Telkomsel Ventures, the investment arm of Indonesian telco Telkomsel, and startup community and VC firm AppWorks have unveiled the seven startups selected to participate in the TINC Batch #9 accelerator programme.

The six-month programme will showcase Indonesian startups creating innovative solutions for healthcare, fintech, climate, marketing, and smart homes.

Also Read: Telkomsel Ventures champions collaboration in supporting the Indonesian startup ecosystem

Built around the B2B Solutions & Emerging Technologies theme, the startups demonstrated significant synergies with major Telkomsel initiatives to promote the development of Indonesia’s digital economy and drive forward inclusive and sustainability initiatives through a highly competitive pitching process.

They were selected from over 100 qualified applicants.

Through the programme, startups will closely partner with Telkomsel Business Units to explore ways for their products and services to be integrated into the Telkomsel Ecosystem. Participating startups will attend activities and events designed to improve company competencies, expand their networks, and build synergies with Telkomsel, including mentorship sessions, office hours, topic deep dives, subject sharing, and community events.

TINC Batch #9 Demo Day is scheduled for October in Jakarta, and regional sessions in December in Taiwan. During these sessions, participating startups will pitch their companies to a select group of investors and potential business partners.

“We’re incredibly excited to launch TINC Batch #9 with these seven dynamic startups. Their innovative B2B solutions and emerging technologies represent the future of Indonesia’s digital ecosystem. We look forward to working alongside them and Telkomsel to accelerate their growth and deliver meaningful impact to our customers and partners,” said Mia Melinda, CEO of Telkomsel Ventures.

The seven startups featured in TINC Batch are:

PrimaKu: Founded in 2021 by Didit Indraputra, PrimaKu is a pediatric health platform that provides tailored, intuitive monitoring of child development.

Finfra: Established by Markus Prommik in 2022, Finfra empowers Southeast Asian companies by providing the infrastructure to integrate financial services seamlessly.

Rey: Launched by Evan Tanotogono in 2021, Rey is an end-to-end healthcare and insurtech company in Indonesia. It offers subscription-based services that integrate insurance, wellness, and medical record data to provide personalized care and services to each client.

Skorlife: Co-founded in 2022 by Ongki Kurniawan and Karan Khetan, SkorLife is a free application that helps users actively manage their credit scores and financial health.

Also Read: SkorLife secures US$4M to allow Indonesians access their credit scores, reports instantly

CarbonEthics: Initiated by Agung Bimo Listyanu in 2019, CarbonEthics is an impact enterprise dedicated to climate restoration through blue carbon rehabilitation and comprehensive natural climate solutions.

Peacom: Founded by Han Truong in 2022, Peacom delivers a multichannel conversational marketing and sales automation platform in Indonesia, enhancing business communications across diverse messaging channels.

myECO: Started by Maulana Derifato Achmad in 2020, myECO innovates in smart home technology by offering IoT-based solutions for electricity conservation, aiding households in reducing energy consumption effectively.

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In his presentation at The AI Summit at the Singapore Expo on May 30, Greenie Web CEO Ian Chew detailed the environmental impact of digital technology, including the use of Generative AI. Digital carbon emissions from online activities—from sending a WhatsApp message to generating a prompt using ChatGPT—are becoming a “massive present-day issue” as they contribute 3.7 per cent of Global Greenhouse Gas (GHG) emissions, almost as large as the aviation industry.

He also highlighted that this is a “rapidly scaling problem” as the number is expected to grow to 14 per cent by 2040.

“[During the COVID-19 pandemic] what happened was that every single country in the world digitised exponentially: The elderly, the young people who had not used digital devices from the beginning, did it for the first time. This will be a problem with a 300 per cent increase by 2040,” Chew explained.

To tackle them, there are two solutions that the CEO proposed: Digital decarbonisation and sustainable digitalisation.

Also Read: Collaboration and a sense of urgency: What it takes to support climate tech startups in Southeast Asia

“These are actually two sides of the same coin. When we think about digital decarbonisation, we are thinking about how we can write the wrongs of the past. When we look at legacy systems and AI models, how can we make that more efficient and continue using it?” Chew said. “When we think of sustainable digitalisation, we think of all the new possibilities. For example, how can we create a low-carbon mobile application?”

He proposed the SWUP framework for developers to help achieve these two goals. This includes monitoring the animation speed of one’s site or app, page weight budget, user optimisation, and eco-personal digital habits.

