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China’s Tencent Music raises $1.1 billion in downsized US IPO

Tencent Music, China’s largest streaming company, has raised $1.1 billion in a U.S. IPO after it priced its shares at $13 a piece ahead of a listing on the Nasdaq.

That makes it one of the largest tech listings of the year, but the pricing is at the bottom end of its $13-$15 range indicating that the much-anticipated IPO has felt the effects of an uncertain market. Indeed, the company is said to have paused the listing process, which it started in early October, for a time so choppy are the waters right now — and that’s not even mentioning a shareholder-led lawsuit that was filed last week.

Still, this listing gives TME — Tencent Music Entertainment, a spin-out of Tencent — an impressive $21.3 billion valuation which is just below the $30 billion that Spotify commanded when it went public earlier this year via an unconventional direct listing. TME was valued at $12 billion at the time of Spotify’s listing in Q1 of this year so this is also a big jump. (Meanwhile, Spotify’s present market cap is around $24 billion.)

The company operates a constellation of music streaming services in China which span orthodox Spotify-style streaming as well as karaoke and live-streaming services. Altogether, TME claims 800 million registered users — although there’s likely a little creative accounting or double counting across apps involved since the Chinese government itself says there are 800 million internet users in the entire country.

Notably, though, TME is profitable. The same can’t be said for Spotify and likely Apple Music — although we don’t have financials for the latter. That’s down to the unique business model that the Chinese firm operates, with subscription and virtual goods a major driver for its businesses, while Tencent’s ubiquitous WeChat messaging app helps it reach users and gain virality.

Tidy though the numbers are, its revenues are dwarfed by those of Spotify, which grossed €1.4 billion ($1.59 billion) in sales in its last quarter. For comparison, TME did RMB 8.6 billion ($1.3 billion) in revenue for the first six months of this year.

TME executives are taking that as a sign that there’s ample scope to grow their business, although it seems unlikely that will ever be as global as Spotify. The two companies might yet collaborate in the future though, since they are both mutual shareholders via a share swap deal that concluded one year ago.

You can read more about TME in our deep dive below.

We also wrote about the lessons Western services like Spotify and Apple Music can learn from TME.

Apple says iPhones remain on sale in China following court injunction

Apple has filed an appeal to overturn a court decision that could ban iPhone sales in China, the company said on Monday, adding that all of its models remain available in its third-largest market.

The American giant is locked in a legal battle in the world’s biggest smartphone market. On Monday, Qualcomm announced that a court in Fujian Province has granted a preliminary injunction banning the import and sales of old iPhone models in China because they violated two patents owned by the American chipmaker.

The patents in question relate to features enabling consumers to edit photos and manage apps on smartphone touchscreens, according to Qualcomm.

“Apple continues to benefit from our intellectual property while refusing to compensate us. These Court orders are further confirmation of the strength of Qualcomm’s vast patent portfolio,” said Don Rosenberg, executive vice president and general counsel of Qualcomm, in a statement.

Apple fought back in a statement calling Qualcomm’s effort to ban its products “another desperate move by a company whose illegal practices are under investigation by regulators around the world.” It also claimed that Qualcomm is asserting three patents they had never raised before, including one which has already been invalidated.

It is unclear at this point what final effects the court injunction will have on Apple’s sales in China.

The case is part of an ongoing global patent dispute between Qualcomm and Apple, which saw the former seek to block the manufacturing and sale of iPhones in China over patent issues pertaining to payments last year.

Qualcomm shares were up 3 percent on Monday. Apple opened down more than 2 percent before closing up 0.7 percent. Citi lowered its Apple price target to $200 a share from $240 a share, saying in a note to investors that while it does not expect China to ban or impose additional tariffs on Apple, “should this occur Apple has material exposure to China.”

The Apple case comes as the tech giant faces intensifying competition in China, which represented 18 percent of its total sales from the third quarter. The American company’s market share in China shrunk from 7.2 percent to 6.7 percent year-over-year in the second quarter as local competitors Huawei and Oppo gained more ground, according to market research firm IDC.

The annual drop is due to Apple’s high prices, IDC suggests, but its name “is still very strong in China” and “the company will fare well should it release slightly cheaper options later in the year.”

Xiaomi is opening a retail store in London as it extends its Europe push

Xiaomi’s expansion into Europe continues at speed after the Chinese smartphone maker announced plans to open its first retail store in London.

The company is best known for developing quality Android phones at affordable prices and already it has launched devices in Spain, Italy and France. Now, that foray has touched the UK where Xiaomi launched its Mi 8 Pro device at an event yesterday and revealed that it will open a store at the Westfield mall in London on November 18.

That outlet will become Xiaomi’s first authorized Mi Store. Styled on Apple’s iconic stores, the Mi store will showcase a range of products, not all of which are available in the UK.

Still, Xiaomi has shown a taste of what it plans to offer in the UK by introducing a number of products alongside the Mi 8 Pro this week. Those include its budget tier Redmi 6A phone and, in its accessories range, the Xiaomi Band 3 fitness device and the £399 Mi Electric Scooter. The company said there are more to come.

That product selection will be available via Xiaomi’s own Mi.com store and a range of other outlets, including Amazon, Carphone Warehouse and Three, which will have exclusive distribution of Xiaomi’s smartphones among UK telecom operators.

It’s official, Xiaomi has finally arrived in the UK! We brought our flagship #Mi8Pro which had its global debut outside Greater China. Other products announced include Xiaomi Band 3, our wildly popular fitness band, as well as Mi Electric Scooter. pic.twitter.com/YlOBysFBgM

— Wang Xiang (@XiangW_) November 8, 2018

Xiaomi hasn’t branched out into the U.S. — it does sell a number of accessories — but the European launches mark a new phase of its international expansion to take it beyond Asia. While Xiaomi does claim to be present in “more than 70 countries and regions around the world,” it has recorded most of its success in China, India and pockets of Asia.

