Japanese Investment Firm NSSK Sets Up US$300 Million Second Investment Fund – NSSK II
Nippon Sangyo Suishin Kiko (NSSK) has raised US$300 million for its second investment fund which has received commitments from North American and European investors, as well as new Japanese LPs.
April 27, 2017 /PRWIRE.asia/ -- Tokyo-based NSSK, who calls itself a new source of strength for Japan’s regional economy, has raised US$300 million for its secund fund NSSK II (Intl) Investment, according to a report in Private Equity International citing sources.
While the first NSSK fund was entirely raised from Japanese investors, this second investment vehicle has instead received commitments from North American and European investors, as well as new Japanese LPs.
The fund however, is still primarily yen-denominated, and has a target size of 63 billion yen (US$539 million) according to a SEC filing in September 2016. The new fund will be used to back retail, consumer, healthcare and hospitality companies in Japan, supporting them for global expansion.
NSSK, which is short for Nippon Sangyo Suishin Kiko is an alternative-investment firm led by the former private equity company TPG Capital’s Japan head – Jun Tsusaka, who now plays the role of Managing Partner and Chief Executive Officer at NSSK.
Other founders of the firm also include Kaz Tokuyama, a former Merrill Lynch Japan Securities Co. banker, and Nobuhiko Ito, who was previously the CEO of General Electric Co.’s Japan operations.
Founded in September 2014, NSSK focuses on proprietary investments in regionally-focused firms and private companies with succession issues. Its investment strategy is to generate superior returns by applying global investment discipline, operating expertise and human capital to the attractive SME market in Japan.
The investment firm had its first investment in December 2014 when it agreed to pay an undisclosed sum for 70 percent of Mie-prefecture based US.Mart Corporation, a developer of amusement facilities.
Recently, the investment firm has acquired SC Holdings Co Ltd, a leading operator of nursing homes and assisted-living facilities for seniors with a primary presence in the Greater Kanto area of Japan.
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Japanese Xtreme Design raises pre-Series A worth US$620k led by Freebit Investment
Japanese Xtreme Design raises its pre-Series A round worth US$620k to go beyond virtual supercomputer on-demand through UI/UX enhancement.
April 27, 2017 /PRWIRE.asia/ -- Xtreme Design, a Tokyo-based startup providing the cloud-based virtual supercomputing-on-demand service known as Xtreme DNA, has on Tuesday announced that it has fundraised 70 million yen (about US$620,000) in its pre-Series A round.
The round was led by Freebit Investment and individual investors which include the former Vice President of Japanese mobile game developer Colopl, Kotaro Chiba and the CEO of Takamatsu-Kotohira Electric Railway, Yasumasa Manabe.
With this funding round, it is said that there would be a probable business synergy between Xtreme Design and Freebit, the parent company of Freebit Investment which businesses involves the provision of Infrastructure as a Service (IaaS).
This financing round also follows the round conducted last January and March by the firm’s founders and angel investors worth 30 million yen (about US$260,000).
Founded in February 2015, Xtreme Design is a platform development company for the democratization of supercomputing. In November 2016, the startup has presented its flagship product Xtreme DNA at the global supercomputer conference SuperComputing 2016.
Xtreme DNA is an unmanned service of operations which is capable of monitoring the dynamic changes of configuration in order for an effective system utilization of supercomputers through the deployment of virtual supercomputers on the cloud.
It is available for Microsoft Azure, supporting InfiniBand as well as applicable on AWS (Amazon Web Service). According to CEO Naoki Shibata, the functions of Xtreme DNA have been attracting a lot of attention as IaaS from enterprise users.
Despite Xtreme Design focus on back-end technologies, it appears to be switching gears for the next stage, releasing “Xtreme DNA 2.0.” in which Shibata explains is an attempt to supplement the visualization with well-designed UI/UX to Xtreme DNA.
“We plan to develop our service to be used not only in genome or simulation analysis but also in various fields such as IoT, image analysis or stock price prediction in fintech. The purpose of UI/UX implementation is to make it easier to be used by a wide range of users,” said Shibata.
Although a few startups in the United States also provide seemingly competitive services, Shibata expects that Xtreme Design can win out if a good product with UI/UX can be offered.
With a vision to dominate the global market, the brand-new Xtreme DNA is scheduled to be exhibited at the SXSW Trade Show which will be held in Austin, Texas on March 10th.
