Gaming guilds fly Southeast Asia's flag and did North Korea hack Axie Infinity?
Gaming guilds fly Southeast Asia's flag and did North Korea hack Axie Infinity?
Asia Tech Review: 18 April 2022
Welcome back,
This week we open with a couple of crypto stories from Southeast Asia. What’s a bigger curiosity than whether play-to-earn games can sustain? How about whether gaming guilds, which focus on serving P2E games, can endure?
Gaming guilds might be the most unique business model to emerge from Southeast Asia—I’ve seen clones based out of the US, Europe and other places, all of which are focused on the Southeast Asian market. And yet guilds themselves have expanded into investing, advisory and much much more.
Also this week: did North Korea hack Axie Infinity for $600M? The US government thinks so. China is again cracking down on tech—this time gaming and live-streamlining. India’s funding wheels continues to turn at pace and the Zilingo controversy rages on with a key investor leaving the startup’s board.
Thanks for subscribing and see you again next time,
Jon
And, yes, ASEAN not Southeast Asia has flag…
In focus: the 5 biggest stories of the week
Are gaming guilds like Yield Guild Games the “gatekeeper to the metaverse”?
Nikkei Asia asks a question that’s quite pertinent in crypto today. Guilds (collections of players) have been around since games have been a thing, but in the last year they took on new significance as intermediaries that manage play-to-earn gamers and buy up game assets, aka NFTs.
Philippines-HQed Yield Guid Games (YGG) began by onboarding gamers to Axie Infinity, painstakingly showing users how to get a crypto wallet, load it, earn in-game currency, etc. Today it counts thousands of gamers under its roof, a host of subDAOs (which have raised tens of millions from investors—including my employer Crypto.com Capital, tens if not millions of dollars in NFTs and dozens of highly-sought-after investments.
When I wrote about YG back in August last year, it was a tastemaker that could send hundreds or thousands of gamers to a new game (that’s power)—but today its status has grown into a powerful investor that rivals investors, and that applies to other guilds, too. (Numerous guilds including YGG’s SE Asian branch joined us in a deal last week, for example.)
In crypto, everyone with a strong business becomes an investor in the end but this is a topic I plan to visit as a standalone essay in the future.
US blames North Korean hacker group Lazarus for $625 million Axie Infinity theft
Sticking with crypto, it looks like North Korea might have been responsible for the massive hack on Axie Infinity last month. That’s according to the US government’s research. It does make you wonder what portion of the country’s income comes from hacks, and crypto hacks in particular.
Wrapped in red tape, China’s startups give up their mainland dreams
An insightful story from my ex-colleague Rita Liao on how a litany of policies to assert more control over China's internet sector have made it difficult for ambitious, young founders who have run into roadblocks in industries as varied as fintech, social media, gaming, e-commerce, live-streaming and more.
WhatsApp is planning significant investment into its payment service in India
WhatsApp’s push into payments has been heavily scrutinised and regulated by the Indian government which, understandably, is reluctant to allow the hugely popular US service the opportunity to build a huge payment service without any conditions. Potentially, WhatsApp Pay could become India’s largest payment service which should elicit concern given how Facebook’s other services have been used and adopted in other parts of Asia with little to no oversight.
But now it has given WhatsApp the nod to increase the number of users making use of the country’s Unified Payments Interface (UPI) to 100M. Now WhatsApp says it will make “significant investments” in its payment business in India, including India-first features and a drive to increase adoption among those not already using UPI.
The US Department of Homeland Security is investigating how TikTok handles child sexual abuse material, according to two sources familiar with the case who spoke to the Financial Times. The department is also reviewing how a specific privacy feature on TikTok is being exploited by predators, said one person with knowledge of the case.