CEO Lei Jun has, however, spoken publicly of his goal to sell Xiaomi phones in the U.S by “early 2019” at the latest.

Still, even with its focus somewhat limited, Xiaomi claims it has shipped a record 100 million devices in 2018 to date. The firm also posted a $2.1 billion profit in its first quarter as a public company following its Hong Kong IPO. However, the IPO underwhelmed with Xiaomi going public at $50 billion, half of its reported target, while its shares have been valued at below their IPO price since the middle of September.

Korean AI startup Skelter Labs lands strategic investment to expand to Southeast Asia

Korean AI startup Skelter Labs is expanding to Southeast Asia after it pulled in undisclosed funding from Singapore-based VC firm Golden Gate Ventures.

Skelter Labs was founded in 2015 by founded by Ted Cho, the former engineering site director at Google Korea. It started out developing apps and services that made use of AI but then it pivoted to focus fully on AI tech, which it licenses out to companies and corporations that it works with. Now it is eying opportunities in  Japan and parts of Southeast Asia — which has a cumulative population of over 600 million — with Vietnam, Thailand and Malaysia specifically mentioned.

The startup raised a $9 million seed round earlier this year, and Golden Gate has added an additional check to that round which came from KakaoBrain — the AI unit of Korean messaging giant Kakao — Kakao’s K-Cute venture arm, Stonebridge Ventures and Lotte Homeshopping, the TV and internet shopping business owned by multi-billion dollar retail giant Lotte.

More specifically, Seoul-based Skelter Labs works on AI in the context of vision and speech, conversation, and context recognition, while it goes after customers in areas that include manufacturing, customer operations, device interaction, and consumer marketing.

The startup doesn’t disclose customers, but it previously told TechCrunch that its vision is to bring its machine learning technology to daily life and schedules. Possible examples of that might be could include “intelligent virtual assistant technology that can be widely applied to various areas including smart speakers, smartphones, home appliances, automobiles and wearable devices.”

Golden Gate is one of Southeast Asia’s longest running tech VC firms. This deal is part of its recently announced third fund, which is $100 million in size.

In a statement, Skelter Labs CEO Cho paid tribute to the VC’s strong footprint in Southeast Asia that he said could open doors for the company. Startups in Golden Gate’s portfolio that might be of particular interest could include mobile listings startup Carousell, auto portal Carro, fashion commerce site Grana and online furnishings seller Hipvan.

Note: The original version of this article has been corrected. Skelter Labs has announced an extension to its previous round not a new round. Apologies for any confusion caused.

Tech In Asia lays off staff after canceling planned ICO

Earlier this month, media startup Tech In Asia surprised its readers when it announced plans to implement an $18 per month paywall. More expensive than packages for the Bloomberg and the Wall Street Journal, the subscription went live this week. It’s designed to make the business self-sustaining after a tricky period of business in which the company contemplated an ICO and was forced to make cutbacks to its team.

The Singapore-based company — which operates a popular blog and events business in Southeast Asia — laid off as many as one-third of its staff after it went back on a plan to raise money from an ICO, according to documents reviewed by TechCrunch and multiple people familiar with the situation.

In July, as the company scrapped its ICO plans, Tech In Asia fired 18 of its 60 employees in Singapore; one-third of its smaller employee base in Indonesia and restructured other business units after scrapping the plan to develop its own cryptocurrency. Most of the layoffs were in non-editorial business lines — like the company’s jobs division, which works with companies to pitch the Tech In Asia website as a recruitment platform. That division laid off half of its team, according to a source, while a number of reporters elected to leave the company too, as E27 reported in August.

Tech In Asia founder and CEO Willis Wee did not respond to multiple requests for comment.

While the fundraising target for the ICO wasn’t disclosed, the plan was to bring in enough new investment to extend the company’s eroding runway.

The ICO was part of ‘Project Tribe,’ a strategy to develop a decentralized platform that would allow any organization to develop online communities using a blockchain-based framework built by Tech In Asia, according to documents viewed by TechCrunch.

“Our goal is to give Tech In Asia back into the hands of the community and harness community forces to bring us closer to our mission of building and serving Asia’s tech communities,” the company wrote in one section of the whitepaper, which was never released but had been widely-circulated beyond Tech In Asia staff.

The most successful ICOs have developed decentralized systems that are often initially beneficial to the company behind the token sale, but that can, in theory, be extended to cover other businesses.

Project Tribe used that angle. Bearing some basic similarities to the Civil journalism platform, the plan was initially to host Tech In Asia’s news and community website over the next three years, before opening up to third parties by 2021.

Company-wide Slack messages seen by TechCrunch show that it was discarded after the management team balked at the risk behind the move. They told staff their concern that token economics, pleasing retail investors and legal uncertainties would all distract from the core business. That reversal was taken despite “significant” investment resources and dozens of staff being allocated to develop the concept and whitepaper over a number of months.

From funding to cutbacks

It wasn’t so long ago that Tech In Asia was the toast of Asia’s media community.

The startup — which launched in 2010 — brought in $6.6 million in fresh funding last November in a round led by Korean investor Hanwha.

In the ensuing six months, after watching annual revenue drop thanks in part to a dramatic decline in its events business, the Tech In Asia leadership caught crypto fever and decided to venture into the new world of ICOs.

