Asia’s Private Equity News Source avcj.com October 14 2014 Volume 27 Number 38

EDITOR’S VIEWPOINT Pick your top performers: Voting opens for the 2014 AVCJ Awards Page 3

NEWS Avenue, Bertelsmann, CDH, CVC, Foxconn VC, Gaja, GIC, Gree Ventures, Hony, IDFC, J-Star, Matrix, MSPEA, SAIF, World Innovation Lab Page 4

DEAL OF THE WEEK Navis revisits Australia’s childcare value chain with Modern Star deal Page 14

INDUSTRY Q&A William Bao Bean of Capital democracy? SOS Ventures discusses ’s start-up scene VCs back peer-to-peer platforms as financing solution for China’s SMEs Page 7 Page 15

ANALYSIS DEAL OF THE WEEK

Alibaba and the rest Dining out in Tokyo Third quarter analysis: Funds, deals, exits Page 12 Bain-backed restaurant chain goes public Page 14 15th Annual Private Equity & Venture Forum India 2014 2-3 December • Taj Lands End, Mumbai

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Register before 17 NOVEMBER What’s new this year? to SAVE INR18,090/  A panel of successful entrepreneurs from US$300 portfolio companies discussing how Private Equity and industry can effectively collaborate to deliver alpha Sanjeev Aga Pramod Bhasin Business Advisor; Founder and Former MD, Vice Chairman, IDEA CELLULAR GENPACT; Chairman, THE SKILLS ACADEMY Registration Enquiries: Yeni Kittrell T: +852 3411 4836  a highly interactive and Investor Selector: E: [email protected] entertaining session on “What do LP’s really look for in a GP when deciding where to For the latest programme and commit their money” speaker line-up, visit avcjindia.com

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2-3 December • Taj Lands End, Mumbai Managing Editor Tim Burroughs (852) 3411 4909 Staff Writers Andrew Woodman (852) 3411 4852 Winnie Liu (852) 3411 4907 Cast your vote Creative Director Dicky Tang Designers Catherine Chau, Edith Leung, VOTING FOR THE 2014 AVCJ PRIVATE Union Bank of Colombo Mansfield Hor, Tony Chow Equity & Venture Capital Awards is now open. The PE community has until October 27 to pay DEAL OF THE YEAR – LARGE CAP Senior Research Manager Helen Lee tribute to the leading fundraises, investments, (Investment size – above $100 million) Research Associates exits, individuals and firms of the past 12 months. Goodpack Herbert Yum, Isas Chu, Votes are cast via the AVCJ Awards website Nanfu Battery Jason Chong, Kaho Mak MODI-F.I.E.D. - FUELLING INDIA'S ECONOMIC DEVELOPMENT (www.avcjforum.com/static/avcj-awards), which Sinopec Marketing Circulation Manager also includes full details of the process, rules and Sony Corp – personal computer business Sally Yip past winners. The public has a 50% say in the Velocity Frequent Flier Program Circulation Administrator Register before Prudence Lau final outcome, with a judging panel of industry Subscription Sales Executive 17 NOVEMBER experts and the AVCJ Editorial Board each EXIT OF THE YEAR – IPO Jade Chan What’s new this year? accounting for 25%. to Manager, Delegate Sales SAVE Relying in part on industry recommendations, Asaleo Care Pauline Chen the AVCJ Editorial Board drew up nominee Healthscope INR18,090/ Director, Business Development  A panel of successful entrepreneurs from shortlists in consultation with the judging panel. JD.com Darryl Mag Nord Anglia Education US$300 portfolio companies discussing how Private Equity Manager, Business Development The nominees in each category are as follows: Anil Nathani, Samuel Lau EXIT OF THE YEAR – MID CAP and industry can effectively collaborate to deliver Sales Coordinator FUNDRAISING OF THE YEAR – VENTURE CAPITAL (Investment size on entry – below $100 million) Debbie Koo alpha DCM Ventures China Fund (DCM VII) Dick Smith Holdings GGV Capital V Golden Gate Conference Managers Sanjeev Aga Pramod Bhasin Jonathon Cohen, Sarah Doyle, Morningside China TMT Fund III Tirumala Milk Products Conference Administrator Business Advisor; Founder and Qiming Venture Partners IV United Cinemas Amelie Poon Former MD, Vice Chairman, Shunwei China Internet Fund II) Yonghui Superstores Conference Coordinator IDEA CELLULAR GENPACT; Fiona Keung, Jovial Chung Chairman, FUNDRAISING OF THE YEAR – MID CAP EXIT OF THE YEAR – LARGE CAP Publishing Director THE SKILLS ACADEMY Registration (Fund size – below $1 billion) (Investment size on entry – above $100 million) Allen Lee Enquiries: Kedaara Capital I CSPC Pharmaceutical Managing Director Orchid Asia VI Matahari Department Store Jonathon Whiteley Yeni Kittrell Quadrant Private Equity No.4 SSG Capital Oriental Brewery T: +852 3411 4836 Partners II Peters Ice Cream  Investor Selector: a highly interactive and Vision Knight Capital (China) Fund II Techpack Solutions E: [email protected] Incisive Media Unit 1401 Devon House, Taikoo Place entertaining session on “What do LP’s really FUNDRAISING OF THE YEAR – LARGE CAP VC PROFESSIONAL OF THE YEAR 979 King’s Road, Quarry Bay, look for in a GP when deciding where to (Fund size – above $1 billion) Hurst Lin T. (852) 3411-4900 For the latest programme and Affinity Asia Pacific Fund IV Jixun Foo F. (852) 3411-4999 commit their money” E. [email protected] speaker line-up, visit avcjindia.com CDH Fund V Richard Liu URL. avcj.com CVC Capital Partners Asia Pacific IV Naren Gupta Beijing Representative Office Navis Asia Fund VII J.P. Gan No.1-2-(2)-B-A554, 1st Building, No.66 Nanshatan, Morgan Stanley Private Equity Asia IV Chaoyang District, Beijing, Asia Series Sponsor Co-Sponsors PE PROFESSIONAL OF THE YEAR People’s Republic of China T. (86) 10 5869 6203 DEAL OF THE YEAR – VENTURE CAPITAL K.Y Tang F. (86) 10 5869 6205 Flipkart David Liu & Julian Wolhardt E. [email protected] LanzaTech NZ) Gabriel Li Snapdeal Chris Hadley Youxinpai Shuge Jiao The Publisher reserves all rights herein. Reproduction in whole or in part is permitted only with the written consent of AVCJ Group Limited. DEAL OF THE YEAR – MID CAP FIRM OF THE YEAR ISSN 1817-1648 Copyright © 2014 Knowledge Sponsor Luncheon Host Cocktail Reception Host Exhibitor (Investment size – below $100 million) Affinity Equity Partners CTOS Data Systems CVC Capital Partners Estia Health KKR IMAX China Pacific Equity Partners Scan this QR code National Bulk Handling Corp Quadrant Private Equity with your mobile Join your peers phone to review AVCJ India latest updates avcjindia.com #avcjindia Number 38 | Volume 27 | October 14 2014 | avcj.com 3 NEWS

