dip its toes into early-stage waters. 

Cylance has another high-profile PE backer as well, in the form of KKR. While its ventures into venture haven't been quite as rare as its New York neighbor's, KKR has provided VC backing to only 35 companies since the start of 2008, again per PitchBook data. And like Blackstone, KKR has its eye on software startups, with more than 41% of its VC deals over the past decade-plus occurring in that space. 

In all, Cylance has raised well over $300 million in VC funding, with its other prominent backers including DFJ Growth, Insight Venture Partners and Khosla Ventures. Founded just six years ago, the company uses AI and machine learning to make cybersecurity software more effective at sniffing out threats. It's based in Irvine, CA, with other offices in Europe and Japan. 

Blackberry, for its, part, has changed tack over the past decade, shifting away from creating phones and other hardware and toward security and other enterprise services. And the move seems to be going well: The company recently reported $210 million in quarterly revenue, while revealing at the same time $2.4 billion in cash reserves. Cylance, apparently, was worth dipping into that nest egg. 

While Blackstone's venture investments are infrequent, this is actually the second exit in quick succession for the firm, following the IPO in May of Carbon Black, another cybersecurity provider. Overall, 2018 has been packed with high-profile cybersecurity exits across VC and PE, with the $2.35 billion acquisition of Duo Security by Cisco and Thoma Bravo's $1.6 billion buyout of Barracuda Networks serving as two other notable examples.

From – PitchBook
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