Public markets to the rescue as private capital dries up for Indonesian startups

Opening Bell 🔔 is Tech in Asia’s free newsletter that brings you the biggest news and latest trends around Asia’s publicly listed tech companies. [Read from your browser]( Opening Bell 🔔 Welcome to the Opening Bell! Delivered every Monday via email and through the Tech in Asia website, this free newsletter breaks down the biggest stories and latest trends on Asia’s publicly listed tech companies. If you’re not a subscriber, get access by [registering here](. --------------------------------------------------------------- Written by Simon Huang Journalist Hello {NAME} Tech companies used to go public at an early stage of their lives. For example, Apple (AAPL, NDAQ) was founded in [1976]( and listed four years later in [1980](. Google (GOOGL, NDAQ) was born in [1998]( and debuted on the stock market after six years in 2004. That same year, Facebook (META, NDAQ) was [established](. It took eight years for the company to do an IPO in [2012](. However, the general trend in the last decade or so had been for companies to wait for as long as possible before listing. For instance, 13 years after it was founded in [2010]( Stripe is still a private firm. So is ByteDance - the creator of viral social media app TikTok was established 11 years ago in [2012](. In the past, fast-growing startups could only rely on private capital to a point before needing to go public to tap the far bigger pools of capital on offer in the public markets. But in the last 15 years, interest rates were low and money was easy, which meant that there were plenty of funds to be had from VC, growth equity, and other providers of private capital. This allowed companies to remain out of the glare of the public markets for much longer periods. That may now be changing. In Indonesia, startups have seen a decline in funding, both in terms of deal volume and value. This may make listing a more attractive option for startups looking to raise capital. My colleague Budi looks at the data and details how the Indonesia Stock Exchange has an incubator program to assist startups in their IPO journey. -- Simon  ---------------------------------------------------------------  THE BIG STORY [As funding drops, will Indonesian startups turn to IPOs instead?]( Funding deals in the country dropped by over 50% year on year in H1 2023 while total investments raised plummeted by over 70%. ---------------------------------------------------------------  3 TRENDS TO KEEP EYE ON Hot stocks, earnings reports, restructuring, pressure from activist investors, and more. 1️⃣ Is Thread a threat to Twitter?: In just a few hours since Meta (META, NDAQ) launched Threads, [over 10 million users]( signed up for the new product, which is meant to be a “friendly” alternative to Twitter. That figure later reached [over 30 million](. Twitter, which has more than 200 million daily users, is still struggling to steady the ship months after Elon Musk’s tumultuous takeover. Meta CEO Mark Zuckerberg is reportedly keen to take advantage of the situation to push out Threads, which he expects to be “a public conversation app with 1 billion people on it” over time. Users can get started with Threads by [using their Instagram accounts]( with username and verification carried over. Other apps have tried and failed to challenge Twitter, but if anyone can succeed, it would be the world’s biggest social media network. Meta’s stock is up 134% year to date, as the company has cut costs and emphasized efficiency. In response to the danger that Threads poses, Twitter has threatened to sue Meta for hiring former employees who had access to its trade secrets and confidential information. Threads represents a logical next step for Facebook’s parent in a way that the metaverse never really was. Would it be too awkward to change corporate names again? 2️⃣ Here today, gone tomorrow: A record number of stocks are expected to be [delisted from China’s bourses]( in 2023, as rules to improve the quality of listed companies kick in. Since the start of the year, 21 firms have lost their listed status on the Shanghai and Shenzhen exchanges, while another 22 are at risk. In comparison, a total of 44 were delisted in 2022, and there’s still around six months to go before 2023 ends. Apart from the new rules, other factors at play include a macro slowdown and weak market sentiment. In the short term, ordinary investors will have to be careful and avoid plunking down money in these companies. Otherwise, they could find themselves holding on to illiquid unlisted shares that can no longer trade easily, and will fetch a lower price. Over the longer term, however, culling such low-quality listings may prove beneficial to the health of the market as a whole. 3️⃣ Nium preparing to go public: The Singapore payments company, which is currently valued at US$2 billion, is [angling for a US listing]( by 2025. Co-founder and CEO Prajit Nanu said that Nium, which like Stripe handles payments for other businesses, more than doubled its revenue to US$82 million in 2022. Nium, which grew by making acquisitions over the past couple of years, expects to break even within 12 months, and list as a profitable company. It will also continue M&A activity in markets like Latin America, Africa, and the Middle East. A successful US listing will be a shot in the arm for Southeast Asian startups and Nium’s backers, which include Singapore state investors GIC and Temasek. But that’s not the case for the Singapore Exchange (S68, SGX), which would no doubt have wanted Nium to list in its home country.  2 EYE-POPPING NUMBERS Tech in Asia scours the internet to bring you head-turning numbers from the world of business. - [2,686%]( Surge in new premiums collected on Hong Kong insurance policies in the first quarter of 2023. Chinese investors are rushing to make dollar deposits and buy Hong Kong insurance amid flagging domestic confidence. - [80%]( China’s share in the global production of gallium, which is essential for making semiconductors. The raw material will now be subject to Chinese export controls. THE ONE YOU DIDN'T SEE COMING We spotlight the story that had everyone talking and social media buzzing during the past week. Japan as no. 1 redux?: The market that has delivered the [biggest gains]( for newly listed Asian shares this year is … Japan! According to Bloomberg, the average IPO in the country this year is up by 75%. The two biggest listings this year are both digital banks: Rakuten Bank (5838, TYO) raised US$676 million while Sumishin Net Bank (7163, TYO) netted US$421 million from investors. Both are up over 30% since their IPOs in early 2023. Their success has undoubtedly been helped by the “buy Japan stocks” [consensus]( among foreign investors, led by none other than Warren Buffett himself. It remains to be seen whether this rally is sustainable, much less whether Tokyo’s stock exchange can become a hub for IPOs of tech companies - and not just Japanese ones. In Asia, Hong Kong seems to remain the market of choice, with logistics provider J&T Express filing to list in the city.  That’s it for this edition - we hope you liked it! Not your cup of tea? You can unsubscribe from this newsletter by going to our preference center at the bottom of this email. Happy investing and see you next week! Disclaimer: This content is for informational purposes only. Kindly do not construe any such information as legal, tax, investment, financial, or other advice. [ADVERTISE]( | [SUBSCRIBE]( | [HIRE]( | [FIND JOBS]( P.S. Don't miss out on the biggest tech news and analysis. Add newsletter@techinasia.com to your address book, contacts, or safe sender list. Or simply move us into your inbox. Too many emails? Switch to a different frequency or get new content through our [preference center]( or [unsubscribe](. You can also break our hearts and remove yourself from all Tech in Asia emails over [here](  Copyright © 2023 Tech in Asia, All rights reserved. 63 Robinson Road, Singapore 068894