Issue 90, March 2017
Asian Technology Newsletter
A S I A N TECHNOLOGY NEWSLETTER MARCH 2017 , I S S U E 90
We hope that you find the Asian Technology Newsletter informative.
BDA Partners is an investment banking firm specializing in executing cross-border transactions involving Asia, including acquisitions, divestments, JVs, capital raising and restructuring. We have offices and professional staff throughout Asia, the Middle East, Europe, and the US. If you would like to learn more about how BDA is positioned to help your business grow through acquisitions, or to achieve maximum value in a divestment or fund raising exercise, please contact us at any one of our offices.
Jeff Acton Matthew Doull Managing Director, Managing Director, Head of Technology Head of Internet and Digital Media [email protected] [email protected]
CONTENTS Market Update 2 Deal Digest – Recent Tech Deals Across Asia
Japan 6 Singapore 7 Vietnam 7
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India Europe China US Japan Korea Global technology indicies have traded 12% higher, on average, in the first quarter of 2017. Growth has primarily come from a global post-US election rally, favorable opening week for Snap, Inc., and a cheap money environment. Over the past twelve months, technology- focused stocks have all traded positively with the Chinese technology companies leading the way.
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Digital Media E-Commerce Travel Tech Fintech Over the last twelve months, the Fintech index has appreciated at a moderate rate to 20% y-o-y, surpassing other technology sub-sector stocks. From investment towards streamlining financial payments to offering easier access to financial planning, both individual consumers and corporations are applying fintech products at an increasing rate on a daily basis.
Source: CapitalIQ, BDA 2 | P a g e
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Source: MergerMarket, BDA 3 | P a g e
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consortium of investors including CDH ambition to launch in China. There has Investments, China Development Bank been a major push towards subscription- Capital Corporation, Yiyao Capital and based video content in China and iQiyi is China Eastern Bell Venture Capital. Hive Box building up a war chest so it acquire
plans to use the proceeds to expand its overseas and national programming to Beijing Sanding Network, a Chinese business into more cities in China, stand out from a crowded field of well- operator of the bicycle sharing platform, improving its information and data funded rivals. The firm is the Chinese Ofo, plans to raise US$450m from a integration, as well as exploring new ways online video market leader in terms of consortium of investors including to enhance user satisfaction. Hive Box was both market share and paying subscribers. Atomico Investments, CITIC Private founded in 2015 by SF Express together February 21, 2017 Equity, Coatue Management, DST with other Chinese courier companies STO Global, Hangzhou Kuaizhi Technology, Express, ZTO Express and Yunda Express, Macrolink Holding and Matrix Partners as well as logistics property GLP. The Richard Liu, Chairman of JD.com along China. Ofo got its start as a student project company now operates 40,000 smart with an undisclosed set of investors, has at Beijing’s prestigious Peking University package self-service units with three agreed to acquire a 68% stake in JD in 2014. Eventual PhD dropout Dai Wei million package boxes in 74 cities in China, Finance, a Chinese internet finance and four other students explored cycle improving convenience and efficiency in company for US$2,076m. JD Finance was tourism before landing on bike-sharing. the last-mile delivery process. Over established in September 2012 to house Once emblematic of China’s socialist 400,000 courier delivery personnel from JD.com’s finance, banking and cred it working class, bicycles remain popular various delivery and e-commerce services and has been operating among students and urban commuters companies use Hive Box's facilities, which separately since October 2013. JD Finance despite increasing car ownership. The are mostly conveniently located in offers fin-tech services in payments, industry has drawn more than a billion apartment building lobbies and insurance as well as consumer, business dollars from investors, betting that bikes transportation hubs. As users do not need and supply chain financing. Separating JD offer a more traditional alternative to car- to be home to receive packages or go to a Finance from its parent, will allow the unit hailing that prevails in urban centers. A specific store to send packages, the service to transform into a purely Chinese entity, government campaign to untangle the is being adopted by delivery firms and making it eligible for securities and fund traffic gridlock now plaguing most major users rapidly. January 06, 2017 licenses, off-limits to foreigners, as well