Singapore-based Golden Gate Ventures just announced its first three investments in to TradeGecko, RedMart and Coda Payments. The three moves coincide with the incubator’s efforts to grow as a Southeast Asian specialist. Golden Gate Ventures has invested in several startups in Singapore, Malaysia and Indonesia.
Vinnie Lauria, founding partner, explained that their investment decisions depend on startup traction, team and the e-commerce industry. Though Golden Gate Ventures doesn’t specifically focus on e-commerce startups, Vinnie believes they have the highest chance of success during their earliest stages.
“We selected these investees for two reasons,” he said. “First, for their strength as high-growth start-ups that are already impacting regional buying and selling behaviors positively and expanding e-commerce in Asia. Second, because they plug us into a market of more than half a billion people. Southeast Asia sees 650,000 new internet users come online each month. Smart mobile devices are the future in this part of the world and our portfolio puts us right at the heart of the mobile space.”
Paul Bragiel, Founding Partner, added: “While e-commerce is a strong thread through our first investments, it is only a starting point. We are actively looking across content sites, apps and B2C services and we are looking into places that other funds are not represented. Many people I talk with in the valley think Asia is just China and India but we see a huge booming market across the region. We are really excited to be at the heart of it.”
Vinnie went on to explain that TradeGecko’s team has very strong technical skills, while RedMart’s team is extremely data-oriented.
Asian hedge funds and other equities may be struggling with national and economic limitations and with hedge fund compliance, but investors have taken interest in such firms nonetheless. For example, Oasis Management Hong Kong has the support of multi-national institutions, European banks, and leading financial firms.
New partnerships between American and Asian firms are established on a regular basis. Billionaire Julian Robertson is currently working on a new investment partnership with a focus on Asian equities. Called Tiger Pacific Capital, LP, the new enterprise will be led by Run Ye, Junji Takegami and Hoyon Hwang, according to Robertson’s firm, Tiger Management LLC.
Though Tiger Management was originally built as a hedge fund, Robertson, 80, shifted focus over ten years ago to invest his own fortune in hedge fund managers. Tiger Management has employed more than 40 portfolio managers and analysts who subsequently formed their own firms and became known as ‘Tiger cubs.’ Those built after the change are known as ‘grand cubs.’
According to an announcement by the Greek agency for privatization HRADF there are now eight potential investors, including private equity funds and a large Chinese conglomerate, showing interest in purchasing a large stake in the Greek gambling monopoly OPAP.
The Chinese concern showing interest in the purchase of OPAP, which needed to meet a November 9 deadline, was a subsidiary of Fosun International. Fosun is one of the largest of China’s business groups whose key shareholder is the Chinese billionaire Guo Guangchang.
OPAP is one of the largest-listed gambling companies in all of Europe. At the moment Greece is offering about one third of OPAP, which is almost its entire stake in the company. OPAP’s total market capitalization is valued at 1.5 billion euros ($1.9 billion) on the Athens Stock Exchange.
Others interested in bidding on the Athens stake in OPAP are several private equity firms including BC Partners and TPG Capital LP. Playtech, the giant Estonia-headquartered online gaming software provider is partnering with the German gaming equipment maker Gauselmann AG to possibly add their own bid.
OPAP is the major monopoly which the Greek privatization program is dealing with in 2013. The privatization program is part of the plan for Greece to raise 2.6 billion Euros to help make its way out of its severe debt and is part of the international bailout plan.
The 10th Asia-Europe Finance Ministers Meeting, to take place today, will address a recent grievance brought forth by Asian firms, according to Somchai Sujjapongse, the director-general of the Fiscal Policy Office.
The companies have asked Europe to simplify processes and allow them to acquire or merge with other European businesses. This issue is only a small part of the meeting’s main topic; stimulating trade and investment flows between the two regions.
Sujjapongse explained that while multinational companies from Europe have extensive history of investing in Asia, Asian investment in the region remains limited. He called on Europe to promote investment from various enterprises.
“There are some obstacles; for instance, Europe should make it much easier for Asian firms to take over, merge with or form joint ventures with local European firms.”
Tudo, one of China’s largest internet companies and second largest video web site there, bravely listed on the NASDAQ Stock Exchange in August 2011. Eleven other IPOs were postponed due to the volatility of the market, yet Tudo listed, believing that this was the right time to go public.
The Shanghai based company was looking to raise upwards of $180 million from the offering of 6 million American depositary shares (ADRs) which sold at $25.11 each, 13 percent lower than their IPO of $29, fueling investors’ fears that perhaps that was indeed not the best time for Tudo to list on the US markets.
Tudo wants to upgrade its technology, buy rights to videos, and bandwidth expansion. According to the company’s filing, it has accumulated losses $179 million since it launched in 2005. However, annual revenue has surged, and Tudo has 200 million unique visitors to its site every month. However, Todu is logged on to only second to its main rival Youku.com, which went public a year before Tudo. On Youku’s first day after its IPO its price per share jumped by 161 percent. Since then Youku’s stock price has increased almost three-fold, closing on August 17, 2011 at $27.
Premier Wen Jiabao’s recent statement that China does indeed have room to add stimulus has buoyed Asian stocks for a fifth consecutive day, while regional bond risks have fallen to their lowest rate in over a year.
Europe’s equity futures have also advanced, as the court prepares for a final verdict regarding Germany’s place in a Eurozone bailout fund.
Yesterday, Wen confirmed that China has “ample” opportunity to use fiscal and monetary policy to meet growth markets, while tomorrow marks the end of a two-day meeting between Fed Chairman Ben S. Bernanke and his colleagues and the final decision regarding their contribution to asset purchases. Germany also plays a significant role in the events as the country’s Federal Constitutional Court will now announce whether it will participate in the European Stability Mechanism.
Hiroichi Nishi of SMBC Nikko Securities Inc. explained:
“The market is getting confident that governments won’t let economies get worse, as expectations are mounting in the U.S. for more monetary easing and China expands public investment. At the same time, Europe is making progress, even though it’s not speedy.”
The news on investors’ minds today, including those managing Oasis Management Hong Kong, is what will be the consequence of the Chinese plan to introduce a new way to make it more convenient for investors to short-sell locally traded equities.
Chinese regulators are determined to help bring its markets to a place more in line with standards which are in place all over the world. The hope is that the move to make short-selling easier will help stimulate the hedge fund industry in China.
In order to achieve its goals Chinese leaders in Beijing plan to start a group called the Centralized Securities Lending Exchange, which they hope will be in place by the end of March this year, which will act as a platform for short-selling activities.
According to a report, China’s market regulator, the China Securities Regulatory Commission, will be the largest shareholder in the new exchange.
Many American companies are making investments abroad for various reasons. According to a recent news article, American firm LeapFrog Investments that invests in companies in “undeserved markets in Asia and Africa,” has just put an injection of $15m capital into Shiriam Credit Co. Ltd., an insurance, investment and savings company in India. According to Jim Roth, the company’s co-founder and partner, this deal is set to have “enormous social impact by financing and improving cover for millions of financially excluded clients and their families in India while also generating healthy financial returns.”
Of course, there are many other reasons American business leaders and companies seek to make their investments in the Asian region. The world’s biggest research-based pharmaceutical company, Pfizer Inc., works substantially in Asia.
The United States Grains Council announced that China may not need to import corn from the U.S. this year.
The group explained that China has no need to “rush into the market,” as they had a successful harvest themselves. Prices have risen to nearly $6.00 a bushel, as well. Still, China may watch to see if the prices fall below $6.00.
As of now, however, corn for the December delivery jumped by 2.1%, to trade at $6.105 with Beijing.