The market slowdown begins to pinch across Asia
Asia Tech Review: 7 June 2022
Welcome back,
It’s been a busy few weeks at ATR HQ which is why the newsletter hasn’t been arriving every week. Never fear, this issue we’re back with a host of stories for your catch-up pleasure, mostly on the bearish market conditions which are impacting Chinese VC deal volume (down significantly), big deals in India—especially edtech—and those in Southeast Asia jostling to join the unicorn club.
Elsewhere, ByteDance is plotting a return to India; 15-minute deliveries are getting hot in Southeast Asia and Amazon’s e-book service is bidding adieu to China.
Until next time,
Jon
China
The Chinese government is reportedly aiming its online commenting and bot army at women of Asian descent who have public platforms, opinions and expertise on China link
What goes up fastest, will come down fastest in a decline: hence China is leading the global decline in VC deals—the value of venture deals in the country tumbled 44% to $24.7 billion in the first four months of the year, compared with a year earlier, according to data from the research firm Preqin link
China’s influencers are also struggling with brands said to be realigning their marketing budgets from live-streaming celebrities to their own channels—that’s reportedly down to continued regulatory crackdowns on streaming, increased fees and—of course—the uncertain economic situation link
Xiaomi-linked companies have faced increased scrutiny by China’s regulators, with some pausing planned initial public offerings after being questioned about their close relationship with the smartphone giant link
Amazon plans to close its China-based e-book service next year, following fellow US firms LinkedIn and Airbnb in leaving the country link
China-backed hackers are exploiting an unpatched Microsoft Office zero-day vulnerability, known as “Follina”, to execute malicious code remotely on Windows systems link
China’s Android smartphone makers, including Honor and Realme, are looking overseas for growth as their domestic market sales slow due to economic uncertainty link
India
ByteDance could return to India with reports suggesting it is close to a partnership (with Hiranandani Group, which runs a data centre) and already hiring previous and new staff for the reentry link
Perhaps as part of the plan, ByteDance has fully exited its investment in VerSe Innovation, which runs short video platform Josh and news aggregator DailyHunt—but it did so at a 56% discount link
But that’s not stopped others from increasing their warchest. ShareChat raised $300M from Google, Times Group and Temasek Holdings at $5B valuation—the deal is Google’s second in the short video space following its investment in Josh link
Despite that deal, India’s flood of venture capital for startups is showing signs of drying up in the last two months. April 1-May 16 saw just 9 funding rounds of more than $100M, reaching a cumulative $2B—that’s compared to 27 deals from January-March this year. That’s an early indicator to keep an eye on link
India’s edtech bubble could be about to burst with once hot firms now forced to make layoffs and watch costs more closely for the first time—that’s a far cry from constant fundraising and hockey stick growth link
India is considering whether to set up an appeals panel with the power to reverse the content moderation decisions of social media firms, according to its information technology ministry link
Temasek in talks to invest in DotPe, a Google-backed company that helps businesses in India go online and sell digitally, as part of a round that’ll reportedly bring in $50M link
Fintech Slice is now valued at $1.5B after raising $50M to scale its recently launched UPI payments product and push to make its core credit business profitable link
The Indian open network for e-commerce—a bold alternative to gated services like Amazon and Flipkart—is reportedly in talks with ITC, Unilever and Dabur while Shopify may join too link
Math tutoring startup Cuemath raised $57M at a valuation of $407M—that’s apparently double what it raised at in December 2020 link
Customer engagement platform MoEngage raised $77M led by Goldman Sachs Asset Management and B Capital link
A PhonePe-BCG study concludes that India’s digital payments market will grow 3X to reach $10T by 2026 link
Southeast Asia
GoTo saw impressive growth of 53% in its first quarter as a public company but it came at cost as losses more than tripled to reach some $450M—higher than gross revenue of $357M. One issue is the firm doesn’t report financials the same way as those in the US (ie Grab) making direct comparisons tricky link (In related news: GoTo founder Kevin Aluwi is moving into an non-executive role and the firm is reportedly expanding its BNPL services as part of a ‘push for profitability’)
Ant Group is joining the digital banking fray for real after it announced a Singapore bank called ANEXT—the firm was one of the winners of a digital banking licence last year alongside Grab-Singtel and others link
Indonesia-based crypto exchange Pintu landed a $113M Series B to take it past from $150M from investors—those in the new round include Intudo Ventures, Lightspeed, Northstar Group and Pantera Capital link
Quick commerce is going big in Indonesia after Astro, which promises 15-min deliveries in Jakarta, landed a $60M round from Accel, Tiger and others—can it last with peers in the US already making layoffs? Link
Traveloka is reportedly close to raising more than $200M from investors after ending talks to go public via a merger with a blank-check company last year (smart move, guys!) link
Lazada has a new CEO with ex-Thailand head James Dong replacing company veteran Chun Li after a two-year stint link
Long-standing SEA VC Golden Gate Ventures is opening two offices in Vietnam to double down on tech investments in the country link
Many say SE Asia tech is sheltered from the downturn as valuations are comparatively low, but Jakarta’s “soonicorns” are already laying off hundreds to acclimatise. Here’s the money quote: “Those who can stay alive are the ones who will win the market.” link
Y Combinator alum HitPay raised $15.75M led by Tiger Global link
For the first time ever Apple is moving some iPad production out of China and shifting it to Vietnam after strict COVID lockdowns in and around Shanghai led to months of supply chain disruptions link
Disney+ Hotstar leads Q1 subscriber growth in Southeast Asia, but we know it is a long battle link
Novoloop, a plastic upcycling startup, raised a $10M led by South Korean chemical firm Hanwha Solutions and Mistletoe, the firm from Masa Son’s brother Taizo link
Indonesian hyperlocal social commerce app Super raised a $70M Series C link
South Korea
South Korean content providers are raising service fees in the wake of Google’s in-app payment policy link
Temasek’s Pavilion Capital invested $50M in AI chip maker Rebellions link
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insightful as always!