airasia acquires Gojek’s Thai operations as SEA’s battle for supper app supremacy intensifies; In return, Gojek will receive shareholding in the airasia Super App, whose market value is said to be around US$1B; The deal is expected to rev up the expansion of the airasia Super App in ASEAN, while enabling Gojek to increase investments in its Vietnam and Singapore operations.

Bukalapak increases IPO target to over US$1B on strong demand; The books for Bukalapak’s IPO will open this week for about 10 days, and will be followed by a listing in August, says a Reuters report citing sources; Bukalapak, which counts GIC and Microsoft among its backers, is set to be the biggest local listing in 13 years and the largest ever by a startup in the SEA country.

Nium acquires India unit of scam-hit Wirecard; Wirecard Forex India is a foreign currency exchange, pre-paid card, and remittance services provider; The German fintech giant hit the headlines last year when it filed for insolvency in June 2020 due to a massive accounting scandal; The deal is Nium’s second in just over a month after its acquisition of Ixaris and is expected to close in Q3 2021.

Insignia Ventures targets to raise US$250M third fund by end-2021; The focus sector of the fund couldn’t be ascertained, but Insignia’s stated aim is to make early-stage tech investments in SEA; In an earlier interview, its founder Yinglan Tan said it sees Indonesia, Vietnam, and the Philippines as key markets and it is bullish on the healthcare and education sectors.

Magic Fund closes US$30M second vehicle, backs 4 Asian startups; Magic Fund typically invests around US$100K-300K in early-stage companies across Africa, Europe, LatAm, North America, and SEA; Its investees include Vietnam’s proptech startup Homebase.

Expara Ventures shelves plan to raise US$30M fund; The VC firm had planned to raise 4th fund to invest in Singapore, Thailand, Malaysia and Vietnam; COVID-19 appears to have sealed the decision for the firm; Last year, it launched an accelerator programme to back startups developing solutions to challenges that emerged due to the pandemic.

On-demand delivery startup Pickupp closes US$15M Series A; Investors include Taiwan e-commerce giant PChome, Cornerstone Ventures, Swire Properties, and Cathay Venture; Pickupp will use the money to add 10 more dispatch points in Singapore within the next 12 months.

iMedia enters e-commerce by acquiring Malaysia’s community beauty store Favful; Favful’s social commerce platform curates recommendations from its community members based on the customers’ skin type, skin concerns, and lifestyle choices; iMedia will be responsible for the acceleration of Favful’s revenue for its influencer advertising unit as well as branded content.

Singapore’s Janio raises US$8M from revenue-based investment and fintech co. Choco Up; Choco Up’s investment is part of a wider closed round bridge investment, which also includes funding from Singapore-based Innoven Capital and Janio’s existing shareholders; Janio is a cross-border platform that provides integrated, end-to-end e-commerce logistics solutions in SEA.

Indonesia’s micro-retail tech startup Warung Pintar reportedly raises US$6M; Investors are East Ventures (led) and Vertex Ventures; This round is expected to bring Warung Pintar’s valuation to US$169M; It followed a Series A round in 2019; Earlier this year, Warung Pintar acquired Bizzy for US$45M.

OsakaKuma raises US$6M from SEEINFRONT Capital to open 3 outlets for Japanese cosmetic brands in S’pore; The firm uses data from over 100K surveyed customers from 15 online stores worldwide to target consumer needs and demands so that solutions can be offered in a more precise way; This round brings its total funds raised to date to US$8M.

Singapore’s smart living startup HiLife Interactive secures US$6M Series A from Shanghai 2345; HiLife Interactive expects to double its presence in SEA with new markets such as Cambodia and plans to break into the Australasia and European markets by the en-2021; It offers hiLife, an all-in-one lifestyle platform that integrates smart home, smart community and smart estate.