An example of such work that Greenie Web had done included a low-carbon site for the elderly, which showcased how the company fine-tuned a platform to the users’ needs to ensure an operation with lower carbon emissions.

On the sustainability of AI

On the same day, a panel discussion featuring speakers from the tech industry and social policy institutions discussed the sustainability aspects of AI technology.

According to Kenddrick Chan, Senior Policy Analyst, Policy and Politics at Tony Blair Institute for Global Change, pointed out, “When people talk about AI … the natural impulse is to think about AI for sustainability. Can AI do climate modelling for me? Can they do calculations of parametric risk insurance for climate disasters?”

Also Read: Collaboration and a sense of urgency: What it takes to support climate tech startups in Southeast Asia

“What we hear less is the other side of the coin which is not so much about ‘AI for sustainability’, but the ‘sustainability of AI’ itself.”

Chew, who also spoke at the panel, stressed the need for a fundamental change in the business model of data consumption. “If you look at the cloud service providers nowadays, one of the biggest issues is that they are incentivised to increase data consumption. The more services you rent, the more data you use, the more you will pay.”

The panel’s one key issue was that “we cannot manage what we do not measure.” But Chan pointed out that at the moment, there was no standardised way to measure. This was heightened by the complexity of analysing a tech platform’s carbon emissions: For example, a data centre might use electricity from various sources, including an eco-friendly one such as a solar panel.

“But one thing that becomes clear with this measurement problem is that it is coming to the forefront of policymakers’ attention, which is rightly so.”

The AI Summit was held in conjunction with the fourth edition of ATxEnterprise, which concluded on May 31. According to an official statement, the event welcomed over 22,000 attendees from 110 countries and regions.

One of the event’s key highlights was the announcement of the Singapore government’s Digital Enterprise Blueprint (DEB). Aiming to accelerate digital transformation in the country, DEB includes empowering small- and medium-sized enterprises (SMEs) to adopt AI innovation.

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As the CEO and founder of Tokenize Xchange, one of Southeast Asia’s largest cryptocurrency exchanges, I’ve seen firsthand the transformative potential of blockchain technology.

Our journey began with a vision: to make cryptocurrency accessible to everyone, foster innovation, and ensure the highest standards of security and trust.

Today, with nearly half a million users, teams in 4 countries, and our just completed US$23 million Series A, I can say with confidence that adhering to a regulatory framework has been crucial to our success.

The crypto market is a dynamic and often turbulent space. The recent debacle involving FTX is a stark reminder of the importance of proper checks and balances. While the decentralised nature of cryptocurrencies offers incredible opportunities, it also brings significant risks.

Without a robust regulatory framework, these risks can quickly become realities, leading to catastrophic consequences for both businesses and investors.

When we founded Tokenize, we made a conscious decision to prioritise regulatory compliance. This wasn’t always the easiest path.

Navigating the complex landscape of crypto regulations required significant resources and a deep commitment to transparency and integrity. However, I firmly believe that this approach has been fundamental to our longevity and growth. Today, we operate in Singapore under an exemption from the MAS, while in Malaysia, we operate with a full license from the Securities Commission Malaysia.

Building trust through transparency

One of the key lessons we’ve learned is that trust is the most valuable currency in the crypto world. In an industry where anonymity can sometimes lead to misuse, we have made it our mission to be as transparent as possible. Our relationship with Singapore’s Monetary Authority and Malaysia’s Securities Commission is a testament to our adherence to stringent regulatory standards. The exemption in Singapore and the license in Malaysia are not just badges of honour; they are symbols of our commitment to operating a secure and trustworthy platform.

Also Read: Lessons from a travel tech startup founder on navigating the pandemic-stricken business landscape

Transparency goes beyond regulatory compliance. It’s about being open with our users about how we operate, the security measures we have in place, and the steps we take to protect their investments. This openness builds confidence, attracts a broader user base, and fosters a loyal community.

Innovation within regulation

Some might argue that regulation stifles innovation. At Tokenize, we’ve found the opposite to be true. By working within a clear regulatory framework, we’ve been able to innovate with confidence. Our development of Titan Chain, a powerful new layer 1 blockchain, is a prime example.

Titan Chain offers enhanced security, scalability, and efficiency, addressing many of the issues that have plagued earlier blockchains. Knowing that we have a regulatory foundation to support our innovations has allowed us to push the boundaries of what’s possible in the crypto space.

Personal journey and lessons learned

My journey into the world of cryptocurrency began long before Tokenize was founded. I vividly remember the early days when blockchain technology was still a nascent concept, and the idea of a decentralised financial system was met with scepticism. It was a leap of faith, driven by a belief in the transformative power of this technology.