ASIA PACIFIC China’s CDH agrees Nanfu times. The app makes money by charging TV Battery carve-out from P&G network operators to promote their shows. Avenue bolsters Asia team CDH Investments has agreed a buy Fujian Sun Hung Kai invests in Nanping Nanfu Battery, China’s leading ahead of fundraise manufacturer of alkaline batteries, from Procter & P2P lending site Avenue Capital Group has hired two executives Gamble (P&G) in one of the largest PE corporate Sun Hung Kai & Co, a leading Hong Kong from PAG – Anil Gorthy and Dan Galanter – to carve-outs ever seen in the country. The private financial institution, has invested in a Series B lead its Asia business, with a new regional fund equity firm will take a 79% stake in Nanfu Battery, round of funding for Chinese peer-to-peer (P2P) planned for the coming year. Gorthy, who will with the entire transaction worth more than lending service Dianrong. The company was become a senior portfolio manager, performed $500 million and possibly as much as $1 billion, launched in March 2013 by Soul Htite, a former a similar strategy within PAG’s special situations according to a source familiar with the situation. Oracle executive who co-founded US-based P2P division. Galanter has spent the last six years as It is expected to be completed before December. lending service Lending Club, and Yuhang Guo, head of business development at PAG. an intellectual property lawyer. GREATER CHINA Tianhe drops on resumption of trading Hony Capital acquires Morgan Stanley Private Equity Asia (MSPEA) portfolio company Tianhe Chemicals saw its Yangsi Hospital stock drop 43% on resumption of trading in Hony Capital has acquired Shanghai Yangsi Hong Kong following allegations of fraud. Tianhe Hospital, the largest privately-owned hospital in issued a lengthy rebuttal of the allegations, while Shanghai. The deal size was not disclosed but simultaneously announcing strong quarterly it is said to amount to hundreds of millions of earnings figures. renminbi. The investment was made through Hong He Healthcare, a healthcare-focused A P&G spokesperson said the divestment Baidu buys VC-backed investment subsidiary set up by the PE firm. would allow the company to focus on its core Duracell battery brand globally as well as within Brazilian discount site Foxconn VC invests $98m in China. P&G announced plans in August to offload Chinese search giant Baidu has bought a more than half of its brands as part of efforts to controlling stake in Brazil-based Peixe Urbano, Taiwan Mobile become faster-growing and more profitable. an online discount platform that has received Hongyang Venture Capital Investment, a Nanfu Battery was acquired as a result of P&G several rounds of VC funding, for an undisclosed corporate investment arm of electronics purchase of Gillette - which also owned Duracell sum. Baidu will bring access to capital and manufacturer Foxconn Technology Group, has - in 2005. Gillette bought a majority stake in expertise, but Peixe Urbano will be run as invested NT$2.98 billion ($98 million) in local Nanfu Battery in 2003. At the time, the company an independent entity within the Chinese telecom operator Taiwan Mobile. Hongyang has had revenues of $84 million and net profit of just company’s corporate ecosystem. The existing acquired 31.97 million shares of Taiwan Mobile at under $12 million. The Nanfu share of China’s management team, led by co-founder and CEO NT$93.2 apiece for a 0.93% stake in the company. battery market was around 30%, compared to Julio Vasconcellos, will remain in place. The move is part of effort to enhance the two less than 10% for Gillette. companies’ cooperation with the 4G mobile China International Capital Corporation (CICC) commits $14m to network built out. invested $60 million in Nanfu Battery in 1999 to help the company improve its product line and GPS firm Careland CVC raises $78m via Jintian fight off competition from the likes of Duracell. Chinese VC-backed smart phone maker Xiaomi CDH - which spun out from CICC in 2002 - has invested RMB84 million ($14 million) in Pharma share sale committed an undisclosed sum to Nanfu Battery Careland Information System, a Shenzhen-based CVC Capital Partners raised HK$610.3 million in 2002. GPS mapping technology developer. Xiaomi has ($78.7 million) through a block trade of shares In addition to being the number one battery subscribed to 7 million shares in Careland, at in Jintian Pharmaceutical Group, a Chinese maker in China, Nanfu Battery now claims to be RMB12 apiece. Set up in 1999, Careland provides pharmaceutical retailer and distributor. The the third-largest manufacturer in Asia and the GPS mapping and navigation software to smart private equity firm sold 185.5 million shares at fifth-largest globally. It has an annual production phone manufacturers and car makers. HK$3.29 apiece and retains a 6.9% stake in the capacity of more than 1.2 billion alkaline business. Jintian Pharma raised $273 million in a batteries. Bertelsmann Asia launches Hong Kong IPO last year. angel fund in China Alibaba invests $50m in US Technology, a California-based start-up that has Bertelsmann Asia Investments (BAI), the Beijing- developed a TV remote control mobile app. based investment arm of German media giant TV remote app Peel Launched in 2012, the app allows Android and Bertelsmann, has launched a new angel fund to Alibaba Group, China’s largest e-commerce iOS-enabled smart phones to be used to control focus on seed-stage investments in China. The player, has invested $50 million in Peel televisions. It has been downloaded 96 million so-called BetaFund - which was announced at

