Major global economies are always looking out for ways to create new and exciting jobs, stimulate the economy, and bolster innovation in technology. With these key goals in mind, it is imperative for countries to focus on areas where all three goals intersect: the tech startup ecosystem.

As one of the many ways to become a self-reliant economy, a country needs to have a robust startup ecosystem and a strong network of accelerators that are designed to support and embolden these startups. With India’s plans to transform itself into a self-reliant economy, 9Unicorns plays a crucial role in strengthening the country’s startup ecosystem, and by extension, the economy.

9Unicorns, an early-stage accelerator and VC fund launched in late 2019, has already become the largest player in the country after investing in over 60 unique technology startups with a cumulative valuation of nearly USD 450 million. Co-founded by Dr Apoorva Ranjan Sharma, Anil Jain, Anuj Golecha, and Gaurav Jain, the Mumbai-based USD 72-million sector-agnostic fund provides up to USD 100K per startup in the first round, and up to USD 2 million in successive rounds with its ecosystem of co-investors. The fund is scouting for startups beyond the top Indian metros.

“9Unicorns is helping build a community where early and idea-stage startups can get more personal and systematic advice which the country used to lack. We ensure that the founders have a great starting up experience as lack of mentorship is the second most important cause of why startups fail. Lack of funding is still the first reason,” said Dr Apoorva Ranjan Sharma, Co-founder and President of 9Unicorns.

He further added that 9Unicorns is on a mission to help strengthen early-stage investing and help create quality startups that have the potential to become billion-dollar companies in the future.

Reputation and experience

Built on the lines of the US-based accelerator Y Combinator, 9Unicorns was launched by the country’s largest integrated incubator, Venture Catalysts (VCats), to identify the best ideas and most promising early-stage startups from India.

India’s startup ecosystem is thriving and the birth of 16 Unicorns this year so far is a testimony to the fact that the emergence of quality accelerators and incubators such as 9Unicorns are playing a major role in providing the basic necessities that come with opening a young startup. At present, India is home to about 50 Unicorns (by valuation) and has the potential to create about 100 more in the next two years.

Also read: STPI’s Vision Programme: empowering Taiwan-based startups to tap into Southeast Asia and beyond

9Unicorns’ platform provides innovative startups with initial handholding, funds, a world-class mentorship programme, and a go-to-market strategy with an idea to create more potential Unicorns in the near future.

While doing that, 9Unicorns also ensures that the accelerator doesn’t interfere in the day-to-day operations and running of the participating companies. “Founders of the startup smart know their product well. We only help them to grow further, raise bigger rounds, and grow their presence in different markets. The larger idea is to create a community of startups that help each other,” as per Dr Sharma.

How 9Unicorns supports promising startups

To help its portfolio companies raise bigger up-rounds, 9Unicorns is launching its first-ever showcase of startups. Called D Day, the event will showcase about 30 shortlisted portfolio startups including 15 from its parent, Venture Catalysts, and enable them to present their ideas before a global marquee of investors on August 11-12.

These startups emerged from various sectors including deep-tech, artificial intelligence, defence tech, fintech, and health-tech amongst others.

“We are super confident that each of our 30 portfolio startups presenting on those two days will be able to impress the global VCs and bag the funding they deserve. The growth of these startups would automatically boost the economy and help in creating more employment,” Dr Sharma added.

Also read: Scaling your startup: A closer look at building your local entity and remote teams

The 30 startups have been selected after rigorous workshops, coaching sessions, mentoring sessions, and proof of concepts (PoCs) that were conducted virtually, in the wake of the remote working conditions due to the COVID-19 pandemic.

The D Day will see over 100 investors from across geographies that include major economies like the US, UK, China, Hong Kong and Singapore.

As a responsible accelerator fund and as part of its efforts to put Indian startups on the global map, 9Unicorns will be organising the Global Demo Day every quarter with the assurance that each edition would see the presence of some of the finest startups from the 9Unicorns family.

To learn more about 9Unicorns, you may visit their official website for more details.