In the initial stages, there were countless sleepless nights, grappling with the complexities of developing a secure and user-friendly platform. The regulatory environment was still evolving, and we had to constantly adapt to new requirements.

There was a moment early on when we faced a significant regulatory hurdle in Singapore. It seemed like an insurmountable challenge at the time, but instead of seeing it as a roadblock, we viewed it as an opportunity to demonstrate our commitment to compliance and transparency.

Also Read: 3 things first-time founders should know about ESOP implementation

This experience reinforced the importance of resilience and adaptability in the face of adversity.

My rules to live by

For those looking to venture into the world of crypto or any other innovative field, here are a few lessons I’ve learned along the way:

• Embrace regulation, don’t fear it: Regulatory compliance may seem daunting, but it is essential for long-term success. Embrace it as a framework that ensures your business can grow sustainably and earn the trust of users and investors alike.
• Build on a foundation of trust: Trust is your most valuable asset. Be transparent in your operations and communicate openly with your users. This will foster loyalty and create a strong, supportive community around your business.
• Innovate responsibly: Innovation is at the heart of the crypto industry, but it must be pursued responsibly. Understand the risks and ensure that your innovations are secure and beneficial to your users.
• Stay resilient and adaptable: The path to success is rarely a straight line. Be prepared to face challenges and setbacks, and view them as opportunities to learn and grow. Resilience and adaptability are crucial traits for any entrepreneur.
• Engage with regulators proactively: Establish a positive relationship with regulatory bodies. Engage with them proactively, seek their guidance, and demonstrate your commitment to compliance. This will help you stay ahead of regulatory changes and build credibility in the industry.

Setting an example for the industry

Our commitment to regulatory compliance has not only benefited Tokenize but also serves as a model for the broader crypto industry. By demonstrating that it’s possible to innovate responsibly, we hope to inspire other crypto businesses to follow suit.

This is particularly important as the industry matures and gains greater mainstream acceptance. Investors, regulators, and users alike need to see that the crypto world can operate with integrity and transparency.

The path forward

As we look to the future, the importance of abiding by a regulatory framework will only grow. The crypto industry is still in its infancy, and the regulatory landscape is continually evolving. Staying ahead of these changes and proactively engaging with regulators will be crucial.

At Tokenize, we are committed to leading by example, showing that it is possible to thrive in this industry while adhering to the highest standards of compliance.

In conclusion, the journey of Tokenize has shown that proper checks and balances are not a hindrance but a foundation for sustainable growth. Our success in navigating the complex regulatory environment of Southeast Asia underscores the value of building a business on principles of trust, transparency, and innovation. By continuing to prioritise these values, we aim to not only sustain our growth but also contribute positively to the broader crypto ecosystem.

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Digital technologies are indispensable in the race to net zero, with projections from the World Economic Forum estimating that such technologies could reduce global emissions by up to 20 per cent by 2050. Everything from AI and advanced analytics, to smart grids and the Internet of Things (IoT) will be increasingly used as energy infrastructure seeks to improve efficiencies, circularity and reduce emissions.

In particular, the Asia Pacific region is expected to maintain a 50 per cent share of global primary energy demand until 2050, playing a pivotal role in the global energy future. The proliferation of interconnected devices and distributed energy resources, including energy storage systems and electric vehicles, are critical to the region’s energy transition but are also new points of vulnerability and risk, which history tells us bad actors will aim to exploit through cyberattack and disruption. Disruption will increase costs, reduce efficiency, consume energy, and delay net zero.

This means that building strong cyber defences and resilient digital energy infrastructure will be essential to protecting tomorrow’s energy infrastructure, helping to prevent attacks and, when there is an incident, ensuring we can recover quickly from it. We all have a role to play in protecting this new digital energy ecosystem, so cooperation should be a top priority.

This means governments, industry, and solution providers coming together to ensure critical national energy infrastructure, so vital to achieving net zero, will have the necessary resilience and protections built in.

Building resilience into our digitalised energy ecosystem

Energy infrastructure cyber disruptions will be a significant risk factor in the future, so we must be thinking about the solutions today. Energy infrastructure is the backbone of economies and societies, and regrettably, it is already the target of frequent cyberattacks.

Also Read: Demystify cybersecurity: EPP vs EDR vs MDR vs XDR

A research study by Rockwell Automation ‘Anatomy of 100+ Cybersecurity Incidents in Industrial Operations’ found that 39 per cent of critical infrastructure attacks are targeted at the energy sector, a rate that is three times higher than the next most frequently attacked verticals, critical manufacturing (11 per cent) and transportation (10 per cent).

