Is China about to make peace with big tech?
Is China about to make peace with big tech?
Asia Tech Review: 3 May 2022
Welcome back,
With Labor Day/May Day/Eid all falling together, Asia Tech Review took Monday off and slipped into work at lunchtime today, but boy was there plenty to reflect on for this week’s email.
This week’s story in focus is whether China will start to ease up on big tech having been tough for the best part of two years. Elsewhere in Asia, India just notched its one hundredth unicorn startup, a new report shows just how investment in Southeast Asia rebounded after Covid and Malaysia dished out its digital banking licenses. Read on for these and more—you can also join the Telegram channel for daily updates.
Have a great week, especially for those celebrating Eid.
See you next time,
Jon
In focus: Will China make peace with big tech?
It sounds like clickbait but might not be. China could make peace with tech companies and potentially bring to end an unprecedented and torrid period of uncertainty that impacted huge companies Alibaba and Didi Chuxing and stymied countless smaller startups trying to make their way in the world.
That’s the hope, at least, based on an upcoming symposium with the country’s big tech firms. Running Saturday to Wednesday after the Labour Day holiday, it is hoped that the meetup will see the government ease its clampdown which has sent share prices crashing as policies honed in on the use of data, restrictions on financial services and much more.
According to sources who spoke to SCMP, the symposium is designed to assure business executives that regulators will no longer demand rectifications or impose surprise fines. It remains to be seen whether it will translate to a bigger picture and longer-term easing of restrictions.
Indeed, the impact has been tangible. Aside from public market share slides—Didi is caught in limbo as to where its stocks will even be listed—data shows the uncertainty has hit private markets.
A report from the China Academy of Information and Communications Technology (CAICT) released last week shows that funding deals in the first quarter of 2022 were down 38% year-on-year while the amount of capital deployed fell by 77%. Yet—despite those sharp declines—US investors are still keen on China exposure with American institutions continuing to put money into Chinese VC funds, according to The Information:
One of the top VC firms in Beijing, Gaorong Capital, recently raised about $1.8 billion from investors in the U.S. and elsewhere, according to two people briefed about the previously unreported fundraising. Meanwhile Shanghai-based Qiming Venture Partners, an early backer of smartphone giant Xiaomi and a major venture investor in healthcare, has raised more than $2 billion for two new funds, mostly from U.S. investors, according to one person with direct knowledge and another person who was briefed about it.
Something has to give one way or the other: either the money will slow or the clampdowns will ease.
China
China’s propaganda system is being sternly tested by outrage around Covid lockdowns link
Arm's Chinese joint venture replaces co-CEOs—the firm has been trying to wrestle back control of its China unit after former CEO Allen Wu (fired in June 2020) refused to leave or complete a handover. Now SoftBank says Arm China's board had voted unanimously to appoint Liu Renchen and Eric Chen as Arm China's co-CEOs link
Robotaxi rivals Pony and WeRide join Chinese ride-hailing service OnTime’s $153M round link
Chinese smartphone maker Honor (spun out of Huawei) is reportedly seeking to raise money for growth ahead of planned IPO that could come as early as this year link
Huya, Tencent’s answer to Twitch, reportedly plans to cut hundreds of staff link
SMIC has two-thirds of its Shanghai workers sleeping in factories in response to fears that Covid lockdowns will threaten the semiconductor supply chain link
China’s logistics robot maker VisionNav raised $76M at $500M valuation link
India
WhatsApp will reportedly roll out cashback rewards of up to 33 INR ($0.40) to lure more Indians to its peer-to-peer payments service—it is testing similar incentives for merchant payments link
Neobanking startup Open became India’s 100th unicorn when it raised $50M in a Series D led by IIFL—Temasek, Google, Visa and Tiger Global are among its past investors. The startup raised $100M at $500M less than six months ago link
International semiconductor consortium ISMC—a joint venture between soon-to-be-Intel owned Tower Semiconductor and Next Orbit Ventures—will invest $3B to set up a chip plant in southern Karnataka link
Vedanta could raise $2.5-$3B for a push into chip making for its plan to be India’s first chipmaker link
India plans to expand its incentives for those investing in semiconductor manufacturing, as its government woos global companies in a bid to become a key player in the global supply chain for chips link
James Murdoch’s Bodhi Tree is leading a $1.78B investment in Ambani-backed Viacom18—the deal is a major piece of consolidation in the media space in India link
Bodhi Tree is also taking a $600M stake in edtech Allen Career, which operates 138 classroom centers in 46 cities in India and Middle East link
Revise raised $3.5M to build rails for programming NFTs link
Lightspeed India Partners is reportedly looking to raise $500M+ for its next fund, which would be its fourth link
Indian investigators seized data and documents from top sellers on Amazon and Flipkart in a second day of raids over suspected competition law violations link
Hot on the heels, billionaire Nandan Nilekani is developing an ‘open technology’ rival that he hopes will eat into the e-commerce duo’s dominance, which has especially alarmed small business who have become so reliant on online sales link
Related: Flipkart opened up its internal logistics arm Ekart to other ecommerce players—it reportedly has 30 clients already and is planning an NFT-related business (!) link
Apple shipped nearly 1M 'Make in India' iPhones in Q1 2022—up 50% year-on-year link
Internet companies must now report cyber incidents to the government within six hours, that spans phishing attacks, identity theft, data breaches, ransomware and more link
Nearly half of the digital lending apps available in India between January and February 2021 were illegal, according to data from the central bank link
Insurtech startup Turtlemint raised $120M at a valuation just shy of $1B link
Southeast Asia
Malaysia’s digital banking licenses were awarded with Grab-Singtel, Sea and a consortium including Carsome among the five successful bidders link
Alibaba looks to be following Shopee’s footsteps into Europe with reports that the company will venture into the region—a great opportunity or would it be smarter to battle harder in Southeast Asia? We’ll see link
Investing bounced back from Covid in 2021 as total capital deployed rose by 70% and the number of deals jumped to 942 from 700—other findings from a new report from Cento Ventures include record-breaking levels of small deals (under $10M) and increased activity in Vietnam and the Philippines link
Arrow, which tries to make the checkout process easier by acting as a layer on top of payment gateways, raised $4.8M led by Sequoia Capital India link
Music and media startup BandLab raised $65M at a valuation of $315M million link
Creator economy startup Bintango, which connects brands and influencers and is focused on Indonesia, raised $2.1M link
Scooter Micromobility startup Neuron raised $43.5M to take its total raised to date to $77.7M link
Dat Bike, another green transportation startup, raised $5.3M to advance its electric bike business—the 3-year-old Vietnamese company has now raised over $10M link
Grab’s head of lending Ankur Mehrotra plans to leave after six years at the firm to join three-year-old Indonesian startup BukuWarung link
Pakistan
Pakistan continues to attract investment as Oware—which gives businesses an affordable and scalable solution to traditional warehouse network—raised $3.3M from investors that include the fund from US logistics unicorn Flexport
South Korea
Edtech Glorang, which offers after-school and extracurricular classes, raised $10M at a valuation of $40M link
Japan
Crypto gaming startup double jump.tokyo—an offshoot of trading group Jump—raised $24M link
Asia is one region where Netflix is still adding users (not losing them), and it just doubled down on anime after it inked a multi-film deal with anime specialist Studio Colorido link
SoftBank is increasing its focus on tech investments in Japan for the first time link
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