General Catalyst on the prowl in India as it weighs buying Indian VC
General Catalyst on the prowl in India as it weighs buying Indian VC
Baidu share price tanked after government AI rumours, Shein is under the microscope and more
Welcome back,
One of the top VC firms in the US is eying a local entry to India with General Catalyst reportedly working on a deal to buy Venture Highway. Elsewhere, Baidu lost more than 10% of its share price after it was linked to helping the Chinese government’s cyberwarfare unit to develop an AI system.
Elsewhere, there’s a big down round for a VC darling in India, Shein is under the microscope ahead of its US IPO, and two blockchains from messaging apps are planning to come together.
That’s all for your recap this week.
Jon
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News in focus
US VC firm General Catalyst eyes local firm buyout
It looks like prestigious US VC firm General Catalyst will soon enter India after reports claimed it is in negotiations to acquire local firm Venture Highway. Key pieces from the news, which was broken by TechCrunch:
The agreement would enable General Catalyst to further tap into India's dynamic technology landscape, which has attracted over $100 billion in startup investments since 2010. According to two sources familiar with the situation, one of the funds General Catalyst has recently been in discussions with is Venture Highway.
While General Catalyst has already supported approximately eighteen startups in India, including notable names like fintech giant CRED, used car marketplace Spinny, and healthtech company Orange Health, the venture firm has been actively seeking to significantly expand its footprint in the country for over a year.
To give an idea of its size, General Catalyst last week revealed plans to buy a US health system for as much as $3B and turn it into a for-profit business
Baidu share price crashes over AI links to Chinese army
Earlier this year, we wrote that Baidu-Alibaba-Tencent (BAT) are struggling having once been China’s Big Tech giants and Baidu has been hit once again.
Its share price dropped by 11.5%, its highest plunge in more than a year, after a report linked its Ernie AI platform to key military research, firing up concerns about retaliation from the US government in its ongoing AI standoff with China.
Chinese researchers are using commercial ChatGPT-like systems to teach military AI how to face unpredictable human enemies, SCMP wrote, explaining that a university affiliated with the People’s Liberation Army’s Strategic Support Force—which oversees cyberwarfare—had tested its AI system on Baidu’s ChatGPT-like Ernie.
Any direct relationship was denied by Baidu.
“Baidu has not engaged in any business collaboration or provided any tailored service to authors of the academic paper or any institutions with which they are affiliated,” it said in a statement, explaining that Ernie is open to the public, but the damage was done.
Shein’s IPO gathers pace as China digs into data policies
We previously noted Shein had secretly filed for a US IPO late last year, and that seemed to gain further credibility this month when China began the process of approvals from its side. Well now that includes a cybersecurity review of how Shein handles data and its sharing practices.
The review not only indicates that the IPO may indeed happen—it hasn’t been officially confirmed and you shouldn’t expect it to for some time—but it is also an insight into the widening reach of China’s regulators. Bloomberg points out that Shein sells no product in China and has moved its HQ to Singapore, yet Chinese regulators are all over it like a rash. It does indeed recall the case of Didi, the ride-hailing firm that was later forced to delist from the US in a painful series of events that hit it hard. Yes, Shein is getting the once-over before any listing but still it will be a painful probe.
Tether is an easy target for the UN
Finally, I can’t pass up on the responses to a United Nations Office on Drugs and Crime report that said Tether, the crypto stablecoin, is a leading choice for money launderers and fraudsters to move money in Southeast Asia.
Tether no doubt has its issue—principally, it has never given true transparency into its funding and the collateral backing the project—but this feels a little like whacking the mole or shooting the messenger since problems like crime and pig butchering don’t go away if (hypothetically) Tether did. Pig butchering, in particular, is a horrid scam that preys upon people being kind to (duped by) strangers and education is one way to help eradicate it. (Check out just a couple of comments in response this post, for example.)
Stablecoins and crypto can also prove vital to many people who otherwise have to suck up the pain and fees of businesses like Western Union. Tether is far from a good citizen but any payment system that reaches scale will be adopted by bad actors, does that make it bad?