There were signs of trouble earlier in 2017 for the company. Tech in Asia laid off most of its India-based team in early 2017 and ended its events business in that country. Those decisions impacted its event business, which a source said saw total revenue drop by more than 50 percent.

A shift to community content, with fewer ‘original’ reporting and journalism pieces also cut into company performance. Internal data seen by TechCrunch shows that monthly active users on the site were down 31 percent year-on-year in Q2 2018 — reaching 1.84 million — while total pageviews slipped by one-third, too.

Tech In Asia’s management team told all staff in June that its runway, which was thought to be shored up by the November deal, had gone from a solid-looking 81 months to just 14 months. Management claimed that a change in financial calculations caused the difference and employees were reassured that their jobs were safe.

One month later, however, the company began shedding staff in an effort to cut costs, reversing a hiring spree it launched in January, according to sources.

Two sources told TechCrunch that morale of the remaining staff was crushed when members of the management ‘flaunted’ the fruits of their wealth on social media just days after firing large portions of the team. Some social media updates posted to the internet that upset departing staff members included a photo of Rolex, the view of a villa on a weekend trip to Bali, and an expensive sushi dinner bill. 

With the company facing a straitened financial situation, if Tech In Asia tries to raise money again it’ll have some explaining to do to potential investors.

The business grossed SG$3.37 million (US$2.47 million) for the first six months of the year. Annualized, that would represent a 15 percent drop on 2017’s revenue, and Tech In Asia is still losing money. It recorded a net loss of SG$1.43 million (US$1.05 million) for the first half of 2018, according to internal data. That’s an average monthly burn rate of SG$0.23 million, or US$0.17 million.

Nonetheless, Wee — the Tech In Asia CEO — is hopeful that the subscription model pivot can make Tech In Asia sustainable in the long run.

“As you probably know, our business model has been built around events and advertising. While these have kept our business going, we are still working towards becoming profitable. Why is achieving this important? Because the only way we can be better at serving Asia’s tech ecosystem is if we have more resources and a consistent income stream,” he wrote when announcing the subscription package.

Full disclosure: I bought an annual subscription to Tech In Asia at the early bird discount rate being offered right now. That doesn’t impact my coverage of this story — I support a number of media businesses via subscription packages.

Golden Gate Ventures closes new $100M fund for Southeast Asia

Singapore’s Golden Gate Ventures has announced the close of its newest (and third) fund for Southeast Asia at a total of $100 million.

The fund hit a first close in the summer, as TechCrunch reported at the time, and now it has reached full capacity. Seven-year-old Golden Gate said its LPs include existing backers Singapore sovereign fund Temasek, Korea’s Hanwha, Naver — the owner of messaging app Line — and EE Capital. Investors backing the firm for the first time through this fund include Mistletoe — the fund from Taizo Son, brother of SoftBank founder Masayoshi Son — Mitsui Fudosan, IDO Investments, CTBC Group, Korea Venture Investment Corporation (KVIC), and Ion Pacific.

Golden Gate was founded by former Silicon Valley-based trio Vinnie Lauria, Jeffrey Paine and Paul Bragiel . It has investments across five markets in Southeast Asia — with a particular focus on Indonesia and Singapore — and that portfolio includes Singapore’s Carousell, automotive marketplace Carro, P2P lending startup Funding Societies, payment enabler Omise and health tech startup AlodokterGolden Gate’s previous fund was $60 million and it closed in 2016.

Some of the firm’s exits so far include the sale of Redmart to Lazada (although not a blockbuster), Priceline’s acquisition of WoomooLine’s acquisition of Temanjalan and the sale of Mapan (formerly Ruma) to Go-Jek. It claims that its first two funds have had distributions of cash (DPI) of 1.56x and 0.13x, and IRRs of 48 percent and 29 percent, respectively.

“When I compare the tech ecosystem of Southeast Asia (SEA) to other markets, it’s really hit an inflection point — annual investment is now measured in the billions. That puts SEA on a global stage with the US, China, and India. Yet there is a youthfulness that reminds me of Silicon Valley circa 2005, shortly before social media and the iPhone took off,” Lauria said in a statement.

A report from Google and Temasek forecasts that Southeast Asia’s digital economy will grow from $50 billion in 2017 to over $200 billion by 2025 as internet penetration continues to grow across the region thanks to increased ownership of smartphones. That opportunity to reach a cumulative population of over 600 million consumers — more of whom are online today than the entire U.S. population — is feeding optimism around startups and tech companies.

Golden Gate isn’t alone in developing a fund to explore those possibilities, there’s plenty of VC activity in the region.

Some of those include Openspace, which was formerly known as NSI Ventures and just closed a $135 million fund, Qualgro, which is raising a $100 million vehicle and Golden Equator, which paired up with Korea Investment Partners on a joint $88 million fund. Temasek-affiliated Vertex closed a $210 million fund last year and that remains a record for Southeast Asia.

Golden Gate also has a dedicated crypto fund, LuneX, which is in the process of raising $10 million.

LinkedIn’s China rival Maimai raises $200M ahead of planned US IPO

Editor’s note: This post originally appeared on TechNode, an editorial partner of TechCrunch based in China.

Maimai, China’s biggest rival to LinkedIn, has revealed today that it received a $200 million D Series investment back in April in what the company claims to be the largest investment in the professional networking market. That’s surprising but correct: LinkedIn went public in 2011 and was bought by Microsoft for $26 million in 2016, but it raised just over $150 million from investors as a private company.

Global venture capital DST led the round for Maimai which include participation from existing investors of IDG, Morningside Venture Capital, and DCM.

The new capital takes Maimai to $300 million raised from investors, according to CrunchbaseCaixin reports that the valuation of the company is more than $1 billion which would see the firm enter the global unicorn club.

