Turbulence ahead for AirAsia parent as it chases super-app dreams

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Hello reader,

I’m really thrilled by the prospect of being able to travel again. With most of the population fully vaccinated, Singapore recently simplified its protocols for travelers entering the country. Many other countries are opening their borders to tourists as well and streamlining their processes.

As such, I’ve been spending a lot of my spare time looking up flights and hotels, making plans for my next holiday.

I’m not the only one who’s excited about travel and tourism picking up again. Capital A, the parent company of Malaysian carrier AirAsia, pivoted towards being a super app amid the pandemic, rolling out a multitude of digital businesses beyond its airline offering.

As Capital A pursues its goal of becoming a tech company, the return of travel will likely put some cash in its pockets – which it certainly needs more of.

Today we look at:

• Capital A’s funding setback and what it means for the business
• A Singaporean fintech startup focused on domestic workers
• Other newsy highlights such as Grab’s head of tech’s new venture and the aftermath of Shopee India’s closure

Premium summary

The road ahead for Capital A

Image credit: Timmy Loen

Capital A – formerly known as AirAsia Group – has been making a concerted push towards becoming a super app, adding logistics, fintech, and other digital services to its AirAsia business. But as it moves towards becoming a tech company, it faces a bumpy road ahead.

• A question of funding: Capital A embarked on a major fundraising push, aiming to collect US$592 million. However, negotiations for one of the main funding sources for the tranche – a US$118 million club facility backed by state-owned financial insurer Danajamin – broke down. Without the Danajamin guarantee, Capital A would be pressured to raise funds to expand operations and diversify.

• The challenges are many: Earlier this year, Capital A dropped to PN17 status, a tag given by the Malaysian stock exchange for financially distressed firms, putting it at risk of being delisted. Additionally, Capital A’s airline and digital businesses are still in the red, with the latter likely to face stiff competition from the likes of Grab and Foodpanda.

• Hopes for the future: Many of the developments that could act as positive catalysts for Capital A are still up in the air, such as the group’s application for a digital banking license in Malaysia and the potential uptick for AirAsia as Malaysia opens its borders and travel resumes. Only time will tell what’s in store for Capital A.

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