as cities, also encourages the proliferation of a future domestic listing. The spin-off is bike and car sharing. Ofo and its expected to help JD Finance take on competitor Mobike are among the two iQiyi, a Chinese online television and Alibaba’s Ant Financial. With the largest of a growing crop of private bike- movie portal, has raised US$1,530m from formation of an independent affiliate, JD sharing operators. Unlike similar services a consortium of investors including Finance will be able to aggressively focus operated by local governments around the existing investor Baidu.com and new on building both product and user base in world, their users find and pay for bicycles investors Boyu Capital, China China. This development comes on the via a smartphone app and then leave them Everbright Group, Hillhouse Capital, heels of Alibaba’s affiliate Ant Financial wherever they want. Ofo alone has IDG Capital and Sequoia Capital. making strides into the international brokered more than 300 million rides and iQiyi.com will use the proceeds to continue market with its recent M&A spree as it has more than 20 million users with investing in content and services as the looks to expand its reach to wider operations in nearly 40 cities in China, the streaming sector develops, to upgrade its audiences across the globe. March 02, U.S., Singapore and the U.K. There are intellectual property ecosystem for 2017 about 600 bike-sharing operations seeking out illegal content, and to globally, with a market that could grow by accelerate intellectual property-related 20 percent a year to generate an estimated businesses, such as subscriptions to its Koubei, an Alibaba backed Chinese $5.8 billion in revenue by 2020. March 01, services. iQiyi claims to have 481m users discovery platform for shopping and 2017 and 5.5 billion hours of time spent on its dining, plans to raise US$1,000m from a service each month. The service is engaged consortium of investors including Silver Hive Box Technology, a Chinese 24-hour in an intense competition with Alibaba- Lake, CDH Investments, Yunfeng self-service open platform for express owned Youku Tudou and Tencent Capital, Temasek and Khazanah delivery companies and e-commerce Holdings. That fierce competition is one Nasional Berhad, the sovereign wealth logistics, plans to raise US$361m from a reason Netflix gave up its long-time fund of Malaysia. Koubei is a joint venture
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founded in 2015 by Alibaba and Ant Maihuolang Information Technology, a collaboration, and manage compliance for Financial, an Alibaba offshoot that Chinese operator of rural e-commerce employees, customers, partners, and manages its Alipay service and other platform 51mhl.com plans to raise suppliers. The Learning Technologies financial tech initiatives. Koubei is closely US$145m from a consortium of investors Group produces interactive multimedia tied to Alipay, giving businesses greater including Great Wall Fund Management programmes. The company also engages insight into customers who come in using and Shenzhen New Industrial Venture in the mobile e-learning, bespoke e- Koubei. Knowing who those customers are Capital. 51mhl.com, launched in 2014, is a learning, and educational games and how often they have been patrons rural third-party e-commerce platform for businesses, as well as operating employee could in theory allow Koubei-affiliated agricultural specialty foods, farm supplies, benefit trust. Learning Technologies businesses to offer highly targeted electric motorbikes and parts and Group’s strategic aim is to build a dynamic coupons or discounts. Koubei said it household appliances. It operates in 23 portfolio of complementary businesses handled more than 15m daily orders in provinces in China with 218 county offices and an international e-learning business of 2016. Alibaba has disclosed that Koubei and 28,500 village services stations. scale. February 03, 2017 garnered some US$7 billion in payment 51mhl.com will use the new funding to volume in the third quarter last year. expand its business to 1,000 offices and Koubei will use the proceeds to expand 30,000 stations this year. In 2017, the aggressively and get some degree of company will also launch logistics, independence and could eventually be training, and financial services to round India listed as a public company. January 24, out its “Internet+” network of services. 