Beyond the fundraising, the firm said it plans to invest RMB 1 billion (around $150 million) over the next three years in a career planning program that it launched in partnership with over 1,000 companies. Those partners include global top-500 firm Cisco and Chinese companies such as Fashion Group and Focus Media.

This investment could be the last time Maimai taps the private market for cash. That’s because the company is gearing up for a U.S. IPO and overseas expansion in the second half of 2019, according to the company founder and CEO Lin Fan.

Launched in the fall of 2013, Maimai aims particularly at business people as a platform to connect professional workers and offer employment opportunities. The service now claims over 50 million users. As a Chinese counterpart of LinkedIn, Maimai has competed head-on with Chinese arm of the U.S. professional networking giant since its establishment and gradually gained an upper hand with features tailored to local tastes.

maimai

It can be hard to gauge the population of social networks, but Chinese market research firm iResearch ranked Maimai ahead of LinkedIn for the first time in the rankings of China’s most popular social networking apps in April last year. The firm further gained ground this year as its user penetration rate reaching 83.8 percent in June, far higher than LinkedIn China’s 11.8 percent, according to data from research institute Analysys.

As a China-born company, Maimai gained momentum over the past two years with localized features, such as anonymous chat, mobile-first design, real-name registration, and partnerships with Chinese corporations. But like all Chinese tech services, it is subject to the state’s tight online regulation. The government watchdog has ordered Maimai to remove the anonymous posting section on its platform last month. The same issue applies to LinkedIn, which has been criticized for allowing its Chinese censorship to spill over and impact global users.

With assistance from Jon Russell

Walmart co-leads $500M investment in Chinese online grocery service Dada-JD Daojia

Walmart sold its China-based e-commerce business in 2016, but the U.S. retail giant is very much involved in the Chinese internet market through a partnership with e-commerce firm JD.com. Alibaba’s most serious rival, JD scooped up Walmart’s Yihaodian business and offered its own online retail platform to help enable Walmart to products in China, both on and offline.

Now that relationship is developing further after Walmart and JD jointly invested $500 million into Dada-JD Daojia, an online-to-offline grocery business which is part owned by JD, according to a CNBC report.

Unlike most grocery delivery services, though, Dada-JD Daojia stands apart because it includes a crowdsourced element.

The business was formed following a merger between JD Daojia, JD’s platform for order from supermarkets online which has 20 million monthly users, and Daojia, which uses crowdsourcing to fulfill deliveries and counts 10 million daily deliveries. JD Daojia claims over 100,000 retail stores and its signature is one-hour deliveries for a range of products, which include fruit, vegetables and groceries.

Walmart is already part of the service — it has 200 stores across 30 Chinese cities on the Dada-JD Daojia service; as well as five online stores on the core JD.com platform — and now it is getting into the business itself via this investment.

JD.com said the deal is part of its ‘Borderless Retail’ strategy, which includes staff-less stores and retail outlets that mix e-commerce with physical sales.

“The future of global retail is boundaryless. There will be no separation between online and offline shopping, only greater convenience, quality and selection to consumers. JD was an early investor in Dada-JD Daojia, and continues its support, because we believe that its innovations will be an important part of realizing that vision,” said Jianwen Liao, Chief Strategy Officer of JD.com, in a statement.

Alibaba, of course, has a similar hybrid strategy with its Hema stores and food delivery service Ele.me, all of which links up with its Taobao and T-Mall online shopping platforms. The company recently scored a major coup when it landed a tie-in with Starbucks, which is looking to rediscover growth in China through an alliance that will see Ele.me deliver coffee to customers and make use of Hema stores.

Away from the new retail experience, JD.com has been doing more to expand its overseas presence lately.

The company landed a $550 million investment from Google this summer which will see the duo team up to offer JD.com products for sale on the Google Shopping platform across the world. Separately, JD.com has voiced intention to expand into Europe, starting in Germany, and that’s where the Google deal and a relationship with Walmart could be hugely helpful.

Another strategic JD investor is Tencent, and that relationship has helped the e-commerce firm sell direct to customers through Tencent’s WeChat app, which is China’s most popular messaging service. Tencent and JD have co-invested in a range of companies in China, such as discount marketplace Vipshop and retail group Better Life. Their collaboration has also extended to Southeast Asia, where they are both investors in ride-hailing unicorn Go-Jek, which is aiming to rival Grab, the startup that bought out Uber’s local business.

Starbucks partners with Alibaba on coffee delivery to boost China business

Starbucks is palling up with Alibaba as it seeks to rediscover growth for its business in China.

China has been a bright spot for some time for the U.S. coffee giant, but lately it has struggled to maintain growth — its China business dragged on its Q3 financials — and it is up against some ambitious new rivals, including billion-dollar startup Luckin Coffee.

One-year-old Luckin recently raised $200 million from investors and it has already built quite a presence. It claims over 500 outlets across China and it taps into the country’s mobile trends, with mobile payments and orders and delivery, too. Then there are some deep discounts aimed at getting new users, as is common with food, cars and other on-demand services.

In response, Starbucks is injecting some of that ‘New Retail’ strategy into its own China presence — and it is doing so with none other than Alibaba, the company that coined the phrase, which signifies a marriage between online and offline commerce.

The partnership between Alibaba and Starbucks is wide-ranging and it will cover delivery, a virtual store and collaboration on Alibaba’s “new retail” Hema stores.

The delivery piece is perhaps most obvious, and it’ll see Starbucks work with Ele.me, the $9.5 billion food delivery platform owned by Alibaba, to allow customers to order and receive coffee without visiting a store. The service will start in September in Beijing and Shanghai, with plans to expand to 30 cities and over 2,000 stores by the end of this year.

