Category: Finance

Formation Group raised US$357 million for debut fund to invest in early and growth stage companies

Formation Group has launched its debut fund worth US$357 million of commitments in partnership with former Facebook chief financial officer and San Francisco 49ers co-owner Gideon Yu serving on the investment team, according to filings with the SEC.

The maiden fund is set up to bridge innovation between Silicon Valley and Asia, whereby it will focus its investments on a number of early and growth stage companies.

In addition to providing capital, Formation Group will also provide operational support and relationships to bring these opportunities to fruition.

“Our investment in Bowers & Wilkins is a prime example of this strategy, in which we enabled a small Silicon Valley startup (EVA Automation) to execute an unprecedented acquisition of an established, profitable, 50-year old iconic brands in Bowers & Wilkins,” according to a spokesperson from Formation Group.

Besides, the firm’s founding managing partner Brian Koo was a former founding partner of Formation 8 and a founder of InnovationHub. He currently serves on several boards including NextVR, Memebox, and YelloMobile.

While Gideon Yu is the chairman and chief executive officer of Bowers & Wilkins. Previously, he was also a General Partner at Khosla Ventures and Treasurer and SVP of Finance at Yahoo.

The company’s offices are located in Palo Alto, Korea, and Singapore. The portfolio also includes on-demand delivery Honestbee, and ride-hailing service Go-Jek and South Korea’s Dayli Financial Group.

By Vivian Foo, Unicorn Media

Temasek unit Heliconia launches US$422 million International Partnership Fund to help Singaporean firms expand globally

Heliconia Capital Management, a unit of Temasek Holdings, has announced the launch of a S$600 million (about US$422 million) International Partnership Fund (IPF) in government capital.

The new fund will be used to co-invest with Singapore-based enterprises, helping local enterprises to internationalise their business operations and expanding into oversea markets via acquisitions.

Its joint investment policy focuses on Asian markets, encouraging local firms to partner with other Asian companies to engage in activities such as extending product lines, brands or value chains, in addition to gaining access to markets, channels, and technologies.

Specifically, the fund will support firms that intend to grow by acquiring their regional peers, but which may not have sufficient capital to proceed with its acquisition.

In this way, the fund will hold opportunities for smaller local firms by allowing them to link up with Heliconia as a consortium partner that is able to co-invest in the target company alongside the Singapore acquirer.

Heliconia will come in purely as a financial investor and will not compete over the acquisition’s ownership. Firms that have not identified an acquisition target can also opt for Heliconia’s help to source deals by tapping its extended networks, which only large private equity funds can maintain.

However, to draw on the funds, firms must meet the criteria of being headquartered in the city-state and to have post annual revenues no higher than S$800 million ($564 million). These conditions place their investment focus firmly on middle market enterprises.

“The creation of the fund is part of an effort to develop a smart financing ecosystem here, in Singapore,” said Finance Minister Heng Swee Keat. “More funding support is also being targeted at infrastructure developers to help them undertake more oversea projects.”

By Vivian Foo, Unicorn Media

CapBridge and Gordian Capital to launch US$100 million rules-based CapBridge Investment Trust to invest in private securities

Singaporean CapBridge and investment manager Gordian Capital has formed a partnership to launch a pre-IPO fund – the first sub-trust fund in a series of CapBridge Investment Trust which is said to be a rules-based trust investing in private securities.

The pre-IPO Fund is targeting a US$100 million fresh capital to provide growth-stage startups and pre-IPO companies an opportunity to tap into additional funding as well as to provide accredited and institutional investors a greater access to venture capital-level returns.

CapBridge’s Co-founder and CEO Steven Fang explained, “Venture Capital consistently outperforms other asset classes and has some of the best returns in the investment industry. Traditionally, accredited and institutional investors have had limited access to these venture capital-backed growth companies.”

Established in 2015, CapBridge is an online capital-raising platform that enables institutional and accredited investors to invest in growth-stage enterprises companies via venture capital financing and pre-IPO placement. The firm has also formed partnerships with the SGX and Clearbridge Accelerator.

“While rules-based processes are applied in the trading of publicly-listed investments, this is the first time, as far as we know, that a rules-based structure is being applied to investments in venture-backed securities issued by private companies,” said Dr. Steven Fang.

“Given the efficiency of a rules-based trust structure, we believe that the Pre-IPO Fund has the potential to expedite pre-IPO capital raising, making Singapore an attractive fundraising destination for growth companies,” he further adds.

In a way, CIT enables qualified institutional and accredited investors the access to quality, diversified portfolios in a cost-efficient and effective manner with no management fee to carry. Over the next five years, the platform will target investments in venture-backed enterprises in pre-IPO investments.

The fund following a rules-based structure is typically defined as a fund that aims to generate exposure to a to a specific segment of the equities market but operates without consideration of stock market capitalisation or portfolio weighting. In the case of CIT’s Pre-IPO Fund, it is aimed is to increase exposure to securities issued by growth-stage companies.

“The rules-based nature of CIT ‘automates’ the selection criteria and removes the need for active discretionary management, which reduces the fund’s expense load,” Steven Fang explains.

