Day: December 16, 2020

Malaysian boutique investment firm Emissary Capital has received US$25 million from state-run Penjana Kapital.

The money will be invested as a Limited Partner to Emissary Capital Growth Fund 1 (ECGF I), a new US$50-million VC fund jointly launched last month by Emissary and New Wave, a subsidiary of Philippines-based IP E-Game Ventures.

ECGF I aims to invest in Southeast Asia’s tech companies, especially in the agritech, fintech, healthcare and other key digital verticals. It aims to build stronger collaboration between startups in the ASEAN region, with a key focus on the Malaysian and Philippine markets.

Also Read: Philippine’s New Wave joins hands with Emissary Capital to launch US$50M fund for ASEAN startups

Under this partnership, New Wave had invested up to US$7.5 million as an LP and joined as a General Partner to manage the fund.

Enrique Gonzalez, Director at New Wave, said that more cross-border investment and expansion opportunities between Malaysia and the Philippines is a vital part of this limited partnership.

“Investments are key to long-term economic growth and productivity as part of the government’s efforts to enhance its startup-enabling environment to generate business opportunities, especially in sectors with high multiplier effects for the economy,” Finance Minister Seri Zafrul Tengku Abdul Aziz said.

Incorporated in June 2020 by Malaysia’s Ministry of Finance, Penjana was formed with an initial allocation of US$290 million (RM 1.2B) to drive Malaysia’s economic recovery via digitalisation of businesses. One of its key purposes is to push tech and automation of local businesses with the help of international and local investors.

In addition to addressing the short-term funding needs of the startups, Penjana also aims to establish Knowledge Transfer Plans (KTPs) to set the clear goal of the startups. This is aligned with Malaysia’s long-term objective of becoming a knowledge-based economy with high value products and services.

In September, Penjana announced its request for proposals (RFP) to invest in companies within four stages: seed/co-creation, Series A/B, growth-stage and venture debt.

Also Read:  MDI Ventures, Finch Capital join hands to launch new US$40M fund Arise to plug ASEANs pre-Series A gap

Malaysia ranked 13 out of 125 countries in the 2018 Venture Capital (VC) & Private equity (PE) country attractiveness index, while the Philippines ranked 42nd.

Kuala Lumpur and Manila are also being seen as the top emerging startup ecosystems in the world, ranking 11th and 31st respectively in the Global Startup Ecosystem Report 2020 (GSER 2020).

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Quona Capital leads US$21M in agritech startup Arya

Arya, a Delhi-based post-harvest agritech and fintech company, has raised US$21 million in Series B round of funding in a mix of equity and debt.

The equity round was led by Quona Capital, a venture firm focused on fintech in emerging markets, alongside existing investors LGT Lightstone Aspada and Omnivore.

Multiple lenders participated in providing additional debt financing to the company.

The new funding will be used to expand financing to farmers through Arya’s embedded fintech arm Aryadhan Financial Solutions, and to strengthen its digital post-harvest services and market linkages platform a2zgodaam.

The company was founded by Chattanathan Devarajan, Prasanna Rao and Anand Chandra.

Also Read: How can India leapfrog into the league of the most innovative countries within the next five years?

Driving technology through a farmer-centred approach, Arya offers storage, warehouse management, embedded finance, and market linkages to agricultural producers and buyers across India through a2zgodaam.

Through its “profitable business model” with over 2.5 million tonnes of storage capacity across 1,500 warehouses in 20 Indian states, Arya helps farmers, aggregators, farmer producer organisations, food processors and end-user corporate agribusinesses avoid post-harvest losses.

It efficiently connects the supply side of the agro-ecosystem with the demand side. Arya’s NBFC subsidiary Aryadhan assists sellers of agri-commodities to avoid distress sale of produce by extending post-harvest credit.

It has completed loan disbursements of over INR 250 crore.

Logistics-tech startup Pickrr secures US$4M led by Guild Capital, Omidyar

Pickrr Technologies, a Delhi-based logistics tech startup, today announced it has raised US$4 million in funding in round led by Guild Capital and Omidyar Network India.

The firm will use the investment to continue its market expansion and product development.

Founded in 2015 by Rhitiman Majumder, Gaurav Mangla, Ankit Kaushik, Pickrr is an end-to-end plug-n-play logistics solution for e-commerce sellers and D2C brands which want to ship anything anywhere in India.

At the core of our technology lies CALCULA, a smart algorithm which provides courier recommendations aimed at improving delivery performance. This Machine Learning-based algorithm ensures each order is assigned to the best courier partner based on 20+ proprietary logistics features that have evolved through continuous evaluation and assessment. Thus, reducing the delivery time and ensuring there are is no hassle in the due process.

Also Read: 5G and the 5 new things it will bring to the world of logistics

Pickrr claims it currently serves 26,000 pin-codes and handles 1.5 million shipments in a month.