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This article is produced by the e27 team, sponsored by 
9unicorns

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Singaporean cross-border logistics platform Jano has raised US$8 million in funding from Choco Up, a revenue-based investment and fintech firm in Hong Kong.

With the new funding, Janio aims to expand its services into new emerging markets.

Founded in 2018, the startup aims to simplify deliveries across borders. It integrates its logistics chain by creating partnerships with a wide network of service providers, connecting clients with logistics partners through its data-driven platform.

Janio’s solutions allow their clients across Asia — including Indonesia, Malaysia, Taiwan, Mainland China, and Thailand — greater control over the supply chain and help streamline logistic-related paperwork.

Also Read: Locad lands US$4.9M seed funding to provide logistics infra for e-commerce businesses

With the e-commerce industry set to boom in the aftermath of the COVID-19 pandemic, Choco Up’s investment will allow Janio to boost its growth to meet rising industry demands.

“E-commerce is at an all-time high and it’s a very good time for Janio to carry out expansion plans to secure their presence in the region as the leading provider of logistic infrastructure that helps businesses scale their operations quickly and reliably,” said Percy Hung, co-founder of Choco Up.

“At Janio, our vision is to build Southeast Asia’s leading logistics network that provides the infrastructure to help companies grow their business more efficiently and reliably. Our goal is to create a superior end-to-end delivery experience for our customers by working closely with our partners across the region,” said Junkai Ng, co-founder of Janio.

“Choco Up’s backing and their fast-track funding system will provide us the quick capital necessary to carry out expansion plans with peace of mind at this pivotal time for the industry,” he added.

The logistics market in Southeast Asia is expected to total US$55.7 billion by 2025 – demonstrating the growing demand and necessity for flexible, technology-enabled solutions.

Founded in 2018, Choco Up offers flexible non-dilutive funding solutions across eight countries and 10 sectors. With offices in Hong Kong and Singapore, Choco Up is an advanced data-driven fintech platform that leverages data analytics and vast integration to automate growth fund deployment and risk management.
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MoneyMatch, a cross-border payment company headquartered in Kuala Lumpur, announced the closing of its Series A fundraising round totalling MYR 18.5 (US$4.4) million.

The fund was raised over two tranches. The initial tranche was led by Cradle Seed Ventures in 2019 while the second one by KAF Investment Bank early this year.

This also includes a venture debt facility secured from Malaysia Debt Ventures through its Technology Startups Funding Relief Facility.

MoneyMatch said in a statement that it will use the proceedings to expand its presence to Singapore and Hong Kong by the year-end. It will also allocate additional resources to Malaysia’s northern and southern regions as it looks to ramp up its presence both nationally and internationally.

“We see tremendous opportunity in Singapore and Hong Kong as it enables us to provide our services to Malaysians and Malaysian-owned businesses in these markets initially. Secondly, it also enables us to expand our services to companies in Malaysia that export to these countries,” co-founder Adrian Yap told e27.

Also Read: Malaysia’s central bank grants approval in principle to fintech startup MoneyMatch

The startup has also announced that it will be participating in the local digital banking scene, with multiple consortiums. The names of the other entities in the consortium were not disclosed.

Founded in 2015 by former bankers Adrian Yap and Naysan Munusamy, MoneyMatch is a multinational financial technology firm specialising in international payments. Its digital platform claims to have executed over MYR 2.3 billion (US$500 million) in transactions covering cross-border trade payments and individual remittances.

MoneyMatch was amongst the first batch of fintech startups enrolled into Malaysian central bank BNM’s fintech regulatory sandbox in 2017.

Since then, MoneyMatch has scaled up to serve over 20,000 individuals and over 3,000 small and medium enterprises (SMEs) in Malaysia, whilst also expanding operations to Australia and Brunei.

Since starting operations in mid-2017, the startup has grown to over 70 full-time employees.

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Image Credit: MoneyMatch

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Singapore-based smart living company HiLife Interactive announced today it has secured SGD8 (US$6) million in Series A funding from Shanghai 2345 Network Holding Group, an internet information services provider and software developer in China.

