Weekly digest - April 14 2021

14 April 2021

COVER STORY

KOREA RETAIL: DIGITAL OR DEAD?

Coupang’s IPO underlines the appeal of a Korean e-commerce industry characterized by chaebols playing catch-up and PE and VC investors looking to profit at the margins.

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TALKING POINTS

BIG IN JAPAN

“Even with everything that has happened in Japan, if someone said to you last year that a private equity firm is going to buy Toshiba, you would have been surprised,” observes a longstanding Japan-focused GP. “In these situations, the government usually steps in with rescue capital, the stock exchange pulls some stunt, or a Japanese conglomerate buys it. For foreign private equity to come in for an asset like Toshiba, that would be a milestone.”

CVC Capital Partners – which only reactivated its Japan coverage a few years ago – has approached Toshiba regarding a purported $20 billion acquisition. The PE firm will likely require financial and strategic co-investors to pull off the deal. And should the Japanese conglomerate launch a formal process, expect a few other global buyout players to enter the bidding.

Investors are excited about the potential for carve-outs in Japan as corporates come under pressure to improve governance, enhance return on equity, and stay competitive in global markets. Acquiring the parent rather than one of its divisions takes things to another level, although if any of the big names were to be taken down, perhaps Toshiba is the most likely. It is still recovering from the collapse of Westinghouse and has been targeted by activist investors.

Toshiba is seeking to reinvent itself as a more of an asset-light, data-oriented business. Other Japanese corporates are doing the same. Hitachi is said to be closing in on a sale of its metals division, having recently agreed to acquire IT services provider GlobalLogic for $8.5 billion. Private equity is playing a role on both sides of this transformation – as a likely buyer of Hitachi Metals and as the seller of GlobalLogic.

In Depth:
• Japan carve-outs: Profit from the core - May 2020

• Revitalizing Japan's conglomerates: Big ticket - June 2019

ANALYSIS

1Q ANALYSIS: AMERICAN DREAMS

New York makes an unexpected reappearance as the preferred IPO destination for Asian companies; the growth-stage tech investment revival continues; KKR lights up lackluster fundraising environment
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Q&A

HIKE CAPITAL'S ANNA XU

China-focused Hike Capital positions itself as an entrepreneur-led VC firm, having been established by two start-up founders. One of them, Anna Xu, explains why this makes a difference.
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FUND FOCUS

LONG HILL BURNS THE MIDNIGHT OIL

Embarking on its first Zoom-based fundraise, China's Long Hill Capital succeeded in closing just above target on $300 million while significantly diversifying the LP base.
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DEAL FOCUS

PARTNERS GROUP-BACKED IT PLAY RIPENS EARLY

Partners Group is set to generate a 5x return on the sale of its 45% stake in GlobalLogic to Hitachi as momentum in corporate digital transformation makes the IT services player a hot commodity.
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FUND FOCUS

QINGSONG PLAYS THE LONG GAME

Qingsong Fund differs from most renminbi fund managers by virtue of its uncommon diversification and farsighted strategy. Data and deep tech will be key focus areas for the firm’s new $153 million fund.
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DEAL FOCUS

GOBI SEES 100X RETURN ON AIRWALLEX

Gobi Partners became Airwallex's first institutional investor in 2016 due to a lack of support in the Australian company's home market. The GP made a partial exit in a recent Series D at a valuation of $2.6 billion.
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A BIG WEEK FOR

CANVA

Australian graphic design platform Canva raised $85 million at a valuation of $3.2 billion 18 months ago. The valuation hit $6 billion following another round in June 2020 and it reached $15 billion last week as investors plowed in still more money. The company might be the beneficiary of swelling valuations for late-stage technology businesses, but its progress also reflects how COVID-19 has driven changes in working culture and accelerated digitalization. Much of Canva's recent traction is attributed to a shift toward enterprise-facing products aimed at corporate clients that need to manage centralized teams and move operations to the cloud.

By the numbers

AVCJ RESEARCH

SCALING UP

From PAMA Private Equity II in 1998 to KKR Asian Fund IV in 2021, the size of the region's largest US dollar-denominated private equity fund has grown 28x fold. The year PAMA achieved its final close, investors put $3.4 billion to work across nearly 300 deals. In 2020, $210 billion was deployed and the transaction count exceeded 5,500. Over the course of 23 years, the mantle of Asia's biggest fundraise has changed hands nine times. Not all of the recipients have prospered.

All of the trends featured here were sourced from AVCJ's proprietary database, AVCJ Research, featuring comprehensive information on private equity deals, fundraises and exits.

Read more on AVCJ Research

The rest of the week

FUNDRAISING

• 5Y raises $2b across dollar, renminbi funds

• Affirma hits first close on Korea fund, backs SK mapping spinout

• Hosen raises $800m for latest China food fund

• Alteria hits first close on second India venture debt fund

DEALS

• India's ShareChat raises $502m at $2.1b valuation

• China grocery platform Dingdong Maicai raises $700m

• PE-backed property platform Anjuke to go public in Hong Kong

• Vision Fund, BlackRock lead Series D for Singapore's Trax

For your calendar

UPCOMING EVENTS

• April 29 - AVCJ SPACs Spotlight

• May 27 - AVCJ Vietnam Forum

• July 26-28 - AVCJ Australia & New Zealand Forum

• August 3-4 - AVCJ Singapore Forum

Regional Reports

Industry Review

Weekly digest - April 14 2021

Asian GPs slow implementation of ESG policies - survey

Singapore fintech start-up LXA gets $10m seed round

India's InCred announces $60m round, claims unicorn status

Insight leads $50m round for Australia's Roller