4 avcj.com | October 14 2014 | Volume 27 | Number 38 NEWS

a press conference in Zhongguancun, Beijing’s IDFC closes second India Capital Fund II. The vehicle is now looking to raise technology hub - is said expected to invest tens up to $225 million by mid-2015 with a hard cap of millions dollars over the next 2-3 years. infra fund at $900m of $250 million. The fund managed to secure a IDFC Alternatives has reached a final close $25 million commitment from the International Singtel Innov8’s Bao Bean on its second Indian core infrastructure Finance Corporation (IFC) - the investment arm of fund of $900 million. LPs have also pledged the World Bank - in October last year. joins SOS Ventures significant additional capital for co-investment William Bao Bean, formerly managing director opportunities. It is the fourth-largest India Solar developer backed by with corporate venture unit Singtel Innov8, has infrastructure fund ever raised. joined SOS Ventures as its investment partner Third-party investors, including institutional Kotak Mahindra, EIB funds in China. He will take over as managing director players from North America, Europe and the Kotak Mahindra Group and European Investment of Chinaccelerator, the firm’s Shanghai-based Middle East, account for $810 million of the IIF2 Bank Group (EIB) have together committed business accelerator. corpus. The remaining $90 million of IIF2 has INR2 billion ($32.7 million) to India Solar Energy been committed by parent company IDFC. The Firm SolarArise India Projects. EIB is making its fund launched in early 2013, with a first close of investment via Luxembourg-based fund-of-funds NORTH ASIA $644 million coming in September of that year. Global Energy Efficiency and Renewable Energy Fund (GEEREF) while Kotak Mahindra is investing J-Star to exit healthcare through the Core Infrastructure India Fund (CIIF). firm HCM to Alshok Group SAIF Partners invest $13m Japanese security firm Alshok Group has agreed to acquire Tokyo-based healthcare service in Indian jewelry chain provider HCM Corporation, paving an exit SAIF Partners has invested INR800 million ($13 for mid-market GP J-Star. The PE firm - which million) in Senco Gold, an Indian jewelry retail currently holds a 56.9% stake in HCM - acquired chain. Headquartered in Kolkata, Senco produces its interest in the company in May 2011 via a handcrafted jewelry. It claims to be one of the management that was understood to be largest jewelry retail chains in eastern India, valued at about $30 million. with 59 outlets nationwide - of which 29 are company-owned while the remaining 30 are run Mercari raises $22m Series The IDFC contribution to the first close was $64 by exclusive franchisees. C round million. LPs in the fund include CDC Group, the UK government’s development finance arm, Matrix backs recruitment Mercari, the Japanese start-up behind the mobile which has put in $200 million. flea market app of the same name, has raised “We are very pleased with the high quality service GrownOut JPY2.36 billion ($21.8 million) in Series C funding and marquee investors that IIF II has attracted Matrix Partners India has provided a first from World Innovation Lab (WiL) and existing and are proud of the speed with which IIF II has institutional round of funding for GrownOut, an investors Global Brain, Globis Capital Partners, been subscribed to, especially given the difficult online platform that helps companies identify GMO Venture Partners and East Ventures. The economic and financial conditions that prevailed potential recruits on the basis of referrals start-up - previously named Kouzouh - has now during the majority of our fund-raising period,” sourced via employees’ professional networks. raised about $38.7 million across four rounds. M.K. Sinha, managing partner and CEO of IDFC With backing from early-stage investor Outbox Alternatives, said in a statement. Ventures, the first version of GrownOut was BrainWars app raises IIF2 will following a similar strategy to its launched in March 2014. It is currently used by predecessor, targeting core infrastructure assets, companies including Quikr, Ola and Stayzilla. $2.8m in VC funding including under construction and operational East Ventures, Skyland Ventures, Genuine Startups assets, and work with proven partners. The and Line Ventures, the VC unit of messaging app primary sectors of interest are roads, ports, SOUTHEAST ASIA firm Line Corp, have together invested JPY300 airports and power. million ($2.8 million) in TransLimit, the Tokyo- GIC leads $150m round for based start-up behind social quiz app BrainWars. Launched in March this year, BrainWars pits round since it won the fifth batch of Incubate US start-up Square players against one another in a series of mental Fund’s Incubate Camp earlier this year. Singapore GIC Private is exercise games in real time. said to have led a $150 million Series E round SOUTH ASIA investment in US e-payments start-up Square. Gree Ventures backs Japan The round values the company at about $6 marketing start-up billion. Previous investors Goldman Sachs and Gaja reaches $130m first Rizvi Traverse Management also participated. Japanese online marketing firm Somewrite has Last month the start-up was reportedly seeking raised JPY100 million (about $1 million) from close on second India fund to raise $100 million. A Square spokesperson Gree Ventures and other undisclosed investors. Indian mid-market GP Gaja Capital has reached a confirmed the company had received new This represents the start-up’s first institutional $130 million first close on its second fund - Gaja funding but offered no further details.

Number 38 | Volume 27 | October 14 2014 | avcj.com 5 Private Equity & Venture Forum Taiwan 2014 20 November • Westin Taipei

GLOBAL PERSPECTIVE, LOCAL OPPORTUNITY avcjtaiwan.com

Keynotes: KAO Shien-quey Nicky Lu Deputy Minister Chairman & CEO Simultaneous translation is NATIONAL DEVELOPMENT COUNCIL ETRON TECHNOLOGY, INC. available

活動全程提供 中英文同傳。

Confirmed speakers include: Chien-Yi Chang Ming Bin Chang Andrew S. Hawkyard Director, Research Division II Deputy Director-General Chief Operating Officer TAIWAN INSTITUTE OF INVESTMENT COMMISSION, MORGAN STANLEY ECONOMIC RESEARCH MOEA PRIVATE EQUITY ASIA

Richard Hsu CY Huang Nisa Leung Managing Director President Managing Partner INTEL CAPITAL FCC PARTNERS QIMING VENTURE PARTNERS

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Scan this QR code with your mobile Join your peers phone to review AVCJ Taiwan avcjtaiwan.com #avcjtaiwan latest updates Private Equity & Venture Forum COVER STORY Taiwan 2014 [email protected] 20 November • Westin Taipei Money to the masses The rise of peer-to-peer lending businesses in China is good for small companies that can’t get bank financing and VC firms looking to ride the next wave. But concerns remain over regulation and reliability

