New Reporter
04-10-21, 10:53
Chinese tech majors could star in more S-E Asian unicorn deals
Oct 04, 2021
BIG tech money from China surfaced in the minting of two South-east Asian unicorns last week.
In Ninja Van's US$578 million fundraise, Alibaba invested a whopping US$200 million, valuing the last-mile logistics company at US$2.2 billion, according to data from VentureCap Insights.
Over in Thailand, Ant Group contributed to the US$150 million Series C round of e-wallet operator Ascend Money, which it had backed earlier in 2016. This took Ascend's valuation to US$1.5 billion and turned it into Thailand's first fintech unicorn.
Both these investments did not surprise the market. Ninja Van has long worked with e-commerce giants, including Alibaba-owned Lazada. The Chinese tech giant has also backed last-mile logistics companies in its home market, such as GOGOX, STO Express and YTO Express.
The Ninja Van deal gives Alibaba "more say in the ecosystem, and it is a defensive move especially when Shopee has also launched their investment arm, Sea Capital," said Yorlin Ng, chief operating officer at Momentum Works.
Likewise, Ant's doubling down on Ascend is in line with its years-long strategy of backing localised e-wallets (see table). In August, Ant's Alipay also bet on restaurant booking app Chope with a US$15 million investment and partnership to help F&B merchants digitalise.
The strategic value of Alibaba and Ant's investments is clear. But these moves are also noteworthy against a broader context: China's tech crackdown.
The potential breakup of Alipay is one issue that is being closely-watched. In mid-September, the Financial Times reported, citing sources, that China plans to break up Alipay and create a separate app for the company's loans business. This is the latest in a series of twists and turns after the authorities slammed the brakes on Ant's US$34 billion initial public offering late last year.
Meanwhile, China struck its iron fist on the tech sector, with antitrust investigations into Meituan and Alibaba, a cybersecurity investigation into Didi and a broad crackdown on edtech. Chinese tech stocks have slumped, with Alibaba's share price down 37.5 per cent year-to-date.
A combination of regulatory and competitive pressures may step up the deal-hunting fervour for Alibaba and Ant in South-east Asia, some reckon.
"The regulatory pressure on Ant since last year has influenced its most profitable consumer lending business and the more stringent data regulation this year also heightened the pressure on Alibaba and Ant's data services," said Forrester analyst Meng Liu.
"In addition, it also faces intense competition from Tencent and other tech giants such as Meituan and Bytedance. All these domestic pressures urged and accelerated Ant's overseas expansion and investments."
Ms Ng similarly cites the competitive landscape. "The fact is that the China market is becoming saturated and Ant's growth pillar is the international markets. They will need to grow and prove that they can grow this business, regardless of the China regulators' decision on Alipay," she said.
https://i.imgur.com/YeCX2Rd.png
Having a foothold in South-east Asia may also be useful when China's regulatory environment is in flux. Such investments can allow Alibaba and Ant to diversify their internal capabilities in case of any necessary pivots, noted Su Lian Jye, principal analyst at ABI Research.
Observers anticipate that Ant and Alibaba could surface in more South-east Asian deals involving core tech infrastructure, such as fintech and e-commerce logistics.
Mr Liu thinks that besides e-wallets, Ant could also look more into digital lending providers and Buy Now Pay Later (BNPL) players. According to Forrester data, Ant's BNPL product Huabei captured about 30 per cent of Chinese Internet users. He believes that Ant will invest more or build joint ventures in the BNPL space.
Other Chinese tech majors are likely to step up deal-hunting in South-east Asia as well, including the rising stars in China's AI sector.
"The usual suspects would be Baidu, Tencent, and JD.com. In addition, I would not be surprised if prominent AI startups such as ByteDance, SenseTime and Megvii participate in fundraising activities in South-east Asia, mainly in early funding rounds," said Mr Su.
Mr Liu thinks that ByteDance could be especially ambitious, given the traction of TikTok in South-east Asia.
Ms Ng is similarly watching whether the likes of ByteDance and Meituan will grow in this region via investments or through their own expansion.
What is undeniable though, is that with the headwinds in China, breaking into international markets will be crucial for many Chinese tech majors. "South-east Asia is always the first step," she added.
