China tighter on tech: ByteDance influence and new rules on data and live-streaming
Asia Tech Review: 23 August 2021
Welcome back,
China’s regulators again dominated the news last week, with the revelation that the Chinese government has ByteDance shares and a board seat. There’s a feature story on what Jack Ma is up to now—apparently he’s learning oil painting among other things—while China has a new data law and fresh rules for live-streaming.
Elsewhere, India’s funding rains continue to pour and, in Southeast Asia, GoTo is closing in on a $2B round ahead of its IPO, which has been pushed to next year. Finally, speaking of money, Pakistan got a huge funding round for an e-commerce service, featuring some notable investor names.
That’s all for this edition—see you next time,
Jon
China
It emerged that the Chinese government is an investor and board member of ByteDance. The Information reported the detail based on filings and sources—which raises the topic of just how involved the government is with China’s top technology companies
Meanwhile, the US SEC is increasing its scrutiny of Chinese firms wanting to list in the US, including deeper questions on their global corporate structures
China has passed a new personal data law which lays out conditions for collecting personal data, mandates an individual executive to take charge of personal information protection and states that personal information collection should be limited to the "minimum scope necessary to achieve the goals of handling" data. It will comes into effect on November 1
Speaking of which, regulators are also cleaning up livestreaming with new rules that prohibit streamers aged under 16s, mandate Mandarin for sessions and include a list of banned items, including sex toys, spying devices and medicines
Hong Kong is poised for a couple of AI IPOs: SenseTime is reportedly eyeing a listing to raise $2B as soon as the of August, while smaller firm Yitu is said to be keen on a Hong Kong IPO too
But Tencent Music’s plan for a $5B Hong Kong listing is on hold, and postponed until 2021
China Unicom plans to spin off and list its majority-owned SMART Connection business, which provides connectivity and applications for connected cars, in mainland China.
Didi may be in trouble after China probed its business right after going public, but it continues to dominate according to numbers from a government report:
The number of ride-hailing orders through Didi rose 13.1 per cent in July over the previous month, showing stronger growth than the market’s overall 10.7 per cent growth nationwide. Already China’s dominant ride-hailing service provider with 90 per cent market share, Didi has managed to expand even in the face of mounting government and competitive pressure.
Didi does, however, have boardroom drama
Baidu raised $1B through ‘green bonds’, it plans to use the proceeds to fund green data centres and research into electric ‘robocars’
Tencent said it will earmark $7.7B for ‘common prosperity’ programs and initiatives in answer to President Xi Jinping’s call for financial equality—can we call this a tax that comes with the territory of being a Chinese internet giant? Don’t forget Tencent has done relatively well on the regulation front compared to others like Alibaba or ByteDance—but it expects to see more action there soon.
What has become of Jack Ma? The Wall Street Journal has a fascinating story:
Mr. Ma, 56 years old, has exchanged a wall-to-wall schedule of business travel and meetings with world leaders for golf and the reading of Taoist texts, people familiar with his activities said. He hired a teacher to learn oil painting, starting out with images of birds and flowers and then shifting to an abstract style, according to these people and photos of his artwork viewed by The Wall Street Journal.
He also has traveled to Beijing to try to smooth things over, the people familiar with his activities said. It was too little, too late, officials said. Mr. Ma strayed too far out of his lane. His ambition and outspoken nature, traits that drew a strong following among many in China, would no longer be tolerated in the tightened grip of Mr. Xi and the ruling party.
Under-fire crypto exchange Binance says it is increasing money laundering checks as it tries to win back a reputation hit by regulatory investigations and blocks from banks across the world—but it still lacks a US head and a sizeable business in North America
A security firm found a large-scale, likely state-sponsored influence operation against the BBC and UK. The campaign involves critical comments across hundreds of websites and social media accounts and thousands of comments across state-affiliated news sources, fake news websites, and Chinese and Western social media platforms.