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Malaysian Cradle Fund unveils DEQ800 to diversify investment strategy for a maturing startup ecosystem
Malaysian early-stage tech startup catalyst Cradle Fund Sdn Bhd has announced the launch of a new investment product known as Direct Equity 800 (DEQ800) which follows an investment portfolio expansion effective February 2017. This equity investment initiative indicates a gradual shift in the firm's investment...
April 27, 2017 /PRWIRE.asia/ -- Malaysian early-stage tech startup catalyst Cradle Fund Sdn Bhd has announced the launch of a new investment product known as Direct Equity 800 (DEQ800) which follows an investment portfolio expansion effective February 2017. This equity investment initiative indicates a gradual shift in the firm’s investment strategy from grant funding model to equity investments model.
With a total funding size close to RM11 million (about US$2.47 million), Cradle plans to close 13 deals by June 2017 – investing in 10 startups via direct equities as well as co-investing in 3 startups, each writing cheques between RM300,000 to RM800,000. For the co-investment exercise, Cradle will be introducing a 2:1 ratio, whereby if one of their investment partners invests RM200,000, Cradle will invest RM400,000, doubling the matching contributions for every ringgit invested, up to a limit of RM800,000.
While Cradle has been mainly focused on tech and innovation startups, Juliana Jan, Cradle’s chief investment officer clarifies that “Cradle is not focusing on any one tech area but rather wants to provide support to areas that have good growth potential.”
Looking at DEQ800, the focused investment sectors under this initiative include areas within Malaysia’s National Key Economic Areas (NKEA) including areas of financial services, tourism, business service, electrical and electronics, wholesale and retail, education, healthcare, communications content and infrastructure, oil, gas and energy, agriculture, information and communications technology (ICT) and non-ICT sectors.
For startups interested in DEQ800, Cradle judges a startup eligibility on several criteria including:
– being a startup incorporated in Malaysia with at least 51 percent owned by Malaysian shareholders;
– ownership of all intellectual property rights, titles and interests relating to prototype, products and/or services for the purpose of commercialisation;
– an operation timeline less than five years, in addition to a total revenue of not more than MYR5 million.
Speaking on the initiative, Cradle’s CEO Nazrin Hassan is ascertained that this is the perfect time for the shift to direct equity investment as local startup ecosystem has significantly evolved and mature throughout the decade. Then again, Hassan adds, “Government- and Cradle-backed prototype grants will always be available as there is always a need for that type of risk taking, but startups still need to learn how to get private investments or they will continue relying on grants.”
Established in 2003, Cradle is a non-profit organisation under the Malaysian Ministry of Finance that manages Cradle Investment programmes. It has filled a funding gap in the area of developing ideas through its CIP150 programme, that helps develop ideas into prototypes as well as its CIP500 programme, that helps to move on to funding for prototype-to-market. The company, since its inception, has also supported more than 700 Malaysian tech start-ups, holding the highest commercialisation rate among government grants in the country.
With the introduction of its new programme, Cradle looks forward to assisting more Malaysian startups by providing them with equity investment, mentorship, as well as help in connecting them with other venture capitals and investors. Companies invested by Cradle, especially those that are looking to go global can look forward to more support and growth guidances via Cradle’s experience and network.
By Vivian Foo, VCNewsNetwork
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CRADLE ANNOUNCES NEW INVESTMENT PRODUCT TO AUGMENT SUPPORT FOR MALAYSIAN TECH START-UPS’ GROWTH
Cradle Fund Sdn Bhd (Cradle) the early stage start-up influencer, today announced its new investment product called DEQ800, following its investment portfolio expansion effective February 2017. DEQ800 is the abbreviation for Direct Equity 800, a form of equity investment that offers capital injection of between...
KUALA LUMPUR, MALAYSIA, April 27, 2017 /PRWIRE.asia/ -- Cradle Fund Sdn Bhd (Cradle) the early stage start-up influencer, today announced its new investment product called DEQ800, following its investment portfolio expansion effective February 2017. DEQ800 is the abbreviation for Direct Equity 800, a form of equity investment that offers capital injection of between RM 300,000 to RM 800,000 for local early stage tech start-ups.
DEQ800 comes as the next phase of product offering after Cradle’s co-investment programme that was first introduced in 2014. The launch marks Cradle’s new direction in supporting tech start-ups, particularly those at early stage.