Starbucks is also building its app into Alibaba’s array of e-commerce sites, including its Tmall brand e-mall and Taobao marketplace. That’s a move that Starbucks President and CEO Kevin Johnson told CNBC would operate “similar to the mobile app embedded right into that experience” and open Starbucks up to Alibaba’s 500 million-plus users.

Finally, Starbucks is bringing its own “Starbucks Delivery Kitchens” to Alibaba’s Hema stores, which feature robots and mobile-based orders, that will combine Starbucks stores to boost its delivery capacity and speed.

Starbucks, as mentioned, needed a boost in China but the deal is also a major coup for Alibaba, which is battling JD.com on the new retail front as well as ambitious on-demand service Meituan. The latter is reported to have recently filed for an IPO in Hong Kong that could raise it $4 billion.

Blockchain media project Civil turns to Asia with fund to kickstart 100 new media ventures

Civil, the blockchain-based journalism organization, is casting its eye to Asia after it set up a $1 million fund that’s aimed at seeding 100 new media projects across the continent over the next three years. The organization has teamed up with Splice, a Singapore-based media startup which will manage the fund, according to an announcement.

There’s been a lot of attention lavished on Civil for its promise to make media work more efficiently using blockchain technology and its upcoming crypto token, CVL. The organization has raised $5 million in financing from ConsenSys, the blockchain corporation led by Ethereum co-creator Joe Lubin, and its ICO takes place next month with the goal of raising around $32 million to launch its network and actively onboard new media companies worldwide.

But the company is waiting around. Civil has already actively jumped into the media space — providing financial backing to the newly-formed The Colorado Sun — but the scope of the project in Asia is different in trying to kickstart a wave of new media organizations by giving them money to get off the ground.

Alan Soon, co-founder and CEO of Splice, told TechCrunch that it hasn’t been decided whether the financing will be in the form of grants or equity-based investments. Despite that, he said deals will be “pre-seed, micro-investments to help entrepreneurs take their ideas to prototype stage.”

Soon said that all kinds of media are in play, ranging from the more obvious suspects such as publishers, reporting websites and podcasts to behind-the-scenes tech like automation, bots and adtech.

Notably, though, he clarified that the beneficiaries of the fund will be under no obligation to adopt Civil’s protocol, the technology that will be funded by the upcoming ICO. Splice itself, however, has committed to doing so which will mean it gains access to the network’s content, licensing opportunities and more.

“I’m with Civil because I really believe in their values,” Soon added. “They want to do the right thing for this space.”

WeWork China raises $500M to triple the number of cities it covers

WeWork’s China business is getting a fresh injection of capital after it raised $500 million.

The company entered China two years ago and today it covers Beijing, Shanghai and Chengdu with nearly 40 locations. It claims 20,000 members, and it is also active in Hong Kong, which technically falls under ‘Greater China.’

The new capital comes from Trustbridge Partners, Singapore’s Temasek, SoftBank, SoftBank’s Vision Fund and Hony Capital. WeWork said it’ll be used for expansion into six new cities: those are Shenzhen, Suzhou, Hangzhou, Chengdu, Nanjing, and Wuhan. This new raise is a Series B, WeWork China previously scored a $500 million Series A last year, which was also when the Chinese entity was founded.

The company has been pretty busy over that 12-month period, most notably it scooped up its largest rival, Naked Hub, in an acquisition deal that is worth a reported $400 million and massively grew its reach.

Naked Hub builds on WeWork’s presence in Greater China by adding 24 office locations and a further 10,000 members. That’s why WeWork China’s figures are so impressive for just two years of operations. Now, this new capital will put WeWork’s own DNA into that network through this planned expansion spree.

“This investment will help WeWork fuel our mission to support creators, small businesses, and large companies across China,” WeWork CEO and co-founder Adam Neumann said in a statement. “WeWork has built an incredible team in China that supports our members every day, serving as a bridge for local companies who want to reach the world as well as for global companies that want to enter the Chinese market.”

Outside of China, WeWork is also making inroads in India — where it launched in 2017 — Korea, Japan (where it operates a joint venture with SoftBank) and Southeast Asia, where it made an acquisition to kick-start its presence. Indeed, WeWork has a float of around $500 million for its operations in Southeast Asia and Korea, although the total pot for India is unknown at this point.

WeWork China’s big raise comes days after Hong Kong’s Campfire pulled in $18 million and Awfis in India raised $20 million.

Korean hotel firm Yanolja moves into Southeast Asia with $15M investment in Zen Rooms

Zen Rooms, the budget hotel network startup founded by Rocket Internet, had faced the deadpool earlier this year after a prospective funding deal collapsed, but now the business appears to have found a home. Korea’s Yanolja, a popular motel brand that has branched out into app-based hotel bookings, has made a strategic investment that could see it fully acquire the business.

Ten-year-old Yanolja is initially paying $15 million for an undisclosed “strategic non-controlling stake,” but it will retain the rights to buy 100 percent of the Zen Rooms business. Zen Rooms clarified that the acquisition is an option and not based on performance or financial metrics.

Founded by a former hotel worker, Lee Su-jin, Yanolja is best known for its lovel hotels although it is trying to clean up the general image of short-stay hotels by promoting them as destinations for business travelers, tourists and families, as noted by a Bloomberg profile story. The company has also grown its own app-based booking service which among the most used in its homeland with 20,000 rooms.

The company is reportedly planning an IPO, so expansion is on its mind.