This is why robust cybersecurity regulation and frameworks, continuous improvement to stay ahead of evolving risks, and adequate resource allocation towards cybersecurity infrastructure are all key steps to help safeguard the digital energy transition. As the digital energy transition accelerates, so will the risks, particularly in an increasingly distributed infrastructure and a more sophisticated threat landscape.

It is reassuring to see that countries across the Asia Pacific region are well aware of the cybersecurity risks facing critical energy infrastructure. Although the respective states have adopted different approaches to cybersecurity, there is a growing trend towards tackling the risks associated with mission-critical operational environments and systems.

In Singapore, for instance, the government recently passed a new law mandating owners of critical information infrastructure to report a wider range of incidents, including those occurring within their supply chain.

The development of international standards will be essential to navigating and protecting the decentralised and globally interconnected digital energy ecosystem of the future. In turn, industry must actively engage in bolstering cyber resilience by implementing robust cybersecurity defences ahead of evolving trends in the cyber threat landscape, and allocating adequate resources towards cybersecurity infrastructure.

A key line of defence against cyber threats lies within the digital solution’s built-in cybersecurity defences itself. This requires a multifaceted approach, encompassing both proactive and reactive measures. Central to this is the cybersecurity accreditations and certifications, which are key to ensuring that digital solutions are robust, resilient, and continuously updated to mitigate emerging threats and safeguard against potential cyberattacks.

Also Read: What if cybersecurity included everyone it protects?

For instance, the adoption of the Secure Lifecycle Development Process (SSDLC) for energy solutions means that product developers are able to ensure a high level of security and resilience throughout the entire product life cycle. The SOC 2 attestation, a valid third-party assessment of a company’s controls against the five Trust Service Criteria, as well as international cybersecurity standards such as ISO 27001 and IEC62443, are equally important to reinforce the integrity of digital solutions against cyber threats.

The path forward in the pursuit of a renewable energy future

In navigating the transition from traditional grids to digital ecosystems, cybersecurity has emerged as a critical cornerstone in ensuring the reliability, resilience, and sustainability of our energy infrastructure.
Achieving true cybersecurity resilience however will be contingent upon collaboration and cooperation.

With Asia Pacific poised to be a key player in the renewable energy transition, it is vital that all stakeholders in the ecosystem remains vigilant regarding cybersecurity threats and practices.

Government and industry must work hand in hand to ensure that we remain on course in our path towards a greener future by safeguarding critical energy infrastructure. Ultimately, good cyber security will deliver good progress on net zero.

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In the wake of the COVID-19 pandemic, many companies have remained in remote setups, operating under this assumption: Working from home enables employees to better manage work-life balance. Instead of having to separate work from life, they could integrate the two, so they could take care of children and other domestic matters in between meetings and deliverables. Employees would have better mental health — at least in theory.

That theory has long gone unquestioned until a recent Gallup survey put it to the test. Gallup found that employees who were engaged on-site became more stressed at home (29 per cent to 32 per cent), those who were not engaged also became more stressed (38 per cent to 46 per cent), and those who were actively disengaged experienced no change at all in their stress levels (remaining at 52 per cent in both conditions).

This survey undermines the assumption that work-from-home is universally better for our mental health. While most businesses would look at this data as a location issue and immediately set in motion a back-to-office change management plan, this view is misguided. This data does not reveal a geographical issue, but a cultural one. 

Companies must address the fundamental challenge that comes with each type of employee.

Empower your engaged employees

For purposes of organisation, the Gallup survey and other similar initiatives had to categorise employees into three distinct groups. This categorisation may promote the false idea that these groupings are fixed and that engaged employees will always be engaged.

Also Read: Examining remote work trends: What it takes for businesses to do this successfully

Such, of course, could not be further from the truth. While certain employees may be engaged now, they may slip toward not being engaged or even actively disengaged. Employees in these other categories may manifest as quiet quitters and other performance issues.

To continue engaging them, you must support their professional growth. Do so by keeping an open line of conversation about their experience. Ask them what they like most about your organisation, why they stay, and, just as importantly, how you can improve. You may even want to keep an open door policy or office hours for these types of conversations. These highly engaged employees are a gold mine: You will learn the most about your culture from them.

Part ways with actively disengaged employees

Keeping these employees is bad for both parties. Employees who are actively disengaged but remain with an organisation remain removed from finding a company that they are passionate about. 

