Asian region has been recently attracting a significant level of investments from global funds. The funds are a mix of traditional venture capital sources combined with hedge funds, private equity and corporates.
In the second quarter of 2016, Mumbai-headquartered, Blume Ventures were ranked as the most active VC investor in Asia with 75 investments in 59 companies, and 5 exits through acquisitions since 2011. Some of their investments include Zopper, a hyperlocal mobile marketplace, has recently started its unique partnership with messaging platform Viber or Grey Orange Robotics, the manufacturer of advanced robotics systems for automation at distribution centers. One of the latest exits covers ZipDial, that is Bangalore-based marketing platform and the Blume Ventures was its first investor. This Startup was acquired by Twitter in 2015 and the value of deal estimated around $30mn.
The latest research made by Preqin – the alternative assets industry’s leading source of data and intelligence, showed that in Q2 2016 the total transactions made by venture capital funds valued of $19bn. Alhambra International has noticed that for the very first time the amount of venture capital invested in Asia was greater than the aggregate value of deals in North America $17.5bn.
Greater China that refers to Mainland China, Hong Kong, Taiwan and Macau remains the major force behind this superior growth and it accounts for more than four-fifths of the aggregate deal value.
Hong Kong’s finance industry has gained majority of the funds, where the highest amount of $272mn were gained by Gateway Real Estate Fund V Lp in April 2016 which is the partner of real estate private equity fund called Gateway China Funds focusing primarily on region of the Greater China. Since 1st of January 2016, software companies have officially gained almost $185mn whereas $172mn went straight to Welab Holdings, creator of the China’s largest mobile and Hong Kong’s leading online lending platforms. Only one company from Biotechnology industry, Prenetics which is a Biomedical Science Research Centre in City University Hong Kong’s spin off company has raised $10mn fund, Online fashion company, Grana Group Ltd from Retailing industry raised in total $13,5mn up to date.
However, in Taiwan there is a significant difference in VC funds’ interest among specific industries. Allocating their resources from the beginning of 2016 the majority of VC had chosen:
- Industrial and Energy sector – $89mn investment
- Biotechnology industry – $25mn
- Software industry – $8,2mn
- Medical devices and equipment – $3mn
In the race to become Asia’s Fintech hub apart from the countries mentioned above, Singapore is undeniably the one of the most well placed to claim the title. The country recorded some $1.15 billion in VC investments over the last five months, which is the highest amount for a South-East Asian country. Singapore is considered as the island of stability so the trend of moving some regional companies to Singapore with a continuously growth plan is highly observed. It may definitely have a net positive effect on VC growth in Singapore for the next couple of years.
From the beginning of 2016 there were so far two companies that got funded over $100mn:
- Garena Interactive Holdings that provides online PC and mobile digital content, e-commerce, and payment platforms received $170mn,
- Grab, a ride-hailing platform with a focus on Southeast Asia, with the incredible amount of $750mn.
Carousell, Paktor Pte Ltd, Trax Image Recognition are the other companies from Software industry that got funded $85mn in total.
From the beginning of 2016 only one company from Telecommunication industry got funded. The amount of $22,3mn went to a satellite operator developing a broadband internet service for the Asian region and especially the pacific islands- Kacific Broadband Satellites.
Dr. Finian Tan, Chairman of Vickers Venture Partners in his recent interview for Preqin mentioned that in Asian region the main opportunities are still available in China itself as it is growing 6.5% domestically. “If you select the best companies within domestic industries, you could get growth in the triple- or even quadruple-digit ranges. Indonesia is starting to exert its ability to produce unicorns and is a market that we are actively investing in.” Speaking about most significant and profitable industries and predictions for Asian VC markets for the rest of 2016 and beyond, Dr. Finian stated that the global life sciences is at its most innovative at the moment and its advisory to search for opportunities over there.
Alhambra International recommends considering areas of digital therapeutics, data and analytics, and diagnostics. China and Singapore are regarded as “hotbeds for healthtech start-ups region” according to Backer&McKenzie. Healthtech is presumably to reach a continued maturing in 2017, while many companies and corporations have already begun entering the sector. The huge opportunities in this field are seen not only by VC funds but also for example by AIA Accelerator that has brought eight healthtech start-ups in 2015 or Metlife that launched its own internal incubator based in Singapore, Lumen Lab, that targets Asia-based consumer health, ageing and wealth field.
Gracja Borowska – Junior Consultant & Pierre Maurin – Senior Partner
Resources:
- https://www.preqin.com
- https://www.valuework.com
- https://www.cbinsights.com
- https://home.kpmg.com
- https://www.crunchbase.com
- https://www.vcinsidernews.com
- http://www.bakermckenzie.com