Singapore biotech startup Allozymes raises US$5M; Investors include Temasek’s arm Xora Innovation (lead), SOSV, TI Platform Management, and Entrepreneur First; Allozymes’s proprietary platform can analyse and maps millions of enzyme variants per day; It can also generate larger datasets than competitors, the company claims, and has the potential to become the largest enzyme data library.

Locad lands US$4.9M seed to provide logistics infra for e-commerce businesses; Investors include Sequoia Surge (lead), Antler, Febe Ventures, Foxmont, and Global Founders Capital; Through its platform, brands can manage their orders and stocks from a single virtual pool across multiple sales channels, with visibility of sales, orders, inventory, and service levels.

Carsome makes strategic investment in Indonesia’s PT Universal Collection; Through this investment, Carsome intends to accelerate its automotive transaction volumes in Indonesia and expand its network coverage and access to financial and leasing providers; As part of its investment, Carsome’s dealer partners will enjoy more inventory diversity and broader options through PT UC.

LendMN’s Singapore parent AND Global lands funding from SBI VEN Holdings; LendMN offers AI-based instant collateral-free loans to customers in Mongolia; As of June 2021, it claims to have over 930K registered users; LendMN uses non-traditional data sources, along with traditional data, to identify the customers’ credit risk instantaneously and issues loans within less than five minutes of signing up.

Indonesian edutech startup GREDU raises US$4M; Investors are Intudo Ventures and Vertex Ventures; Its subscription services allow schools and teachers to track the performance and progress of students in line with the national curriculum to improve oversight and effectiveness of instruction; It also helps administrators handle documentation, compile syllabuses, manage teaching schedules, improve big data management, and increase transparency.

Dagangan bags pre-Series A for its one-stop platform for household needs in Indonesia; The capital that came from Spiral Ventures, CyberAgent Capital, 500 Startups, and Bluebird Group will be used for expanding into 7K villages; The startup is currently operating in more than 4K villages spread across Yogyakarta, Central Java, and West Java.

Grab PayLater, Atome, Hoolah gain traction amid BNPL boom in Singapore, says report; About 19% of Singapore’s population above the age of 16 has tried a tech-enabled BNPL service, according to a report by Milieu Insight; 30% of Singaporeans aged between 25 and 34 were “most likely” to have used a BNPL service.

One in four remote workers in Singapore feels less connected to their firms, finds Qualtrics study; Creating a culture of belonging is the top driver of employee engagement, as well as a positive influence on engagement, intent to stay, and wellbeing; Stress, anxiety, and concerns about job security continue to have an adverse effect on the workforce.

E-commerce for the future: How open banking enables greater security and trust; Leveraging on open APIs, open banking enables e-commerce platforms to securely connect to a consumer’s bank account for purposes including initiating payments or retrieving data on their behalf; Online retailers and e-commerce platforms will need to fight harder for loyalty by establishing competitive advantages in user experience.

Can alternative proteins help build a more secure and sustainable food system?; The current food system is struggling to keep up with the demand from a growing global population; Investors pouring billions into alternative protein sources are betting that foodtech can be part of the solution by building a more resilient agri-food system.

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Image Credit: airasia

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“I’ve not heard of a friend not having a SPAC”, I recall one of the speakers from Wall Street saying that in a conference earlier this year. The statement might come with a little exaggeration, but it did signal how hot SPACs (special purpose acquisition companies) were in 2020 and even hotter in 2021.

The pandemic does not seem to slow down the SPAC IPOs. SPAC IPO count increased by 320 per cent in 2020 followed by 46 per cent in 2021 as of July 3, 2021.

As of gross proceeds raised by SPAC IPOs, value increased by 513 per cent in 2020 followed by 34 per cent in 2021. As SPACs continue to gain popularity in the US, SPACs are turning their attention to foreign markets, especially the SEA region, for acquisition targets.

How do SPACs work anyway?

As indicated by its name, SPACs are blank check companies raising funds through IPOs to acquire private companies. Generally speaking, they are formed by experienced management teams or sponsors with some nominal capital invested.

