TikTok is saved in the US but selling in India—plus the good and bad of crypto
Asia Tech Review: 15 February 2021
Welcome back,
Clubhouse getting blocked in China was inevitable, but few people saw it coming as quickly as it did. It seems so long ago—nearly a week has passed—and it happened right before Lunar New Year.
The week saw plenty of other developments, some more obvious than others.
TikTok’s rickety US sale deal to Oracle and Walmart1 has somewhat-inevitably collapsed following the change of Presidency; but it looks like the Chinese firm may sell its India-based business, which died when it was banned by the government
Elsewhere in India, there’s a load of money incoming to major tech firms Meesho, BharatPe, Dailyhunt and Swiggy while Grofers could become Asia’s first major SPAC
Then there’s the good and bad of crypto: Jay-Z and Twitter’s CEO set up a Bitcoin-funded investment vehicle for India and Africa; new reports give us an idea of how much crypto North Korea has stolen—we’re talking billions…
That’s all for this week. If you’re on Clubhouse, check out the SEA startup show I’m running with a few friends from Singapore. Next airing is tomorrow at 12 noon SGT.
Until next time,
Jon
China
I said last week that Clubhouse was living on borrowed time in China and lo and behold it was blocked, faster than anyone expected. The hammer dropped on Tuesday. Clones are being prepared and launched across China but they won’t fill the gap. The service was notable for allowing Chinese users to take part in global conversations and discuss topics that are taboo nationally. Existing Chinese social media doesn’t allow either and their content is heavily regulated by internal censors and police. There’s no reason to think China’s Clubhouse alternatives will be any different.
There’s a massive piece of consolidation in the logistics space after mainland Chinese delivery firm SF Holding—which works with Alibaba and Tencent—announced a deal to buy a majority stake in Hong Kong-listed Kerry Logistics for $2.3B. The deal would create Asia’s largest logistics business, and Kerry itself would manage the overseas portion of that. (Challenger Lalamove is on the cusp of new funding that would value it at $10B—SF and Kerry are both incumbents.)
The proposed sale of TikTok US to Oracle and Walmart2 has been shelved, and now TikTok plans to aggressively hire in the US where it wants to take on Facebook with a focus on e-commerce. (WeChat may also be off the hook, too.)
Speaking of efforts to overturn government decisions: Huawei has filed a US lawsuit that claims it is not a security risk. The telecom giant is also being linked with a deal to buy a fintech company. It is said to have sought approval from authorities to acquire licensed digital payment provider Xunlian Zhifu
Tesla has been in the news for quality issues with its production in China, that’s an issue the Chinese government is now grilling the firm on
Tencent is apparently adapting its business model, and the models of its many portfolio companies, to fend off competition from ByteDance, which it sees as only increasing. You’ll recall it also recently fired off another legal challenge against ByteDance, showing it is very much wary of its younger competitor.
Meanwhile, in the world of TikTok, regulators want to put a cap on the amount that viewers can tip content creators on live-streaming platforms
India
ByteDance got booted from India last, and now it appears to have truly thrown in the towel and given up. The Chinese firm is reportedly in talks to sell the TikTok India business to Glance, a rival firm run by internet advertising firm InMobi—which also operates a short video app in India called Raposo.
SoftBank is an investor in both companies and, in true SB fashion, it is said to have brokered the deal, which is described as in its early stages and “complicated.” Still, it makes sense. TikTok actually began letting people in India go last month. That’s a sure sign that it has given up on its chances of reversing a ban that effectively closed its business in India, which had been its largest market based on users outside of China.
India may be among the benefactors of a unique new charity movement focused around Bitcoin. Rapper Jay-Z’s investment firm and Twitter CEO Jack Dorsey have clubbed together to invest over $20M in the cryptocurrency (500 BTC) into a blind trust that aims to “make Bitcoin the internet’s currency.” The initial focus is India—where crypto could soon be banned by law—and Africa.


Twitter suspended over 500 accounts to comply with “several” orders from the Indian government after it was threatened with legal action against its executives
Twitter had suspended hundreds of Twitter accounts, several with links to farmers’ protests on agricultural reforms, at the request of New Delhi early last week, but then reversed its decision within hours citing users’ freedom of speech. The company said on Wednesday that it was re-suspending most of those accounts, in some cases, permanently, and preventing certain terms from appearing in the Trends section.
The company said Twitter handles are only being blocked in India and will remain visible outside of the country as it believes orders by the Indian government are inconsistent with local law. It also said that no accounts belonging to news media entities, journalists, activists or politicians were taken down. “To do so, we believe, would violate their fundamental right to free expression under Indian law. We informed MeitY [Ministry of Electronics and Information Technology] of our enforcement actions today,” it said.
Social commerce service Meesho, which helps people to sell via WhatsApp, is reportedly raising $250M from SoftBank which could double its valuation to $2B
Another valuation raise comes from BharatPe, a digital payment service, which is now valued at $900M after raising $108M in fresh money
News app Dailyhunt, which also runs video app Josh, raised over $100M—that’s over $430M so far from the likes of Google, Microsoft and others
On to an existing unicorn: online grocery service Grofers could go public in the US via a SPAC. A reported deal could value the firm around the $1B mark and it would be India’s first major SPAC, and one of the most prominent from Asia so far.
