As $3b gets injected into SEA tech, GOJEK’s major backer exits

Southeast Asia seems to continue to attract large-scale funding, sometimes tilting the subtle balances between the major players.  

Softbank ups its bet on Grab

Firstly, Softbank Vision Fund is confirming  a $1.46 billion investment into Grab, as part of the ongoing H round.

To date, Grab has raised about $4.5 billion in a span of less than a year. By upping the bet, Softbank again shows its firm commitment in Grab.

Grab pointed out that most of the new money will be injected into the Indonesian market, including food delivery and new services to be launched.

Prior to the H round, Grab’s three major shareholders were Uber, Softbank and Didi. (Reference: Who are the shareholders of Grab?)

Softbank has been investing in Grab since 2014. It has been providing Grab with not only funding, but also connections and other strategic resources.

Their continued investment as well as presence of suite of new shareholders in Grab’s latest funding round also shows that investors have some confidence in their super app strategy.

Only bonus

At the same time, Deal Street Asia reported today that Northstar has exited 25% of its stakes in Go-Jek.

Like Softbank to Grab, Northstar has been backing Go-Jek since 2014.

It initially invested through its VC arm NSI Ventures (later spun off as Openspace Ventures), and in 2015 it went in direct.

Many in the industry believe that Northstar is to Go-Jek what Softbank is to Grab. For example, former Northstar Executive Director Andre Soelistyo joined Go-Jek as president. In comparison, Grab’s president, Ming Maa, has a background in Softbank.

In the Deal Street Asia report, it is said that this exit allows Northstar to complete the return of its fourth fund, and then “no pressure from LPs”, as the remaining shares would be bonus.

Go-Jek has been trying to complete its current round of financing. At the same time, its expansion overseas has been bumpy.

Sea of profits, perhaps?

Finally, NYSE-listed SEA Group announced that it aims to raise $1.5 billion through new share issues.

This followed SEA’s latest financial report, announced towards to the end of February. The report stated that Shopee’s annual GMV exceeded $10 billion for the first time, with an increase of 117% in the fourth quarter alone.

It is quite likely that the $1.5 billion will be injected into Shopee.

SEA share price soared after the release, surpassing $20 for the first time. Investors suddenly have the confidence that Shopee can actually burn its way towards profitability.

Shopee has recently been pushing for breakeven in Taiwan, a market where it does not have a strong competitor especially since Taobao withdrew (for obvious reasons).

Once the Taiwan market is profitable, the market will get a further confidence boost about Sea’s prospects.

This probably also adds some pressure to Alibaba-owned Lazada, which has undergone painful cultural integration and team restructuring.

In fact, Lazada has all the natural advantages over Shopee. So it would really be a shame if Lazada does not manage to contain Shopee.