2017 The emerging rural e-commerce market in Accelya Kale Solutions, an Indian China has become more competitive. In provider of financial and commercial 2016, Alibaba Group Holding also solutions to the airline industry and Leshi Internet Information and partnered with China’s National backed by Warburg Pincus, has agreed to Technology, a Chinese internet and value- Development and Reform Commission to merge with Mercator, a UAE based added video platform and owner of establish 300 pilot programmes in rural provider of product-enabled solutions to LeEco, which has a wide-ranging business villages and towns in three years, aiming the travel and transportation industry, for covering smartphones, automobiles, TVs to push the growth of e-commerce in US$70m. Mercator is also backed by and sports media, plans to raise China’s upcountry area and attract Warburg Pincus. The combination will US$2,200m from Sunac China Holdings, a migrant workers to return to work in create a leading global technology-enabled Hong Kong based property developer. hometowns. In the same year, Taoshihui, solutions provider to airlines, travel Sunac has been seeking investment another rural-targeted e-commerce agents and freight forwarders. Warburg opportunities linked with China's platform, secured $46m in funding. Pincus will be the majority shareholder in technological innovation and the upgrade February 28, 2017 the combined company following its of consumption sectors. The partnership acquisition. Together, Accelya and with LeEco will enable both firms to Mercator will offer a broadened product cooperate in areas such as intelligent Hong Kong portfolio with complementary offerings hardware, real estate, and smart homes. including revenue accounting, revenue Sunac also highlighted industrial real management and revenue assurance, Learning Technologies Group, a United estate as an area for greater cooperation. cargo management, payment solutions, Kingdom based provider various e- For LeEco, the fresh round of funds can data analytics, cost management and learning services and technologies to likely help resolve some financial commercial solutions. The customers of corporate and government clients, has difficulties it has faced in recent months, as Accelya and Mercator will benefit from agreed to acquire NetDimensions, a Hong it continues its push into the smartphones, enhanced product and technology Kong based provider of performance, film, sports, electric and driverless capabilities, which will ensure the knowledge, and learning management vehicles markets. LeEco also had to continued development of innovative solutions, for US$64m. NetDimensions postpone its plans to expand in India, axe solutions for the travel industry. With a provides secure, flexible, and practical about 1,000 employees and lower its global footprint and more than 400 clients enterprise learning and talent advertising budget as it has admitted to worldwide, including 250 airlines, the new management software solutions to burning its cash too quickly, splurging company will be at the forefront of personalize learning, share knowledge, money on different ventures. January 13, automation, helping customers manage enhance performance, foster 2017 their financial processes more efficiently,
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minimizing revenue leakages, reducing to ultimately drive growth. CarTrade is plans to use the latest funding round to operational costs and optimizing aggressively looking at the used car develop new services and offerings, management of their indirect distribution finance market, with less then 8% of used strengthen marketing efforts, and boost channel. The combined company will have cars sold being financed through an brand recognition. Both personal savings revenues in excess of US$200m, with the organised financier. To address this and corporate cash balances are high in scale to make investments in products and opportunity, CarTrade Finance was Japan, trends which should drive the technology in order to remain at the recently launched by the company. Apart emergence of digital money management cutting edge of innovation and service from being an online marketplace, solutions as investors seek to earn higher quality. February 04, 2017 CarTrade also provides reviews, on-road returns on their savings. The app allows prices, car comparisons and latest auto users to easily select and buy US-listed news. The company had acquired rival stocks and Japanese exchange traded Fino Paytech, an Indian technology CarWale in November 2015 for an funds rather than using conventional solutions provider for banks, micro undisclosed amount. Cartrade claims to trading platforms. The company says that finance institutions (MFIs), insurance have about 15m unique visitors per the new funds will be used to accelerate companies, government entities, plans to month, has struck partnerships with system development efforts for new raise US$21m from a consortium of approximately 8,000 car dealers. The services in addition to strengthen investors including ICICI Lombard platform lists more than 200,000 used cars marketing efforts to make more people General Insurance and ICICI Prudential for sale and auctions as many on the recognize the service. February 14, 2017 Life Insurance. Fino Paytech will use the wholesale market every year. CarTrade proceeds to set up the technology competes with the likes of CarDekho framework for its payments bank to build (which acquired Gaadi.com) and Droom, its brand, create a