US still glitters for Chinese tech IPOs and a new era for India's pharma startups
US still glitters for Chinese tech IPOs and a new era for India's pharma startups
Asia Tech Review: 24 August 2020
Welcome back,
There’s a lot going on in this week’s newsletter. For that reason, I confess that this edition is more of a link list than usual.
But if you’re seeking consistent threads, there are many that recur once again: the impact of US-China politics; the continued stream of Chinese tech IPOs in the US; and, in India, Reliance and its money train.
Until next time,
Jon
PS: We’re hiring for a reporter to join our lean and mean team at The Ken—must love writing deeply-researched business stories and be passionate about subscription media. Is that you or someone you know? Drop me a line!
China
Trump escalated his position against ByteDance with an executive order that forces the sale of TikTok in the US—previously it was banned from doing business there. That’s led to some ‘interesting’ names surfacing as potential acquirers… including Oracle. As Tim Culpan points out (with some fun) a lot of this speculation is designed to drive attention.
In response, ByteDance has challenged the orders and a group of users of WeChat—which has also been targeted—have sued the Trump administration. It’s being reported that Facebook CEO Mark Zuckerberg stirred up the unrest by telling Trump last year that he feared the threat of Chinese internet companies.
Despite the situation, the US remains “the gold standard” for Chinese tech IPOs. The Wall Street Journal points out that more than 20 Chinese firms floated on the Nasdaq or NYSE this year with more to come.
If the US government is planning a major delisting spree of Chinese tech stock, the exchanges themselves aren’t taking it too seriously. Indeed, Beike hit the NYSE on August 13 and EV maker XPeng is tipped to follow suit soon with plans to raise $1.1B via a US IPO.
Speaking of listings, Ant Group’s bumper IPO (a dual China/Hong Kong affair) looks increasingly tied to Alibaba founder Jack Ma. Ma’s plan to reduce his shareholding has left uncertainty about how it’ll be carried out, who will buy, at what price etc. It’s threatening to put a damper on the much-anticipating listing that could be huge. Ant is being tipped to hit a $225B valuation—it reportedly posted a $3.5B profit in the first six months of 2020.
A report suggests $50B of Chinese money has flowed into crypto to avoid the country’s tight international currency controls.
This is a thorough primer on Tencent
More on Tencent, it picked up a minority stake in France-based games startup Voodoo, which is now valued at $1.4B
Waterdrop, a crowdfunded mutual insurance service, raised $230M led by existing investor Tencent (again). The company’s services included medical insurance and GoFundMe-like crowdfunding. It’s raised over $500M and is reportedly valued at over $2B. Apparently its IPO plans are on hold for now.
Look at those who are already public and reported earnings: Alibaba’s growth returned to pre-pandemic levels, Meituan beat estimates but PDD saw its share price fall 12% after it missed analyst forecasts
China is building its own version of Github—surprised this didn’t happen sooner
Here’s a worrying report alleging that budget devices from China’s Transsion, Africa’s top phone seller, came preloaded with malware that stole money from users
Hong Kong
TikTok rival Bigo has moved its servers from Singapore to Hong Kong given the introduction of recent security laws and their impact on data protection. In a similar vein, Google has stopped responding to data requests from Hong Kong.
DayDayCook, a company that sells ready to eat food and has an online community of foodies, raised $20M
Fintech startup Neat, which gives digital banking services to SMEs, added $4M to its $11M Series A which closed in April 2020
Taiwan
Taiwan plans to ban Chinese streaming services iQiyi and WeTV. Neither service got a license, but they skirted that issue by teaming up with broadcasters… until now
AI startup iKala, which runs an e-commerce streaming platform and other services, raised $17M to expand its presence in Southeast Asia
Streaming startup M17 got a new CEO, the man who helped turn it profitable in Japan
India
Education was India’s main focus during the initial Covid-19 outbreak, now India’s pharma industry is having its moment with a flurry of deals. Amazon launched an online pharmacy service and Flipkart is looking to follow.
That was the final trigger for two rivals—Medlife and PharmEasy—to agree to bury the hatchet and merge to form a billion-dollar entity in the name of survival.
Finally, Reliance—which raised $20B from a bevy of foreign investors—has also been busy: Reliance Retail bought 60% of pharma marketplace Netmeds for $83.2 million.
