Malaysia-based logistics firm Teleport has signed a subscription agreement with funds managed by HPS Investment Partners on Thursday for the issuance of redeemable convertible perpetual securities (RCPS) to raise a total consideration of $50 million as pre-initial public offering (IPO) growth capital.

Teleport said in a statement that this raise values Teleport, the logistics arm of Capital A Berhad (Capital A), at $500 million pre-money and will accelerate the expansion of Teleport’s unique cross-border eCommerce model globally.

This capital raise allows Teleport to strengthen its balance sheet and fund network growth with its key partner airlines, ahead of a future public listing.

Altogether, the company has raised approximately $109 million since inception in 2018.

According to the statement, Teleport’s updated valuation from a leading global institutional investor is a strong validation for Capital A and the various AirAsia airlines, who have supported the build of Teleport since its inception eight years ago.

This increased institutional confidence in Teleport’s model demonstrates the commercial viability and sustainability of its unique model, as Southeast Asia’s integrated eCommerce logistics specialist.

Since it was founded, Teleport has scaled its infrastructure and asset-light Teleport Network to rank #1 within Southeast Asia, #9 in Asia and #13 globally by volume.

The statement highlighted that Teleport’s unique model, anchored on an asset-light air network infrastructure, allows it to deliver cross-border eCommerce at marginal cost.

It highlighted that the Teleport Network has the most direct point-to-point connections – reaching over 290 capital and smaller cities across 80 countries in Asia Pacific; connecting over 50 partner airlines.

It is further enabled by technology, from first to last mile, built to continuously move eCommerce faster, cheaper, better.

“We are happy to welcome HPS in our next stage of growth to scale our unique ‘asset-light’ model for cross border eCommerce to reach further into key global markets, specifically targeting high-growth eCommerce corridors between China, the rest of Asia, Middle East and beyond,

“…we built Teleport uniquely, against many industry norms, which was not easy but the team persevered – alongside Allstars notably from AirAsia, ADE and GTR, each of whom are an integral support to Teleport’s operations and success, a true show of strength from within the Capital A ecosystem,” said Pete Chareonwongsak, Chief Executive Officer of Teleport.

According to him, the Teleport model has proven itself in more ways than one and we are still ahead of the curve.

“Today, we have only captured 1 percent of a $28 billion Total Addressable Market for China and Southeast Asia air cargo and cross-border eCommerce,

“We will continue with that same perseverance with the continued trust and support of Capital A, AirAsia, our shareholders, investors and partner airlines who share the same belief of being better together in order to serve our customers faster, cheaper and better,” he added.

Tony Fernandes, Chief Executive Officer of Capital A Berhad, said this investment is a clear vindication of the firm’s strategy and innovative approach.

“I am thrilled that Teleport has evolved into a leading cargo and logistics provider globally, ranked among the top players in Asia,

“Our unwavering support for Teleport and belief in its potential have directly resulted in this significant capital raising,” he added.

According to him, this partnership is immensely beneficial to the AirAsia airlines, to work with a dedicated partner to maximize their belly space and network utilization.

“This updated valuation represents an unrealized return of over 100-fold for Capital A, and positions Teleport well for a future IPO,

“This is a clear win for our shareholders, delivering significant returns, and this strategy will continue as we actively look for growth capital for other Capital A companies,” he added.

The completion of the issuance of RCPS by Teleport is subject to the satisfaction or waiver of the conditions precedent as set out in the subscription agreement.

BNP Paribas and Milbank acted as financial advisor and legal counsel respectively to Teleport, while Latham & Watkins acted as legal counsel to HPS Investment Partners.

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