With the new financing, HiLife will continue to invest in technological capability development to enhance its solution.

HiLife Interactive expects to double its presence in Southeast Asia with new markets such as Cambodia and plans to break into the Australasia and European markets by the end of 2021. It will bring its hiLife smart estate solution into commercial, hospitality, healthcare and educational institutions with the investment from Shanghai 2345 and its technological know-how.

Established in 2015, HiLife Interactive is a smart living company providing its hiLife solution to residential projects in Southeast Asia. The all-in-one app combines smart home, smart community and smart estate in a single holistic solution for both residents and estate managers.

Also Read: 5 ‘made in Asia’ smart living projects that will get you pumped

The hiLife 360° Smart Access system features visitor management and vehicle management capabilities supported by licence plate recognition technology to enhance convenience and security.

Estate managers can also better oversee the development with hiLife’s smart estate solution that allows them to manage facilities, feedback, payments, contracts, residents, visitors and assets such as the security system, lighting and energy meters through a dashboard.

Estate managers of properties such as schools and hospices can benefit from enhanced productivity, efficiency and security with hiLife. For example, its asset management system allows real-time monitoring of the facility’s security system, visitor system as well as lighting and energy meters to detect incidents and inefficiencies.

Today, HiLife works with over 30 property management companies to provide its solution to over 80,000 households in more than 300 condominiums in Singapore.

hiLife currently has a presence in Indonesia, Malaysia, the Philippines, Sri Lanka, Thailand and Vietnam.

Also Read: Getting smarter with tech: How will smart cities look like 10 years from now?

“The hiLife platform has played a significant role in keeping people safe in this pandemic. Beyond convenience, it enabled contactless living. Homeowners could book limited slots at condominium facilities without any face-to-face contact. In fact, our visitor management platform, complemented by Licence Plate Recognition technology, made it easy for both residents and security guards to manage the increase in online shopping deliveries,” said Sam Ho, Deputy CEO, HiLife Interactive.

“Singapore is a regional hub for tech and startups. Its startup ecosystem is an exciting space to be in. HiLife’s smart lifestyle solution will bring value to the digitally-savvy populations with the digital industry booming as a result of the pandemic. We are proud to support HiLife Interactive as they grow the hiLife platform into the leading smart lifestyle platform in Southeast Asia and beyond,” said Han Meng, Founder, Shanghai 2345.

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Image Credit: HiLife Interactive

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AND Global, a Singapore-based micro-lending startup providing AI-based instant collateral-free loans to customers in Mongolia, has secured an undisclosed sum in funding from SBI VEN Holdings, the local subsidiary of Japanese investor SBI Holdings.

Under this agreement, SBI Holdings will consider the adoption of AND’s fintech-as-a-service (FaaS) software into its global subsidiaries, such as SBI LY HOUR BANK in Cambodia, in which SBI Holdings have a 70 per cent stake, as a precursor to its collaboration with AND.

At the same time, SBI Holdings will collaborate with AND and its shareholder Marubeni Corporation to promote the introduction and proliferation of AND Global’s FaaS in the Asia Pacific, as per an official statement.

Additionally, SBI and AND will jointly create strategic new businesses and develop sustainable and advanced technology solutions and promote the creation of a digital ecosystem by utilising the existing network (clients, group companies, investees through funds, etc.).

Established in 2017 by Mongolian founder Anar Chinbaatar, AND Global operates under the brand name LendMN. It is a micro-lending mobile app powered by its Artificial Intelligence-based credit scoring system.

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. According to Chinbaatar, LendMN offers 10x faster, more convenient and cheaper micro-loans, compared to other competitors, which follow mostly traditional business models.

Also Read: How fintech startup LendMN saves 30K salaried employees from loan sharks in Mongolia

“Our mission is to make financing accessible and inclusive to the under-banked, not just in Mongolia but also across Asia,” Chinbaatar said in an interview with e27 in 2018. “Our mission is to save people from loan sharks, who mostly charge seven to 10 per cent interests rates per week. Obviously, this doesn’t help the economy, nor does it help the country. If anything, it has made the matters worse.”