The remaining interest of SPACs is held by public shareholders through the IPO processes of the SPACs shares. Each share offering will also come with a fraction of a warrant as well.

Also Read: The hidden danger in SPACs. Is the hype worth the risk?

Once the SPACs are formed, the rules governing them usually require the SPACs to identify firms they can merge with within two years otherwise the SPACs will be wound up and IPO proceeds would be returned to the investors.

Once the SPACs have identified target companies, their public shareholders may vote against the transaction and push the SPACs back to target searches, though in practice most SPACs come with major shareholders who can ensure the deal proceeds smoothly. Minor shareholders in this case can elect to redeem their shares.

This design helps SPACs to complete their mission within the 24-month timeframe but does leave some risks for future class actions against them. If the SPACs require additional funds for the merger, the SPACs may issue debt or additional shares (typically through PIPE) before the mergers.

Remember the reverse merger crisis?

SPACs are a form of a reverse merger. Looking at SPACs, It’s difficult not to think of the reverse merger crisis back in the 2000s. The streamlined process of the reverse merger and the access to US capital markets attracted more than 150 Chinese companies to this route from 2007 to early 2010 (PCAOB, 2011).

Many of these target companies were with the quality, but a more relaxed regulatory environment did leave some grey areas for certain issuers to commit fraud. Eventually, dozens of listed companies through reverse merger were either delisted or halted from trading based on claims of fraud or violations of US securities laws, and a number of others were targeted by short-sellers.

Also Read: The hidden danger in SPACs. Is the hype worth the risk?

According to PCAOB, billions of dollars of market capitalisation have been lost in the US capital market because of the crisis. Scrutiny was raised, confidence was lost, and law enforcement eventually stepped in (Marketwatch, 2016).

Risks associated with SPAC

Given the short timeframe granted to SPACs to complete the mergers alongside growing competition due to increasing numbers of SPACs in the US capital markets, SPAC sponsors might end up choosing targets not optimal for the shareholders. After all, we only have so many quality targets but there are many SPACs racing to close the deals.

So far, we have seen several failed SPAC deals. For example, after the merger with SPAC Landcadia Holdings, Waitrr, a food delivery platform, lost 96 per cent of its market value, replaced its CEO twice, and eventually faced being delisted from Nasdaq after trading below US$1 per share for 30 days.

On the other hand, Multiplan’s top customer UnitedHealth Group Inc. withdrew from the relationship to form its own competing unit shortly after Multiplan’s merger with SPAC Churchill Capital Corp. III. Multiplan, later on, became a target of short-seller Muddy Water (IFLR, 2021).

There are several other SPAC deals that turned sour, and Stanford Law School has tracked 25 securities class action filings against SPACs since 2019.

Mitigation of SPAC risks

Although there are some brutal failures of SPAC merger and a long list of securities class action filings, it’s best not to let availability heuristic mislead us plus the lawsuits may be in cases of pettifogging, for instance claiming that the SPAC sponsors have not disclosed sufficient information to minor shareholders to make judgment hence the choice to redeem SPAC shares could not serve its purpose.

However, there are in fact several measures and tools typically implemented in SPAC deals to address conflict of interests among sponsors, SPAC shareholders, and target shareholders. For instance, as in many suits brought by SPAC shareholders, the business judgment rule is usually unavailable as the sponsors receive part of the target company ownership after the merger deal.

The entire fairness standard on the other hand would incentivise SPAC sponsors to request fairness opinions from independent parties before proceeding with the deal (Baker Mckenzie, 2021). Secondly, the warrants attached to the SPAC shares will come with an exercise price higher than the issuance price of the SPAC shares.

It creates another layer of incentive, an enticing proposition for the SPAC sponsors to acquire quality targets at fair offers. Lastly, the SPAC sponsors’ founders’ shares and warrants are usually locked up for a certain period (typically one year but subject to negotiation at the inception of SPACs) starting from the date of Super 8-K filings.