physical infrastructure, apart from horizontal P2P platforms such U-Next, a Japanese provider of on-demand meet marketing and operational budgets, as OLX and Quikr. In January 2016, entertainment services has agreed to and invest in its lending arm. The deal CarTrade secured US$145m from acquire 65% of Usen Corporation, a would lead to the twin benefit of Fino Temasek Holdings, US-based March Japan-music delivery, broadcasting, and Paytech moving towards meeting Capital and existing investor Warburg information and communication regulatory orders on foreign holding in the Pincus. February 08, 2017 technology business, for US$692m. U-Next company, allowing it to start a payments provides on-demand internet services and bank and help the two insurers to sell their its content platform business offers a products in remote villages. The company, widely used video delivery service. The a few months ago, sold a 21% stake to oil Japan Company also operates a communication marketing company Bharat Petroleum, network business for marketing network
which would make it offer services at more lines and provides digital content delivery than 12,000 petrol pumps across the One Tap Buy, a Japanese application services which include movies, drama, e- country. Having been incubated by ICICI developer which helps people manage books, and music. U-Next also offers the U- Bank, the company’s investors include their savings and investments, plans to mobile high-speed data communication Blackstone and Intel Capital. January 11, raise US$13m from a consortium of service and WithU net, an internet 2017 investors including Mizuho Capital, connection service. U-Next was founded in Mizuho Securities, Mobile Internet 2009 and previously acquired part of Capital, and SoftBank. The Company Arteria Networks’ residential fixed-line provides a financial smartphone MXC Solutions, an Indian operator of broadband business for US$26m in early application that allows its users to automobile classifieds portal 2016. February 13, 2017 research stocks, decide on appropriate CarTrade.com, plans to raise US$55m from quantities, and purchase shares. The app a consortium of investors including allows users to sell only profits over time Temasek Holdings and an undisclosed US and maintain core holdings. One Tap family office. Cartrade.com will use the Korea previously raised US$9m from SoftBank in proceeds to focus on strengthening its 2016 as well as an undisclosed amount dealer and customer services, evaluating Kakao Pay, a South Korean fintech from DBJ Capital and others in 2015. One potential acquisitions, expand into new company owned by Kakao, the country’s Tap claims to have acquired over 150,000 areas like auto finance, and sharpen its dominant messaging service platform, downloads to date with 70% of users services to consumers, dealers and OEMs plans to raise US$200m from Ant being new to investing. The Company
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Financial, which manages payments the second global acquisition for Wangsu service Alipay and Alibaba’s digital this year. Earlier this year, the company banking business. The deal will see Ant acquired content distribution network Singapore Financial begin to offer its financial operator, CDN-Video. February 21, 2017 services through Kakao Pay in Korea, and AirTrunk, a Singaporean data centre help expand its business from online operator, plans to raise US$305m from a payments into offline, banking and consortium of investors including PE firms financing services. Kakao Talk has 48m Goldman Sachs PE and TPG Capital. users and is installed on over 95 percent of Malaysia AirTrunk will use the proceeds to fund smartphones in Korea and has long offered data center projects in Melbourne and mobile payments through its platform. iflix, a Malaysian Internet TV service for Sydney, to execute its vision that will Last month, the company’s board made streaming TV shows and movies, plans to support cloud, content, and to lay a solid the decision to split its financial services raise US$90m from a consortium of platform as it looks to become the region’s into a new company which, beyond investors including Catcha Group, leading data center platform, supporting housing Kakao Pay, allows over-counter Evolution Media Capital, Liberty Global, large scale enterprise and technology payments, peer-to-peer transactions, bill Zain Group and TPG Capital. iflix initially companies. AirTrunk’s facilities in Sydney payment, web banking and more, will made its name in Southeast Asia where it and Melbourne are targeted to be move to offer financial services such as specialized in a more local approach than operational in the third quarter of 2017 loans and financing. These are all areas the global streaming giants like Netflix and and will initially support more than 20 where Ant Financial is already well Amazon, in terms of programing, payment MW of IT load. Both data centres are entrenched and experienced in China, so