[06] Alta Views: your fortnightly scoop of Private Capital Markets

Hi Alta-natives! In this edition we will talk about uncertainties surrounding US business operations in China, funding trends in Southeast Asia and the recent developments in Artificial Intelligence.?

Note: We’re also taking time this week to digest the reports from the fallout from SVB and other banks; rather than add more noise, we’ll put down some thoughts here, and save a deeper dive for an upcoming edition – watch this space!

US business operations in China remain uncertain?

• Rising tensions between the US and China have created an uncertain business climate. For the first time in 25 years, AmCham’s China Business Sentiment survey reported less than half of responding companies viewing China as a “top investment priority”, citing rising US-China tensions as a primary reason.

• Adding to the uncertainty is the new US congressional panel for addressing Chinese threats. The panel has been scrutinizing American business activities in China, claiming that US companies are “being seduced” by Chinese claims of post-COVID resurgence.

• Considering the hostile business climate and rising interference of Congress, investors will be wary of continued investment in China, in fear of the US government barring access to the Chinese market completely.

Southeast Asian early-stage funding props up floundering regional market

• Southeast Asian fundraising slowed in 2022 with deal value contracting by about 31% from a year earlier. Yet, despite this drought, early-stage deals remained robust, with the median value of seed rounds rising 56% to US$2.5M and that of Series A rounds rising 8% to US$8.1M

• The trend was punctuated by several large venture deals in the region closing over the past few months, including a US$300M growth stage fundraise from Merah Putih Fund in February and a US$500M early-stage healthcare tech fundraise from B Capital Group. Despite Southeast Asian fundraising waning, venture capital has only grown and looks to continue doing so.

• A quick word on the fallout from SVB and its impact on Southeast Asia: Following the decisive moves by the US Treasury Department and the FDIC, nerves around the closure of SVB, Signature, and Silvergate are calming down. Even with the contagion being mostly contained, the longer tail impact on the startup ecosystem at large is still unknown. For now, the investment community in the region are bracing for a more challenging fundraising environment in 2023. Startups and growth-stage companies are likely to need to explore alternative avenues for capital outside of traditional sources.?

Grab earnings report paints a sunnier picture

• Singapore-based ride-hailing and food delivery giant Grab posted strong revenue growth in its latest earnings report. Revenue for 22Q4 grew 310% to US$502M, up from US$122M a year ago. Full-year revenue came in at US$1.43B, up 112% from US$675M in 2021 and exceeding guidance of US$1.32 – 1.35B

• The company now projects its 2023 revenue to come between US$2.2 – 2.3B, compared with earlier estimates of US$1.97B, according to data from Refinitiv. Grab’s strong showing, combined with the lingering effects of COVID on peoples’ transportation habits, foretells continued success for the wider ridesharing market

Rally for Artificial Intelligence

• Recent advancements in machine learning and AI technology have led to the automation of business processes causing the wider Artificial Intelligence market to explode. The global AI market is expected to grow from US$119.78B in 2022 to US$1.6T by 2030 with a CAGR of 38.1%

• The market has attracted investments from tech giants like Amazon, Google, and Microsoft. Facebook spent over US$32B on their Metaverse initiative throughout 2022, while Google recently dropped US$300M for a 10% stake in AI company Anthropic, apparently looking to match Microsoft’s relationship with OpenAI

• APAC has captured about 25% of the global market, led by giants like Huawei, Alibaba, and Baidu. Singapore’s own AI market was an estimated US$960M in 2022, though the government seems determined to grow it with a planned US$371.45M investment into AI R&D in the near future

?? Exclusively on Alta

Bibit, Canva, Alodokter, Gupshup, Igloo discover who’s trending with our investor network! Researched by experts, voted by insiders. View our Top Picks here!

?? Notable Fundraises

CyberX | US$15M | Series A | Financial Services

CyberX is a Singapore-based technology firm that specializes in building digital asset infrastructure and market making. Through advanced technologies in blockchain, deep learning, and financial engineering, CyberX’s decentralized liquidity network connects assets in CeFi venues and DeFi protocols, dedicated to enhancing the efficiency and infrastructure of the digital market.

Moladin | US$103M | Series B | E-Commerce

Moladin is an omnichannel used car dealer in Indonesia that empowers agents and micro-dealers by using technology to simplify the transaction process and enable a better customer experience. Using their full-stack digital automotive platform and partnerships with top financing companies in Indonesia, Moladin ensures a seamless car purchase experience across 115 cities.

Asa Rén | US$8.15M | Seed | MedTech

Asa Rén is the developer of a DNA testing software, utilizing data science and machine learning to process and report findings on samples. Their software compares these findings against longitudinal and genomic data to create personalized treatment and medication plans for individual patients.

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About Alta Views

A fortnightly collection of the latest news from Private Capital Markets. Put together by Alta’s team of analysts, we bring you the most critical and timely pieces from private markets, to help you navigate the broad horizon. Stay tuned as we bring you the most notable fundraises, analysis on industries and companies trending within investor networks, the latest headlines, and more!

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About Alta

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