TikTok restarts Indonesia’s e-commerce focus with $1.5B Tokopedia deal

What better narrative to replace the faded listing story of two homegrown tech firms coming together?

Dec 12, 2023

[We are resending this week’s email to correct an important figure: TikTok will own 75% of Tokopedia following the deal, not 25%.]

Welcome back,

It’s been quite a week already with the TikTokopedia deal announced yesterday. I think most Western eyes are missing the role played by the government here which could make everyone a winner, in time.

Elsewhere, Klook sucked up even more money—the travel startup has now raised nearly $1B from investors to date. A far cry from when I wrote about it raising $1.5M back in 2015. I’m not exactly the target market but I remain a little unsure whether this gargantuan sum really translates into a business that can reach that level of scale.

Nvidia has been busy in Asia, making pledges and partnerships across the region. There’s also more on Pinduoduo, which has seen an unlikely climb in recent years to overtake Alibaba, a promising Indian AI startup just came out of stealth with a load of money from top VCs, and a Singapore-based crypto company faces a winding up order due to bickering co-founders… yeah that sounds like crypto alright!

See you next week for more,

Jon

PS: Follow the Asia Tech Review LinkedIn page for updates on posts published here and interesting things that come our way. If you’re a news junkie, the ATR Telegram news feed has you covered with news as-it-happens.

News in focus

TikTok restarts Indonesia’s e-commerce focus with $1.5B Tokopedia deal

They say you can only buy what’s out there, so perhaps it is no surprise that ByteDance’s TikTok has bought into Tokopedia—one-half of Indonesian tech firm GoTo—to restart its e-commerce business in the country.

To recap, the Indonesian government banned e-commerce trade on social media back in October, forcing TikTok to halt its Shop product in the country, which accounts for one-third of Southeast Asia revenue. Now, though, it can restart using Tokopedia and the momentum it has built over the previous decade and more.

It’s a complicated deal with a lot of moving parts but essentially:

TikTok will own 75% of Tokopedia
Tokopedia will acquire the exclusive rights to run TikTok Shop in Indonesia for $340M
TikTok will make a $840M investment in Tokopedia
TikTok will give Tokopedia $1B to spend on working capital
The deal is for a total package of $1.5B and it is set to close in Q1 2024

Momentum Works has an interesting quick take on the winners and losers. You can expect to see something more detailed on ATR this week, but the real winner in my eyes is Indonesia.

GoTo had been struggling as a public company. The narrative of combining two homegrown winners—Gojek and Tokopedia—for a major homegrown IPO focused on tech hadn’t played out as hoped. The stock price is down more than 75% from its initial listing, at the time of writing.

Still, what’s the next best narrative now for GoTo? How about one of the world’s largest and most influential companies swooping in for a deal? Maybe but investors don’t seem to have bitten yet. The share price actually fell 13% following the news, as many had sold on rumours of the impending TikTok deal.

Perhaps the most interesting part is that the government has facilitated this deal—directly or indirectly, depending on your persuasion. That’s a point missed by a lot of commentary, especially from outside of Asia.

Klook raises another $210M this time at a $1.5B valuation

Travel booking platform Klook is one of those companies that seems to just hoover up investor money, and it got itself another $210M after claiming to have reached profitability for the first time.

The round was led by Bessemer Venture Partners and it takes the company to over $900M raised, with a new valuation of $1.5B. It reached a $1B valuation back in 2018, long before Covid caused chaos to its business.

I’d never used the service until I visited Japan this summer, and then when I did I was quickly hooked on the ability to buy tickets for amusements, trains, etc from an app on my phone. The issue, though, is I haven’t used it since and I don’t know when I will. I’ve always wondered just how sticky a travel booking platform can be—people tend to travel a lot less than we assume…—but Klook has spent time developing its network both among consumers and businesses who can push it to customers for distribution.

Nvidia’s mini Asia tour

The chip leader had a busy week of announcements and partnerships in Asia, including:

CHINA: Nvidia says it is working closely with US to ensure new chips for China are compliant with regulatory curbs link
MALAYSIA: Nvidia has partnered Malaysia's YTL Power in $4.3B AI development project to build Malaysia's fastest supercomputers using Nvidia AI chips and cloud computing platform to develop a large language model in Malay link
VIETNAM: Nvidia is also looking at Vietnam with CEO Jensen Huang keen to set up a base there to boost local semiconductor development link
JAPAN: Nvidia plans to help build an AI tech-related ecosystem in Japan to meet demand in a country eager to gain an edge in artificial intelligence link

China

The timing of Shein’s blockbuster IPO, which could top a $100B valuation, may be at the mercy of China-US relations link

U.S. lawmakers have Shein in their crosshairs as the China-founded fast-fashion retailer gears up for what could be an enormously valuable initial public offering. But another potential roadblock to Shein’s hopes for a U.S. listing may lie elsewhere—in China.
For months, Shein has been discussing with the Chinese government whether it needs to register with the country’s securities regulator before it files for a U.S. public listing. While Shein is not headquartered in China and it doesn’t sell to the Chinese market, its extensive Chinese footprint means the government there might decide it is on the hook to comply with IPO regulation. Having to get permission from China’s regulators could lengthen the listing process and hurt its attempts to shed its image as a Chinese company.