GLOBAL PERSPECTIVE, LOCAL OPPORTUNITY avcjtaiwan.com ALIBABA GROUP’S ARRIVAL IN THE rules. The explosion in activity has made the products have trumpeted their potential returns internet finance space inevitably created regulators sit up and take notice. If and when but offered little detail as to the actual underlying Keynotes: shockwaves. Last year the e-commerce giant they do impose stricter requirements in order assets, and many investors have been left KAO Shien-quey Nicky Lu bought Tianhong Asset Management and within to protect customers, it will bring additional disappointed. Online P2P lending sites are seen Deputy Minister Chairman & CEO Simultaneous a few months the Yu’e Bao money market fund pressure to an already fiercely competitive as a means of improving the current system. NATIONAL DEVELOPMENT COUNCIL ETRON TECHNOLOGY, INC. translation is had swelled tenfold to RMB500 billion ($81 industry. Consolidation is all but certain. “The online P2P platforms help provide an available billion). Once the 50th largest fund house in VC investment in the space is rising in alternative investment product that should be 活動全程提供 中英文同傳。 China, suddenly Tianhong was in top spot. tandem with market interest. According to AVCJ more transparent as to the risk involved and Investors flocked to the fund but only existing Research, about $99 million has been invested also more formalized in terms of distribution, Confirmed speakers include: users of online payment service Alipay got in four online P2P sites so far this year, while which will help both lenders and borrowers,” access. Just as it had disrupted retail, so Alibaba the valuations for six more deals have not been says Zennon Kapron, managing director at Chien-Yi Chang Ming Bin Chang Andrew S. Hawkyard was threatening to do the same to finance, using disclosed. This compares to $143 million for two consultancy Kapronasia in Shanghai. Director, Research Division II Deputy Director-General Chief Operating Officer its unique reach to offer customers a potentially disclosed deals in 2013 and $25 million for one The government has reiterated its support TAIWAN INSTITUTE OF INVESTMENT COMMISSION, MORGAN STANLEY more lucrative alternative to bank deposits. As transaction in 2012. for P2P lending as a concept. In May, the term ECONOMIC RESEARCH MOEA PRIVATE EQUITY ASIA an added incentive, redemptions are permitted At the same time, market research firm “internet finance” appeared in a government at any time – provided the proceeds are used to Richard Hsu CY Huang Nisa Leung shop on the Alibaba platform. Average size of online P2P transactions in China, 2013 Managing Director President Managing Partner The ripples were felt at all levels of online INTEL CAPITAL FCC PARTNERS QIMING VENTURE , including peer-to-peer (P2P) PARTNERS lending. There were 600 P2P lending sites in Above RMB50,000 China at the end of 2013, up from 240 in 2012 RMB10,000 -50,000 RMB5,001-10,000 Gordon Shaw Weichou Su Sonia Sun and 20 in 2011. As of June 2014, there were 1,263. RMB2,001-5,000 Managing Director, Shanghai Partner Partner Transaction volume reached RMB10 billion in the RMB1,001-2,000 BARING PRIVATE EQUITY STEPSTONE GROUP KPMG LAW FIRM first half of the year – close to the full-year total for RMB501-1,000 ASIA 2013 – according to the Internet Society of China. RMB201-500 The P2P premise is simple: People lend their RMB101-200 Alex Ying Brooke Zhou money to strangers for virtually anything – a RMB50-100 Managing Director Executive Director - Asia new car, home improvements – and in turn 0 5 10 15 20 25 (%) THE CARLYLE GROUP Pacific, Private Equity enjoy interest rates exceeding 15%, far more Source: iResearch LGT CAPITAL PARTNERS than the 3% offered by banks. More importantly, the online platform serves as a bridge between lenders and small-scale start-ups, many of which Reportstack estimates that 71 of the 800- work report for the first time as Premier Li For the latest programme and speaker line-up, please visit avcjtaiwan.com are unable to get bank funding. plus online lending platforms it tracked went Keqiang pledged to promote the healthy Venture capitalists see it as an enormous bankrupt last year. development of the industry. In response, Yi investment opportunity, partly because the likes Gang, governor of the People’s Bank of China Registration enquiries: Pauline Chen T: +852 3411 4936 E: [email protected] of Baidu, Alibaba and Tencent Holdings have yet Official support (PBoC), noted that despite being supportive of Enquiry Sponsorship enquiries: Darryl Mag T: +852 3411 4919 E: [email protected] to build a dominant presence in the space. P2P lending has existed for years as part of the innovation, the central bank will take appropriate Speaking enquiries: Joy Qian T: +852 3411 4866 E: [email protected] “There is a market window to invest in P2P shadow banking sector, but it has become more measures to minimize risk. platforms,” says Ray Yang, managing partner at prominent in response to liquidity tightening “The authorities support the industry and Northern Light Venture Capital (NLVC). “There at central bank level. Unable to borrow money won’t surprise people with new rules, for are four large state-owned banks and more than through conventional channels, the small and example saying that all online P2P lending sites Asia Series Sponsor Co-Sponsors 5,000 smaller banks nationwide. Online P2P medium-sized enterprises (SMEs) that contribute are illegal,” says Raymond Wang, managing platforms are shaking up the traditional banking up to 70% of GDP but receive only about 37% partner at Beijing-based law firm Anli Partners. system and adding value to it. Internet giants of total financing must look elsewhere. Moody’s “That’s why we’re seeing VC investors feel more like Alibaba cannot monopolize the entire P2P estimates that the balance of outstanding comfortable about investing in this sector.” online lending landscape because it’s out of their shadow banking products in China stands at Most of top 20 P2P lending platforms have current ecosystem.” RMB21 trillion ($3 trillion). received VC funding. PPDai, founded in 2007, was Knowledge Partner However, exposure to the industry requires Non-banking financial institutions raise funds among the first batch of start-ups and has raised a high level of risk tolerance. When the first P2P from retail investors through selling wealth capital from Lightspeed China Partners, Sequoia site was launched in 2007, there were no specific management products. However, some of these Capital and Noah Holdings. Yooli.com, started Scan this QR code with your mobile Join your peers phone to review AVCJ Taiwan #avcjtaiwan latest updates avcjtaiwan.com Number 38 | Volume 27 | October 14 2014 | avcj.com 7 COVER STORY [email protected]

by a former executive at TPG Capital, received be performed by a P2P platform based on the their capacity to pay is assessed, and inquiries backing from Morningside Technologies and Western model. In China, though, over half of the are made to ensure the loan will be used for the Softbank China. lending sites currently in operation are handling stated purpose. On the lender side, the platform Meanwhile, Dianrong.com, launched by Soul money and therefore behaving like banks. In allows lenders to commit small amounts across Htite, co-founder of US-based Lending Club, and some cases, money is channeled into projects thousands of loans without Dianrong performing Kevin Guo, an intellectual property lawyer, has without the lender’s knowledge. any money management role. Lenders can say raised two rounds of funding from NLVC and Renrendai, Jimubox and CreditEase – the which borrowers will receive their capital. Hong Kong financial institution Sun Hung Kai & largest P2P lender in China – have started The downside to this approach is that it takes Co. Jimubox, which came online in August last creating online financial products where, for much longer to achieve scale than platforms that year, recently got $37 million from smart phone example, RMB50,000 is raised from multiple acquire the customers first. Yooli launched in maker Xiaomi and Shunwei Capital Partners. lenders at annual return of 10% but the end use February of last year and already has more than Unlike online payment firms – a former of the capital is not specified. Once the money 790,000 registered lenders with total transaction venture capital darling – P2P lenders are has been raised they seek out borrowers capable value exceeding $300 million since inception. reasonably differentiated and it is unlikely that of paying above a 10% interest rate. PPDai has been around six years longer but one or two players will dominate the market. The business model is therefore not to earn its transaction volume is a fraction of that size. Alipay was an early mover in online payment a commission on each transaction, but to profit Dianrong has the same issue. and built up a head of steam thanks to business through interest rate arbitrage. “Although our practices are close to what from Taobao and TMall, Alibaba’s C2C and B2C In contrast, PPDai and Dianrong are among the regulators expect, it’s difficult to scale up platforms. It now has a 50% market share and the few that source the borrowers first and then quickly,” says Guo, Dianrong’s other co-founder. “If a small company wants to borrow RMB30,000 within a three-day window, it is very hard for China online P2P platform transaction volume us to accommodate them. We have to evaluate the borrower’s debt repayment capability even 2011 though we might assume the borrower is able to make payments on time.” 2012 Credibility questions 2013 Dianrong’s transaction volume stands at RMB100 million per month and it has a risk management 2014 team of more than 300 people. The company has also sought to build up its market reputation 0 100 200 300 through a partnership with China Orient Asset (RMB billion) Management, a state-owned fund house. Source: Internet Society of China Other P2P online platforms have also teamed up with third-party guarantors to help drive confidence in the industry. Yooli uses a third- regarded by many as unsurpassable. In contrast, put them in front of prospective lenders. Both party guarantor to ensure that lenders receive the P2P online market is large to accommodate platforms claim to differ from many practitioners the monthly returns they have been promised. various business models, based on different due to their strong risk controls, with several It also sources funding projects from guarantors, underlying assets. For example, a P2P platform dimensions of analysis conducted to determine a including small credit leasing firms, to raise funds that specializes in providing loans for SMEs in borrower’s probability of default. online. In such cases, Yooli might not know who Beijing may not have a similarly strong local “When we build a P2P company, we have to the borrowers are. network in Shandong province. decide to have a transparent model. Our revenue While relying on guarantors means the model is based on how many lenders and platform itself is exposed to minimal risk, the A blurred line borrowers we help, not how much borrowers lenders’ risk is substantially higher because However, these differentiated business models are paying in interest,” says Htite, co-founder of neither they nor the platform know where are a potential headache for the authorities. The Dianrong. “There is a clear line that distinguishes the money is going. VC investors are therefore China Banking Regulatory Commission (CBRC) us from banks – we do not get involved in the cautious. “The problem in China is that third-party is seeking to impose some rules on the industry transaction. Of course, to do what banks do guarantors are immature and their potential because of concerns that individual lenders will requires a license.” default risks are high,” NLVC’s Yang says. “You can’t fall victim to illegal fundraising and poor credit Dianrong aims to help high-quality borrowers fully rely on them.” management by platforms. get lower interest rates, but this can be achieved Industry participants also express reservations “It’s clear that the CBRC mainly allows P2P by creating customized products for specific about CreditEase’s credit assignment model. platforms to serve as information intermediaries, industries. For example, a restaurant in Shanghai, Instead of collecting money from lenders, Tang but not financial agencies. This means online which operates a cash business, is more likely Ning, the company’s founder and CEO, will firstly operators can’t manage capital on their own interested in making daily payments then lend his own money to the borrowers. Then he accounts and they can’t provide loans guarantees borrowing money for a long period of time. sells the loans to other investors who in turn to lenders, which is usually what the traditional The platform’s verification process is similar become the lenders. banks do,” says Anli’s Wang. to the underwriting services used in banks: a “This structure is legal according to the law. Indeed, these functions are not supposed to prospective borrower’s identity is confirmed, Another reason for taking this approach is that