On the employer side, actively disengaged employees waste resources. Many organisations tend to fall into a sunk cost fallacy with these employees: Since they already invested so much time in training, education, and other activities, it only makes sense to continue trying to engage them. This view is full of false hope: No amount of work will get them invested.

It is best to part ways with these employees as soon as possible. Although this choice may be difficult to do – and tempting to stall with a PIP and other procedures — swift action is empathetic: They will be one step closer to finding the role that is right for them.

Study your quiet quitters

You need to identify your quiet quitters – the people doing the bare minimum required of their job — and find out what makes them tick. In many cases, their lack of engagement is due to issues with recognition or competition: They feel there is a disconnect between how they perceive the company and how it rewards performance.

Also Read: Examining global hybrid and remote work trends beyond the West

Companies will have their own unique problems. The important part is that you surface these issues through dialogue with your quiet quitters. With enough engagement, some of these quiet quitters may trend in a positive direction and become engaged employees, rather than slide into active disengagement. 

If you give them a voice to speak up, quiet quitters will not sit on the sidelines. Every employee wants to be heard. 

First steps 

To address the challenges associated with each employee type, business leaders and entrepreneurs must reframe the overarching problem. They do not have a location problem on their hands — it’s not an issue so much of where to work, but how.

Business leaders must continue dialogue with engaged employees, study employees who are not engaged for areas of improvement, and part ways with the actively disengaged employees. You could view these actions as a sort of triage: You are focusing on what needs the most attention, so that your business can not only survive, but thrive.

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Startup Terrace Kaohsiung (STK), proudly supported by the Ministry of Economic Affairs and renowned as the premier international startup hub in southern Taiwan, is thrilled to unveil its 2024 Soft-Landing Program.

Building on their successful track record since 2021 where 137 startups have been nurtured and business and investor connections have been facilitated, STK has collaborated with over 10 global accelerators and over 50 business partners, including Google, AWS, and Microsoft to synergise innovation and entrepreneurship internationally.

These startups have benefited from extensive support, facilitating valuable business connections and attracting significant investor interest. This ongoing commitment to fostering innovation and growth has solidified its reputation as a key player in the startup ecosystem.

Explore the dynamic Southern Taiwan market

The 2024 Soft-Landing Program invites global startups to experience firsthand the dynamic Southern Taiwan market. Participants will immerse themselves in the vibrant Taiwan business environment, gain insights into the entrepreneurship ecosystem, explore potential sales opportunities, and engage in targeted matchmaking with Taiwanese companies and venture capitalists during the one-month visit. Accommodation subsidies, co-working space and facilities, business match-making and more perks will be provided in this complimentary program. 

Also read: SAFE STEPS: 8 disaster tech startups wow at Echelon X

Startup Terrace Kaohsiung is located at the largest 5G demonstration field in Taiwan, focusing on 5G and AIoT. STK’s 2024 Soft-landing Program aims to attract startups in these fields as well as smart manufacturing, smart harbour, and greentech development & transformation. The program offers a comprehensive training agenda designed to provide tailored support and opportunities for selected startups. 

Tailored support and opportunities for STK participants

Selected startups can expect the following experiences and benefits:

• Guidance to the Southern Taiwan market
• Real-site visits & business tours
• Targeted matchmaking, linking with VC, accelerators
• Participation in startup events

Additionally, participants will receive:

• Accommodation Subsidy (Kaohsiung only): USD50 per day (limit < 30 days)
• 1-month free use of co-working space and facilities
• Free participation in the Soft-Landing Program
• 1-on-1 business matchmaking service
• Participation in the 2024 Meet Greater South Expo and Pitch event
• Certificate upon completion of the Soft-Landing Program, becoming global startup ambassadors of Startup Terrace Kaohsiung

Also read: Check out these key highlights from Echelon X!

Application is open until June 28th.2024 

For more information, visit Startup Terrace Kaohsiung (yawan-startup.tw) or contact STK’s representative, Ms. Vanessa Lee, at: vanessalee@vnrc.tw

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This article was produced by ACE SG and published by e27.

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Last week, a diverse group of investment firms supported promising startups across Southeast Asia and India. From established giants like Temasek with billions under management to early-stage champions like 100Unicorns, these investors represent a range of focus areas, from fintech and healthcare to AI and sustainability.

Let’s delve into the investment landscape and discover the firms shaping the future of these dynamic regions.

