Author: vivian

For its IPO, SEA Group scales back public offering size to US$800 million

Singapore’s SEA Group, formerly known as Garena, which is slated to make its debut on the New York Stock Exchange (NYSE) in early 2018 has scaled down its public offering size from the much reported figure of US$1 billion to US$800 million.

In an updated SEC filing, SEA Limited will be offering 49,690,000 American Depositary Shares to be sold in the offering, at the indicated range of between US$12.00 and US$14.00.

With these terms, a share sale at the upper limit price band of US$14 will manage to raise close to US$700 million of capital while at US$12, it could be around US$600 million. The proposed maximum aggregate offer price, based on the filing is US$800 million.

The amount to be raised via IPO will be cut by almost US$200 million, as compared to the previous reported figure of US$1 billion that SEA Group has been looking to raise.

Under the United States Securities Law, SEA is labelled as an emerging growth company and is eligible for reduced public company reporting requirements.

Since its inception in 2009, SEA is best recognized for its Garena gaming business, which predominantly focuses on PC games. In recent years, the startup has branched out into ecommerce with its Shopee service and digital payments service AirPay.

Revenue-wise, the startup said that a significant portion of its revenue is generated from online games while its ecommerce and online financial service businesses are still in their early stages of monetization and do not generate any significant revenue at the moment.

“In the last three years and for the first six months ended June 30, 2017, our digital entertainment business on average contributed more than 94.9% of our total revenue,” said SEA. “Among our online games, we are substantially dependent on a small number of games”

Then again, the startup hope that its revenue sources would diversify as each of its three businesses continue to grow.

“As we further monetize our e-commerce business and expand our digital financial services business, we expect the revenue generated from these businesses will make us less dependent on the revenue from our digital entertainment business.”

In its earlier SEC filing, the startup has noted its challenges with a history of losses. However, SEA believes that it maintains a strong market position, with the regions underlying fundamentals being drivers for future growth.

The proceeds from the listing will be used by the company to grow its business, including research and development, user acquisition, and content procurement. While the remainder will be deployed for working capital and other general corporate purposes.

If successful, the main beneficiary of the SEA listing will be Tencent with 39.7 percent share, followed by Blue Dolphins Venture which holds 15 percent. Meanwhile SEA Founder Forrest Li himself has 20 percent and CTO Gang Ye has 10 percent.

This IPO is an important event for Southeast Asia as SEA is the much anticipated listing that investors and founders look forward to head the pathway for other IPOs from the region.

Indonesia startup M Cash Integrasi set to IPO in November

After announcing its plans for a year-end IPO back in May, Indonesia’s ecommerce startup M Cash Integrasi (MCI) is now revealing its IPO price at between Rp 1,300 and Rp 1,405 (about US$0.097 to US$0.11).

The startup is set to list on the Indonesian Stock Exchange (IDX) in November, where it will be offering up to 216 million shares, which is equivalent to 25 percent of its paid-up capital.

If successful, the company will raise up to Rp 300 billion (about US$22 million) in fresh funds which will be used for business expansion and working capital requirements.

M Cash Integrasi will also become the second startup to be listed on the IDX after Kioson, an O2O e-commerce service company who is a rival to Grab’s Kudo.

Currently, the company has also reportedly receive a strong response to its anchor book, driven by the market’s optimism about the technology space in the country.

“So far, we are open to strategic partners who want to enter, and many strategic partners and funds have expressed interest in M Cash,” Suryandy Jahja said.

According to Kresna’s managing director Suryandy Jahja, the company has received strong anchor book interest from investors in Hong Kong, Singapore, Australia, United Kingdom, and the United States.

“We want to make sure that the anchors will be good names, so well will be very, very selective,” Jahja added.

Although the anchor book allocation period was closed last Wednesday, other investors can still place their bookings from October 5 until October 19.

Founded in 2010, M Cash Integrasi generate physical cards such as mobile SIM and e-money with automatic registration, in addition to other services including credit top-up, routine bill payment, and e-commerce transactions.

M Cash Integrasi said it is already profitable in business, having reported a revenue of Rp 480 billion (about US$73 million) in 2016.

Kresna Graha investment currently owns 17.6 percent of shares in the company. By the end of the year, the investment firm will help MCI launch 1000 outlets, and double that number in 2018.

GrowPal wins G-Startup Indonesia 2017 for aquaculture investment platform

Global startup competition G-Startup Worldwide recently announced GrowPal, an aquaculture investment platform as the winner of G-Startup Indonesia 2017.