For those reasons, Zen Rooms fits that new focus. The company borrowed the budget hotel model, first pioneered by SoftBank-backed Oyo in India, and brought it to Southeast Asia when it launched three years ago. The concept is simple, Zen Rooms guarantees minimum standards at all hotels including free WiFi, fresh towels and bedding, hot showers, etc all of which is controlled via a mobile app. Those standards are normal to most hotel stayers, but when traveling in the East, standards can vary wildly especially at budget hotels, which Zen Rooms is focused on.

For hotels, Zen Rooms manages the brand — and sometimes more — and it allows helps them tap the internet to find customers and bookings.

Today, Zen Rooms is active in six cities in Southeast Asia — it had previously also run operations in Brazil, Hong Kong and Sri Lanka — across which it claims to operate 1,000 hotel franchisees with an inventory of more than 7,000 rooms. Its rivals in Southeast Asia include Red Doorz, which raised $11 million earlier this year.

The startup has raised $8 million from investors to date, including a $4.1 million Series A last April that was led by Korea’s Redbadge Pacific and SBI Investment Korea with participation Asia Pacific Internet Group (APACIG), the joint venture fund in Asia between Rocket Internet and Qatari operator Ooredoo.

However, TechCrunch understands that a major funding deal of over $10 million fell apart in Q1 2018 which left the company with a rapidly depleting runway. As a result and as TechCrunch reported in March, the company was aggressively shopped to potential buyers, investors and rival companies in order to keep the business afloat.

Yanolja has come to the rescue but a full buy-out looks like it will be dependent on the company’s future performance, such is often the arrangement with strategic deals made with a view to full ownership. Rocket Internet, which remains a major investor in Zen Rooms, will hope that the deal goes as smoothly as Lazada, its e-commerce service that is now owned by Alibaba.

Lazada ran out of capital in similar circumstances in early 2016 and Alibaba, the Chinese internet giant, came to its aid with a $1 billion investment. Although that was a majority investment it wasn’t a full-on buyoutAlibaba later increased its holdings until it fully owned the business, and today it is a key part of the firm’s overseas expansion strategy.

Already, TechCrunch understands from one source that Zen Rooms has gone on a hiring spree in recent weeks after it closed the deal. It had earlier been forced to make cutbacks to its team as a result of cost-cutting following the collapse of the funding deal earlier in the year.

“We now have the capital to invest,” ZenRooms co-founder Kiren Tanna told TechCrunch. “The deal has been in discussion since earlier this year…. we are treating like an acquisition but this is step one.”

Tanna added that the company plans to focus on five markets in Southeast Asia, and an expansion to Vietnam may be in the pipeline soon.

Apple’s iCloud user data in China is now handled by a state-owned mobile operator

If you’re an Apple customer living in China who didn’t already opt out of having your iCloud data stored locally, here’s a good reason to do so now. That information, the data belonging to China-based iCloud users which includes emails and text messages, is now being stored by a division of China Telecom, the state-owned telco.

The operator’s Tianyi cloud storage business unit has taken the reins for iCloud China, according to a WeChat post from China Telecom. Apple separately confirmed the change to TechCrunch.

Apple’s transition of the data from its own U.S.-based servers to local servers on Chinese soil has raised significant concern among observers who worry that the change will grant the Chinese government easier access to sensitive information. Before a switch announced earlier this year, all encryption keys for Chinese users were stored in the U.S. which meant authorities needed to go through the U.S. legal system to request access to information. Now the situation is based on Chinese courts and a gatekeeper that’s owned by the government.

Apple itself has said it was compelled to make the move in order to comply with Chinese authorities, and that hardly eases the mind.

It’s ironic that the U.S. government has pursued Chinese telecom equipment maker ZTE on account of national security and suspected links to Chinese authorities, and yet one of America’s largest corporates is entrusting user data to a state-owned company in China.

The only plus for Apple users in China is that they can opt out of local data storage by selecting a country other than China for their iCloud account. Since it isn’t clear whether making that change today would see information migrated or deleted from the Chinese server, starting over with a new account is probably the best option at this point.

Hat tip @yuanfenyang

Aspire Capital offers fast finance for SMEs in Southeast Asia

Southeast Asia’s digital economy is tipped to grow more than six-fold to reach more than $200 billion per year, according to a report co-authored by Google, with e-commerce accounting for the dominant share. The emergence of e-commerce platforms like Alibaba’s Lazada and U.S.-listed Shopee have enabled online entrepreneurship across the region, but still financial support for online sellers, who are basically SMEs, is lagging.

That’s where Singapore-based Aspire Capital, a six-month-old organization focused on speedy SME lending, is hoping to make a difference.

The company certainly has opportunity. With a cumulative population of over 600 million consumers and a rising middle class, Southeast Asia is increasingly an attractive market for businesses of all kind, and online companies in particular. Chinese giants Alibaba and Tencent have long devoted significant resources to the region where, like India, they see significant growth potential. E-commerce is the clear winner, in terms of size, with the e-Conomy SEA report — a joint research project between Google and Singapore sovereign fund Temasek — forecasting e-commerce revenue will hit $88 billion by 2025 from $10.9 billion in 2017.

Data from the e-Conomy SEA report

The crux of its problem is that online sellers who use Lazada, Shopee or other platforms that are forgoing profit in order to grow, are ironically less able to scale their business since there are few ‘e-commerce friendly’ financing options.

That problem became apparent to Aspire founder and CEO Andrea Baronchelli during a four-year stint with Lazada Singapore where, as CMO, he identified a financing disconnect for Lazada merchants.

“I saw the problem while trying to rally small businesses trying to grow in the digital economy,” Baronchelli told TechCrunch in an interview.

