Weekly digest - June 16 2021

16 June 2021

TALKING POINTS

SOFT SELL

Sifting through Didi’s IPO prospectus, SoftBank Vision Fund is an indelible presence in the China ride-hailing giant's ecosystem: the largest shareholder in the parent and an investor in subsidiaries focused on community group buying, bike sharing, and autonomous driving.

SoftBank is unique in its ability to bankroll aggressive pursuits of scale. This means it ends up with unusually large stakes for a minority internet investor – 33.1% in Korean e-commerce player Coupang, 21.5% in Didi. Coupang listed earlier this year and its jump in valuation has contributed significantly to the improved performance of Vision Fund 1. Should Didi achieve its mooted $100 billion-plus market capitalization, the fund would receive another boost. SoftBank first backed Didi in 2016 at a valuation of $25 billion and later re-upped at a higher valuation.

For balance, SoftBank's blockbuster strategy doesn’t always work. Last week, US modular construction start-up Katerra filed for bankruptcy following an overly ambitious expansion drive.

TALKING POINTS

BEST BOURSE?

Chinese online grocery delivery platforms Dingdong Macai and Miss Fresh were apparently so keen to steal one another’s thunder that they filed for US IPOs on the same day. Egos aside, the development is important in that it underlines how New York continues to secure big-ticket technology offerings even as Shanghai’s Star Market loses its appeal for regulatory reasons.

With highly accommodating underwriters and roadshows replaced by Zoom calls, investors claim it has never been easier for a start-up to go public in the US. Last year was the biggest for PE-backed US IPOs by Chinese companies since Alibaba's debut in 2014, with $9.1 billion raised through 19 offerings. The running total for 2021 was $5.6 billion from 11 as of mid-June.

In Depth:
• China IPOs: Regulatory rumblings - June 2021

FUND FOCUS

PLUGGING ASEAN FAMILY OFFICES INTO GLOBAL TECH

DEAL FOCUS

CHUBBY BEAR THINKS BEYOND MARKETPLACES

DEAL FOCUS

TEALIVE TAPS PE SCALING EXPERTISE

DEAL FOCUS

A VERY MODERN MASAN

By the numbers

AVCJ RESEARCH

GROWTH PHENOMENON

Private equity investment in Asia reached $211 billion in 2020, the second-highest annual total on record, thanks to a surge in growth capital activity. It represents the continuation of a trend that started in 2017 and can be tied to the rise of growth rounds for tech and tech-enabled companies. Speaking to AVCJ, Juan Delgado-Moreira, vice chairman at Hamilton Lane, played down the notion of private equity taking on venture capital risk, claiming that generalists tend to target more mature companies, characterized by sizeable recurring revenues and broad EBITDA margins. In this sense, investments are more likely to be de-risked.

The rest of the week

UPCOMING EVENTS

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

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

• September 7 - Infrastructure Investors Forum Asia

• September 8-9 - AVCJ Singapore Forum