B Capital Group

B Capital is a multi-stage global investment firm with US$6+ billion in assets under management across multiple funds. The VC firm focuses on seed to late-stage venture growth investments, primarily in the technology, healthcare and climate sectors.

Founded in 2015 by Facebook co-founder Eduardo Saverin, B Capital leverages an integrated team across nine locations in the US and Asia, as well as a strategic partnership with BCG, to provide the value-added support entrepreneurs need to scale fast and efficiently, expand into new markets and build exceptional companies.

British International Investment (BII)

Established in 1948, BII is the UK’s development finance institution and impact investor with a mission to help solve the biggest global development challenges by investing patient, flexible capital to support private sector growth and innovation.

It invests in creating more productive, sustainable and inclusive economies in Africa, Asia and the Caribbean, enabling people in those countries to build better lives for themselves and their communities. It invests every year in green infrastructure, technology and other sectors that need our capital the most.

BII currently partners with over 1,500 businesses in emerging economies and has a total assets of £8.1 billion.

Quona Capital

Quona Capital is a global venture firm focused on inclusive fintech. It invests in startups that expand consumers’ access to financial services and grow businesses in India, Southeast Asia, Latin America, Africa, and the Middle East.

It focuses on markets that are massively underserved by the legacy finance infrastructure, where it sees the biggest opportunity for transformation into more equitable financial systems.

Beyond pure-play fintech, Quona also invests in startups solving broader economic and social challenges, where embedded financial solutions can serve as a catalyst—from supply chain and agtech platforms to e-commerce, proptech and health.

Since 2015, it has invested in emerging markets while simultaneously measuring its impact on financial inclusion at the company and portfolio level.

Last week, B Capital, British International Investment, Quona Capital, and Stellaris Venture Partners invested in Turno, which offers financing solutions to SMEs, distributors, logistics firms, and e-commerce operators that plan to buy commercial three-wheeler electric vehicles.

Stellaris Venture Partners

Stellaris is an early-stage, technology-focused, sector-agnostic investment firm. It started its first fund in early 2017 and is currently investing from its second fund (US$225 million).

It prefers to partner at the ground floor level and is typically the first or the second institutional investor in companies that it partners with.

Stellaris has partnered with 30+ businesses across various sectors, including SaaS, financial services, B2B commerce, consumer brands, social commerce, education, electric vehicles, healthcare, and others.

9unicorns

9unicorns (now 100Unicorns) is an India-based accelerator VC. The fund operates uniquely as an accelerator and invests in very early-stage startups. It aims to disrupt idea-stage funding in India by backing founders with early access to capital with mentorship.

100Unicorns has funded 145 startups, including ShipRocket, VideoVerse, Zypp Electric, Renee Cosmetics, Assiduus, IGP – Join Ventures, Homeville, Alo Fruit, TruNativ, Rezolv.AI, OTO Capital, Klub, Wiom, BluSmart, DrinkPrime, LeverageEdu, Prescinto, and Rooter.

Indian Angel Network

Indian Angel Network is a leading network of angel investors keen to invest in early-stage businesses with the potential to create disproportionate value. The members of the network are leaders in the entrepreneurial ecosystem, having strong operational experience as CEOs or a background in creating new and successful ventures.

IAN is an angel investor network with over 500 investors across 10 countries. Over 80 per cent of its investors are actively investing, leading, etc.

IAN has invested in 200 companies spanning various sectors, including education, healthcare, QSR, e-commerce, gaming, semiconductors, robotics, and manufacturing.

Last week, 9unicorns, IAN, and Venture Catalysts invested in India-based Zypp Electric, which plans to expand into Southeast Asia.

Venture Catalysts

Established in 2016, Venture Catalysts++ is a multi-stage VC in India. It has a presence in 50+ cities in countries such as the UAE, the USA, the UK, Singapore, Luxembourg, Thailand, Canada, Eastern Africa, Zimbabwe, Hong Kong, and Southern Africa. It has US$700 million syndicated across 300+ portfolio startups. Besides making seed-stage and Series A investments for startups, Venture Catalysts is known for its startup-building capability, strategic guidance, generating business leads, leveraging its network across the globe through its partners and providing phenomenal returns to its investors.

Wavemaker Partners

Wavemaker Partners invests in a broad range of technology-driven companies in the US and Southeast Asia. The Singapore-based VC firm invests in angel, seed, pre-Series A, and Series A-stage startups across Hong Kong, Singapore, the Philippines, Thailand, the US, Indonesia, Vietnam, Malaysia, Brunei, Myanmar, Cambodia, and Laos. The average investment size is US$250,000 to US$5 million.

