Welcome back from the holidays.
We’ll catch you up on the key developments in private equity and venture capital in Southeast Asia, India, and China.
After a lacklustre two years following its 2021 peak, funding in Southeast Asia’s logistics sector is up and is expected to continue its recovery, particularly in the first and mid-mile segments, given their roles in supply chain and manufacturing activities. Deal volume in the sector was up more than 20% from the year before, while deal value rose to more than $95 million. Read more about opportunities in the sector in our latest DATA VANTAGE report.
Malaysia-based private equity firm Creador has made its first investment in travel with the acquisition of a majority stake in the Indonesian hospitality marketplace MG Group. MG Group runs the B2B platform MG Jarvis, connecting 350,000 accommodation suppliers across Southeast Asia with global buyers.
The deal, details of which were not disclosed, gives peer Northstar Group and other shareholders an exit. Northstar first invested in MG Group in 2016. Creador has now made 11 investments in Indonesia, including Hermina Hospitals, Adilmart, and IDX-listed Mr. D.I.Y. Creador is raising its sixth fund with a target corpus of as much as $800 million.
Secular growth in India
After a blistering run over the preceding years, private equity and venture capital firms in India saw a muted 2024. While fundraising among firms in the country was still significant, at $6.8 billion it was an 18% fall from 2023. The year before that, private capital firms investing in India raised $11 billion in commitments.
Industry observers note caution among LPs, as well as in dealmaking by GPs amid a tough macroeconomic environment. Still, as investors remain confident of the long-term secular growth potential of the Indian economy, firms such as Kedaara Capital, Edelweiss Alternative Asset Advisors, and ChrysCapital continued to secure significant capital for their latest vehicles.
PE and VC investors also managed to eke out a modest rise in the value of their exits during the year, compared to a year ago. The number of exit transactions, from public market sales to secondary transactions and strategic deals, was slightly lower than last year, even as the three-year period saw the highest cumulative exit deal value on record.
The IPO market in India in 2024 saw the most listings in two decades, while the value of those listings surged to nearly $20 billion, the highest in the region.
One area of concern is how VC funds of the 2012-2015 vintage are yet to fully realise even distribution of 1x, as one fund manager noted.
To be sure, as one of the largest economies in Asia, India will continue to attract allocations from investors in particular who are wary of sinking capital into China, for one. However, one LP tells DealStreetAsia that peers are keeping an eye on the region’s lagging performance compared to US-focused funds, responding by consolidating into larger regional funds, and selectively adding single country-focused funds from Japan, Australia, and India.
Capital injections in China
Funding in Chinese industrial tech startups remains robust.
Electric vehicle battery company IM Motors secured $190 million in its closing Series B round from state-owned and private capital firms. The current round of funding, which totals $1.3 billion, is expected to help ramp up the launch of its product, as well as the development of a digital chassis and Steer-by-Wire systems for electric and autonomous vehicles.
Electric truck maker AnHui DeepWay Technology has secured $103 million in a Series B round led by Chinese VCs Puhua Capital, and Zhongan Capital. The company already counts Qiming Venture Partners and China Construction Bank’s CCB Trust as shareholders.
Elsewhere, electric vehicle maker Xpeng’s CEO He Xiaopeng has said the company intends to bring on more than 6,000 workers this year, as he expects competition in the sector to intensify.
Another Qiming-backed venture, biopharma startup AusperBio, has raised $73 million in fresh capital from HanKang Capital, CDH Investments, and InnoPinnacle Fund, among other investors.
Separately, two domestic commercial aerospace companies – reusable rocket developer LandSpace Technology Corporation, and Shanghai satellite maker Gesi Aerospace (Genesat) – each raised more than $100 million from the state’s National Manufacturing Transformation and Upgrading Fund.
LandSpace also counts HongShan, previously known as Sequoia Capital China, and MPC among its backers in its efforts to launch a medium-to-heavy vehicle this year. Genesat, maker of China’s answer to SpaceX’s Starlink satellites, also has Guosheng Capital and SIMIC Capital as its investors.
In venture partner news, Granite Asia has hired two new partners to lead its credit solutions strategy. Ming Eng, formerly managing partner at Orion Capital Asia; and Roger Zhang, who joins from Blackstone Credit, will be based in Singapore.
At Singapore’s VC firm Vertex Ventures, long-time general partner Carmen Yuen has left the firm. After 11 years at the firm leading investments in startups in Singapore and Southeast Asia, Yuen said on her LinkedIn page that she is moving to an advisory role.
In other developments, the International Finance Corporation is set to invest up to $50 million in a green bond issued by Ho Chi Minh City Development Commercial Joint Stock Bank, which will use the funds to finance climate-related projects.
And in case you missed them, catch up on our 2024 top stories in the Asia PE-VC space.
Also, don’t miss our upcoming Indonesia PE-VC Summit in Jakarta this month.
