The AI mania
If there is one segment that’s defying all the odds and commanding incredibly high valuations amid the lingering funding winter , it is artificial intelligence (AI). All thanks to the generative AI wave that has swept everyone off their feet.
As per a recent New York Times report, there is a gold rush into generative AI start-ups , so much so that it has turned into a no-holds-barred deal-making mania. It is observed that AI startup valuations have even gone beyond the 2021 levels. Good AI companies are scarce and the supply of AI experts is limited. It’s no surprise that investors are so desperate to be part of the next big thing that they are offering AI entrepreneurs nine-figure valuations “for little more than an idea and a résumé.” They are ready to pay up as long as they can get in on an AI deal.
And it is not only Silicon Valley that’s going crazy. The Asian startup ecosystem is singing the same tune.
New York and Pune-based Alphasense just received an additional US$100 million check for its series D round from Alphabet’s CapitalG, Goldman Sachs' growth equity business, and Viking Global Investors at a US$1.8 billion valuation. Why? Because the startup has built an AI-powered market intelligence and search platform that helps its clients come up with corporate and investment strategies. And it’s deploying advanced AI capabilities including generative AI.?
In fact, more and more startups are coming up with innovative use cases involving generative AI—beyond writing like humans, creating images, coding, and role-playing. For instance, Singapore-based firm Silent Eight is a regulatory tech startup that has developed a ChatGPT for banks, which uses AI to tackle financial crimes. Singapore’s Tiger Brokers has also developed an AI chatbot investment assistant called TigerGPT. The online broker touts TigerGPT as the first program of its kind in the industry.
In China, Alibaba Group has recently launched its large language model Tongyi Qianwen, which the internet giant will integrate across its business functions. To begin with, Tongyi Qianwen will power its enterprise communication and collaboration platform DingTalk, with which users will be able to write automated emails, summarize meeting notes, and create promotional campaign plans and business proposal drafts.
What’s more interesting is this: AI enthusiasts—VCs and entrepreneurs—aren’t deterred even though trouble seems to be brewing for generative AI.?
Last month, a research paper said GPT-4, the smartest generative AI so far, is still prone to making reasoning errors, has a tendency to hallucinate, and may produce fake content. Two weeks back, an open letter signed by Elon Musk and several thousand others called for a six-month pause on the development of AI models more powerful than GPT-4. The letter cited negative consequences of superintelligence—beyond disinformation and job loss for humans—given the lack of checks and balances in place.?
Around the same time, Italy announced banning ChatGPT on data privacy concerns, while an AI policy group filed a complaint against GPT-4 with the Federal Trade Commission for violating rules. Just recently, a regional Australian mayor threatened to sue OpenAI for defamation because ChatGPT falsely claimed that he had served time in prison for bribery.?
To counter piling criticism and promote GPT-4, OpenAI CEO Sam Altman has begun a global tour this week, which will cover 17 countries including Singapore, Indonesia, India, Korea, and Japan.?And the strategy seems to be working.
On that note, let’s dive into this week’s recap.
What stood out this week—M&As
Indian entertainment giant Nazara Technologies’ esports and gaming arm Nodwin Gaming has snagged a 51% stake in Singapore-based live media company Branded . Although, the deal value is undisclosed, what is known is that Nodwin Gaming will take over all of Branded’s event intellectual properties. Branded CEO Jasper Donat will join Nodwin and focus on growing its IPs as the esports firm looks to expand globally.
The deal is another indicator of increasing cross-border merger and acquisition (M&A) activity in the region. In fact, 2022 was the second-best year for M&As in Southeast Asia after 2019. Last year, there were 75 M&As in the region, totaling more than US$1.5 billion. This year so far, eight deals have been made including Nodwin’s.?
In another big M&A news, Singapore-based VC firm The Edgeof is set to buy SoftBank Ventures Asia, a venture arm of Japan’s SoftBank Group. After the acquisition, which is pending regulatory approval, the entities will assume a new brand identity and focus on supporting and developing game-changing startups across Asia. Interestingly, The Edgeof is co-led by Taizo Son , the youngest brother of SoftBank chairman Masayoshi Son.
领英推荐
Buzzing deals
The past week saw investments sprinkled across sectors, particularly in Indonesia.
Indonesian cloud kitchen startup Legit Group has raised a US$13.7 million series A round led by MDI Ventures. The fresh capital will go into ramping up the company’s presence in the country. Jakarta-based Travelio , a rental marketplace that allows tenants to book short-, medium-, and long-term apartment rentals, has closed a series C round led by a large South Korean financial group. The deal size and the name of the specific investor were not disclosed. The startup manages 15,000 properties exclusively on its platform across 12 Indonesian cities and will use the new funding to expand into the rent-to-own vertical, wherein people renting a home get an option to buy it before the lease expires.?
Indonesia’s Fit Hub which offers affordable gym memberships has received seed funding of US$6.5 million from Wavemaker Partners. Launched in 2020, Fit Hub has reached 50,000 paying members with 60 offline clubs across 14 cities in the country. Now it aims to have 100 clubs by the end of the year.
Elsewhere in Asia, Singaporean intelligent energy solution TablePointer has bagged US$2.2 million from Wavemaker Partners, Steve Melhuish, AgFunder, and ENGIE. The startup primarily focuses on making F&B businesses more energy efficient.?
Singapore-based BetterTradeOff, which helps financial institutions tackle challenges like poor customer engagement, scaling, and limited client data with bespoke financial planning solutions, has raised an undisclosed sum from SC Ventures, the VC arm of Standard Chartered. The company plans to use the funding to expand its operations in Asia Pacific.
Malaysian financial services firm Soft Space has recently closed its US$31.5 million series B1 round led by private equity firm Southern Capital Group. The company provides point-of-sale software and works with 70 financial institution partners globally. Vietnamese edtech firm MindX has raised a US$15 million series B round led by Kaizenvest. With over 32 campuses in its home country, the startup claims to have become the largest platform for teaching coding in Southeast Asia.
More action in Crypto, Web 3, and NFT
LayerZero Labs, the company behind LayerZero, a crypto messaging protocol that enables interoperability and facilitates cross-chain messaging across various blockchains, recently raised a US$120 million series B round at a post-money valuation of US$3 billion. With its kitty full now, LayerZero Labs is all set to expand its presence across the Asia Pacific.?
Meanwhile, Crypto firm Bitget has launched the Bitget Web3 Fund with an initial investment of US$100 million . The four-year-old company provides futures trading and copy trading services and caters to over 8 million users in over 100 countries. With the new fund, Bitget will invest in Web3 startups , particularly in Asia. According to its official statement, it will focus on Web3 projects that offer innovative solutions to real-world problems.?
Hong Kong-based crypto derivatives firm Metalpha is launching a Bitcoin tracker fund called Next Generation Fund I in partnership with NextGen Digital Venture. Metalpha is raising US$100 million for the new fund that purchases shares of Nasdaq-listed Grayscale Bitcoin Trust, the Bitcoin price tracker and the largest holder of cryptocurrency in the world . The fund has already raised US$20 million. This idea is to allow investors to gain exposure to Bitcoin without actually owning the digital asset.
Last, but not least, Hug, a social marketplace for digital artists and NFT creators to sell their creations, has just raised a US$5 million seed round led by Web3 investment fund Digital . The company was founded in 2022 by Randi Zuckerberg , Mark Zuckerberg's sister and the creator of Facebook Live.