Welcome back,
Well, Ant Group’s botched IPO is the biggest news—all you need to read is in just two links. And you probably read them already.
So what else?
Indian corporations are really picking up their role in technology. Tata is on what could be an M&A spree and Reliance Jio will show us how its relationship with foreign investors might work—they want help circumventing a rule that could significantly limit their digital banking plays.
In Southeast Asia, Google and Temasek’s latest annual report is out and Grab is buying into a government-backed mobile banking service.
Quick PSA: I don’t stuff this newsletter with stories from The Ken because it is not self-promotional, but this week I plan to give away five 30-day access codes. Email me if you want one. First come, first serve.
Our reporters get more time to dig into stories and we proactively select stories rather than going with whatever is in the news or companies want to discuss. That makes a unique business publication in Southeast Asia.
See you next time and take care,
Jon
China
Biggest news to start with: Chinese President Xi Jinping is said to have personally made the call to block Ant Group’s IPO. Reuters also has a detailed look at what happened. Yep, that’s it. All you need to know so far.
Image via Alizila
TikTok’s US business looked to be off the hook after the Trump administration missed a deadline for the Chinese firm to divest its holdings in the US. But now the company has been granted a further extension of 15 days: that means it has until 27 November to divest. ByteDance has, of course, appealed but who knows what will happen next…
The Trump administration is getting in more blows while it can, though, having just banned US investment firms from putting money into companies deemed to be controlled by China’s military—the White House has a list of 31 companies, and it wants any ownership stakes to be divested
Qualcomm, meanwhile, says it has been granted an exemption to sell 4G chips (and more) to Huawei—that overrides the US trade ban on Huawei
But it looks like Huawei will unload its Honor smartphone brand as previously reports had suggested. Reuters again reports on the deal, which will see a consortium that includes the Shenzhen government and a handset distributor pay $15B for the business, which specialises in mid-range smartphones:
Honor-brand smartphones made up 26% of the 51.7 million handsets Huawei shipped in July-September, showed estimates from Canalys. Honor’s products also include laptops, tablet computers and smart TVs.
Still, a Biden presidency doesn’t mean all is forgiven and back to square one. China’s manufacturers remain concerned that the US will continue to remain hostile, such is the deep mistrust that’s taken root since Trump took office
Early consumer feedback in 5G in China isn’t great, thanks mainly to inconsistent data coverage
Apple’s international executives are reportedly returning to doing business in China
In recent months, Apple has resumed flying U.S. employees to China to work with the manufacturers that make most of its iPhones, Macs and iPads, according to seven current and former Apple employees and people working for its partners. These voluntary visits, which now typically last at least six weeks and include a two-week stay in a quarantine hotel negotiated by Apple and the local Shanghai government, come with an incentive: up to $500 a day in addition to the normal daily expense for business travel, according to two of these people.
Elsewhere in Apple manufacturing news: it suspended new business with iPhone assembler Pegatron after discovering labor violations at a student workers’ program
Tencent saw profits jump 89% thanks to gaming—a quarterly profit of $5.8B is wild even for Tencent’s lofty standards
Alibaba and luxury goods firm Richemont have invested $1.1B online luxury fashion retailer Farfetch in a deal that will expand its focus to the Chinese market
Alibaba’s cloud business is now bigger than IBM’s with over $2B in quarterly revenue—very different targets, of course, with Alicloud almost entirely winning in China
China’s Uber for Trucks—Full Truck Alliance—is reportedly raising $1.7B at a $10B valuation ahead of an IPO next year
China plans to regulate live-streaming
AI, robotics and smart city tech were among the top products on show at the China Hi-Tech Fair, an annual convention know for showcasing tech
Btw, a small mention on Single’s Day, the 11/11 shopping ‘bonanza’—this year it certainly got less attention, which is not a bad thing since it is essentially a marketing day and a lot of stories just skim the topline numbers. Sure, they are large but ultimately a lot of platforms and retailers sell at a loss so there’s a finite amount of analysis you can make from them. This year the ‘day’ even stretched to a week or longer, which again means that there’s a limit to what you can learn from the big numbers.
Taiwan
Taiwan’s two largest Apple suppliers plan to invest in the US following Biden’s election win
India
India is capping the transaction share of digital wallets like Google Pay, WhatsApp and PhonePe to 30% of UPI payments. It’s a highly controversial move that’s aimed at stopping digital players completely disrupting the market and it remains to be seen how it will be enforced.
More than 2.07 billion UPI transactions were processed in October, according to NPCI, with Walmart’s PhonePe accounting for just over 40% of those transactions. Google Pay was a close second, with rivals like Paytm and dozens of others splitting the remaining 20% share.
Companies such as PhonePe and Google, which currently exceed NPCI’s stipulated cap, will get two years to comply with the new rules.
Lo and behold, the foreign firms are now said to be looking to work with Reliance Jio to set up their own networks and thus bypass this enforcement. An early test for Jio’s ambition and how it will support the foreign firms that ploughed billions into its platforms business. Lots to watch out for here.
And that corporate-tech machinery continues to whir: Reliance Retail snapped up online furniture retailer Urban Ladder for $24M. (It has technically acquired 96% of the business with a view to a full buyout.)