China
Didi has called a shareholder vote on May 23 to decide on plans to delist from the NYSE link
Delivery giant Meituan, famed for making its business profitable when others can’t, has axed up to 20% of jobs in core departments including food and grocery delivery—a signal that China’s tech players are going through tough times link
Synopsys., the biggest supplier of software used to design semiconductors, is under investigation by the US Department of Commerce for possibly passing key technology to Huawei and SMIC link
Internet portal Sohu is delisting from Nasdaq after being named by US regulator as non-compliant with audit rules—it listed back in 2000 and is one of many likely to exit US public markets link
China’s banking association has proposed restrictions on NFTs, must not be used for securitization or transacted in cryptocurrencies link
Things could get more serious for Jack Ma with China’s top anti-graft watchdog said to be among the agencies involved in a recent inquiry into links between Jack Ma’s Ant Group Co. and state-owned Chinese companies. The CCDI, which oversees corruption probes involving senior members of the Communist Party, was involved in the queries sent to state firms in February about their exposure as part of its investigation of former Hangzhou party chief Zhou Jiangyong link
Tencent will shut down a service that allowed Chinese gamers to access overseas platforms to play unapproved foreign games—Tencent hasn’t commented on the impending closure which is a further sign of tightening compliance as regulators more closely scrutinise the gaming industry link
Elsewhere, China has banned live-streaming of unauthorised titles link
ByteDance is pushing a music-streaming service, called Qishui Yinyue (aka Soda Music), in mainland to challenge market leaders like Tencent and NetEase link
Game engine Cocos—founded way back in 2020—raised $50M to take its business beyond games link
India
Delivery giant Swiggy led a $180M investment in bike taxi platform Rapido at a $800M valuation link
OfBusiness, which helps Indian enterprises buy bulk raw materials, is being tipped to raise up to $2B for an October IPo—for now, though, the husband-wife founding team is in talks to raise a $400M pre-IPO round in the coming months link
India is emerging as Apple’s big Asian manufacturing bet outside China, but there’s still much work to do—India accounted for about 3.1% of Apple’s global manufacturing base in 2021 (up from 1.3% in 2020) and is expected to reach 5% to 7% in 2022, according to estimates by Counterpoint Research link
Ola founder and CEO Bhavish Aggarwal will step back from day-to-day operations to focus on engineering, team building, and product and long-term strategic projects like two-wheelers, cars, quick commerce and international expansion—current CFO GR Arun Kumar will drive day-to-day operations link
Lenskart is reportedly in “advanced talks” to close a $200-250M at a $4.5-5B valuation link
Social commerce pioneer Meesho is reportedly likely to postpone new funding amid market uncertainty—the $4.9B-valued company is said to be burning $40M-$45M per month. Already it has let 150 staff go with other streaming said to be planned link
The government’s Enforcement Directorate has summoned India-based executives at Xiaomi and OnePlus after its tax analysts claimed to have seized data allegedly corroborating charges of tax evasion during searches link
There’s uncertainty among top Indian crypto exchanges after CoinSwitch Kuber and WazirX disabled rupee deposits—that’s led to renewed claims for regulatory clarity link
Neobank Fi is reportedly in advanced stages of talks to raise about $100M at a $700M million valuation, with Temasek among the prospective investors in the round link
Another acquisition for digital payments and financial services provider Pine Labs which picked up a majority stake in payments solution provider Mosambee at a reportedly overall valuation of $100M link
The party for e-commerce rollup forms could be over—Economic Times reports the platforms are facing their first big test as demand has fallen leading some players to consider sales to larger rivals. For example, 10Club, which raised $40 million in a seed round almost a year ago, reportedly approached bigger firms for a potential takeover. There’s a similar story for Upscalio, which recently raised $15 million in debt and equity link
E-commerce startup FirstCry.com is planning to file for an IPO to raise about $700M at a $6B valuation, according to reports link
Itilite, a Bengaluru, India-based company developing travel and expense software, raised $29M co-lead by Tiger Global link
B2B medical supply startup Medikabazaar raised $65M at a $700M valuation link
PhonePe and Affle Global have settled their dispute over the acquisition of IndusOS—the former being the purchaser and latter an investor link
Southeast Asia
Sequoia Capital India’s Shailendra Singh has stepped down from the board of troubled Zilingo following questions about the high-profile Singapore startup’s accounting practices link
Sequoia appeared to hit back with a blog post that, while not naming any companies by name, calls allegations of “fraudulent practices or poor governance” among some of its founders “deeply disturbing” link
Hot on the heels of GoTo, travel booking startup Tiket and e-commerce company Blibli are considering a merger after Tiket’s planned SPAC deal fell through—reportedly they plan to raise $1B going public but they are actually owned by the same corporate which could make this somewhat of a publicity stunt, my former colleagues at The Ken note link
Philippines’ President Rodrigo Duterte has vetoed a bill that would require social media users to register their legal identities and phone numbers, calling for a more thorough study of the measure link
Pakistan
Pakistan’s Zaraye, a B2B supplies platform, raises $2.1M from Tiger Global and Zayn link
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