“The problem is really about providing working capital to small business owners. We started with online sellers, but we have expanded a bit as we see demand. There are 65 million small businesses in Southeast Asia, that’s ten times more than the U.S. so we see so much potential,” he added.

Aspire founder and CEO Andrea Baronchelli pictured while at Lazada

Today, Aspire Capital covers Singapore where it has expanded beyond e-commerce merchants to cover other things of SMEs who seek loans, primarily for working capital as Baronchelli explains. So far, he added, it has served loans to over 100 businesses. Typically, its spread goes from as low as SG$5,000 to up to SG$100,000, that’s around $3,600-$73,500 in U.S. terms.

The company was founded in early 2018 and already it has done plenty. It was part of the Y Combinator Winter 2018 cohort and it has closed a $9 million seed round to kick its business off with the working capital that it needs itself.

That round included a range of investors such as Europe-based Hummingbird, New York’s Mark II Capital, ex-Sequoia partner Yinglan Tan’s Insignia Ventures Partners and Y Combinator.

The principle behind the business is to make business financing quick and simple, Baronchelli said.

So rather than stacks of paperwork, SME owners fill out online forms and get a response the same day. Large parts of the application and review process are automated using a proprietary risk assessment engine, but Baronchelli said that ultimately a human makes the final call on whether to accept the application or not.

“We want to really be fast,” Baronchelli explained. “SMEs need quick decisions, they cannot wait three months for a bank. They need super quick, fast and no paperwork.”

The application process for companies seeking loans from Aspire Capital

He paints an example of online merchants who typically buy inventory from China which is sold customers within three to six months. If the business has a track record, it can take a loan to increase its stock and grow its revenues and profit, he explained.

Singapore may be a key market in Southeast Asia, but with a population of just over five million expansion is top of mind for Aspire. Baronchelli said he is doing due diligence on the first market expansion which he expects will happen before the end of this year. He expects that the business will raise further capital, perhaps towards the tail end of this year, which would be used to expand more aggressively across Southeast Asia in 2019.

He is also occupied building out the team. Right now, Aspire has ten people but he is keen to bring in ten to fifteen more staff, particularly on the tech side of the business.

Grab co-founder says Southeast Asia still has plenty of competition despite Uber’s exit

Grab may have bought itself a dominant position in Southeast Asia through its acquisition of Uber’s regional business, but the company still believes there’s competition in the ride-hailing space despite what consumers may feel.

But Grab customers aren’t alone in feeling that the Grab-Uber deal is detrimental, the Competition and Consumer Commission Singapore (CCCS) last week expressed concern that the tie-up is hurting consumers and that a lack of competition will reduce innovation. The watchdog is in the process of an investigation into the deal which could see it dish out fines for Uber and Grab, or potentially unwind the deal in Singapore altogether.

Despite that threat looming, Grab co-founder Hooi Ling Tan told an audience at the Rise conference in Hong Kong that the market, and ride-hailing more generally, remains competitive in Southeast Asia despite Uber’s exit.

“There’s still a lot of existing competition, we don’t foresee it ending ever.. and to be honest we don’t want it to because we continue to learn from them,” Tan said. “We continue to learn from alternative players who take alternative strategies [and] operational tactics.”

Go-Jek, the billion-dollar firm that dominates Indonesia and is plotting a regional expansion to fill Uber’s void, may be the most obvious rival, but Tan said that Grab is competing with more basic forces.

“From day one, our primary competitor has never been other ride-hailing apps, it’s actually been what [Grab CEO Anthony Tan] calls the hand — the hand that waves down a taxi on the side of the road,” Tan, who is not related to the Grab CEO, said. “That market is huge, [and it is something] we’re trying to provide an alternative service to because it isn’t exactly efficient as is.”

10 July 2018; Tan Hooi Ling, left, Co-Founder, Grab, and Kara Swisher, Executive Editor, Recode, on Centre Stage during day one of RISE 2018 at the Hong Kong Convention and Exhibition Centre in Hong Kong. Photo by Stephen McCarthy / RISE via Sportsfile

CCCS, the Singaporean watchdog, doesn’t agree, however. Last week it expressed concern that no other taxi apps rival Grab and that a prohibitive barrier of cost and network effects prevents new entrants from competing squarely. A lack of competition has already led to Grab raising prices, it argued, although Grab has denied doing so.

Tan didn’t comment directly on the regulator’s comments, but she did say at a subsequent press briefing that regulating ride-hailing is a tricky process.

“We’re all trying to figure out what’s the right way to balance the needs of the consumer and need to create an environment that’s supportive of innovation,” she said. “Together we’re trying to figure things out, we make mistakes together but are 100 percent combined in terms of our intent.”

An entity with which Grab is more unexpectedly combined with is Uber, and Tan’s comments certainly paint the relationship between the once-sworn enemies as a very pally one.

“The partnership makes a tonne of sense to us because we saw [Uber] as really true potential partners,” Tan said. “For example some of the things that they’ve been helping us a lot on… they have Uber Eats in Southeast Asia, which we didn’t have, and since we’ve helped take over their operations we’ve helped them expand it from two countries to six countries right now with a bunch more growth expansion plans.

“They’ve also had some of the best technology know-how, whether it’s mapping or just basic scaling infrastructure, those are some of the other things we’ve continued learned from them,” she added.

Tan said that Uber and Grab are educating each other on how their respective businesses are developing, and on that note Grab today went beyond ride-hailing with the launch of its “super app” that integrates third-party services. Uber has embraced scooters with its acquisition of Jump Bikes, but it will take some imagining for the ride-hailing giant to adopt non-transportation services like Grab’s push into payment and financial services.

