Weekly digest - May 20 2021

20 May 2021

TALKING POINTS

A GIANT BEYOND COMPARE?

“There is no modern internet company, in any part the world that I’m aware of, that has such deep ownership of so many categories at the same time,” said Sequoia Capital India's Shailendra Singh on the merger of Gojek and Tokopedia, two of Indonesia’s leading unicorns.

The combined entity - known as GoTo - spans transportation, food delivery, logistics, e-commerce, and financial services. Coming up with comparable companies is hard. In China, it would be a Didi-Meituan-Alibaba-Ant Group hybrid; in India, Ola-Swiggy-Flipkart-Paytm. Neither represents a perfect match, and GoTo often trails in terms of maturity and scale.

Nevertheless, when the company inevitably files for an IPO, analysts will draw on comparisons when pondering the valuation. Gojek and Tokopedia together have raised more than $7 billion in private funding – from Sequoia, among others – and the combined valuation based on the most recent rounds would be $18 billion. It will likely command a rich premium to this on IPO.

Grab agreed to merge with a special purpose acquisition company (SPAC) at an equity valuation of $39.6 billion, having pegged the target valuation for its last private round at $10-14 billion. The bullishness is based on a projection that Grab’s total addressable market will grow 3.5x to $180 billion by 2025. Three-quarters of that will come from financial services.

Expect a similar narrative around GoTo. Given the nature of the investor base – a single LP might have exposure via venture capital, mid-market private equity, global growth-stage technology, and large-cap pan-Asian managers – it is a liquidity event many will be tracking.

In Depth:
• Asia technology: Anatomy of a rebound - May 2021

• Model behavior: China to Southeast Asia tech transplants - November 2020

Q&A

GAW CAPITAL'S CHRISTINA GAW

ANALYSIS

VIETNAM HEALTHCARE: EARLY DAYS

By the numbers

AVCJ RESEARCH

RAISING MONEY FOR SOUTHEAST ASIA

Singapore is the focal point of Southeast Asia private equity fundraising, routinely accounting for more than two-thirds of the capital raised for the region in most years. Strip out the multi-country vehicles and the picture changes, with the likes of Indonesia, Malaysia, and Vietnam coming to the fore. Together, these three markets received over half the money that has gone to country funds in the past decade. In this context, the rise of VC is unmistakable. The venture share of fundraising for country-focused vehicles in Southeast Asia was 28% over the same 10-year period, and 41% over the last five years. Between 2016 and 2020, there were no commitments to buyout and growth managers in Malaysia and just one in Indonesia (representing just 14% of the total). Vietnam remains more of a growth capital holdout, with a 42-58 split between growth and venture.

The rest of the week

UPCOMING EVENTS

• May 27 - AVCJ Vietnam Forum

• June 2 - Infrastructure Investors Forum: Energy & Renewables Asia

• June 23 - AVCJ Chinese PE & VC: The outlook for Q3 and beyond

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

• August 2 - Infrastructure Investors Forum Asia

• August 3-4 - AVCJ Singapore Forum

• August 5 - Southeast Asia M&A Forum