8 avcj.com | October 14 2014 | Volume 27 | Number 38 COVER STORY [email protected]

technology was lagging eight years ago. It was ability to repay the debt; in China fraud risk is a their own online presence. However, unlike impossible to use digital signatures to help key consideration too and scams are sometimes the P2P lenders – at least for now – they face complete transactions over the internet. Since very well-organized. significant regulatory requirements and have a the technology has improved, the majority of It is unlikely that the Chinese authorities will host of other issues to deal with, such as non- borrowers and lenders on our platform now unveil rules for online P2P platforms this year. The performing loans, interest rate liberalization and enter into loan agreements directly. This is a good regulators require time to continue familiarizing increased competition on main street as well as example of how technology helps transform themselves with the industry and come up with online. finance,” Tang says. an appropriate approach. But few in the industry “These challenges make it difficult to Founded in 2006 as a bricks-and-mortar are under the illusion that this will not happen. innovate in the same way that we’re seeing operation, CreditEase has expanded rapidly and now offers a range of consultancy services, including wealth management. It has received “There is a clear line that distinguishes us investment from the likes of IDG Capital Partners, from banks – we do not get involved in the Morgan Stanley Private Equity Asia and KPCB. Now the company is also in the process of transaction. Of course, to do what banks do moving online. One investor familiar with the firm suggests that a network of physical stores requires a license” – Soul Htite could reassure potential customers unfamiliar with internet finance. A P2P player that starts The natural consequence is smaller firms from the technology companies,” says Kapron of online could face questions about reliability exiting the business, either because they don’t Kapronasia. “Certainly, this could change going and sustainability and by extension its ability to have the resources to address unsustainable forward, but it will take significant investment operate offline. lending practices and poor credit risk and a change in mindset for them to be able to “It’s not too difficult to set up a pure online management, or because they don’t have the compete effectively. We could see institutions platform but it takes a long time to build will to try. In that context, cooperation with buy some of the larger online players.” up a risk management culture and credit traditional financial institutions is important – This week Dianrong became the first online risk management ability, just like traditional these groups have the staff and facilities to meet P2P platform to form a partnership with a financial services,” the investor says. He adds with borrowers and verify submitted information. local bank. It will work with Bank of Suzhou on that, unlike more developed markets, credit risk At the same time, traditional banks and other providing lending services to SMEs in Jiangsu management is about more than a borrower’s financial institutions are also trying to build out province – cost-effectively and online.

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Scan this QR Scan this QR code with your code with your Join your peers mobile phone Join your peers mobile phone to review AVCJ to review AVCJ Forum latest Forum latest avcjforum.com #avcjforum updates avcjforum.com #avcjforum updates ANALYSIS [email protected] The IPO genie Real and paper windfall for PE investors in Alibaba spurs exit environment; the latest round of fundraising for pan-regional mega vehicles draws to a close; dominates the investment numbers

1) Exits: Alibaba makes PE wishes come true CDH Investments, Goldman Sachs, New them generated $2.2 billion. These calculations At $3.3 billion, the overallotment option on Horizon Capital, Temasek Holdings and Kerry apply to the $21.8 billion offering prior to Alibaba Group’s IPO was more than one third Holdings did not take any money off the table, underwriters fully exercising the overallotment the size of the total proceeds from private their combined interest in the company is now option, which took the total to $25 billion. equity-backed offerings in the second quarter worth around HK$52 billion. Healthscope’s Of the GPs, Silver Lake and Yunfeng can of 2014. This put the size of the third quarter IPO owners, TPG Capital and The Carlyle Group, were consider themselves big winners. Silver Lake spike in context. Buoyed by the world’s biggest able to realize proceeds of A$654 million. They is said to have committed $300 million to ever public offering, the $34.2 billion raised is still hold a 38% stake worth approximately A$1.6 the company, investing in 2011 as part of a unsurprisingly the highest on record. billion at current market prices. consortium that paid $2 billion for a 5.7% stake But it wasn’t just an Alibaba story. Chinese As for Alibaba, eight private investors and again as part of a $7.6 billion debt and equity pork producer WH Group – known as Shuanghui – in alphabetical order: Asia Alternatives fundraising effort used to take out half Yahoo’s International until a touch of re-branding after Management, Boyu Capital, China Investment holding in 2012. The PE firm’s partial exit was the acquisition of US-based Smithfield Foods Corp, CITIC Capital, Siguler Guff, Silver Lake, worth $278.8 million and it retains a 2.2% interest – pitched in with $2.4 billion, while the IPO of Temasek Holdings-owned Pavilion Capital and with a current valuation of around $4.7 billion. Australian hospital operator Healthscope raised a Yunfeng Capital – all made partial exits. Though Yunfeng first invested in 2011 as part of the further A$2.25 billion ($2.1 billion) tiny in percentage terms, these sales between same consortium as Silver Lake. It is sold $442 million in shares through the IPO and now has a 1.1% stake worth nearly $2.4 billion. PE-backed IPOs in Asia Alibaba’s $2.2 billion contribution helped 35,000 80 private equity exits by way of public market sales reach $6.4 billion in the third quarter of 2014, 30,000 70 more than double the total for the previous three 25,000 60 months and the third-highest quarterly total 20,000 50 ever seen. It did not, however, translate into a

