The Inside Pocket #6
I was at SuperReturn Asia this morning, and more than once I had fund managers ask me whether I felt if the market has slowed. The answer is obvious — it has. Deals are happening, but the narrative has completely shifted. But venture capitalists being true venture capitalists will always be eager to emphasise the upside in such conversations.
SEAsia’s internet star Sea Group isn’t shining so brightly anymore
Media outlets meanwhile, prefer gloom-and-doom. Nevermind that axing 3% of total staff count isn’t actually altogether that meaningful but makes for a sexy headline because everyone’s strapped for cash anyway.
I thought the more interesting bit behind Sea Group’s cost cuts was the CEO’s decision to have his top lieutenants forgo salaries. The entire senior team has committed to not taking payroll until the firm reaches “self-sustainability”.
Forrest Li is probably doing this because he needs to manage team morale and public perception while the firm is deep in the troughs. No better way to do this than taking the first cut yourself. Pretty admirable leadership.
AirAsia, the taxi-hailing company?
In other news, a certain Malaysian low-cost airline is actually serious about ride-hailing. O_O
Capital A’s Tony Fernandes announced that AirAsia Ride will debut in Indonesia and Singapore by year-end, following their recent launch in Thailand and Malaysia. Capital A continues to accrue widening 1H losses (1.8 billion ringgit or $399 million). The Malaysian stock exchange has already issued a warning on the fledgling carrier.
Stock exchange Bursa Malaysia in January raised a red flag over Capital A's finances, putting it under "Practice Note 17" (PN17), which requires that a company restructure within one year or face automatic delisting. (Nikkei Asia)
Crazy? Desperate? Genius? Maybe all?
It doesn’t matter.
I’d say most of us would agree that if there was just one Malaysian left in the world who can pull this off, it would be the man who bought an airline for under $1 and transformed it into one of the most successful low-cost carriers in this region — the indomitable Tony Fernandes himself. Give crazy a shot!
Come back in 2023: Institutional fund managers are away on holiday
I did not think that this was actually going to be a thing when an investor I spoke with months ago joked that he was thinking of “vacationing for the rest of the year”. He didn’t think the market was going to be great for deployment so soon.
And then today at SuperReturn:
“Institutional investors go on the longest holidays! I reach out to some of these LPs and they tell me to come back later because they are on holiday for all of September…” — a fundraising VC partner, frustrated
I guess “wait-and-see” is going to be around for a little bit longer…
Venture capital/startup news:
“TikTok owner ByteDance offers to buy investors’ shares after scrapping IPO plan” — Wall Street Journal
“Why Ant Group and Didi investors have to wait another six months for IPO clarity” — The Information
“The shaky future of India’s biggest loss-making unicorn and most valued edtech: Byju’s” — DealStreetAsia
“AirAsia Ride to debut in Singapore, Indonesia this year: Fernandes” — Nikkei Asia
“SoftBank considers launching a third Vision fund” — Wall Street Journal
(One of) the best damn things in the world:
Idli for breakfast <3 These things make my day!