China
China may have banned the mining and sale of crypto, but where there’s a will, there’s a way, and small investors are reportedly using underground networks of brokers and go-betweens to skirt the ban on trading link
Speaking of crypto: China has established a task force dedicated to promoting standardisation within the metaverse industry—the working group includes Huawei, Ant Group, Tencent, Baidu, NetEase, and Sense Time among others link
China has released preliminary guidelines aimed at standardising the AI industry—the draft suggests the creation of over 50 national and industry-specific standards for AI by 2026 and outlines China's goal to actively contribute to the development of more than 20 international AI standards link
Last year marked the most significant decline in China's chip imports on record, facing challenges from prolonged economic uncertainties and US export controls. The value of integrated circuits imported by the world's largest semiconductor market experienced a sharp 15.4% drop to $349.4B—that’s the most substantial decrease since Chinese customs data began in 2004… and the second consecutive annual decline. Shipment volume, meanwhile, also saw a 10.8% decrease link
However, there’s home advantage for some—Chinese chip-tool giant Naura is forecasting a surge in 2023 sales on strong local demand amid US export controls link
Elsewhere, Chinese chipmakers are taking group tours to network with their Japanese counterparts, as the semiconductor industry adapts to increasingly stringent export controls introduced by the US and its allies link
Chinese autonomous trucking startup TuSimple will delist itself from the Nasdaq stock exchange as it moves forward with its plan to fully exit the US market link — that delisting will see the autonomous truck driving firm shifting focus to APAC, in particular China, Japan and Australia link
Tencent is looking at new payment tech: one that scans a palm to mean you literally pay with a swipe of the hand link
China’s internet giants have been told that they must step up opening their ‘walled gardens’, according to state media, ahead of Tencent flagship game’s return to Douyin link
Huawei is accelerating its shift away from Android after it released a preview version of its updated HarmonyOS Next link
Nokia is set to exit its joint venture with Huawei amid US-China tensions link
India
There’s a massive down round for Udaan, the B2B e-commerce startup that was an investor darling and spawned a new industry. It raised $340M in December at what is now revealed to be a $1.8B valuation—that’s down from a previous $3.2B in January 2021 and particularly concerning since Udaan has raised $1B to date link
India has warned tech companies that it is prepared to impose bans if they fail to take active measures against deepfake videos link
Foxconn is setting up a chip packaging and testing venture with India’s HCL link
Google Pay India signed an agreement with pact with NPCI, the Reserve Bank affiliated organisation, to expand India’s UPI payment system worldwide link
The companies said the MoU has three key objectives: to broaden the use of UPI payments for travelers outside of India so they can conveniently make transactions abroad, to assist in establishing UPI-like digital payment systems in other countries and to focus on easing the process of remittances between countries by utilising the UPI infrastructure, thereby simplifying cross-border financial exchanges.
ZestMoney, the beleaguered BNPL startup that previously raised over $125M, has been sold to financial services company DMI Group in a fire sale link
Southeast Asia
Apple supplier Goertek plans to invest up to $280M in Vietnam to manufacture consumer electronics products for the US tech giant link
Locofy, a Singapore-based frontend development platform backed by Accel, launched a one-click design-to-code tool link
Binance's joint venture with Gulf Energy begins exchange operations in Thailand link
Klaytn, a blockchain network backed by South Korea’s Kakao, and Finschia, a blockchain in Japan developed by LINE, may merge—that could be interesting as it combines the blockchains from two of Asia’s largest messaging apps link
Tech In Asia found that the CEO of AI startup Vizzio Technologies had faked having a Cambridge PhD link
Taiwan
Taiwan’s president-elect faces growing challenges with the country’s chip industry link
TSMC announced another delay to its $40B site in Arizona, dealing a further blow to the Biden administration’s plans to boost manufacturing of critical components on US soil—executives said their second plant in Arizona, whose shell is now being built, will start operations in 2027 or 2028, later than TSMC’s prior guidance of 2026 link
But TSMC does expect a return to ‘healthy growth’, backing hopes for global tech recovery in 2024—it projected revenue growth of at least 8% in the March quarter link
Indeed, TSMC’s strong outlook is driving a $165B rally link
Semiconductor stocks from Tokyo Electron to Nvidia gained more than $160 billion of market value after Taiwan Semiconductor Manufacturing Co.’s outlook for capital spending and revenue lifted hopes of a broad tech recovery in 2024.
TSMC’s better-than-projected numbers underscored expectations for a bounce-back in smartphone, chip and computing demand, following more than a year of post-Covid malaise. On Friday, the world’s most valuable chipmaker gained more than 6% in Taipei — its biggest gain in almost a year — after a near-10% climb in the US.
Crypto exchange WOO X, incubated by Kronos Research which was hacked for $25M last year, raises $9M to increased its liquidity—the investment came directly from market makers working with the exchange having previous used Kronos solely link
Rest of Asia
South Korea unveiled plans by leading firms such as Samsung and SK Hynix to spend more than $470B to establish the world’s largest chipmaking cluster link
HashKey Group, operator of one of Hong Kong’s two licensed crypto exchanges, raised nearly $100M at a valuation exceeding $1B—OKX Ventures was one lead investor link
Tokyo-based artificial intelligence startup Sakana AI has raised $30M led by Lux Capital, with participation from Khosla Ventures link
Amazon's AWS plans to invest $15B to expand its cloud computing business in Japan link
In other Amazon news, it is now eying AI, autonomous vehicles and Asia as its $1B innovation fund evolves link
Kazakhstan-based mobile app provider Kaspi.kz raised $1B+ in its US IPO, with the stock rising 4.3% on its debut, giving the company a market cap of ~$18B link
Korea’s Myrealtrip cashes in on travel rebound with $56M in new funding link
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