15,000 40 IPOs bumper period for overall PE exits. According to preliminary data from AVCJ Research, a total of

US$ million 30 10,000 $14.1 billion was raised, compared to $15.4 billion 5,000 20 and $14.1 billion for the previous two quarters. 0 10 The key element was the trade sale figure, 3Q2012 4Q2012 1Q2013 2Q2013 3Q2013 4Q2013 1Q2014 2Q2014 3Q2014 which came to $6.1 billion, down from $8.5 No. of IPOs Funds raised Healthscope WH Group Alibaba Group billion for April-June 2014. Secondary sales also Source: AVCJ Research fell from $3.5 billion to $1.5 billion. The first quarter had Oriental Brewery and the second quarter had Queensland Motorways, the only single-hit exits in Asia to exceed $5 billion. MBK Asia private equity fundraising by jurisdiction Partners’ agreement to offload Taiwan cable TV 20,000 120 operator CNS was the largest trade sale of the July-September period at $2.4 billion.

15,000 100 However, there is reason to believe that 2014 could yet surpass 2012 as the biggest year on record for Asian PE exits. The 2012 total was $53.5 10,000 80

Funds billion. With $44.7 billion already logged for 2014,

US$ million the final quarter figure could drop into the single 5,000 60 digits and still be enough to claim top spot.

0 40 2) Fundraising: Look past China to the pan- 1Q2012 2Q2012 3Q2012 4Q2012 1Q2013 2Q2013 3Q2013 4Q2013 1Q2014 2Q2014 3Q2014 regionals No. of funds Australia Hong Kong Japan South Korea China private equity fundraising slumped from China (PRC) India Singapore Other $10.2 billion in the first quarter of 2012 to just Source: AVCJ Research *Excluding real estate & global funds with a focus on Asia $2.6 billion in the third quarter of 2013. The industry has since recovered from this nadir with

12 avcj.com | October 14 2014 | Volume 27 | Number 38 ANALYSIS [email protected]

their predecessors, with four finishing above Asia PE investment by geography target and two increasing their hard caps. It hasn’t been plain sailing for all, but the continued patronage of these GPs points to two trends. Australia First, the flight to quality in Asian private equity China as LPs gravitate towards a smaller number of GPs, Hong Kong with stand-out performers and brand names the 2Q2014 India 3Q2014 obvious beneficiaries. Second, when individual Japan 4Q2013 1Q2014 markets are blighted by uncertainty, there is Singapore South Korea comfort in a pan-regional strategy. Other Once Baring Private Equity Asia closes its sixth fund, there is likely to be a period of more modest quarterly fundraising totals and more Source: AVCJ Research mid-market GPs.

3) Investment: Growth capital dominates Characterized as a significant step in China’s Asia PE investment by nancing stage push to restructure state-owned enterprises 25,000 800 by bringing in more private capital to diversify ownership, oil refiner Sinopec agreed to sell a 20,000 29.99% stake in its retail business in September 700 for $17 billion. Private equity investors China 15,000 International Capital Corp (CICC), Bohai Industrial

Deals Investment Fund Management, RRJ Capital, 10,000 600 Haixia Capital, Goldstone Investment and Hopu US$ million Investment picked up 8.7% for just over $5 billion. 5,000 It followed another consortium deal in 0 500 which the likes of Warburg Pincus, Goldman 3Q2012 4Q2012 1Q2013 2Q2013 3Q2013 4Q2013 1Q2014 2Q2014 3Q2014 Sachs, CITIC Securities, Khazanah Nasional, CICC No. of deals Buyout PIPE Other and Fosun International participated in a $2.35 Growth/pre-IPO Start-up/early stage billion investment in China Huraong Asset Source: AVCJ Research Management. The company, which is expected to go public, is one of four groups tasked with managing non-performing loans (NPLs) from progressively large sums raised over the first been committed. Chinese private equity comes state-owned banks. three quarters of 2014. in many different forms. These two transactions were largely The revival was initially driven by venture What is arguably more interesting about responsible for China PE investment reaching a capital. Between April and June alone, a total of the driving factors responsible for the uptick in single-quarter high of $13.1 billion for July- $4 billion entered China-focused VC funds – 26% Asia private equity fundraising is the role of the September 2014. With deal flow in most other of the capital entering all PE funds in the region. pan-regional vehicles. Just as the China share has major jurisdictions either flat of declining, the This momentum was never likely to be sustained grown since the start of the year, so has the Hong China share of the Asia investment jumped into the third quarter and indeed it wasn’t: China Kong contribution – and most Asia vehicles are to 63%, up from 30% the previous quarter. VC fundraising slipped to $382.6 million. Yet classified by AVCJ Research as resident in this Investment was also slightly up on the April-June China private equity continued its roll, with $9.7 jurisdiction. A relatively low first-quarter total of period at $20.8 billion compared to $19 billion. billion committed to the asset class during the $1.5 billion was followed by consecutive three- Sinopec Marketing and Huarong boosted quarter, up from $6.7 billion for the previous month periods in which fundraising reached $5.9 the growth capital contribution nearly twofold three months. billion and $5 billion. to $13.5 billion while slipped from $8 However, $8.1 billion of this total went to a This is essentially the final hurrah in the three- billion to $3.9 billion. It serves as a reminder single vehicle – the China Minsheng Investment year process that has seen nearly all of the largest that – from a China perspective – although Fund. Set up by the former head of China global and Asia-based PE firms raise their first there is increasing interest in and availability of Minsheng Banking Corporation, an inauguration regional vehicles since before the global financial control deals, growth capital will likely remain the ceremony was held for the fund in August. It crisis. Starting with Bain Capital Asia II, which lifeblood of the industry for some years to come. was announced that 59 domestic enterprises reached a final close in July 2012, eight firms have How strongly state-owned enterprise are serving as LPs, including leading appliances raised $27.2 billion between them. In addition restructuring features in this remains to be maker Suning Commerce Group. to Bain, they include KKR, MBK Partners, Affinity seen. Sinopec Marketing and Huarong are It is difficult to know quite what to believe Equity Partners, CVC Capital Partners, Morgan both examples of deals that are relatively rare, in these situations. Numerous questions remain Stanley Private Equity Asia and The Carlyle Group. run as highly competitive processes, and often unanswered, notably whether the fund is The latter two closed in the third quarter of 2014 expensive to get into. But there is the sweetener governed by a traditional GP-LP structure and on $1.7 billion and $3.9 billion, respectively. of an all-but-guaranteed public market exit at the whether the stated amount of capital has really In all but two cases the funds are larger than end.