Majumdar said: “Our aim is to create a brand that online sellers use for ‘anything and everything related to logistics’. This includes warehousing and fulfilment, cross-border logistics, and B2B logistics.”

“We are also planning to provide our tech solutions to aggregators and franchisees so that we can manage their shipments through a single end to end platform. The company’s goal is to help become growth drivers to their sellers and not just logistics service providers. Pickrr also plans to enhance services that decrease the cost and the inconvenience of logistics while also helping them to increase revenues,” he added.

 

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Helicap, a Singapore-based fintech company specialising in alternative lending, has announced a strategic partnership with Japanese financial services group Credit Saison.

The group will deploy US$10 million in impact debt financing through a pilot focusing on the growing alternative lending sector that serves financially underserved and excluded individuals and enterprises in Southeast Asia.

Also Read: Don’t break the bank: Enabling financial inclusion and equity through tech

As per a press note, Credit Saison will leverage its presence in the region as well as the resources and capabilities of Helicap to invest in select alternative lending platforms and non-bank financial institutions in Southeast Asia, with the intent of bolstering financial inclusion in the region.

Credit Saison’s venture arm Saison Capital was the lead investor in Helicap’s US$10 million Series A funding round in November 2019.

“Our collaboration with the Credit Saison group will create a significant impact, especially for low-income borrowers and micro-enterprises in Vietnam and Indonesia,”said David Z. Wang, Co-founder and CEO of Helicap.

The pilot will be jointly led by Credit Saison’s network of local lending institutions in the region and Helicap’s proprietary credit analytics engine.

Also Read: What makes investments in fintech and alternative lending in SEA promising?

This technology has been utilised by Helicap’s fund management subsidiary since 2019 to analyse, structure and monitor a diversified portfolio of alternative lenders.

Helicap is a fintech-driven investment firm specialising in the alternative lending space in Southeast Asia and Australia. The Singapore-based firm claims these algorithms will enable increasing volumes of targeted investments by the Credit Saison group and other Helicap partners and investors to serve over 300 million underbanked SMEs and individuals in Southeast Asia.

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Image Credit: Helicap

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Cove, a Singapore-headquartered co-living company targeting young professionals and students, has closed a US$4.6 million in a financing round from Keppel Land, the property arm of Singapore’s Keppel Corporation.

Other investors who joined the round include Idinvest Partners, a subsidiary of Eurazeo Group, along with existing investors Antler, Venturra, Yuj Ventures, Picus Capital, Found Ventures and several unnamed angel investors.

The fresh funds will go towards extending the company’s geographical reach into other key markets like Vietnam and the Philippines.

Also Read: How gnomadic is making its mark on the crowded co-living space by focusing on expats

In a statement, Cove also said it is on a good growth trajectory as it has so far already expanded from Singapore to Jakarta with a total of 550 rooms in just two years.

In addition to that, it has also built a student co-living space outside of Jakarta in partnership with Indonesian real estate developer the Lippo Group.

“Cove has a complementary expansion strategy into markets in Southeast Asia where Keppel Land is already present. It will be able to leverage our experience and wide networks as it scales up in providing well-managed, quality homes to a growing segment of those seeking creative shared living spaces that offer a unique and vibrant community experiences,” Tan Swee Yiow, CEO of Keppel Land, said.

Founded in 2018, Cove offers a one-stop solution to those looking to rent rooms and studios. Its properties come fully-furnished with WiFi, housekeeping and utility services at an all-inclusive price. Contract terms are flexible with short minimum stays and there are no agent fees to pay.

Tenants also get access to a vibrant community with regular social events and perks so they feel part of the family from the moment they move in.

Also Read: From co-working to co-living, these 7 brands in Southeast Asia have got you covered

At present, there are about eight co-living companies in Singapore which include Hmlet, The Ascott Ltd, Login Apartment, CP Residences, SOHO, Easycity and Commontown.

Despite the stiff competition, Cove’s co-founders continue to see huge potential in co-living spaces as they believe fewer people will be buying properties due to “prohibitively inflated prices and more flexible lifestyle needs”. This will result in the need for people to find more simple and relaxed solutions.

In 2019, Cove raised US$2 million in a seed funding round co-led by Venturra, Yuj Ventures, Investigate, and Picus Capital, with participation from Aetius Capital, Found Venture and some unnamed angel investors.

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Image Credit: Cove

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2020 has been a very challenging year for all businesses, particularly startups that are still struggling to get a foot in. With production lines affected by movement restrictions, a precarious market with shifting consumer demands, and the difficulty of securing funding due to all the austerity measures, startups are some of the hardest-hit companies in the world.