options and partnerships with local capable of offering significant scale the alliance makes strategic sense for both mobile operators, but has since pushed on (Sydney 70MW of IT load and Melbourne parties. Beyond helping Kakao accelerate, beyond the region. The service is officially 50MW of IT load) once fully completed, parent company Alibaba also has plenty to available in nine countries in Asia, most of making them among the largest data gain. This alliance could open the door for which are in Southeast Asia, and parts of centres in the Asia-Pacific region. Alibaba to push its e-commerce services the Middle East and Africa via ‘iflix Arabia,’ AirTrunk believes Australia has the more aggressively in Korea, and also make a joint venture with Zain, the telco which potential to be among the world’s leading it easier for visitors from China to use covers seven countries across both data center service providers because of Alipay. February 21, 2017 regions. While Amazon and Netflix pride the country’s wide adoption of cloud themselves on Western-focused programs computing technologies. February 13, like House Of Cards or the Top Gear 2017 Wangsu Science & Technology, a Hong reboot, iflix offers a more local focused Kong based internet service provider has catalog to give a different appeal and is agreed to acquire CDNetworks, a Korean also cheaper. With major names like content delivery and streaming services Liberty Global and Sky on board, iflix has firm, for US$185m. CDNetworks operates gained the backing of members of a global network of Internet servers that traditional entertainment who are keen to allow publishers to locate their content expand their reach through the growth of closer to readers, reducing page-loading mobile, and mobile internet access, in times when surfing the internet. It offers a emerging markets. Beyond expansions web performance suite that integrates a into new markets, iflix is also working on range of tools for accelerating web content its own original content. There are delivery and application performance. The currently more than 2.5 billion people target also provides China acceleration with smartphones in emerging markets service to connect with China’s internet who have a passion for cultural influences user community and offers imagine from around the globe and want access to optimization and other services. the best entertainment content available CDNetworks covers 98 cities in 49 easily and reliably. March 07, 2017 countries and is the leading content delivery services provider in Korea and the no. 3 provider in Japan. The deal marks
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BDA Partners Ltd is an investment banking firm that advises on cross-border mergers and NEW YORK LONDON acquisitions, distressed situations, capital Euan Rellie, [email protected] Charles Maynard, [email protected] raisings and restructurings. Our focus is on 1270 Avenue of the Americas, Suite 2901 Andrew Huntley, [email protected] transactions with an Asian angle or story, New York, NY 10020, USA 7-8 Conduit Street including the Middle East, with enterprise values of up to US$1bn. BDA has ten offices T (1) 212-265-5300 London, W1S 2XF, United Kingdom and over 85 professional staff throughout F (1) 212-265-4300 T (44) 20-3327-3360 Asia, the U.S. and Europe. For further F (44) 20-3327-3377 information on BDA’s services or on any of the DUBAI articles in this newsletter, please contact the offices listed. Ahmed Al Balooshi, [email protected] MUMBAI Meral Building #2572, Road #2833 Kumar Mahtani, [email protected] 4th Floor, Office #42, Block #428 302 Vibgyor Towers, C-62, G Block, PO Box 30295, Seef District Bandra Kurla Complex, Bandra (East), Kingdom of Bahrain Mumbai 400051, India
T (973) 1758-1336 T (91) 22-6140-3800 F (91) 22-6140-3820 SINGAPORE Jeff Acton Rica Wirianata, [email protected] Managing Director, HO CHI MINH CITY Head of Technology Singapore Land Tower, Paul DiGiacomo, [email protected] [email protected] 50 Raffles Place #37-00, www.bdapartners.com Singapore 048623 #1330 Kumho Plaza [email protected] T (65) 6829-7101 District 1, Ho Chi Minh City F (65) 6829-7070 Vietnam T (84) 8-62-888-755
SHANGHAI Jeffrey Wang, [email protected] HONG KONG The Center, #1602, 989 Changle Road Shanghai, 200031, China Paul DiGiacomo, [email protected] T (86) 21-5407-5580 Suite 905, ICBC Tower
F (86) 21-5407-5680 3 Garden Road, Hong Kong T (852) 2537-9565
F (852) 2537-4406 SEOUL Howard Lee, [email protected] 21 Floor, S-Tower TOKYO 116 Sinmunno 1-Ga, Jongno-Gu Jeff Acton, [email protected] Seoul, 110-061, Korea 17F Atago Green Hills Mori Tower T (82) 2767-2730 2-5-1 Atago, Minato-ku F (82) 2757-2702 Tokyo, 105-6021, Japan T (81) 3-3433-5800 F (81) 5404-8181
All information is accurate based on the information found at CapitalIQ, Mergermarket, CrunchBase, and VCCircle. Further detail regarding the source of information used is available upon request.
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