Also Read: Carousell mulling US listing via SPAC merger at US$1.5B valuation: report

On the other hand, the targets’ shareholders are usually expected to sign a lock-up agreement before the merger as well, typically 180 days of lock-up from the closing date.

With most SPAC mergers we’ve seen so far resulting in the target shareholders owning more than 70 per cent of the merged company alongside the above measures, the interests among SPAC and target shareholders and SPAC sponsors are largely aligned.

All for all

SPACs are effective and streamlined tools to bring capital market access to private companies. But nothing in the world comes with only benefits if adopted too much and too often. With growing numbers of SPACs hunting for available targets, it is expected that more caution and mechanism will be exercised by the government and players to better safeguard the value of stakeholders.

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Since as early as 2014, Malaysia has been considered to be in the Top 10 states when it comes to cybersecurity, according to the Global Cybersecurity Index.

With the newest report released this past Tuesday, Malaysia came in at number eight out of 194 states in this year’s index, released by the International Telecoms Union (ITU)–  a United Nations agency.

Despite what many may initially think, the Asian nation has been a quiet leader in cybersecurity for quite some time, due to its policy infrastructure, which has been supported by an ongoing commitment to cybersecurity issues and maintaining a solid national strategy.

The critical national information infrastructure

Malaysia’s first cybersecurity policy dates back at least 15 years, giving rise to what is today’s Critical National Information Infrastructure – a portal for sharing information and a coordination and command centre that addresses the nation’s cybersecurity crises, evaluating threat levels on a regular basis.

One of the most appealing aspects of the country’s model is X-Maya, annual drills that are run to test the nation’s readiness and ability to address security incidents.

Also Read: 4 ways to protect your business from cybersecurity threats

While this isn’t necessarily unique to the Asian nation, the ongoing assessment and commitment to running these drills demonstrate the nation’s ability to continue growing its position as a cybersecurity leader.

Behind its No. 8 power ranking, Malaysia achieved a top score in three of the five categories used by the ITU:

• A legal framework for handling security and crime;
• Capacity measures based on R&D, education and training, and
• International partnerships and information sharing.

But no system is perfect, as the country is still lacking in some technical areas, particularly when it comes to its own internal hygiene-related proficiencies.

When it comes to defensive tactics, the country is relatively week, according to analysts from Harvard Kennedy School’s Belfer Center.

In other words, a good offence requires a strong defence. Malaysia’s ability at destroying and/or disabling a hostile infrastructure is less than satisfactory, compared to countries like Russia and the US.

Countries such as China and Singapore are leading when it comes to the defence of government and national assets and systems.

In May, Microsoft announced the launch of the Asia Pacific Public Sector Cybersecurity Executive Council to help unify policymakers from government and state agencies.

The purpose, according to the US software vendor, is to establish better communications between these organisations and facilitate the sharing of best practices, including a better exchange of threat intelligence and technology in a “timely and open manner.”

Upon the launch of the Executive Council, 15 policymakers from Singapore, Indonesia, South Korea, Malaysia, Thailand, Brunei, and the Philippines have joined the council.

Also Read: From our community: Why SEA needs HR tech, better cybersecurity talent, open conversations on ethics and more …

The significance of bringing policymakers to the table is the opportunity to meet virtually every quarter to establish a “continuous” sharing of information on cyber threats and cybersecurity products.

The collective intelligence amongst the Asia Pacific nations is crucial to helping bridge the gap and balance policy and projection moving forward, as discussed in CPO Magazine.

Compared to most countries in the Middle East, Malaysia sits in a very powerful position, but certainly has some work to do. “You have to invest in diplomacy,” said Greg Austin, IISS’s Senior Fellow for Cyber, Space and Future Conflict.

“If you’re a tier-three country, you cannot be secure in cyberspace without securing the support of stronger countries who can help you.”

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Despite many positive changes in managing stress in the startup ecosystem, mental health issues continue to be an epidemic.