According to Nazrin Hassan, Group CEO of Cradle, the new direction is in line with the government’s intent to wean the market off grants in funding early stage start-up noting that half of Cradle’s total allocation in 2017 given by the Ministry of Finance, is in the form of equity funding as the agency gradually evolves from its grant funding model to equity investment model.
He further viewed the new direction and launch of DEQ800 as a testament to Cradle’s continuous commitment to fund start-ups with strong growth potential and elevate Malaysian start-up ecosystem to greater heights.
‘‘The launch of our new product clearly demonstrates our relentless passion and tenacity to build great Malaysian start-ups and fortify the nation’s start-up ecosystem, ultimately. We believe DEQ800 will serve as a crisp avenue for start-ups with clear growth and good exit potentials at pre-seed and seed stages to raise capital for their businesses and help achieve these objectives,’’ he said.
Focused investment sectors under this initiative include areas within the National Key Economic Areas (NKEA) such as Financial Services; Tourism; Business Service; Electrical & Electronics; Wholesale and Retail; Education; Healthcare; Communications Content and Infrastructure; Oil, Gas and Energy; and Agriculture. In addition, Cradle shall also include ICT and Non-ICT sectors under its radar.
Meanwhile, targeted and potential investee companies are start-ups with tech-based products or services.
Nazrin later shared that Cradle’s DEQ800 brings more value to the table than capital injection alone.
“Our strong entrepreneurial heritage and extensive experience in pre-seed and seed stages will give us the upper hand in catering to the start-ups’ needs for growth. Rather than just putting money in their ventures, the product, through various subject matter experts, will help build them through various value-added services such as in the areas of mentoring, commercialisation support and many others,’’ he explained.
Additionally, Nazrin said having the access to ecosystem players is also amongst the key benefits start-ups get to enjoy when they receive investment under DEQ800.
He added, ‘‘one major advantage of getting seed funded by Cradle is that our start-ups can look forward to leverage our ecosystem of diversified investor groups which can add value to their knowledge and experience as they strive to scale beyond their home market.’’
With regard to the product outcome, Nazrin hoped that DEQ800 could serve as an alternative to stimulate the growth of high-potential Malaysian tech start-ups and make the early stage funding ecosystem in Malaysia, more robust, albeit the current economic downturn and government’s stance on reducing dependence on grants.
Additionally, he wished to look forward to the day where DEQ800 could close the funding gap in the nation’s seed stage where there are very few players that invest below RM 800,000.
On a strategic side, Cradle plans to invest in up to 10 start-ups under direct equity and close 3 co-investment deals in 2017.
Prior to this, Cradle’s equity investment was practised via one-to-one partnership. However, following the portfolio expansion, the co-investment initiative will see a significant change with the introduction of two-to-one ratio. This means Cradle will double every matching contribution with its partners on their co-investment deals.
In relation to this, the ticket size for co-investment also sees a little rise to RM 800,000 from RM 500,000 from previous years.
About Cradle:
Cradle Fund Sdn Bhd (Cradle), an agency under the Ministry of Finance Malaysia (MOF) is the organisation that manages the Cradle Investment Programme. The MOF had allocated RM100 million to Cradle for this programme since it began in 2003.
The agency was awarded with an additional allocation of RM175 million for the 2011-2015 period, under the 10th Malaysia Plan. Cradle now runs the Coach and Grow Programme (CGP), a market-driven programme to train entrepreneurs and also administers the Angel Tax Incentive, which was designed for angel investors to be accorded a tax deduction of up to RM500,000.
The organisation has been expanding its capacity by venturing in co-investment partnership. Since its inception, Cradle has helped over 700 Malaysian tech start-ups and holds the highest commercialisation rate amongst government grants in the country.
Cradle Seed Ventures (CSV) is a subsidiary of the venture capital arm of Cradle Fund Sdn Bhd focusing on early stage venture fund based out of Malaysia. CSV has added strength of being able to leverage Cradle’s experience in supporting early-stage start-ups, understanding their funding and operational needs and also be by their side when they scale in their local Malaysian market and to foreign shores.
For more information on Cradle, please visit www.cradle.com.my
For media queries relating to Cradle’s DEQ800, please contact Ashraff Taharim at 019-278 9760 or email ashraff@cradle.com.my
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Southeast Asia: The Next Major Market in Asia for Founders and Investors
When Garena, Southeast Asia’s most valuable startup picked Goldman Sachs Group Inc. to lead a planned initial public offering in the United States, it made an optimistic statement about the future of startups in Southeast Asia. The initial public offering, if completed, would record the...