LendMN lends from its own cash reserve. According to Chinbaatar, not only has the service proved to be useful for underbanked customers, its business model is profitable with the revenues that led the firm to a cash positive state in less than 11 months of launching the service.

As of June 2021, LendMN claims to have over 930,000 registered users, which accounts for more than one-fourth of the total population in Mongolia.

In addition, with its mobile commerce business, AND Global has created a digital ecosystem through SuperUp. It connects other companies’ services with APIs and integrates with 23 member stores to provide various services, such as public service goods & food delivery, asset management, travel & hotel bookings.

In March 2018, LendMN was listed on the Mongolian Stock Exchange. In the same year, AND acquired a non-bank financial institution license in the Philippines, where it provides LendPinoy, the local version of LendMN.

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Image Credit: LendMN

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Indonesian new retail startup Warung Pintar has raised an IDR87 billion (US$6 million) in Series B funding round, according to sources. The funding round is led by existing investors East Ventures with the participation of Vertex Ventures.

DailySocial has reached out to relevant parties but has not received any response until this story is published.

This funding round is expected to bring Warung Pintar’s valuation to US$169 million. It followed up a Series A funding round that the company has secured in 2019.

Apart from the two venture capital firms, Warung Pintar also counted EV Growth, Agaeti Venture (now AC Ventures), LINE Ventures, SMDV, Pavilion Capital, Triputra Group, Digital Garage, OVO Fund, and a number of angel investors as their backers.

In an interview with DailySocial in May, Warung Pintar Co-Founder & CEO Agung Bezharie said that the company’s mission is to provide a holistic, end-to-end solution for the warung (mom-and-pop stores) ecosystem. This includes solutions for warung owners, bulk sellers, small- to medium-sized distributors as well as brand owners.

Also Read: Warung Pintar buys Bizzy Digital for US$45M to create full-stack supply chain platform for Indonesia’s mom-and-pop stores

“We digitalise and integrate every stakeholder with our supply chain system to create greater transparency and efficacy,” he said.

Earlier this year, Warung Pintar also announced an acquisition of Bizzy for US$45 million. Despite continuing operations as two separate business entities, the acquisition enabled Warung Pintar to get access to new channels in Bizzy’s network which includes bulk sellers, distributors, and brands/manufacturers.

Bizzy is already well-known as a B2B e-commerce platform that provides tech-based procurement services.

Improving the supply chain is part of the evolution of Warung Pintar’s business model. Through Grosir Pintar app, they provide an inventory and logistics management solution for the bulk sellers, making it easier to connect with the warung in its network.

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The article Warung Pintar Dikabarkan Raih Pendanaan Seri B 87 Miliar Rupiah was written in Bahasa Indonesia by Randi Eka Yonida for DailySocial. English translation and editing by e27.

Image Credit: Warung Pintar

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Dagangan, an FMCG-focused B2B supply chain and social commerce startup in Indonesia, has bagged an undisclosed amount in pre-Series A financing from a host of investors, including Spiral Ventures, CyberAgent Capital, 500 Startups, and local transportation company Bluebird Group.

The fresh capital will be used for business expansion. By the end of this year, the company looks to expand into 7,000 villages, open 30 hubs, and reach 40,000 active consumers.

The startup is currently operating in more than 4,000 villages spread across Yogyakarta, Central Java, and West Java. In the future, Dagangan also wants to expand to other village locations around Java.

Also Read: RateS snags Series A to expand social commerce platform to tier 2, 3 cities in Indonesia

Founded in 2019, Dagangan is a demand aggregation platform for small towns and villages in Indonesia.

The firm leverages the power of community and social networks of influencers to solve production and accessibility issues, enabling rural households to get their daily needs delivered to them at cheaper prices and with much less effort.

Dagangan targets two types of consumers:

1) Small-time shop owners: They are usually underserved by principal brands as most of them are located far away from urban areas. Now, with the Dagangan app in place, they can order online and get the stuff delivered at their doorsteps. They no longer need to close their shops to travel for 20-30 km for purchasing items.

