VC Funding, Impressive IPOs, and New Stock Exchange Regulations to Allow SPACs Encourage ASEAN Startup Ecosystem

This week, Philippine food maker Monde Nissin Corp. filed for an initial public offering to raise as much as 63 billion pesos ($1.3 billion) in what could be the nation’s biggest ever first-time share sale. SiCepat, an end-to-end logistics startup in Indonesia, announced today it has raised a $170 million Series B funding round, and Southeast Asian digital payments infrastructure provider Xendit has raised US$64.6 million in a Series B funding round led by Accel.

VC Funding, Impressive IPOs, and New Stock Exchange Regulations to Allow SPACs Encourage ASEAN Startup Ecosystem


Indonesia Stock Exchange to Allow SPACs

The Indonesia Stock Exchange (IDX) plans to win over local tech unicorn listings by relaxing its rules this year following news that three such companies were considering listing abroad.

IDX development director Hasan Fawzi announced regulations are to be passed by July, which would allow companies to go public using special-purpose acquisition companies (SPAC) and to issue dual-class shares, both of which have been hot topics among tech start-ups worldwide.

“The nature of these new types of economies is different from traditional companies, so we need to anticipate their interest in going public,” Fawzi told The Jakarta Post, referring to tech startups such as fintechs and e-commerce platforms.

Attracting tech startups is just one of many strategies aimed at deepening Indonesia’s shallow financial market; whose market capitalization-to-gross domestic product (GDP) ratio of 46.8% is the lowest among the ASEAN-6.

The IDX’s decision comes at a time when many unicorns want to go public as private investments decline. Unicorn funding in South-East Asia only reached $3 billion USD in the first half of 2020 compared to the $5.1 billion USD in the same period the previous year, according to the 2020 “e-Conomy SEA” report by Google, Temasek Holdings and Bain & Co.

“Securing funding in the near future will likely get increasingly difficult as investors shy away from heavy cash-consuming businesses,” the study noted.

Indonesia has five startups valued above $1 billion USD; including ride-hailing company Gojek, travel booking firm Traveloka, e-commerce outlets Bukalapak and Tokopedia, and e-wallet provider OVO. Despite their significant funding and soaring gross merchandise value (GMV), not one has recorded a profit.

Monde Nissin Seeks $1.3B in Philippines’ Biggest IPO

Philippine food maker Monde Nissin Corp. filed for an initial public offering to raise as much as 63 billion pesos ($1.3 billion) in what could be the nation’s biggest ever first-time share sale.

Bloomberg reports that the producer of the country’s best-selling instant noodle brand Lucky Me! plans to sell 3.6 billion shares at as much as 17.5 pesos each, according to a filing with the Philippine Securities and Exchange Commission last Thursday. The company could issue as many as 540 million additional shares in an over allotment option, the filing noted.

At $1.3 billion, the share sale would be the country’s largest IPO to date, based on data compiled by Bloomberg. National Grid Corp. of the Philippines is seeking an IPO in the Southeast Asian nation to raise as much as $1 billion, Bloomberg News has reported.

The Makati-based company has a presence in more than 30 countries. In 2015 the firm acquired British meat substitute maker Quorn Foods Ltd. for £ 550 million pounds ($768 million USD).

The company plans to use the IPO proceeds for purposes including loan repayment and general corporate use, according to the filing.

UBS Group AG, Citigroup Inc., Credit Suisse Group AG and JPMorgan Chase & Co. are the joint global coordinators of the deal, while the local lead underwriters are BDO Capital & Investment Corp., BPI Capital Corp. and First Metro Investment Corp.

Indonesia Delivery Startup SiCepat Raises $170M

SiCepat, an end-to-end logistics startup in Indonesia, announced today it has raised a $170 million USD Series B funding round, backed by Falcon House Partners, Pavilion Capital, MDI Ventures and others.

New investors include German development institution DEG, Trihill Capital and Daiwa Securities, while existing backers Kejora Capital and Indies Capital also contributed, according to a Sicepat statement.

"This financing round is designed to further fortify SiCepat's position as the leading end-to-end logistics service provider in the Indonesian market and potentially to explore expansion to other markets in Southeast Asia," said The Kim Hai, Founder and CEO of Sicepat's parent company Onstar Express (Nikkea Asia).

SiCepat noted that the $170 million round counts as the largest Series B in Southeast Asia. While the company did not disclose current valuation, SiCepat described itself as a "soonicorn," suggesting that it is getting closer to the $1 billion unicorn mark.

The startup's growth can largely be attributed to Indonesian VC firm Kejora Ventures, which seeded SiCepat with $3.5 million in 2017 through its Kejora-InterVest Star Growth Fund in a $50 million Series A round in 2019.

SiCepat was founded in 2014 as a last-mile delivery company for online merchants in Indonesia. Since then, it has expanded its service to some of the largest e-commerce platforms in Indonesia. Recently, the company has consolidated its key logistics assets across warehousing, fulfillment and e-distribution.

In the beginning of the year, SiCepat diversified into the food delivery business after acquiring a 51% stake in DigiResto, a food ordering platform developed by Digital Maxima Kharism, a subsidiary of listed M Cash Integrasi.

Tech Crunch reports that the logistics industry in Indonesia is highly fragmented- yielding higher costs for businesses- while demand for deliveries is increasing thanks to the growth of e-commerce, especially during the COVID-19 pandemic.

SiCepat is one of several Indonesian startups that have raised funding recently to make the supply chain and logistics infrastructure more efficient. For example, earlier this week, supply chain SaaS provider Advotics announced a $2.75 million round. Other notable startups in the space include Kargo- founded by a former Uber Asia executive- and Waresix.

Indonesian Payments Infrastructure Firm Xendit Raises $64.6M

Southeast Asian digital payments infrastructure provider Xendit has raised US$64.6 million in a Series B funding round led by Accel.

Businesses from small kiosks (warungs) to SMBs and large players like Transferwise and Grab use Indonesian-based Xendit's API-based technology to process payments, run marketplaces, disburse payroll, and detect fraud.

Finextra reports that the firm- which is processing more than 65 million transactions with $6.5 billion USD in payment value annually- says it will use the new funding to scale its business, which mainly operates in Indonesia and the Philippines.

Moses Lo, Xendit CEO, explained: “Southeast Asia is a massively complex region, with Indonesia having 17,000 different islands alone—not to mention the region’s regulatory and technological challenges. Trying to build the businesses of tomorrow on yesterday's infrastructure is holding Southeast Asia’s businesses back.

“This latest investment will enable Xendit to scale our digital payments infrastructure quickly and provide millions of small and medium-sized businesses across Southeast Asia with an on-ramp to the digital economy,” Lo added.

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