Swiggy, another in the delivery space, is said to be closing in on $700M-$800M in fresh capital at a valuation of around $5B. The money is reportedly coming from Qatar Investment Authority alongside Singapore’s GIC and US firm Falcon Edge; and it comes as rival Zomato lines up its widely-speculated IPO.
Health tech startup Phable raised $12M—it has a platform that helps patients of chronic diseases manage their day while it uses internet-connected devices to provide data for monitoring to doctors
Amazon is reportedly in talks with Mahindra Electric to source electric three-wheelers for some of its global operations
Pencil, an upcoming e-publishing startup, raised $1M
Southeast Asia
Gojek and Tokopedia are reportedly close to finalising their merger deal. I get that there’s a rush to reach public markets, particularly given the success that Sea has enjoyed, but I still find the milestones to be rather ambitious:

Related: Chinese electric scooter maker Niu is reportedly in talks to supply Gojek
There’s concern that tie ups like Gojek-Tokopedia, and the previously rumoured Gojek-Grab, will mean gig workers dependent on the platforms are paid less. While I agree with the sentiment, and this story is well-reported, the issue has raged for time. The real problem is not consolidation, but—as I’ve written in the past—the fact that these services have raised too much money and promised to do too many things despite immature business models that aren’t sustainable.
It has been a rough year or so for Singapore sovereign fund Temasek, which hasn’t fared well during the pandemic. Now it has a new CEO with Dilhan Pillay Sandrasegara, currently CEO of the firm’s investment arm Temasek International, set to step in to the hot seat from October 1
MDEC, one of Malaysia’s innovation and startup government divisions, is going through a period of soul-searching after it lost a flurry of executives and an apparent in-house power struggle took over as The Ken’s Ka Kay Lum reported
It looks like Singtel suffered a data breach after a third-party file-sharing system it uses was hacked—customer information may have been compromised
Did you know Malaysia houses a vibrant animation industry? Many firms are breaking out in search of global success, as my colleague Li Mei Foong wrote in The Ken last week.
Japan
SoftBank had a great quarter thanks to a record period for the Vision Fund, with an $8M profit on paper—thanks to some bets that have come good:
That impressive increase is mostly on paper and courtesy of Uber’s stock market gain and the Initial Public Offering (IPO) of delivery service DoorDash. The Vision Fund’s US$7.7 billion investment in Uber is now worth over US$11 billion. And its DoorDash position, acquired for US$700 million before the IPO, is valued at US$9 billion.
Meanwhile, SoftBank has canceled a LATAM joint venture with OYO
Renesas is in talks to buy Europe’s Dialog Semiconductor—a supplier to Apple among others—in a deal that would value it at around $6B
South Korea
E-commerce leader Coupang has filed for a US IPO:
In its filing, Coupang said 2020 total revenue jumped 91% to $11.97 billion from a year earlier, and net loss narrowed to $474.9 million from $698.8 million in the same period.
It is backed by SoftBank’s Vision Fund and often heralded as the blueprint for how modern e-commerce should work thanks to fast delivery times. But it has come under fire for the intense pressure that it puts its workers under. Two workers died last year—Coupang denies its work was the cause—and many caught Covid-19 due to reports that warehouses were not adequately managed during the initial outbreak.
In more deal news: US-based dating specialist Match is buying Korea’s Hyperconnect for $1.73B—the company is backed by SoftBank and it offers streaming services for dating across Asia:
Seoul-based Hyperconnect was launched in 2014 and offers mainly two apps, Azar and Hakuna Live.
Azar, which has reported 540 million cumulative downloads so far, allows users to connect with others from around the world and instantly translates voice and text messages.
North Korea
North Korean hackers are seemingly very good at stealing cryptocurrency. One group—which is thought to have led the Sony Pictures hacked—is said to have made some $1.75B from looting—money that likely goes to the government and programs including nuclear weapons development.
A North Korean hacker crew called Lazarus Group has been accused of carrying out a heist on cryptocurrency exchange KuCoin, dubbed the biggest cryptocurrency theft of last year at $275 million worth of virtual money. That figure represented half of all cryptocurrency stolen in 2020, according to cryptocurrency tracker and law enforcement contractor Chainalysis
Separately, the North Korean government is said to have made more than $300M from raiding crypto exchanges in just one year, according to a UN report
Pakistan
Stripe continues to invest in emerging markets. The payment giant led a seed investment in one-year-old Safepay—Stripe’s past deals have included Nigeria-based Paystack (which it later bought for over $200M) and PayMongo in the Philippines
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The original email sent out stated that the deal was with Salesforce. That’s wrong and it has now been fixed. My apologies for the error.
The original email sent out stated that the deal was with Salesforce. That’s wrong and it has now been fixed. My apologies for the error.
Gah, Salesforce didn't agree to buy TikTok USA—that was Oracle and Walmart. Apologies to anyone who is very confused by that error. I've since corrected it on the website but it will be live in the email.