Amazon’s crackdown on sellers in China has resulted in over 50,000 being banned
SoftBank led an investment in Chinese driverless delivery van startup Neolix
India
Conglomerate Tata Digital’s investment in Dunzo is seen as a big deal, but the deal is stuck on Tata wanting majority control, according to Economics Times. While negotiating terms with the Tatas, Dunzo is simultaneously in active discussion with financial investors for a fresh $100M-$120M at an estimated valuation of $500M-$600M—it was last valued at $300M
Facebook launched Small Business Loans Initiative, a program to help SMEs secure loans through local partner Indifi—it said loans will range $6,720-$67,200, with an annual interest rate of 17%-20% and no need for collateral
OYO is tipped to join India’s tech IPO wave but just before it does it raised $5M from Microsoft at a slightly lower valuation of $9.6B—Microsoft has invested in tech companies like Flipkart and Grab in Southeast Asia as part of its efforts to get its Azure cloud computing platform established among growing tech firms and this looks like being the case here too
But India’s decision on listing overseas has been delayed by six months—that’s a crucial route for new IPO companies to find liquidity and capital from more established tech markets like the US.
Fintech company Cred is much maligned for seeming to lack a business model but last week it introduced a peer-to-peer lending feature
It was a busy week of funding deals, including:
India has a new e-commerce aggregator as UpScalio (has there ever been a worse name?!) came out of the shadows to announce a $42.5M round
API management system Postman was once an under-the-radar Indian-founded startup—now it’s valued at $5.6B after raising a new round worth $225M
Amazon backed its first wealth management startup in India, joining a $40M round for Smallcase
Bike taxi aggregator Rapido raised $52M
Zetwerk Manufacturing, which helps SMEs turn digital designs into physical products, raised a $150M Series E that reportedly values it at $1.5B
Klub, a fintech platform that provides revenue-based financing, raised $20M
Skill-based online gaming platform Zupee raised $30M
Health technology startup Ultrahuman raised $17.5 million
Southeast Asia
GoTo—the merged entity of Gojek and Tokopedia—is close to raising $2B in what would be a pre-IPO round. The listing itself is likely to happen next year, not this year as had been hoped originally.
The Bank of Thailand said its central bank digital currency pilot program planned for the second quarter of next year will test its use as a cash-like payment system.
Indonesia’s LifePal, a direct-to-consumer insurance marketplace, raised $9M
RaRa Delivery, a startup that thinks it can do delivery efficiently and without burning cash, raised a $3.25M seed round. It works with e-commerce platforms and service providers and claims to use smart routing and batching tech. The proof will be in the pudding when it expands its service area beyond greater jakarta.
Thailand has inked QR code payment corridors deals with Vietnam, Malaysia, Cambodia, Singapore and now Indonesia is on the list too
Revenue-based financing startup Jenfi raised $6.3M to focus on high-growth Southeast Asian companies
Japan
Coinbase has mostly focused on the US and Europe, but it’s taking a renewed shot at Japan after announcing a tie-up with MUFG bank that’ll let it offer local products. It raised money from Japanese investors as far back as 2016
Meanwhile, crypto exchange Liquid lost more than $90M following a hack—I previously wrote about Liquid’s struggles to deliver on its promises to investors and this is a massive setback to its (albeit ambitious) plans to start over
Even Covid can’t make telemedicine work in Japan
South Korea
Bloomberg has a long story on Coupang’s struggle to balance worker health and rights with the demands of its super speedy on-demand platform—which is has seen its valuation fall to $55B, with shares down some 40% since its IPO in March
Danggeun Market, which operates hyperlocal community app Karrot, raised $162M at a valuation of $2.7B
Delivery Hero has offloaded food delivery service Yogiyo in a deal valued at 800 billion won ($685 million)—the sale is part of the conditions laid out by regulations for DH to acquire Woowa, which owns industry leader Baedal Minjok
Pakistan
Quick commerce startup Airlift raised $85M. Not only is it a huge round for Pakistan (which takes it to $110M to date) but it comes from a range of notable investors including Harry Stebbings of 20VC, former Y Combinator president Sam Altman, Twitter and Medium co-founder Biz Stone, Bain Capital co-chairman Steve Pagliuca, ex-chief executive of Disney and Quibi Jeffrey Katzenberg and Taavet Hinrikus, the founder and CEO of TransferWise.
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