Last week, it invested in Beppo, which automates accounting and tax compliance for Filipino businesses and the self-employed.

Hitseries Capital

Hitseries Capital provides growth-as-a-service (GaaS) to its portfolio. The firm invests in artificial intelligence/machine learning, vertical SaaS applications, connected IoT, healthcare, mobility, fintech, and the marketplace across Asia Pacific.

Last week, the VC firm invested in WeSale, a proptech platform connecting partners, individuals and organisations to project owners and developers.

Temasek

Incorporated in 1974, Temasek is an investment company headquartered in Singapore. Supported by 13 offices internationally, Temasek had a net portfolio value of US$287 billion as of 31 March 2023. It aims to build a forward-looking and resilient portfolio that delivers sustainable returns over the long term.

Temasek deploys capital to catalyse solutions that can enable the transition to a low-carbon economy, tap into opportunities to build future growth sectors, and lead enterprises through our efforts in innovation.

Last week, Temasek invested in Marketnode, a digital market infrastructure operator aiming to develop a multi-asset ecosystem starting in Asia Pacific.

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Indonesia’s aquaculture company eFishery has received US$30 million in green and social loan from leading lender HSBC Indonesia.

The aquatech startup will use the money to accelerate the utilisation of its automatic feeding product for small-holder farmers, eFeeder, which speeds up the crop cycle by up to 74 days.

Also Read: eFishery banks US$200M, targets to engage 1M+ aquaculture ponds by 2025

According to founder and CEO Gibran Huzaifah, the eFeeder penetration will empower small-scale fish and shrimp farmers with the technology and resources needed to be more productive and sustainable.

As per the agreement, HSBC Indonesia will act as Sustainable Finance Coordinator for eFishery to support the implementation of ESG principles.

Founded in 2013, eFishery is one of Indonesia’s largest digital co-operatives for fish and shrimp farmers. It offers an integrated aquaculture ecosystem that provides access to technology, supporting over 70,000 fish and shrimp farmers in 280 cities across Indonesia.

Its solutions also include access to financial institutions worth more than US$40 million and a platform to sell fish and shrimp crops.

The company has three main objectives: to address food security through aquaculture, to overcome fundamental challenges in the aquaculture industry by providing affordable technology, and to reduce social and economic inequality through an inclusive digital economy.

The company looks to expand the eFishery farming community, targeting to engage over one million aquaculture ponds in Indonesia by 2025 and increasing the transactions of fish feed and fresh fish on the platform. The goal is to export fully traceable, chemical-free and antibiotic-free shrimp to international markets.

Also Read: eFishery will look to expand across Asia, Middle East: CEO Gibran Huzaifah

Three months ago, eFishery acquired AI-powered IoT startup DycodeX to its AI initiatives, including the launch of an upcoming brand, eFishery.ai.

Last July, the startup secured US$200 million in its Series D funding round led by Abu Dhabi-based global fund manager 42XFund. Malaysian public sector pension fund, Kumpulan Wang Persaraan (KWAP), Switzerland-based asset manager responsAbility, 500 Global, Northstar, Temasek, and SoftBank also co-invested.

According to a Tech In Asia report, eFishery secured a US$32 million loan from DBS Bank Indonesia in October 2022.

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There has been a significant slowdown in the early-stage funding ecosystem in Southeast Asia, with fewer startups getting funded and fewer funds being created. I’ve seen a few comments that have tried to explain why it is slowing down, so I thought that I’d add some colour to the discussion.

There’s no doubt that there’s been some frustration on the part of LPs with how slowly existing GPs have been returning capital from their funds. I would hazard a guess that this is because the TVPI (Total Value-to-Paid In capital) multiples aren’t what they are advertised to be and if they were realised, there would be a prodigious amount of shrinkage.

The funds don’t want this reality because to do so would likely expose the fact that their total returns are lower than the S&P500 with less liquidity, which would beg the question — why would anyone invest with them again?

TVPI reflects the current value of the portfolio as compared to the capital that has been given to it. As investments are realised, the Distributed-to-Paid in the capital will start to increase, and the Residual Value-to-Paid in the capital will decrease. Put another way TVPI = DPI + RVPI.

TVPI vs DPI

Currently, I would guess that there are a lot of funds that are holding their investments at an elevated valuation on their balance sheets. Let’s say that they are marking them at 5x TVPI. This would be great if they were able to realise their 5x TVPI and convert it into the DPI.