The deal has reportedly only provided partial returns to investors:
Founded in 2012 by Ashish Goel and Rajiv Srivatsa, the furniture portal had raised a total of about Rs 860 crore ($115 million) in venture funding and was last valued at over Rs 1,200 crore ($160 million).
“The sale is at about 20 cents to a dollar raised," said one investor on the condition of anonymity. The RRVL acquisition valued at about $24 million is a “ distress” sale, investors told ET.
Elsewhere in big corp India, Tata Group is planning deals of its own. It is reportedly preparing to pay $1B to get a majority stake in online grocery platform BigBasket—as written in ATR before, Tata is trying to develop its own super app strategy. The firm is also looking to buy a majority stake in pharma startup 1mg
Away from the US, ByteDance is said to be hatching plans to return to India, which was its largest market for TikTok based on users
Perhaps it can take inspiration from hit game PUBG is returning to India after being banned—the firm said it’ll invest $100M to grow the gaming market in India, too, although exact details are unclear. (Responsive PR always looks better when you can throw in a big number and say you are investing in local talent/people...)
India also plans to regulate streaming services and other online content
Zomato is raising nearly $150M ahead of a planned IPO in 2021
Grofers is reportedly close to raising $55-$60M from existing investor SoftBank Vision Fund and others
Private equity funds Investcorp, Norwest Venture Partners and Gaja Capital invested $110M to buy a 31% stake in logistics and supply chain firm Xpressbees, which counts Alibaba as an investor
AWS is getting deeper into India after it unveiled plans to spend $2.77B to set up data centres in Telangana
Southeast Asia
The latest report from Google, Temasek and Bain is out. Always a worthy read, expected the data to be quoted widely by the press for the next year or so. Confession: I’ve not had a chance to get deep into the weeds yet
Grab led a $100M investment in LinkAja, a government-backed mobile wallet and payment business. Grab also has a stake in OVO, which is said to be merging with rival wallet Dana. That essentially leaves GoPay as the only other major wallet in Indonesia
Gojek said last week that it is (finally) generating positive gross margins—aka, apparently, on the path to being profitable
My colleague at The Ken, Ben, looked at Singapore’s digital bank license bidders to see who is best placed when the announcement comes in before the end of 2020 (this is a free read on The Ken)
Indonesia wants Tesla to invest in its nickel processing industry to help the company produce lithium batteries faster and more cheaper than it does now
Facebook struggled to contain false information ahead of Myanmar’s recent election:
Facebook executives told Reuters hate speech in Myanmar was “near historic lows” after it invested in resources from artificial intelligence language and photo detection to measures to slow the spread of viral content.
But civil society groups have found dozens of networks of accounts, pages, and groups spreading ethnically and religiously charged falsehoods that they fear could lead to strife and undermine the second election since the end of hardline army rule in 2011.
Reuters separately found more than two dozen inter-connected pages and accounts with a combined reach in the hundreds of thousands. The majority were removed after Reuters flagged them to Facebook.
Singapore has a new visa to draw talent, but there are some big caveats:
Candidates must meet two of the three requirements before they can apply for the program starting in January. They must have last drawn a monthly salary of at least S$20,000 ($14,800); have at least five years of experience in leading a tech company with a valuation or market value of at least $500 million; or have at least five years of experience in developing a tech product that has at least 100,000 monthly active users or at least $100 million of revenue.
On the subject of talent, I looked at the challenge facing early stage ‘talent investors’ Entrepreneur First and Antler in Southeast Asia
Meanwhile, Singapore sovereign wealth fund Temasek is looking to invest in healthcare and education tech companies. That’s the approach most VCs have taken based on funding deals, but it is something when a large ship like Temasek changes course.
Speaking of which: Alodokter closed an extension to the $33M Series C raised in 2019 led by MDI
We have a two-part series of MDI, and its parent company Telkom, is which looks at how its fund returned $100M so quickly and how it is shooting for a Reliance-like digital play in Indonesia
Japan
SoftBank is reportedly planning to sell Boston Dynamics, the robotics business it bought from Google in 2017, to Hyundai for as much as $1B
The firm has also lifted the lid on SB Northstar, its new unit that invests in public market tech stocks. It isn’t going particularly well with the division losing $3.7B so far
Sony’s image sensor business has long been one of its strongest performers—now it is set to face renewed competition from Samsung
KKR and Rakuten are buying 85% of supermarket chain Seiyu from Walmart
South Korea
Sony is entering the drone market
In South Korea, some couriers are paying for same-day deliveries with their lives—”long hours for low wages—just US$0.70 per package in some cases—are driving a growing number of couriers to an early grave”
Scandals are rocking South Korea’s booming hedge fund industry
Other parts of Asia
How technology has ‘hacked’ democracy in Indonesia
Hackers are going after Covid-19 vaccine makers—Microsoft has traced attacks from a Russian group and two from North Korea
Netflix says it will increase its original content creation across Asia—anecdotally in Bangkok I’m already seeing Japanese and Korean OC dominate the top content watched in Thailand
An interview with Philippines journalist Maria Ressa on her battle against Facebook and abusive of the social network
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