April 27, 2017 /PRWIRE.asia/ -- When Garena, Southeast Asia’s most valuable startup picked Goldman Sachs Group Inc. to lead a planned initial public offering in the United States, it made an optimistic statement about the future of startups in Southeast Asia. The initial public offering, if completed, would record the largest share of IPO proceeds from Southeast Asia at US$3.75 billion.
“This is an extremely significant deal,” said Vishal Harnal, a partner at 500 Startups in Singapore. “Once you have a success story coming out of the region, it becomes easier for others to emulate. An IPO of this magnitude will galvanize and serve as a beacon to all the startups in Southeast Asia.”
Founded in 2008 by Forrest Li, Garena is a Singaporean unicorn currently valued at US$3.75 billion.
SEA – the Next Rising Star in Asia
Like China a decade ago, Southeast Asia is now an emerging market on the verge of something big. The region has raked in a cumulative funding of US$2.6 billion in 2016, increasing over 60 percent from its previous year of US$1.6 billion. It has even been touted as the most attractive emerging market for private equity investment in Asia, according to Global Lead Insights.
“Southeast Asia for the next 10 years is going to be one of the most exciting regions to invest in. If you think about it, it’s kind of situated between the two giants – China and India – and then if you look at it – Silicon Valley companies who missed out on China and India are looking at where are the last big markets that are left. And Southeast Asia it is,” said Thomas Tsao, the Founding Partner of Malaysia-headquartered Gobi Partners.
But it is not just the market opportunities that have drawn entrepreneurs from around the globe to places like Singapore, Thailand or Malaysia.
The Catalyst to The Rise of SEA
There is a host of factors contributing to the surge of interests in startups outside the established hotbeds for technology and innovation. Southeast Asia’s growing digital connectivity for one, has made the population addressable. With over 300 million smartphone users in the region as compared to the United States which has only 225 million – this brings about a greater consumer demand and purchasing power.
On the other hand, business-friendly initiatives have also further supported the investments in Southeast Asia. For example, the Malaysian government runs Malaysian Global Innovation and Creativity Centre (MaGic), a startup entrepreneurship program that has provided many benefits for startups to find fertile ground in Malaysia.
Programs to help startups like the MaGIC Accelerator Program is readily available across many SEA countries.
Most importantly, the market in Southeast Asia has a lesser competition intensity for startup founders and investors alike which provide a rational entry valuation.
Even Timor-Leste, a country located beneath Indonesia (for those who have never heard of the country) has a proportionately large number of startups despite having the requirements for entrepreneurs to deposit 260 percent of their average income in a bank. This is considerably a huge amount of capital to raise up front in comparison to the global average amount which is just 9 percent.
Non-SEA Investors Dominates Market Sphere
Statistics have also shown that non-Southeast Asia investors are dominating the SEA market sphere. As the region has drawn attention from neighboring countries including Japan, China, and India as well as accumulating substantial capital from major global venture capital firms like Northstar, IMJ and Sequoia Capital.
500 Startups, a United States-based venture capital firm, is also heavily involved in Southeast Asia – having helped startups work on specific growth goals. Just last year, it added another US$50 million into 500 Durians, a micro-fund focused on investing Southeast Asian startups. Its active involvement has even made it SEA’s most active early stage investor.
Another notable investor interested in the region is Jack Ma, extending his influence in the region as he acquired Malaysia’s eCommerce platform Lazada in April 2016 for a total US$1 billion. For Alibaba, this is a big wager on the region as the enterprise competes against Amazon to dominate the eCommerce sphere.
Besides, the Chinese mogul has also been very active in the region’s political scene, associating with the head of states from Thailand, Singapore, and Indonesia, in addition to becoming the economic advisor for Malaysia. The same goes for the Chinese government as it invests heavily in Cambodia, Laos, and Myanmar to transform them into bigger destinations for export.
Alibaba founder, Jack Ma has agreed to act as an advisor to the Malaysian Government on its digital economy
This is an interesting moment in time for Southeast Asia. It is essentially because investors are now realizing that Southeast Asia is the only large market left to grow.
Amidst the positive outlook, ASEAN own startups which are valued at more than US$1 billion, from ride-hailing leader Grab to e-commerce operator Tokopedia, are also coming to age. With this, it is only expected that Southeast Asia’s entrepreneurial ecosystem will receive a tremendous boost in the near future.
And Garena’s IPO is just the beginning.
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