Oct 04, 2021
BIG tech money from China surfaced in the minting of two South-east Asian unicorns last week.
In Ninja Van's US$578 million fundraise, Alibaba invested a whopping US$200 million, valuing the last-mile logistics company at US$2.2 billion, according to data from VentureCap Insights.
Over in Thailand, Ant Group contributed to the US$150 million Series C round of e-wallet operator Ascend Money, which it had backed earlier in 2016. This took Ascend's valuation to US$1.5 billion and turned it into Thailand's first fintech unicorn.
Both these investments did not surprise the market. Ninja Van has long worked with e-commerce giants, including Alibaba-owned Lazada. The Chinese tech giant has also backed last-mile logistics companies in its home market, such as GOGOX, STO Express and YTO Express.
The Ninja Van deal gives Alibaba "more say in the ecosystem, and it is a defensive move especially when Shopee has also launched their investment arm, Sea Capital," said Yorlin Ng, chief operating officer at Momentum Works.
Likewise, Ant's doubling down on Ascend is in line with its years-long strategy of backing localised e-wallets (see table). In August, Ant's Alipay also bet on restaurant booking app Chope with a US$15 million investment and partnership to help F&B merchants digitalise.
The strategic value of Alibaba and Ant's investments is clear. But these moves are also noteworthy against a broader context: China's tech crackdown.
The potential breakup of Alipay is one issue that is being closely-watched. In mid-September, the Financial Times reported, citing sources, that China plans to break up Alipay and create a separate app for the company's loans business. This is the latest in a series of twists and turns after the authorities slammed the brakes on Ant's US$34 billion initial public offering late last year.
Meanwhile, China struck its iron fist on the tech sector, with antitrust investigations into Meituan and Alibaba, a cybersecurity investigation into Didi and a broad crackdown on edtech. Chinese tech stocks have slumped, with Alibaba's share price down 37.5 per cent year-to-date.
A combination of regulatory and competitive pressures may step up the deal-hunting fervour for Alibaba and Ant in South-east Asia, some reckon.
"The regulatory pressure on Ant since last year has influenced its most profitable consumer lending business and the more stringent data regulation this year also heightened the pressure on Alibaba and Ant's data services," said Forrester analyst Meng Liu.
"In addition, it also faces intense competition from Tencent and other tech giants such as Meituan and Bytedance. All these domestic pressures urged and accelerated Ant's overseas expansion and investments."
Ms Ng similarly cites the competitive landscape. "The fact is that the China market is becoming saturated and Ant's growth pillar is the international markets. They will need to grow and prove that they can grow this business, regardless of the China regulators' decision on Alipay," she said.
https://i.imgur.com/YeCX2Rd.png
Having a foothold in South-east Asia may also be useful when China's regulatory environment is in flux. Such investments can allow Alibaba and Ant to diversify their internal capabilities in case of any necessary pivots, noted Su Lian Jye, principal analyst at ABI Research.
Observers anticipate that Ant and Alibaba could surface in more South-east Asian deals involving core tech infrastructure, such as fintech and e-commerce logistics.
Mr Liu thinks that besides e-wallets, Ant could also look more into digital lending providers and Buy Now Pay Later (BNPL) players. According to Forrester data, Ant's BNPL product Huabei captured about 30 per cent of Chinese Internet users. He believes that Ant will invest more or build joint ventures in the BNPL space.
Other Chinese tech majors are likely to step up deal-hunting in South-east Asia as well, including the rising stars in China's AI sector.
"The usual suspects would be Baidu, Tencent, and JD.com. In addition, I would not be surprised if prominent AI startups such as ByteDance, SenseTime and Megvii participate in fundraising activities in South-east Asia, mainly in early funding rounds," said Mr Su.
Mr Liu thinks that ByteDance could be especially ambitious, given the traction of TikTok in South-east Asia.
Ms Ng is similarly watching whether the likes of ByteDance and Meituan will grow in this region via investments or through their own expansion.
What is undeniable though, is that with the headwinds in China, breaking into international markets will be crucial for many Chinese tech majors. "South-east Asia is always the first step," she added.