ByteDance is working to launch a platform allowing users to create chatbots by the end of this month link

A profile of Chinese whistleblower Tang Mingfang, who called out injustices at a Foxconn factory making Amazon devices in 2022—nothing has changed, he says, except that he still pays the price link

Chinese chip designers including Tencent are aggressively pitching their AI chips as alternatives to Nvidia's, hoping U.S. export restrictions will prompt clients to switch link

G42, an Abu Dhabi-based AI company that raised over $800M, has invested in TikTok and runs a $10B fund, plans to cut ties with Chinese hardware suppliers in favour of US counterparts because it “cannot work with both sides" link

Alibaba's new 'Animate Anyone' image-to-video model went viral for its potential to replace TikTok personalities using AI… but the model was created by ripping off content creators, raising ethical questions link

Autonomous trucking company TuSimple (a regular fixture in ATR) will finally cease US operations as it makes lay-offs—the plan is to instead focus on its Asia-Pacific business link

If you’re looking for future Netflix show inspiration… China is ramping up a crackdown on online scams operated by criminal syndicates in border areas of Myanmar in an effort that has included a shootout, confession videos and national TV broadcasts of arrests of high-profile suspects link

A look at how Pinduoduo has enjoyed a resurgence in China as its business grew bigger than Alibaba thanks to its Temu discounts app rivalling Amazon and Walmart in the US link

In comparison, Alibaba—which was once unstoppable—is now faltering and looking very off the pace as new e-commerce players like Temu, Shein and TikTok change the game in China, the US and beyond link

China and Singapore will let each other’s tourists pay with digital yuan as Beijing seeks to globalise its e-CNY currency link

One year after OpenAI’s ChatGPT took the AI world and China is still playing catch-up link

Huawei’s Mate 60 Pro smartphone shows “significant progress” in China’s domestic design and engineering of radio-frequency chips, according to the latest findings from research firm TechInsights link

India

A five-month-old AI startup called Sarvam raised $41M after coming out of stealth mode link

The $41 million funding raise is across the seed and Series A financing rounds. Lightspeed led the Series A round and co-led the seed with Peak XV Partners. Peak XV and Khosla Ventures also participated in the Series A funding.
The Bengaluru-headquartered startup is building large language models with support for Indian languages, Sarvam AI’s founder Vivek Raghavan told TechCrunch. The startup is also creating a platform that will allow businesses to build with LLMs — “everything from writing an app, deploying it to popular channels, observing logs, and custom evaluation,” he said.

Buy-now, pay-later startup ZestMoney, once valued at $450M, is closing down following unsuccessful efforts to find a buyer link

Tata Group plans to build one of India’s biggest iPhone assembly plants, tapping Apple’s ambitions to increase manufacturing in the country. link

India’s top VCs face fresh obstacles as startup investment plummets link

Samsung looks set to overtake Xiaomi as India’s top smartphone brand in 2023, reclaiming crown amid crackdown on Chinese brands link

On-demand service Dunzo’s survival appears to hinge on its existing (and largest) investor Reliance Retail’s commitment to provide further funding link

Southeast Asia

The future of Singapore-based crypto service Cake DeFi appears unclear after one co-founder has filed for the company to be wound up—CEO Joseph Hosp said the petition stems from “internal disagreements” dated to layoffs made in November, he also claims the business “is solvent and financially strong” link

Streaming service 17Live became Singapore’s first listing via SPAC merger—the share price is currently down 8% at the time of writing but it could lead to other SPAC deals in the country link

Singapore plans to triple its pool of artificial intelligence experts, including machine-learning scientists and engineers, to 15,000, as part of its national AI strategy link

Apple is planning to move key iPad engineering resources to Vietnam link

Alibaba’s research unit unveiled LLM tailored for Southeast Asia as the e-commerce giant tries to push AI services in the fast-growth region link

Rest of Asia

SoftBank Corp bought 51% of Cubic Telecom, once a telco focused on roaming, for $513M to drive into the connected car world link

Cubic Telecom is currently linking up 450,000 new vehicles — consumer cars, trucks and more — using its platform each month, and orders in the books are going to raise that rate “exponentially” over the next five years, the company said.

Twitch will shut down operations in South Korea due to high costs, which the government said it is reviewing as "a comprehensive matter that requires consideration of the sustainable development of the internet network, the content industry and user convenience" link

Network fees in Korea are still 10 times more expensive than in most other countries, CEO Dan Clancy said, adding that the company spent significant effort working to reduce operating costs to remain in business.

Disgraced Terra/Luna co-founder Do Kwon will be extradited to US by Montenegro, according to the Justice Minister link

Japan is earmarking ¥129.4B ($902M) to Rohm and Toshiba’s joint push to boost production of power semiconductors, seen as key to lifting energy efficiency in electric vehicles and factories. link

Last but by no means least—The Nikkei looked at Japan’s top 100 websites and concluded that they’ve seen traffic from X and Facebook fall by as much as 40% as “platforms are giving less prominence to posts and messages with links to external sites” in order to boost retention and appeal to advertisers. You’d imagine this probably applies to websites across the world and not just in Japan link

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