MDI Ventures continues spree, exits from cloud communications company Wavecell
MDI Ventures announced that it has cultivated another successful exit scenario, this time in the form of the acquisition of Singapore-based cloud communications platform Wavecell by US-based 8x8 (NYSE: EGHT). The deal was worth approximately US$125 million. It is the largest reported Southeast Asian startup exit in 2019 so far.
In the venture capital industry, the term ‘exit’ is used to describe a point at which an investor sells their stake in a firm to realize gains or losses. In the case of Wavecell, MDI Ventures claims it was able to generate substantial capital gains for its fund and limited partners.
Established in 2010, Wavecell helps businesses enhance customer experiences by offering SMS, chat apps, video interaction, and voice solutions for any platform. The startup operates in key Southeast Asian markets such as Singapore, Indonesia, Philippines, Thailand, and Hong Kong. The acquisition was a strategic play by 8x8, which means the US firm can now boast multiple strong footholds and points of market entry across Asia.
Wavecell is expected to further accelerate 8x8’s growth, expand its international presence, and deepen the company’s technology capabilities in cloud communications. Wavecell comes with a talented employee base and more than 500 enterprise customers, including Lazada, Traveloka, Tokopedia, Paidy, and Lalamove.
The deal brings Jakarta-based MDI Ventures to a total of three successful portfolio company exits in 2019, all of which have taken place simultaneously during the month of July. The corporate venture capital (CVC) firm can now claim that it has cultivated a total of five success stories since the fund’s first investment in 2016.
“2019 has undoubtedly been the most significant year so far for our fund,” explains MDI Ventures’ VP of Investments Joshua Agusta. “Three of our portfolio companies exiting all at the same time, and in the same month, is a true culmination of the thesis we’ve built and put our faith into. I have no doubt that this team will continue to propel startups in Asia to new heights and drive the startup-investor ecosystem further. We at MDI Ventures couldn’t be more proud of Wavecell’s achievement.”
With the acquisition of Wavecell, 8x8 customers in Asia in key verticals such as healthcare, financial services, and retail will be able to quickly configure 8x8’s voice, video, messaging, and analytics to meet their regulatory compliance requirements or build unique customer experiences across multiple channels.
Global market intelligence firm IDC forecasts the worldwide voice and text messaging communications platform-as-a-service market to grow to US$10.9 billion in 2022.
“Wavecell is a great example of our firm backing a company based on a founding team with deep industry know-how, who are aiming to solve a real problem, in a relatively untapped space, at just the right time,” says Agusta. “MDI Ventures will continue forward using Wavecell as one of our shining examples of how Asia Pacific is ripe for corporate venture capital initiatives today.”
Recent data shows that 2018 saw a surge in CVC activity worldwide. The second quarter alone clocked a record 757 CVC deals and US$14.1 billion in funding. For the whole year, there were 2,740 deals on record, while roughly US$53 billion was disclosed in CVC funding for tech startups. This is a staggering increase from US$36.1 billion the year before.
Asia attracted 38% of all CVC deals in 2018, up from 31% in 2017. In the third quarter, Asia overtook North American deal share for the first time. CVC accounted for 38% of all disclosed funding for tech startups in Asia.
MDI Ventures is a corporate venture capital initiative backed by Telkom Indonesia, with headquarters in Jakarta and operations in Singapore and Silicon Valley. It is an independent entity aiming to bridge the gap between large corporates, smart global investors, and innovative startups in Asia Pacific.
