This week brings further challenging developments in Southeast Asia’s venture sector.
In Indonesia’s now-floundering aquaculture industry, another noted startup, Aruna, is understood to have laid off about 40% of its staff since December last year, even as it tries to raise further funds.
To be sure, Aruna, which functions as a B2B marketplace linking small-scale fishermen to global buyers, has a business model different from that of scandal-hit eFishery. Aruna, which counts Vertex Ventures, East Ventures, and SMDV as its shareholders, has expanded its business significantly since it was founded in 2016.
With eFishery, shareholders could be looking at writing off their investment. According to the forensic audit, which recommends the startup wind up the bulk of its businesses, investors could recover under 10 cents per dollar invested.
The Singapore-registered company is believed to be lodging a police report against the co-founders, alleging that they had cost the company $253 million in losses. The forensic investigation also found that the two, Gibran Huzaifah and Chrisna Aditya, had increasingly fatter compensation packages over the years, as the company’s valuations grew. However, the history of their share transactions suggests that they did not cash out.
Here are eight charts on the trouble with eFishery.
Meanwhile, our reporter in Vietnam looked into the challenges of Vietnamese tech unicorn VNG Corporation’s ecommerce ventures through Telio and Tiki.
Against this backdrop, Southeast Asia’s venture capital sector continues to face headwinds, and VC firms’ fundraising hit a four-year low in 2024, according to DealStreetAsia DATA VANTAGE’s latest report. Regional VC firms secured nine final closes in the second half of 2024, raising a combined $915 million. This brought the annual total to 14 funds and $2.15 billion in capital.
Deals ahead
In a confirmation of DealStreetAsia’s reporting, Vietnamese agritech platform Techcoop announced it raised $70 million in a Series A round, likely the largest such fundraising in Southeast Asia. The funding was led by TNB Aura and AVV, with participation from new investors including Dutch development Bank FMO, and impact investor BlueOrchard.
Another earlier DealStreetAsia scoop was confirmed when Indonesian fintech company Kredivo announced they acquired earned wage access startup GajiGesa, for what is understood to be a fraction of GajiGesa’s last valuation.
Vietnam-based ‘new retail’ firm Seedcom is understood to be seeking an exit from last-mile logistics services provider Scommerce, DealStreetAsia has learned. It would be part of a restructuring to focus on its retail business, which includes distribution, and supermarket units.
Indonesian conglomerate PT Elang Mahkota Teknologi Tbk (Emtek) has, through its subsidiary PT Kreatif Media Karya (KMK), increased its stake in Indonesian-listed e-commerce company Bukalapak for 1.3 trillion rupiah ($79.6 million), according to its disclosure on the Indonesia Stock Exchange. With this acquisition, KMK’s stake in Bukalapak has increased to 34.05% from 24.61%.
In other news, sovereign wealth fund Danantara Indonesia, which President Prabowo Subianto has pledged $20 billion to for its first investments, will target large-scale projects in natural resources processing, AI development, and energy and food security. Just launched this week, the fund’s initial capital is expected to come from the Indonesian government and dividend payments from its interests in state-owned enterprises.
Private equity distributions to come
In private equity, the narrowing of valuation expectations in the lower mid-market segment is expected to fuel exit activity and boost private equity fundraising, with limited partners seeing liquidity.
Top executives at Flexstone Partners told DealStreetAsia in an interview that distributions should start flowing as funds near their investment periods, and supply chains return to normal, earnings projections become clearer and valuations more realistic.
Most recently, DealStreetAsia has learned that mid-market fund Dymon Asia Private Equity is preparing to sell its shares in Meiban Corp Holdings, a Singapore-based molding company. Should Dymon divest its seven-year holding in Meiban, the deal would return capital to the investors of its 2017-vintage flagship fund, Dymon Asia Private Equity Fund II.
Even as China-focused funds struggled to raise capital, Shanghai-based HighLight Capital, which focuses on healthcare assets, scored several exits and returned about $200 million to its investors last year. Most were trade sales to strategic players, the CEO told DealStreetAsia in an interview. Some exits were Sinopharm’s acquisition of HOB Biotech; BioNTech’s acquisition of Biotheus; and the mergers between Cullgen and Pulmatrix, Xingyun Group and Youshu, as well as Inmagene and Ikena Oncology.
Mainland China recorded 131 private equity exits in 2024, amounting to $46.3 billion, nearly 7x the $6.7-billion exits in the prior year and the highest exit count and value since 2019.
Separately, Chinese GPs, or fund managers with a link to China, have been increasing their stakes in Japan’s private equity market, as part of the broader interest in the industry. Most recently, China’s HongShan Capital reportedly opened a new office in Japan with a hire from Bain Capital to spearhead its operations.
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