In Thailand, many companies have shown initiative that have yielded positive results despite COVID-19. A number of Thai startups managed to adjust their business models in order to survive, while others have gone through mergers, such as Lineman and Wongnai, to strengthen themselves and better compete with larger companies. There were also collaborations to develop services that specifically tackle the pandemic, such as the “Ped Thai Su Phai” Facebook page, which uses technology and innovation to address social problems, provide correct information, reduce the burdens of health workers, and generally help the public sector handle the pandemic.

Challenges when it comes to government support

However, despite these initiatives, many startups still struggle to cope with the new normal, especially in the tourism, event management, and food and beverage spaces, as well as other offline service sectors. Whereas many services have successfully shifted to virtual or online platforms or have pivoted to offer pandemic-specific services that address people’s needs during the crisis, startups in these key offline service industries are having a much harder time than their online counterparts.

Also read: Startup Thailand x Innovation Thailand Expo 2020: a catalyst for innovation

Although Thai startups received better support from the public and private sectors this year, their growth still did not match up with startups in other countries. Pattaraporn Bodhisuwan, President of Thailand Tech Startup Association, TTSA / CEO and Co-Founder of Eventpop, said a lack of support and assistance was the main reason why Thai startups did not grow as much as large foreign competitors.

Most platforms and services currently used by the Thai public sector are developed by foreign companies. For example, the Thai Ministry of Public Health recently collaborated with Agoda to launch a platform for Alternative State Quarantine hotel reservations. Mr Pattaraporn explained that there are several Thai startups with similar platforms and services and that were equally effective but were not chosen by the Thai government. He therefore urged the public sector to give support to Thai startups more, not only to help them grow and strengthen them, but also to better address the specific needs of Thai people. By not choosing Thai platforms and services, the government entrusts the important data of Thai users to foreign companies, exposing the people to many potential data risks.

Moreover, Mr Pattaraporn said that Thai startups managed to receive more attention from public and private agencies whose efforts to promote Thai startups so far have focused on collaboration on startup acceleration such as SCB10x, Kasikorn X etc. rather than funding.

Funding from investors is another big challenge for Thai startups in 2020 because many investors have decided to delay funding early-stage startups from January to October this year. Compared to an average of 30-35 startups each year, funds were mobilised for only 16 startups in 2020.

Also read: Don’t break the bank: Enabling financial inclusion and equity through tech

Increased support from both public and private sectors

On the government’s side, support and assistance have been provided for new startups to help them enter the ecosystem. Nevertheless, there are some government agencies that still have limited knowledge of how startup businesses work, resulting in regulations and government assistance that are off target.

“There were proposals for the government to use services by startups at ministries as well as campaigns for amendments to some laws, so that Thai startups would attract more foreign investors. The National Innovation Agency (NIA) has launched measures to give startups funding with no strings attached and educate them in various aspects,” explained Mr Pattaraporn.

On the future of Thai startups in 2021, the TTSA president said startups should pay more attention to their finances and performance as well as revenue channels, cost control, and accounting in a bid to boost investor confidence. He further advised that startups should find ways to create their own strengths by cooperating with the private sector or large corporates or ask the government to use their services more. Thai startups should also join hands to help one another in expanding services and exchanging knowledge, he said. Pattaraporn added that the TTSA is hard at work to foster and nurture a larger startup community for Thailand.

Thai startups also urge for a limit on foreign ecommerce companies’ e-marketplace share in the Thai market, as well as the enactment of an anti trust law to prevent monopoly. They also call for a policy to stimulate the use of Thai startups’ services, especially by the government, saying that the government should set an example for people to follow and encourage Thai consumers to choose services developed by Thais for Thais. Also, Thai startups have made a request for more business-matching initiatives between Thai startups and other private companies.

Moreover, Thai startups have requested the government’s assistance in four areas, including public relations for its projects to support Thai startups and measures to provide thorough assistance for them, ease of doing business, easy access to information and services of the government, and support for skilled professionals particularly developers and programmers.

Entering the negotiating table, laws that seek to support the startup ecosystem are now being considered and are being discussed to find mutually beneficial resolutions that both sectors may agree upon. Some examples of the laws include laws on the ESOP — Employee Stock Ownership Plan, vesting, and convertible note, among others.

In his capacity as the president of the association, Mr Pattaraporn said he is continuously following up on the progress of all of the proposals in cooperation with National Innovation Agency (NIA).

The future growth of Thai startups is the direct product of cooperation between three parties: startups, the government, and the private sector. The cooperation of each component is key to developing the Thai startup ecosystem, and helping startups become at par with their foreign counterparts. With this cooperation, the NIA hopes to help bring Thai startups to the global market.

Visit the Startup Thailand Marketplace at ecosystem.startupthailand.org for updates on the Thailand startup ecosystem.

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This article is produced by the e27 team, sponsored by the National Innovation Agency of Thailand.

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