Weekly digest - June 23 2021

23 June 2021

COVER STORY

Japan activists: Enablers or destabilizers?

The corporate governance scandal at Toshiba underlines the increasing influence of activist investors in Japan. For private equity firms, there are two sides to the coin

Read more

TALKING POINTS

SOFTWARE SELLS

BrowserStack, which has surpassed Freshworks to become India's most valuable software-as-a-service (SaaS) property, fits a standard profile: Indian founders, a sizeable Indian presence, but US-domiciled to serve a primarily US customer base. And US-backed. The company's $200 million Series B, completed at a valuation of $4 billion, was led by KPCB spin-out Bond and featured Insight Venture Partners and existing investor Accel Partners.

Iron Pillar, a local VC firm, told AVCJ in February that 26 of India's 59 technology unicorns are SaaS providers that hit big by targeting global markets. ChargeBee and Zeta joined the club in the past two months, riding a wave of investment activity in the space globally that has seen existing unicorns like Zenoti and now BrowserStack raise sizeable up-rounds.

According to LPs, the handful of Indian GPs with people based in Silicon Valley have prospered. They include Nexus Venture Partners, and bizarrely, the legacy portfolio of Helion Venture Partners, whose leadership team disbanded a few years ago. Meanwhile, other VCs are building dedicated SaaS teams as they seek to back start-ups on the cusp of going global.

Bain & Company estimates that India's SaaS industry will generate $18-20 billion in annual recurring revenue in 2022 for a global market share of 7-9%. This compares to $5-6 billion, or 3-4%, in 2019. The bulk of this money will come from start-ups with global customer bases.

At the same time, there is an emerging opportunity set within India itself. SaaS is growing faster in Asia than anywhere else in the world as corporates that were previously unwilling to pay for software review their habits. This is not solely an Indian phenomenon. Yipin Ng, co-founder of Yunqi Partners, recently made the same observation about China, noting an acceleration in SaaS uptake and a growing acceptance that superior service comes at a price.

In Depth:
• India SaaS: Global first – February 2021

• Q&A: Yunqi Partners' Yipin Ng – June 2021

PORTFOLIO

MANDALA CAPITAL AND EFRAC

Mandala Capital is helping Indian food and pharma testing laboratory EFRAC distinguish itself against a field of ragtag competitors. Personnel, networks, and technology are the critical inputs.
Read more

DEAL FOCUS

AUSTRALIA'S ENA HITS COVID-19 ON THE NOSE

Australian investors see hope in ENA Respiratory, a nasal spray specialist aiming to complement global COVID-19 vaccine programs with an immune system-boosting product.

Read more

DEAL FOCUS

CONTENT TO THE MASSES

Xiaoe Tong gained traction during the pandemic in China as a channel for educational content providers, big and small, to reach their customers. It is also a SaaS player that stands firm on product standardization.
Read more

SEEN AND HEARD

KEEN TO DEPLOY

More than half of LPs continue to establish new GP relationships at the same rate as before the pandemic, according to Coller Capital's global private equity barometer survey. Moreover, 45% expect to accelerate these new commitments over the next 18 months. An inability to meet managers face-to-face hasn't necessarily impaired job performance, with nearly half saying their personal productivity has improved since the onset of the pandemic. In addition, two-thirds said they are now happier with their work-life balance, with the challenges of working from home more than offset by the advantages of less frequent travel.
Read more

SEEN AND HEARD

FAMILY MATTERS

Indian ultra high net worth individuals (UHNWIs) will account for 30% of the $100 billion that Indian start-ups are expected to raise by 2025, according to a report on venture capital for Indian family offices by 256 Network and Praxis Global Alliance India. This will see the current 56-strong crop of unicorns swell by 95. At present, there are currently about 140 family offices catering to UHNWIs, typically business leaders, celebrities, non-resident Indian families, and technology entrepreneurs. They are already participating in more than 50 deals every year.
Read more

The rest of the week

FUNDS

• New Zealand's Oriens hits $56m Fund II target

• Singapore's Venturi achieves first close on consumer fund

DEALS

• India's Byju's raises $340m at $16.5b valuation

• Joy, Nio Capital invest $315m in China online used car dealer

• KKR buys controlling stake in India's Vini Cosmetics

• Fidelity backs $131m Series A for China citytech platform Venturous

• Quadrant buys Australia's Affinity Education from Anchorage

• PE-backed China Youran Dairy loses ground after $643m HK IPO

• Apis leads $45m Series C for India's RenewBuy

• Chinese pharmaceutical platform Yaoshibang raises $270m

For your calendar

UPCOMING EVENTS

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

• September 3 - AVCJ Korea Forum

• September 7 - Infrastructure Investors Forum Asia

• September 8-9 - AVCJ Singapore Forum

• October 5 - Infrastructure Investors Forum Australia

• October 6 - Australia M&A Forum

• October 13-14 - AVCJ China Forum

Regional Reports

Industry Review

Weekly digest - June 23 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