In 2017, 500 Startups Managing Partner Khailee Ng stated that:

“If you ask any founder how he’s doing, he’s probably going to say that he’s killing it. But deep down inside, the product is broken; customers are leaking out; your co-founder hates you; you just made a bad hire; your team hates you; if you go back home, maybe your partner or spouse hates you; your pet hates you, and you don’t even know whether you are supposed to be a founder or not!”

This statement continues to hold true today especially since the COVID-19 pandemic started. The mental health epidemic has especially escalated after COVID-19 where gloomy news spreads like wildfire and many companies have to switch their business models. It is undeniable that many founders are suffering from more stress despite putting up a strong front.

According to a whitepaper report by Action Community for Entrepreneurship (ACE) and Safe SpaceTM, male founders in Singapore were seen to be twice as likely to experience a toll on mental health, but are also twice as likely to confide in no one.

Also Read: How ThoughtFull aims to destigmatise mental health through daily chats with professionals

Another key finding was that whilst 78 per cent of startup founders agreed that mental health is important in a high-functioning team, only 12 per cent of them admitted to having a mental health advocate in their companies.

This could be since startups are mostly too focused on growth and have the tendency to overlook other things such as wellness.

On being asked what strategies were employed to cope with stressors, more than half of the founders (54 per cent) said exercise, followed by mindfulness (40 per cent), peer support (36 per cent), and family support (32 per cent).

However, in spite of these strategies, the report found that many founders lack practical strategies for managing stress, and are perhaps unaware that therapy is accessible online, where therapists are increasingly offering more flexible hours for sessions.

ACE and Safe Space are calling on all members within the startup ecosystem and their investors to show commitment and place greater importance on mental health.

Members can take the first step forward by signing up for the Startup Mental Wellness Pledge, a statement that affirms that your startup is committed to implementing a practical and effective mental wellness policy.

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Bukalapak shares to trade in IDX on Aug 6

The story: Indonesian e-commerce firm Bukalapak’s share is set to list on the Indonesian Stock Exchange on August 6, according to Kr-Asia.

More about the story: The company has been targeting raising more than US$1 billion in its IPO, more than 25 per cent than previously planned.

Bukalapak, which counts GIC and Microsoft among its backers, is set to be the biggest local listing in 13 years and the largest ever by a startup in the SEA region.

Kurly raises US$200M from Sequoia, Hillhouse, DST

The story: Kurly announced that it has raised US$200 million in a Series F funding round at a US$2.2 billion post-money valuation.

Investors: Aspex Management, DST Global, Sequoia Capital China, Hillhouse Capital, Millennium Management, CJ Logistics Corporation.

What the funding will be used for: Product enhancement, hiring, customer acquisition, investment in logistics infrastructure, and expansion.

Also Read: Sequoia Surge’s new cohort comprises a vegan makeup startup, an innovative email marketing platform, and more

About Kurly: Founded in 2015, Kurly is a South Korean grocery startup that is designed to provide groceries and produce to customers who don’t have the time or interest to visit regular retail stores for their shopping.

Kurly Market delivers orders by 7 AM each morning, with customers were given until 11 PM the previous day to place their order.

More about the story: Kurly claims to have generated US$845 million in annual sales in 2020, marking a 124 percent year-over-year growth.

The company believes that margins will also continue to grow as it achieves scale and operational efficiency while offering quality products and services.

Tencent launches new facial recognition to help the government regulate minors’ time spent gaming

The story: Chinese web giant Tencent has launched a new facial recognition function called “Midnight Patrol” to help the government curb minors’ time spent on gaming.

About the curfew: Anyone under 18 cannot play games after 10 PM.

Also Read: Google, JD.com, Tencent confirm leads in GOJEK Series F fundraising

More about the story: Social media impressions on WeChat suggest that many gamers are not happy with the news, as is expected. Since the system is tied to age restrictions, many minors just months away from turning 18 are being kicked out of their gaming sessions.

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