The Pre-IPO Fund will also invest exclusively in convertible instruments issued by companies curated on the CapBridge platform. This will allow the company to preserve capital and maximise returns, allowing for a measure of downside capital protection and potential capital gains.

Commenting on the deal, Mark Voumard, the Founder and CEO of Gordian Capital Singapore Pte. Ltd said, “We are delighted to be working with CapBridge to help support the venture capital ecosystem in Singapore.”

By Vivian Foo, Unicorn Media

Israeli JOY Ventures launches US$50 million neuro-wellness fund

JOY Ventures, a new Israeli investment firm, has recently initiated a US$50 million vehicle centered on the emerging field of neuro-wellness, in addition to the inauguration of its office in Herzliya Pituach.

Founded by the Israeli-Japanese Corundum Open Innovation Fund, JOY Ventures will invest in developments offering scientifically validated technologies offering anti-stress and mood alteration solutions in addition to neuro wellness solutions, that can be turned into marketable products.

Additionally, the new fund will be headed by Avi Yaron, a serial entrepreneur, Founder of Visionsense and the inventor of a state-of-the-art instrument for complex brain surgery along with Beer-Sheva-based Incubit Technology Ventures’ Idan Katz.

Speaking on the vehicle, Yaron said, “Originally developed to make things easier for human beings, technology actually intensifies the tension we live in. For this reason, we decided to invest in neuro wellness by leveraging the large body of research and neuro developments in Israel.”

JOY Ventures will adopt a two-track approach, funding research grants of at least US$1.2 million per annum to academic research in the emerging field, startup companies, and technological incubators for entrepreneurs.

“We’re establishing a new ecosystem in the new industry of neuro-wellness,” Yaron said. “Our emphasis will be on the development of scientifically-proven products whose goal will be to help people manage and overcome chronic conditions.”

“Many years of being involved in the development of brain surgery technologies, made me realise the human need for joyful and relaxed moments and how critical they are for our health,” Yaron explains. “Many neuro researches show that the modern life intensity contributes to prolonged hostile emotions of sadness, anger, anxiety, guilt and more. These emotions, in turn, generate stress and collect a heavy toll from our health.”

By Vivian Foo, Unicorn Media

Indian telecommunications firm Tikona Digital gets US$171 million loan from US govt agency

Telecommunications firm Tikona Digital has recently received a funding of US$171 million in the form of a commercial loan from Overseas Private Investment Corporation, an independent US government development finance agency, according to a report in The Economic Times.

The loan comes as a chance for Tikona Digital, providing the firm with the required liquidity for revival while putting talks of M&A with Telenor to rest.

There were reportedly talks of Tikona’s merger with Norway’s Telenor and leading Indian telecom player Airtel because of the 4G airwaves that it had bought in 2010. However, valuations have been an issue, according to a statement by an investment banker.

“This could be the company’s second coming with renewed interest in the telecom sector and its ancillaries,” The Economic Times quoted a senior investment banker who wanted to remain anonymous.

In October 2015, Tikona Digital Networks, engaged in building the next generation wireless broadband services for home and enterprise customers in India, has announced that it would launch 4G broadband plans in 30 cities by the first half of 2016.

The telecommunications firm currently runs a pilot project in Varanasi to wire the city with 4G technology for home broadband. The company has 20 MHz of broadband spectrum in 5 telecom circles including Gujarat, UP=East, UP-West, Rajasthan, and Himachal Pradesh, for which it had paid Rs 1,058 crore during the 2010 Broadband Wireless Auctions.

Prakash Bajpai, a technocrat, started Tikona’s home WiFi service on free airwaves, but business did not shape up as earlier forecast. In 2012, Tikona consolidated resources shutting service in 12 out of the 38 cities and has now developed technology to provide broadband with 4G technology.

After its latest technology investments, Bajpai said the company can now produce 1GB of data for a mere Rs 5. It is looking to replicate this process in Varanasi in at least 60 more cities within the next 18 months.

“Mobile telecom operators produce a GB of data at about Rs 60 to 70,” said a senior telecom analyst. However, the cost structure for mobile operators and home broadband operators will always be disparate because maintaining mobile continuity is costly.

However, the company is not trying to complete with wireless operators, but instead challenges only BSNI, Tata Teleservices, and other local broadband operators such as Hathaway.

In Varanasi, Bajpai said the company has been able to take on competition and gained around half the market. It is not offering low-end solutions and instead wants to corner the multi-device, heavy users who consume tens of GB data. Bajpai also said the move has resulted in a seven-month break even for Varanasi.

“Varanasi is the first city where 4G services has been launched and plans are to launch 4G network in other cities and circles soon. We are hopeful that subscribers in Varanasi will get to experience world class home broadband services which they can use conveniently for various reasons,” said Prakash Bajpai, the Founder, MD and CEO of Tikona Digital Networks.

The company had earlier secured US$45 million in November 2014 from International Finance Corporation, Goldman Sachs, Oak Investment Partners, Everstone Capital Advisors and L&t Infrastructure Co Ltd.

Tikona plans to use the fresh funds for rolling out the 4G-based broadband services across the country.

By Vivian Foo, Unicorn Media

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