2) Retail buyers: Individual buyers can purchase household items such as snacks, kitchen spices, and processed ready-to-eat foods.

According to the company, the products are delivered within a day by Dagangan’s own fleet of vehicles.

Dagangan operates warehouses as a hub and distribution channel in every village across Java island, involving local communities.

According to co-founder Wilson Yanaprasetya, the entire procurement process is carried out in two ways — 1) taken directly from the principal brands and then stored in hubs, 2) taken directly from MSME owners in the surrounding villages.

Also Read: YC-backed Super raises US$28M to grow its social commerce platform in Indonesia

“The unseen opportunity in the rural areas of Indonesia is huge. We believe that in the next three to five years, a good number of quality startups will take birth in the archipelago, and many investors will try to inject capital to help startups outside of Jakarta,” Gio Novfran, Head of Indonesia at Spiral Ventures, said.

Dagangan’s co-founder Ryan Manafe said that with the current business model, his team is able to attract the local community to grow together. “Dagangan is here to provide convenience to local communities in getting on with their daily economic activities. With the spirit of building the local economy, Dagangan offers a one-stop digital service solution to provide various household needs.”

The Indonesian social commerce industry is crowded with multiple players. In April, Super, a social commerce platform serving second- and third-tier cities and rural areas in Indonesia, announced the completion of a US$28 million oversubscribed Series B round led by SoftBank Ventures Asia.

A few months earlier, RateS, another player, bagged an undisclosed amount in Series A, co-led by Vertex Ventures and Genesis Alternative Ventures.

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Image Credit: Dagangan’s

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Sqreem launches Data Natinto

The story: Sqreem Technologies (Sqreem) has announced the launch of a new tool called Data Natinto to track COVID-19 related information including hospital beds, ventilators, and more in the Philippines.

This was first reported by TechInAsia.

More about the story: According to co-founder Ian Chapman-Banks, the way that the Philippines government is handling COVID-19 data is unstructured. Sqreem said it had redesigned, recoded, and further developed its technology to augment government contact-tracing efforts worldwide last year and is investing US$500,000 to create the tracker.

About Sqreem: An AI company that provides data analysis and programmatic targeting services to companies and government agencies.

Indonesian biotech startups receive approval for saliva-based COVID-19 tests amid infections rise

The story: Two of Indonesia’s biotech startups have gained approval to launch saliva-based COVID-19 tests, according to KrAsia.

Who the startups are: Nusantics, Nalagenetics.

Also Read: How Singapore’s tech community is helping India in its battle against COVID-19

More about the story: Indonesia is currently battling a COVID-19 surge which has led to an increasing shortage of medical supplies, including oxygen cylinders.

Both Nalagenetics and Nusantics are hopeful that the newly developed test kits can improve Indonesia’s COVID-19 tracing capabilities.

Accuracy rates: Nalagenetics (Quickspit) has an accuracy of up to 97, while Nusantics has an accuracy of 95 per cent.

India’s cannabis startup Hempstreet receives government grant

The story: Hempstreet announced today that it has received a grant from The Biotechnology Industry Research Assistance Council (BIRAC) of India.

What the funding will be used for: To patent and commercialise a recent research breakthrough around transdermal delivery technology, a technique that provides drug absorption via the skin.

More about the story: In around six months, HempStreet claims that it has marked the fastest rollout witnessed by the industry across over 2,000 clinics in 24 states in India that are now prescribing HempStreet medicines.

Also Read: Cannabis tech startup Hempstreet blazes hot in India’s ancient medicine market

About Hempstreet: A startup that creates natural relief products from cannabis for chronic pain and uses blockchain to prevent drug misuse.

Volopay, WeWork partner to help businesses with expense management in Singapore, Australia

The story: Volopay, a Singaporean fintech startup, has partnered with WeWork to offer an integrated business spend management solution in Singapore and Australia.

More about the story: This partnership will offer WeWork’s members, from startups to larger tech enterprises, to streamline their expense and payable management processes that align with their business needs.

