Weekly digest - August 03 2022
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03 August 2022
COVER STORY
Seed investors are pursuing global mandates and building out larger teams. Challenges are starting to cast shadows over the benefits, but it’s early days.
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PORTFOLIO
CBC GROUP AND ENSEM THERAPEUTICS
 CBC Group plans to allocate USD 300m from its latest flagship fund to a biotech incubation platform. Artificial intelligence-enabled drug discovery player Ensem Therapeutics is an example of what it wants to achieve.DEAL FOCUS
CREADOR GOES EARLY IN DIGITAL BANKING
 Only six digital banks are licensed to operate in the Philippines. Enthused by the prospect of helping build one of these select few from the ground up, Creador moved fast to back UnoAsia.DEAL FOCUS
CHINA START-UP MINES 3-D PRINTING'S MICRO POTENTIAL
 Supported by a string of Chinese investors, Boston Micro Fabrication has carved a niche serving global manufacturers that want 3D printing solutions for very small components. |
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By the Numbers
AVCJ RESEARCH
ANOTHER WINDFALL DOWN UNDER
Only a hanOnly a handful of enterprise software exits in Australia and New Zealand have surpassed USD 400m. Potentia Capital closed its debut fund on the back of one of them: the sale of HR software provider Ascender in early 2021, which generated a 16x return. Now the GP appears to have repeated the trick with Micromine.
Less than two months since announcing a AUD 635m (USD 438m) final close on Fund II – suggesting that an exit process was at the very least being teed up when LPs cut their cheques – Potentia has agreed to sell its position in Micromine. UK-based AspenTech will acquire the mining software business for AUD 900m. The deal takes total proceeds from technology sector exits in Australia and New Zealand to USD 1.6bn year to date. This compares to USD 2.8bn in 2021 – for the full 12 months – and USD 2.6bn in 2020. The combined total for the preceding five years was USD 3.5bn. Sales to strategic players and to other financial sponsors account for the bulk of deal flow, in terms of value and volume. This activity underlines the fundamental appeal of business services in Australia and New Zealand. Start-ups have demonstrated an ability to target global customers by leveraging their common language with key Western markets, relatively deep pools of local talent, and the proliferation of increasingly affordable cloud-based services. One possible exit that failed to materialise was MYOB, which ANZ was in talks to acquire from KKR for a reported AUD 4bn. The company is peculiar in that it had to transition to the cloud – products were initially shipped by CD-ROM – and continues to rely on Australia for the bulk of revenue. Moreover, its former CEO and one of its former investors went on to establish Potentia. 
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.
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UPCOMING EVENTS
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