However, this valuation is based on the last round, which is problematic because venture rounds are typically priced according to the dilution that is appropriate for the level of funding as opposed to the financial value of the discounted cash flows.

Also Read: Funding frenzy in SEA: Fintech, proptech, EV startups secure millions

To realise the 5x TVPI, the fund manager would likely need to accept a discount unless they are able to achieve an IPO or some kind of exemplary trade sale — which are few and far between in Southeast Asia.

A worked example

What is more likely is that the 5x TVPI that they are carrying is sitting pretty far back in the cap stack, as liquidity preferences from later rounds have diluted the actual value. To give an example of this, if a company did a round of funding and raised US$1 million from Fund A at a US$10 million post-money valuation, the fund would own 10 per cent of the company. The company subsequently raised US$10 million at a US$50 million post-money valuation with preference shares that carried a 3x liquidity preference.

Arguably, Fund A would own eight per cent of the company (10 per cent less 20 per cent dilution, assuming the pro-rata wasn’t taken up). As mentioned above, the valuation that a private company can raise money at likely isn’t the same price that the same company would trade at in a secondary market.

Continuing from the above example, if the company was then sold for US$35 million a year later, what would Fund A’s position be worth? On their books, Fund A would have marked up their investment by 4-5x (50m/10m post-money valuations, the lower end taking into consideration dilution).

However, when they actually exit the business, the second funding round would first get paid their US$30 million (3x liquidity preference x $10m investment), leaving US$5 million for the remaining investors. Fund A’s 8 per cent position would now be worth US$400k (8 per cent of US$5 million), which is less than they had invested. It’s likely that they received preference shares, so they would get their investment back, but it’s still a far cry from the $5m that they said it was worth to their investors.

This is an extreme example but shows how there could be a significant difference between the TVPI and DPI when push comes to shove because of the positioning of the cap stacks. What looked like a 4-5x TVPI was something closer to a 1x DPI when realised (depending on whether it was a participating preferred).

The DPI dip

There are likely a lot of funds in this situation, where they might not have done the cap table calculations and instead relied on the movement of the share price to guide their internal valuations with no regard for their position in the preference stack.

Also Read: Southeast Asia startups secure funding for logistics, anime, sustainability and more!

When they look at exiting their positions, they realise that they need to win the lottery with an irrational buyer stepping in and paying above the odds for the business so they can realise the TVPI that they have been marketing. Faced with that conundrum, they would obviously prefer to let the investment ride in the hopes of some windfall in the future rather than accept the reality that their DPI will never get anywhere near their current TVPI.

Final thoughts

This results in funds holding onto positions longer and being unwilling to return capital to investors. If they were to return capital, their Internal Rates of Return (IRRs) would start to converge and potentially dip below those that an investor could have achieved by investing in the S&P500 but with a significant amount of additional liquidity.

Those investors are frustrated with the current situation, and they don’t have any capital to recycle back into new funds. This leaves us in the present predicament that we face with fewer investors deploying into funds, fewer funds being deployed, and fewer startups raising capital to grow and expand.

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Dear reader,

Elon Musk’s AI startup, xAI, has secured a monumental US$6 billion in Series B funding from Valor Equity Partners, Vy Capital, and Andreessen Horowitz, marking a significant milestone for the company founded in July 2023.

This capital infusion, following a report of a potential US$6.5 billion round, will enable xAI to advance its infrastructure and product lineup. xAI’s flagship product, Grok, a rival to ChatGPT, is now open-source, emphasising Musk’s commitment to “truth-seeking” AI technology.

This move sets xAI apart from competitors like Alphabet and Microsoft-backed OpenAI. Notably, Musk has also legally challenged OpenAI for straying from its original open-source mission.

The fresh funding position xAI among elite startups attracting substantial investment, mirroring recent significant raises like Alibaba’s US$1 billion investment in Moonshot AI and Alpha Intelligence Capital’s US$250 million fund.

xAI’s upcoming product announcements are highly anticipated, promising to further disrupt the AI landscape.

Sainul,
Editor.

========

NEWS

Musk’s startup xAI nets US$6B to take on rivals like OpenAI
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Y Combinator’s Garry Tan supports some AI regulation but warns against AI monopolies
Tan said he was “overall supportive” of the National Institute of Standards and Technology (NIST) attempt to construct a GenAI risk mitigation framework.

Gate.io arm shelves HK crypto license application amid regulatory hurdles
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Vietnam’s proptech startup WeSale bags seed capital from Hitseries CapitalHitseries Capital
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