Number 38 | Volume 27 | October 14 2014 | avcj.com 13 DEAL OF THE WEEK [email protected] Bain serves up Skylark in Tokyo IPO

WHEN BAIN CAPITAL BOUGHT SKYLARK IN The PE firm’s first move was to bring in Ralph the country’s economic reforms, that prompted 2011, the restaurant operator was going through Alvarez, former global president and COO of Bain’s decision to the take the company’s public. one the rougher patches of its 40-year history. McDonald’s Corporation as chairman. It further Skylark sold 62.6 million shares – including A dysentery outbreak had forced the closure of bolstered the management team with executives an overallotment option of 7 million shares – at 120 outlets, further delaying a transaction that from the likes of Starbucks and Uniqlo. The JPY1,200 apiece, the bottom end of the indicative had already been on hold for several months as a second stage was to focus on customer service, range. Bain’s stake fell from 97.7% to 66.1% as it result of the Fukushima earthquake. in particular addressing issues with waiting took the opportunity to realize JPY68.8 billion Despite the drawbacks, Bain – which already times and consistency in the quality of food from the investment. Skylark dropped 5% on its had exposure to the sector through Dominos preparation across the outlets. first day of trading on October 9. Japan – remained keen on the business “We implemented a bunch of The stock is yet to recover, having and confident it could unlock more value. It standards and tracking metrics last traded at JPY1,138, but Gross- eventually bought a 100% stake in the business – things you would commonly Loh remains optimistic, saying from Nomura Principal Finance for JPY160 billion see in the US - to increase there is a lot more work to do. ($2.1 billion). productivity and reduce wait “We have spent the last “We have had a lot of experience in the retail times, particularly at peak hours. couple of years getting the and restaurant sector and in Skylark we saw a We also reconfigured tables so fundamentals strong again and very well-positioned business, but one that had people could be seated more Skylark: Flying the nest now we are looking at growing a lot of opportunities to be run better,” explains quickly,” says Gross-Loh. our footprint,” he explains. “We David Gross-Loh, managing director with Bain in The strategy seemed to pay off, with the think there is a sizeable opportunity in Japan Japan. “The original team was a solid, but we felt company reporting improved customer to open new stores and we have identified we wanted to take it from a leading Japanese satisfaction scores and seeing steady same store around 1,000 new locations. The return on the player to a business that could perform on a sales (SSS) growth for the first time in several economics for a Skylark store is very attractive – global level, so the first step was building the years. It was this, plus the positive performance around 20-30% – so that is going to be another management.” of the Japanese equities markets in the wake piece of our growth story.” Navis makes Modern Star education play

JUST OVER A YEAR AGO, NAVIS CAPITAL boards and sports equipment, as well a more jurisdictions like Hong Kong and Singapore.” Partners bought Australian childcare services complex items for primary and secondary However, education is just one part of provider Guardian Early Learning from fellow PE schools such as lab equipment, robotics, beakers the company’s business. Modern Star is also investor Wolseley Private Equity for A$120 million and Bunsen burners.” Australia’s biggest independent toy supplier, ($110 million). The idea then was to anticipate According to sources familiar with the selling both its own products and acting as the the rise in the demand for childcare services situation, Modern Star’s EBITDA is around A$23 exclusive Australian supplier for global brands amid wider government efforts to get mothers million ($20 million) and the deal values the firm such as puzzle-maker Ravensburger and action back into work and bolster the at approximately 8x that. figure brand Schleich. country’s dwindling tax base. While the industry is large, it is In total, the company holds an inventory of With its latest investment in also highly fragmented. Between 10,000 products and has around 40,000 customer Modern Star – another Australian 400 and 500 companies – relationships – including schools, children centers firm – Navis is tapping the same ranging from specialist suppliers and specialist toy shops. At present, around 60% opportunity, although this time focusing on sports or science of Modern Star’s business is conducted online, it has entered at a different point equipment to more generalist with the balance of transactions executed by on- in the value chain. Instead of players – supply the country’s the-ground reps. providing education, Modern Star Modern Star: Child’s play schools and nurseries. While international expansion is very much supplies the vast the catalogue of “The strategy is first on the agenda, the company will seek to build specialist furniture, equipment, toys and teaching to become stronger in Australia through upon its strengths in an orderly fashion. “We aids that companies like Guardian require. consolidation of this fragmented supply base, will decide where we want to go deepest, that “The company supplies 20,000 childcare so we will look for companies with particular might be in science products, or arts and crafts, centers, primary schools and secondary schools products or relationships that we think would be or even outdoor sports,” says Latham. “Then across the whole of Australia and New Zealand,” valuable,” says Latham. “But the strategy will also we can decide where the best opportunities says Philip Latham, a partner at the PE firm. “It’s look at international diversification and how this are for organic expansion – through product everything from blocks, bricks, crayons, white company can become a supplier to schools in development – and acquisitive expansion.”

14 avcj.com | October 14 2014 | Volume 27 | Number 38 WILLIAM BAO BEAN | INDUSTRY Q&A [email protected] Start-up central William Bao Bean has left Singtel Innov8 for a new role as investment partner of SOS Ventures in China and managing director of the firm’s accelerator program. He shares his thoughts on the China start-up scene

