The company, which was backed by Crosby, GK Goh and OUB, says it was unable to secure another round of funding, and has thus had to close. An email was sent to clients on Saturday and a notice posted on the company's website at www.growasia.com.
Growasia sought to carve a niche for itself in deals with much smaller valuations than any normal investment bank would care to look at. It aimed – via its Internet site – to match buyers with sellers on small deals, charging a $10,000 success fee for deals worth less than $1 million and up to $200,000 for deals worth more than $100 million.
It launched during the Internet boom and to be fair, the firm’s prospects looked as good as any. However, some questioned how much of the transacting would be ‘really’ done online, as most transactions would inevitably be complex and its shareholder/partner Crosby would deal with the paperwork and legal issues offline.
Growasia sought to silence its critics by stating it had hundreds of assets for sale worth $1 billion. It said these came from over 30 industries.
When FinanceAsia last spoke to Growasia – after it had signed a cooperation agreement with Indian rating agency, ICRA – it was told that the firm had 500 investment opportunities on its books and 100 were undergoing active negotiation. It had also signed a deal with the Philippine Small and Medium Business Development Foundation.
Its CEO, Ian Gibbs told FinanceAsia: “It is a known fact that the Asian SMEs form the backbone of the Asian industry, and this is a segment of the market that has not had much access to investment banking services.”
Unfortunately, with Growasia’s demise, that segment will remain unserved.
In its notice explaining the closure, Growasia noted: “We would like to thank all our partners, members and other users of Growasia for their support and cooperation of the last year. This support from both financial intermediaries and individual companies, has reinforced management’s view that there remains a strong need for a service such as Growasia to improve the efficiency of origination and execution of small and medium sized Asian M&A transactions.
“Despite this market acceptance of the Growasia business model, we have not been able to secure sufficient funding to finance the ongoing development required.”