Foreign language e-learning platform Squline and logistics aggregator platform Shipper has won the second and third place respectively.

GrowPal is a P2P lending platform that helps freshwater fishermen to raise funding for their businesses, in addition to shipping these products to countries like the United States, France, and Russia through partnerships with export companies.

Founded by Paundra, the startup is currently working with fishermen in Pacitan, Situbondo, Karimun Jawa Island, and Makassar. It monetizes through taking 15 percent of every investment, claiming to be profitable with US$1.5 million of Gross Merchandise Volume (GMV).

As the winner, GrowPal has won an investment cheque worth US$150,000 from GWC Innovator Fund and Kejora Ventures, as well as represent Indonesia at the G-Startup Worldwide final round in Silicon Valley.

GrowPal will go up against representatives from other countries, including Tel Aviv winner Donde Fashion, an AI-powered visual search for eCommerce and Beijing winner Zion China, a startup researching the kinetics of glucose metabolic.

Filipino fast food chain Jollibee may take a bite of UK sandwich chain Pret A Manger

Filipino fast food restaurant chain Jollibee has been engaging in talks exploring a bid for Britain’s sandwich chain Pret A Manger, according to various sources familiar with the matter.

The valuation for the upscale sandwich chain may exceed US$1 billion, based on the sandwich chain’s 2016 core earnings of over 93 million pounds (about US$125 million).

This unsolicited offer for Pret A Manger was also derived to compete with its likely valuation from a potential listing of its private equity owner, Bridgepoint which was preparing for a New York listing later this year.

If the deal is successful, this would mark Jollibee’s biggest overseas deals to date and potentially one of the biggest ever outbound deals from the Philippines.

Jollibee’s most recent expansion move was in May through the acquisition of SuperFoods Group who owns and operates the brands Highland Coffee and noodle house Pho 24.

The pairing comes unlikely as Jollibee has a huge following in the Philippines for its fast food burgers, fried chicken, and sweet-style spaghetti.

On the other end, Pret A Manger with over 400 shops worldwide is famous for selling organic coffee and wholesome sandwiches to office workers in Britain and in cities like Hong Kong and New York.

At present, Jollibee operates the largest foodservice network in the Philippines with 2,700 restaurant outlets in the country – giving it a market valuation of US$5.2 billion.

The fast food chain, which outsells McDonald’s and KFC in the Philippines, has been starting to push into global markets to boost sales and profits through acquisition.

Jollibee has also been expanding across Southeast Asia, looking to appeal to lucrative local consumers as well as overseas Filipinos with coffee, donuts, and noodle offering.

JAS Asset acquires cafe chain Casa Lapin to set up joint venture Beans and Brown

Thai listed property developer JAS Asset Plc has bought over the trademark food and cafe chain Casa Lapin from Coffee Project Co Ltd for a price tag of 42 million baht (about US$1.27 million).

The company concluded the agreement earlier last month, whereby the high-end coffee house chain will enter into a new joint venture – Beans & Brown Co Ltd. – with JAS Asset having 60 percent ownership while 40 percent is held by Coffee Project.

In other words, three of Casa Lapin current seven branches in Bangkok will belong to Beans and Brown while the remaining four will be jointly operated by the company and its partners on a revenue-sharing basis.

Additionally, Beans and Browns plans to open three more Casa Lapins in the central business districts this year and at least another 10 in 2018 including its first flagship store at a premium shopping complex in the heart of Bangkok which will cover at least 200 square meters.

“Coffee Project was very successful in building the Casa Lapin brand,” said Suphot Wanna, the Chief Executive Officer of JAS Asset Plc. “It is clearly different from other cafe franchises.”

“Casa Lapin is famous for its quality coffee beans, as well as neat coffee-making, and attention to every step from roasting to brewing and other stages of preparation.”

Moving forward, Casa Lapin is looking to expand its presence to Asian cities in the region such as Tokyo, Seoul, Hong Kong, Taipei and Singapore.

But ultimately, this move for JAS Asset is aimed at diversifying JAS Asset’s portfolio and springboard the firm to enter the food and cafe market that it has long expressed interest.

“We target our revenue will grow from 60 million baht this year to 180 million baht ($5.4 million) in 2018 and 360 million baht ($10.87 million) in 2020 and get it listed on the stock market in the same year,” Suphot said.

At present, 70 per cent of Casa Lapin’s revenue comes from coffee and beverage sales and the rest comes from food and bakery. It plans to generate more revenue from selling souvenirs in the future.

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