On track to end 2023 on a high note

We are less than two months away from closing this year. And it seems despite all the ups and downs, we may get to close 2023 on a high note.?

The US economy has stayed strong and clear of recession. Amid all the forecasts of an economic downturn, consumers have kept spending , while the job market has remained robust.?

Although, at 3.7%, inflation is still above the Federal Reserve’s 2% target, it has cooled down significantly compared to 9.1% in June 2022. And the US central bank's aggressive interest rate-hike campaign has finally cooled down the labor market as well as wage growth.

All this has bolstered expectations that the pause in rate increases is permanent and that the US central bank may start cutting rates next year.?

Back in Asia, Southeast Asia’s economy has been seeing encouraging upswings , especially in travel. For context, FDI flows have increased this year by 36% over 2019, while regional exports have risen 32%. Travel has rebounded in the region as well, with outbound passenger volume increasing by 80% and travel demand going up by 40% this year over 2019.?

Inflation in Southeast Asia has remained under control compared to other regions. More importantly, consumer confidence in the economy has begun to recover in Q3 2023 across most of the region.

Overall, Southeast Asian GDP growth is forecast to keep up with the world’s fastest-growing economies.

There is more. China is finally beginning to recover.?

China’s re-opening in early 2023 did not give the global economy as much boost as expected, mostly due to the sluggish domestic growth and supply chain disruptions in the backdrop of its tech war with the US.??

But now, things seem to be moving north.?

IMF just upgraded the Chinese economic growth forecast for 2023 to 5.4% from the earlier 5%, given a strong post-COVID rebound. China also recorded a trade surplus of US$684 billion in the first 10 months of 2023. And lastly, China’s President Xi Jinping will be meeting top US business executives next week in San Francisco, as the country looks to woo back foreign investors. This sets a positive tone for the next year.?

On that note, let’s dive into this week’s recap.

Buzzing Deals

The past week saw a slew of interesting deals happening, particularly in fintech.

• Singapore-based financial services company Singlife has bagged US$132.8 million from Japan’s Sumitomo Life Insurance Company. Founded in 2014, Singlife provides insurance for Singapore’s Ministry of Defence, Ministry of Home Affairs, and Public Officers Group Insurance Scheme. The recent investment takes Sumitomo Life’s stake in Singlife up to 27%. The company will use the new funds to expand its products and geographical presence. It also plans to strengthen its tech infrastructure and data analytics capabilities to improve customer experiences.
• Indonesia’s Energi Selalu Baru, the parent firm of electric vehicle company Volta, has received a strategic investment from Twin Towers Ventures and Rigel Capital. The financials of the deal were not disclosed. This funding will help Volta accelerate the development of its electric motorcycles, increase its network of battery-swapping stations in Indonesia, upgrade its tech and digital platform, and grow its market share. So far, Volta has facilitated over 3 million battery swaps and reduced 20,000 tons of carbon emissions.
• Singapore-based quantum software company Entropica Labs has raised US$4.7 million in a series A funding round to develop tools for error correction and fault tolerance in quantum computing. The round was co-led by Liftt, an Italian deep tech VC firm, and regional investor Wavemaker Partners. Entropica Labs provide developers and users with tools that can design and run quantum circuits and algorithms that are resilient to errors. The firm will use the new funding to grow its team, speed up software development, and test its products on different quantum hardware platforms.
• Singapore-based fintech firm Funding Societies has received US$7.5 million in debt funding from Norwegian state-owned investor Norfund . The company operates by the name Modalku in Indonesia. It will use the capital to support its financing solutions in Southeast Asia. Besides Singapore and Indonesia, it has a presence in Thailand, Malaysia, and Vietnam. The development comes over a month after Funding Societies raised US$27 million in debt.
• Japanese conglomerate Mitsui has invested US$58 million in Axiata Digital & Analytics (ADA) , the data and AI unit of Malaysian telco Axiata. The new funding has shored up ADA’s valuation to US$550 million. The deal—made through ADA’s parent company Axiata Digital Services (ADS)—has increased Mitsui’s stake in ADS to 20%. In turn, Mitsui holds a 12.69% stake in ADA. Softbank-backed ADA will now deepen its collaboration with Mitsui to empower its partners with cutting-edge data, AI, and technology solutions. This aligns well with the company’s overall vision to become a unicorn in the AI, data analytics, and digital transformation space.?

Crypto Tidbits

The past weak was pretty intense for a former crypto mogul and founder of now bankrupt crypto firm FTX, Sam Bankman-Fried.?

He was found guilty of defrauding FTX customers in one of the biggest financial frauds on record . A 12-member jury in a US court convicted him on all seven counts of fraud and conspiracy he faced. Prosecutors had alleged he stole US$8 billion from the exchange's customers out of sheer greed, while Bankman-Fried had pleaded not guilty. The verdict came almost a year after FTX filed for bankruptcy, shocking financial markets and erasing Bankman-Fried’s estimated US$26 billion personal fortune.?

Meanwhile, Asia’s crypto and web3 space witnessed a few positive developments.?

Hong Kong-based blockchain-focused VC firm CMCC Global has launched its US$100 million fund called Titan Fund despite the funding winter. The new fund has already hit its target corpus in the first close earlier last month. The firm plans to invest in early-stage startups across infrastructure, fintech, and consumer applications. So far the firm has backed five companies including Mocaverse and Terminal 3.

Loi Luu , the co-founder of blockchain startup Kyber Network, has also launched a new? Web3 venture builder Caliber with the aim of creating crypto consumer apps and infrastructure. Caliber plans to work with Web3 founders, who are building services for the next wave of crypto retail users. The firm will support these projects through series A rounds and beyond.

Meanwhile, Authentick, a platform that lets users access and buy digital collectibles or NFTs in a new way, has just emerged from stealth mode with a US$4 million seed investmen t from Menyala, a venture incubator backed by Temasek. The company has developed a system that enables people to buy digital collectibles without the need for a Web3 wallet or access to exchange by listing them on ecommerce platforms.

Standing Out

Sydney and Singapore-based VC firm Investible has partnered with Mandiri Capital Indonesia to launch a new climate tech-focused fund . Dubbed Mandiri-Investible Global Climate Tech Fund, it will invest in companies across Southeast Asia and Oceania, with 30% of investments earmarked for Indonesia. The two companies will explore projects in sectors like energy, transport, buildings and cities, industry, food, and agriculture, forests, and land use. The fund size remains undisclosed.

Chinese automaker Geely has joined hands with Malaysian partner Proton Holdings to regain the foothold in the Southeast Asian electric vehicle market. Geely owns 49.9% of Proton. Its efforts are fueled by a US$10 billion investment in Malaysia, which will be used to establish a local hub for R&D and manufacturing.

Fast-fashion giant Shein is eyeing a valuation of $US80 billion to US$90 billion in a US initial public offering. This is more than the firm’s current valuation of US$50 billion to US$60 billion. However, the timing of the IPO is not certain yet, due to the market volatility.?

South Korean conglomerate Shinhan Financial Group’s subsidiary Shinhan EZ General Insurance has tied up with PasarPolis‘ insurance sales platform Tap Insure to enter the Indonesian market . Shinhan will bring its expertise in microinsurance and non-life insurance product development to the partnership, initially focusing on auto insurance.

And that’s the wrap for this edition of #ICYMI . We will continue to curate the weekly highlights of the Asian tech ecosystem in case you missed what made the buzz in the week that just went by. You can subscribe to #ICYMI to get it every Thursday to stay abreast of noteworthy tech developments.