My colleague Rohin noted in The Ken today that this is pharma tech’s e-commerce moment:
With Covid-19 accelerating India’s shift towards digital healthcare and the regulatory uncertainty over e-pharmacies starting to fade, the focus now shifts to the second of the battles.
That of business models.
That movement will go broader. Netmeds is just one of a handful of startups that Reliance is being linked with as it aims to grow into new services. Furniture retailer Urban Ladder and daily delivery service Milkbasket are two others mooted, alongside lingerie retailer Zivame.
Reliance has bought out companies like streamer company Saavn and Saas business NowFloats. It looks like it’ll become a soft landing for many others.
Meanwhile, Saudi fund PIF—already a Jio investor—is being linked with a billion-dollar investment in Jio’s fibre assets.
Massive scandal: Facebook’s Hate-Speech Rules Collide With Indian Politics: Company executive in vital market opposed move to ban controversial politician; some employees allege favoritism to ruling party
Zomato is raising money from Temasek
Lightspeed has launched its third fund at $275M
Bharti plans to launch high-speed internet from OneWeb satellites in India by early 2022
Sharechat is talking to Google as part of plans to raise $150M-$200M in a round
Apple plans to produce its upcoming iPhone 12 flagship in India when it launches. Samsung is also increasing its production in India moving some from Vietnam.
Earning imaging satellite company Pixxel raised $5M
Times of India is reportedly planning to sell 10% of its internet business to generate funds for expansion
SoftBank is said to be ready to invest $150M into edutech startup Unacademy
The Chan-Zuckerberg Initiative is reportedly among a number of US investors ready to back another edutech startup, Eruditus, at a valuation of $800M+
Southeast Asia
Cento’s newest report on Southeast Asia investments dropped, lots of data and charts but the big takeaway is that Covid hasn’t massively impacted deals that were announced this year. (Many, of course, may have closed before the pandemic hit so it isn’t clear just how true that is.)
Speaking of investments, MDI Ventures—a firm affiliated with Indonesia’s Telkom Group—has a new $500M fund
Sea announced impressive financials, including strong growth for Shopee but an overall profit thanks to Garena
Netflix is beginning to develop local strategies to compete in Southeast Asia
Vietnam’s VNG is suing TikTok for alleged copyright infringement
Alibaba recently invested in Yoma, now it is providing tech to enable it to offer loans
Foodpanda is testing drone delivery in Singapore
Singapore’s MAS is investing $180M into a new fintech program to accelerate growth
Digital ledger service Bukukas raised $9M
Zoom has its first data center in Southeast Asia, in Singapore of course
Japan
SoftBank invested $1.1B in WeWork—the deal comes weeks after WeWork asked a judge to dismiss a case against SoftBank filed by two board members for reneging on an investment agreement
Speaking of SoftBank, it disclosed that its bet $3.9 billion on a number of US tech firms including Tesla and Amazon
Rakuten has abandoned plans for a US bank because US banks fear the move would encourage Amazon to follow suit… something they clearly don’t want
South Korea
Apple is ready to spend $85M on SME programs in Korea response to an ongoing antitrust probe assessing whether it abuses its dominant position
North Korea
The US army claims North Korea’s hackers operate from locations across the world—perhaps not a huge surprise since the famous Sony hack was reported to have been carried out from Bangkok, Thailand
Outside of Asia tech
Huawei is suffering in North America, Europe and elsewhere, but its position in Africa appears solid
An insightful look at why moderating online content is so hard in Africa
Covid-19 could mean shopping time for major hotel brands buying distressed assets in Southeast Asia
Last week on The Ken
I work at The Ken where we publish one daily story for each of our subscriptions. Here’s a recap what we ran over the last week:
Southeast Asia
Wahyoo’s recipe to spice up Indonesia’s traditional food stalls link
The Singapore Exchange faces an identity crisis link
Malaysia’s grant-focused Cradle Fund enters its second act link
Covid rocks Southeast Asia’s key exports link
Southeast Asia’s startups surf a secondaries wave link
India
Alliance or Reliance: Samsung prepares for life without Jio link
Whose land is it anyway? link
Hero Electric powers up for post-Covid EV rush link
India shies, SE Asia splits, while others sit on Huawei’s 5G future link
Reliance’s Netmeds acquisition marks the end of an era link
You can sample more stories on our free reads page.
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