According to Rohit Bhageria, founding member of Volopay, this will allow members can close their books 5x faster.

About Volopay: An all-in-one platform for managing business spendings that combines expense approvals, corporate cards, bill payments, expense reimbursements, credit, cashback, and accounting automation.
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Southeast Asia’s super app battle continues, as airasia Digital (previously known as RedBeat Ventures), the digital arm of the Malaysia-based airline operator, has acquired the Thailand operations of Gojek.

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.

In return, Gojek will receive shareholding in the airasia Super App, whose market value is said to be around US$1 billion.

Also Read: AirAsia aims to fulfill super app ambition with upcoming launch of ride-hailing services in Malaysia

In Thailand, airasia Super App aims to continue to leverage the existing ecosystem services for riders, merchants and customers, while adding new offerings such as groceries and beauty items.

It will also seek regional expansion into new markets like Chiang Mai and Phuket in the near future.

The Gojek app will continue to operate for existing users in Bangkok through to 31 July 2021. Its driver and merchant partners will be invited to join the airasia Super App in the coming weeks.

The airline company will work with the existing Gojek team in Thailand, who will operate the Gojek business during the transition period before moving over to its super app.

At the same time, in a realignment of its international strategy, Gojek is increasing investment in its Vietnam and Singapore operations. It has identified these markets have strong sources of growth for the business going forward. This includes increased driver and merchant acquisition initiatives, enhancements to user experience as well as launching new products and services.

airasia Group CEO Tony Fernandes said today’s announcement is the start of a tremendous long-term strategic partnership with Gojek. “By taking on Gojek’s well-established Thai business, we’ll be able to turbo-charge our ambitions in this space to become a leading ASEAN challenger super app.”

“We already have a complete digital economy ecosystem. We have successfully established over 15 different non- airline products and lifestyle services on our digital e-commerce platform in Malaysia. Now it’s time to take it to the next level. In response to overwhelming regional demand, we are setting our sights on bringing our Super App offerings to all of our key markets, following the successful rollout in Thailand,” he added.

Gojek CEO Kevin Aluwi said: “airasia Digital and the airasia Super App will become a highly valued partner for us as we share the same goal to provide users with better services while enhancing the livelihoods of drivers and merchants. At the same time, the deal will enable us to pivot our focus in international markets towards Vietnam and Singapore — markets providing us with the best return on investment and strategic growth opportunities.”

Also Read: AirAsia, MaGIC partner to introduce drone-based e-commerce delivery in Malaysia

airasia Digital leverages the group’s physical and digital assets to create an ecosystem of businesses that connect with its customers in their everyday life. It consists of three key digital companies: 1) airasia Super App, which provides a lifestyle platform for travel, e-commerce, financial services, farm to table, health and edutech products and services; 2) Teleport, an e-commerce logistics company offering instant door-to-door deliveries; and 3) the fintech arm BigPay.

On Tuesday, the group announced the launch of its fresh groceries delivery service, airasia fresh, in Singapore as part of its continued expansion in the island state. It follows the introduction of its food delivery platform, airasia food, in March.

The airasia-Gojek deal is expected to further intensify the battle for the number one super app position, as tech giant Grab, which positions itself as a super app, is far ahead of others with its deep pocket and backing from top-notch investors. The Singapore-based tech giant recently announced that it is going public in the US through the largest-ever merger with a blank-cheque company at a market valuation of US$40 billion.

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Image Credit: airasia

 

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They may be set for one of the biggest IPOs investors have seen over recent years, but TikTok owners ByteDance have been forced to shelve their preparations for their initial public offering due to the choppy regulatory waters put in place within China.

ByteDance seemingly cemented its intentions by launching a recent share buyback for current and former employees. The buyback comes after the company announced in April that it had no imminent plans for a public listing.

This represents a full reversal after ByteDance had initially planned to list some of its Chinese businesses, including Douyin, a Chinese equivalent to leading social media app TikTok, in Hong Kong, according to Reuters.