Q: Why the move? many become investors in the Accelerators came into vogue A: I am very interested in early- companies they mentor. We globally and there has been a stage investment and building also have close relations with narrowing and I’d say the culture up the China ecosystem, and AngelVest, the largest angel of start-ups in China doesn’t lend also in the cross-border element. group in North Asia, as well as itself to accelerators. However, for The SOS platform is extremely a network of other angel funds those going outside the country, powerful, doing over 120 and early-stage investors. We the network of local relationships investments a year. It operates differ from other accelerators in provided by an entrepreneur as an evergreen fund and has that SOS Ventures usually invests or doesn’t help a very strong IRR. Their brand in the start-ups that come out of much, so they need mentorship of mentor-driven accelerator the program. The model works and acceleration. investment really fits with my especially well when you double approach. I’ve been a mentor down on the winners. Q: What is behind the rise in at Chinaccelerator since the “The virtuous angel investors? Is it evidence beginning in 2010 and also at Q: There was a boom in of the virtuous cycle, with hardware accelerator HAXLR8R. cycle didn’t kick accelerators in China a few successful entrepreneurs There are six accelerator in with the first years ago but many have since backing the next generation programs globally and then we closed. What happened? of start-ups? also make direct investments of generation of A: The issue has been localizing the A: Rather than follow what US $50,000 to $5 million. These may accelerator model in China – it entrepreneurs did and turn be follow-ons or investments in entrepreneurs, hasn’t worked for some people their companies over to companies that aren’t part of the but with and there are various reasons for professional management and accelerator programs. this. For example, the concept start that virtuous cycle, the first the second of sharing and mutual support generation of entrepreneurs Q: Five batches of start-ups come between teams is quite difficult in China are still running their through Chinaccelerator. What generation, and to foster in China. Start-ups worry companies. However, the second are the big success stories? they are now about ideas and staff being generation – who worked at A: Orderwithme was founded stolen. Our approach is more those first-generation companies in and started off funding the third international and coming from before starting their own helping US small retailers buy the outside in, there is a lot less businesses – are exiting. People directly from factories in China. generation” of that. You need cooperation to have made money from stock They have since expanded survive. We are mentor-focused, options or by selling to Alibaba into a platform managing all Now they cover 250 universities with all the start-ups in one Group or Tencent Holdings, they relationships between retailers, nationwide. If you are a brand location, and we work together have capital and experience, distributors and factories. The that wants to reach out to the for three months, focusing on and they are investing. So the company has moved to Las university population you go to the demo day [the next one is in second generation is now Vegas and now focuses on Launchpilots. Shanghai on November 25] and funding the third generation, connecting US retailers with beyond. We help international and the first generation is factories all over the world and Q: What kind of support do start- start-ups penetrate China and purchasing everyone. This round managing the supply chain. They ups receive? emerging Asia and help Chinese of acquisitions has only been raised a Series A round from SOS A: Once you are accepted into the start-ups going global. There going for two years. Before that, Ventures and another VC firm, program you get $16,000 in cash is a huge cross-border aspect most companies did everything and then got a $6 million Series plus services such as free rent to it and the program is run in in house – they saw someone B round last year led by Tony for six months and attendance English, not Chinese. doing something good, put Hsieh’s VegasTechFund. Another at the 8x8 conferences we together a product team and company, which came out of hold in Beijing and Shanghai. Q: In the absence of a sizeable it themselves. However, China the program last year, is called After graduation we expose number of accelerators, what has become so competitive and Launchpilots and runs student start-ups to a wide variety of fills the funding gap? talent has become so scarce that events on university campuses. funding sources. We have 150 A: There are 10,000 angels running the internet leaders have added They started in Hong Kong and mentors who are business around China, it has ballooned the acquisition tool to their tool we helped them get into China. leaders and entrepreneurs and over the last two years. box.

Number 38 | Volume 27 | October 14 2014 | avcj.com 15 AVCJ Private Equity & RECOGNISING EXCELLENCE IN ASIAN PRIVATE EQUITY Venture Capital Awards – Asia Voting now open until 27 October. ACT NOW! Held in conjunction with the AVCJ Forum and now in their 14th year, the AVCJ Awards have become the highest distinction that can be achieved in private equity in Asia, and a showcase for first-class innovation, ingenuity and performance. Tell us who you think deserves recognition. Voting now open until 27 October, 2014. Visit www.avcjforum.com/static/avcj-awards and start to vote. For any enquiries, please e-mail [email protected]

THE CATEGORIES & SHORTLIST • Fundraising of the Year - Venture Capital • Deal of the Year - Mid Cap • Exit of the Year - Large Cap DCM Ventures China Fund (DCM VII) (DCM) CTOS Data Systems (Creador) CSPC Pharmaceutical (Hony Capital) GGV Capital V (GGV Capital) Estia Health (Quadrant Private Equity) Matahari Department Store (CVC Capital Partners) Morningside China TMT Fund III IMAX China (FountainVest Partners/ Oriental Brewery (Affinity Equity Partners/KKR) (Morningside Technologies) China Media Capital) Peters Ice Cream (Pacific Equity Partners) Qiming Venture Partners IV (Qiming Venture Partners) National Bulk Handling Corp Techpack Solutions (MBK Partners) Shunwei China Internet Fund II (India Value Fund Advisors) • Venture Capital Professional of the Year (Shunwei Capital Partners) Union Bank of Colombo (TPG Capital) Hurst Lin (DCM) • Fundraising of the Year - Mid Cap • Deal of the Year - Large Cap Jixun Foo (GGV Capital) Kedaara Capital I (Kedaara Capital) Goodpack (KKR) Richard Liu (Morningside Technologies) Orchid Asia VI (Orchid Asia) Nanfu Battery (CDH Investments) Naren Gupta (Nexus Venture Partners) Quadrant Private Equity No.4 (Quadrant Private Equity) Sinopec Marketing (CICC/Bohai Industrial J.P. Gan (Qiming Venture Partners SSG Capital Partners II (SSG Capital) Investment Fund Management/RRJ Capital/Haixia • Private Equity Professional of the Year Vision Knight Capital (China) Fund II Capital/CITIC Goldstone /Hopu Investments) K.Y Tang (Affinity Equity Partners) (Vision Knight Capital Partners) Sony Corp - personal computer business David Liu & Julian Wolhardt (KKR) (Japan Industrial Partners) • Fundraising of the Year - Large Cap Gabriel Li (Orchid Asia) Velocity Frequent Flier Program Affinity Asia Pacific Fund IV (Affinity Equity Partners) Chris Hadley (Quadrant Private Equity) (Affinity Equity Partners) CDH Fund V (CDH Investments) Shuge Jiao (CDH Investments) CVC Capital Partners Asia Pacific IV • Exit of the Year - IPO • Firm of the Year (CVC Capital Partners) Alibaba Group (Silver Lake/Yunfeng Capital/CITIC Affinity Equity Partners Navis Asia Fund VII (Navis Capital Partners) Capital/Boyu Capital/Asia Alternatives/Pavilion CVC Capital Partners Morgan Stanley Private Equity Asia IV Capital/Siguler Guff) KKR (Morgan Stanley Private Equity Asia) Asaleo Care (Pacific Equity Partners)Healthscope Pacific Equity Partners • Deal of the Year - Venture Capital (The Carlyle Group/TPG Capital) Quadrant Private Equity JD.com (Tiger Global/Hillhouse Capital Management/ Flipkart (Tiger Global/Naspers/GIC Private/Morgan DST Advisors/Capital Today) Stanley Investment Management/DST Global/Accel Nord Anglia Education (Baring Private Equity Asia) Partners/Iconiq Capital/Sofina) LanzaTech NZ (Siemens Venture Capital/K1W1/ • Exit of the Year - Mid Cap Qiming Venture Partners/Khosla Ventures/Malaysian Dick Smith Holdings (Anchorage Capital Partners) Life Sciences Capital Fund/CICC) Golden Gate (Mekong Capital) Mogujie (Hopu Investments/Trustbridge Partners/ Yonghui Superstores (Headland Capital Partners) Qiming Venture Partners/IDG Capital Partners) Tirumala Milk Products (The Carlyle Group)United Snapdeal (eBay/Intel Capital/Bessemer Venture Cinemas (Advantage Partners) Partners/Nexus Venture Partners/Kalaari Capital/ Saama Capital) Youxinpai (Warburg Pincus/Tiger Global) For any enquiries, please e-mail [email protected]

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