To add further uncertainty to the immediate future of ByteDance, the company founder and CEO, Zhang Yiming surprised stakeholders by announcing that he’s stepping down from the company in the wake of increased state scrutiny over China’s leading tech firms.

As we can see from the chart above, ByteDance is one of the world’s leading companies when it comes to generating advertising revenue, attracting twice as much money as YouTube for ad sales over the span of 12 months.

In fact, ByteDance’s performance has become such a leader in the Asian tech landscape that the South China Morning Post estimated in April 2021 that the company was on course for a US$400 billion valuation.

However, in a recent company-wide email, ByteDance confirmed that eligible shareholders can apply to sell their holdings by the June 20 at US$126 per share for current employees and US$100.80 per share for former employees. This represents a significant increase on a November buyback that was US$60 a share.

The delay in going public will undoubtedly be cause for frustration with ByteDance as the global IPO market undergoes a boom period that’s been punctuated by widespread investor optimism- particularly for tech companies.

Also Read: How founder-CEOs can setup their startup for a successful IPO

Regulatory hurdles in the East and West

One of the biggest hurdles that ByteDance will need to overcome in order to revive its listing plans revolves around appeasing investors in both the US and China. According to reports, the company has failed to work out a way of restructuring its business operations in a way to meet the regulatory requirements of both the US and China.

Notably, the fact that TikTok and Douyin operate using the same algorithm means that it’s been difficult for ByteDance to separate the operations of both apps.

In the wake of ByteDance’s founder and CEO stepping down, one source told the South China Morning Post that “many people with different agendas are trying to have a say in the IPO plan.”

Because of ByteDance’s global outlook, the company’s ambitions to appeal to US investors has been difficult to make functional as the relationship between the US and China becomes increasingly strained.

Beyond the difficult relationship between the US and China, ByteDance may also be required to navigate the increasingly restrictive IPO rules that have recently been set out by China. In a recent bid to protect against stock market volatility, the country’s securities regulator announced draft rules in a bid to boost the transparency of its IPO listings.

As part of the IPO process in China, a sponsorship system has been developed where third parties act in a similar way to underwriters to assess risks, detail competitive advantages, profitability and business plans pertaining to firms looking to go public.

When a firm is accepted by a sponsor it’s thoroughly scrutinised and may even be restructured based on subsequent recommendations, however, the final decision as to whether the business is in a position to go public is still down to the securities regulator, known as the China Securities Regulatory Commission.

Some of the more restrictive requirements detailed in the draft include more in-depth interactions between sponsors and their clients, transparent financial reporting and the threat of shutdowns for uncooperative sponsors.

Capitalising on the IPO boom

It’s likely that ByteDance would have identified the current IPO climate as an ideal backdrop for its flotation.

With investor confidence growing after the pandemic, and social distancing measures making for an extremely profitable 12 months for tech-based companies, recent IPO listings have grown significantly.

As the data above shows, global IPO proceeds in Q1 of 2021 have dwarfed every other opening quarter for the past decade, paving the way for a record-breaking year for companies going public.

Also Read: Ecosystem Roundup: Grab’s SPAC deal and SEA startups’ IPO aspirations

According to Maxim Manturov, head of investment research at Freedom Finance Europe, the pandemic inadvertently brought far more confidence to the investment market. “People in the US traded about 90 per cent more stocks than the week before they received their stimulation funds,” Manturov explained.

“Finally, a survey by Deutsche Bank, which included 430 retail investors, showed that the respondents were going to invest, on average, 37 per cent of all their stimulation money into stocks. Goldman Sachs recently raised its expectations for stock demand by retail investors in 2021, from US$100 billion to US$350 billion.”

After such a successful year for apps like TikTok, and a resounding rise in the revenue generated through IPOs in early 2021, it seemed like an appropriate time for ByteDance to go public.

Although regulatory hurdles may have pushed an IPO out of the hands of the company, it’s still reasonable to believe that when the choppy waters are cleared and tensions between the US and China dissipate, we could still be on for a mammoth initial public offering.

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