But then that’s entirely the point of its Southeast Asia exit. It’s widely-believed that Uber left Southeast Asia’s loss-making market to clean its balance sheet ahead of a future IPO. Nonetheless, it got a solid 27.5 percent share in Grab in return and with the Singapore-based firm in the process of raising capital at a valuation of over $10 billion, Uber is already reaping the rewards on paper.

Grab raised $1 billion from Toyota last month and that is the first tranche of a larger fundraising effort to support the one-stop “super app” strategy in Southeast Asia’s post-Uber world.

Crypto visa card company Monaco just spent millions to buy Crypto.com

Highly-prized domain name Crypto.com has been sold!

Registered in 1993 by Matt Blaze, a professor of computer and information science at the University of Pennsylvania who sits on the board of directors of the Tor Project, the domain has attracted a vast amount of interest as you’d expect given the explosion of crypto in recent years. However, Blaze has turned down all offers.

In January, Blaze repeated that the domain was “not for sale” and that people shouldn’t both to contact him — as The Verge noted —  however fast forward to July and he has parted with it after Monaco, a crypto project best-known for developing a crypto debit card, bought the domain in an undisclosed deal.

Experts told The Verge that Crypto.com could have attracted as much as $10 million, however Monaco CEO Kris Marszalek declined to go into the specifics.

“If it was only about money he’d have sold it a long time ago,” he told TechCrunch in an interview.

Hong Kong-based Monaco’s ICO finished in June 2017 with the company raising what was then worth $25 million in crypto. Fast forward today and Marszalek said the firm has close to $200 million on its balance sheet thanks to a surge in the valuation of cryptocurrencies like Ether, but he suggested that, more than money, the sale was about finding the right home for the domain.

“This is a very powerful identity that we are taking on. It’s representative of the entire category so it comes with a huge responsibility on us to carry the torch. We don’t take it lightly and this is one of the things that I think we conveyed successfully, that, as a company, we do have a higher purpose,” he said.

“Fundamentally, blockchain and crypto will enable [the next generation] to control their money, to control their data and to control their identity, these are the three fundamental things that weave the fabric of society. For us this is the purpose, we want to acceleration the world’s adoption of cryptocurrency,” he added.

The splashy purchase of the domain is part of a rebrand for Monaco that will see the parent company become Crypto.com and its Monaco services — which the upcoming Visa card, peer-to-peer transfer and a wallet app — become MCO, the same name as the company’s cryptocurrency.

The Monaco card itself just entered testing for a small group of users, primarily the MCO team, and Marszalek said it will be available for all customers in Singapore and Europe this summer, with a rollout for those in the U.S. likely in Q4. That’s covering a backlog of over 70,000 waiting users, but the company has sweetened the appeal of a card for new people by adding a number of perks, most notably cashback on transactions and a concierge, which vary based on the level.

At around $7 per MCO token, the commitment for a card isn’t cheap. The top of the range ‘Obsidian Black,’ which has the highest rate of cashback and perks, requires a customer to hold around $350,000 in MCO tokens. However, there’s a selection to cater to different budgets.

MCO is well-known for its card project, which has been two years in the making and it captured the attention of early crypto enthusiasts, but Marszalek said the company is cooking up other services in a bid to offer a more rounded product line. (That also explains the rebrand.) Among things to expect, he said MCO is opening to introduce lending that uses crypto as collateral, a low-rate credit service, and a robo trading investment feature.

Note: The author owns a small amount of cryptocurrency. Enough to gain an understanding, not enough to change a life.

oBike is closing its dock-less bike-sharing service in Singapore

Singapore’s upcoming licensing for dock-less bike-sharing services has claimed its first scalp after oBike — a Singapore-based company run by Chinese founders — announced that it would cease its service in the country ahead of the implementation of regulations.

The Land Transport Authority (LTA) is introducing measures to protect Singapore’s streets from a glut of bicycles left all over the place, as photo essays from China and beyond have cautioned can happen.

oBike launched its service at the beginning of 2017, and it claims over one million registered users but still it will end its service today, June 25. oBike said it will continue to run operations in other markets, although it hasn’t said if/when it will refund Singapore-based users with the deposits that they paid upon registration.

“oBike strongly believes and is committed to provide [sic] dock-less bicycle sharing service that would benefit users’ commuting and Singapore’s transportation system, however it is with regret that the new regulation measures do not favour this belief of ours,” the company said in a statement that posted to Facebook.

This move comes weeks after oBike exited Melbourne in Australia following issues with regulation.

oBike has directed its customers to the newly-launched bike service from ride-hailing giant Grab, which went live in March, although that service has temporarily paused new user sign-ups. Other alternatives in Singapore also include services from Chinese duo Ofo and Mobike.

Grab is actually an investor in oBike, as TechCrunch reported last year, after taking part in its $45 million Series B round that was announced in August 2017.

Singapore-based game studio Mighty Bear raises $2.5M ahead of debut release

Mighty Bear, a game studio startup that grew out of King.com’s former office in Singapore, has landed new funding as it readies its debut title for smartphones.

The startup was founded by four former King.com staffers — Simon Davis, Fadzuli Said, Benjamin Chevalier and Saurabh Shukul — after the gaming giant closed its Singapore office — inherited via the acquisition of Non Stop Games — following its $5.9 billion acquisition by Activision. Today, Mighty Bear’s team of 18 counts experience working with Ubisoft, EA, Lucasarts, Disney, Gameloft and others.

The startup previously raised $775,000 in a pre-seed round in early 2017, and this time around it has pulled in a seven-figure USD investment. The deal is officially undisclosed, but a source with knowledge of discussions told TechCrunch it is worth around $2.5 million.

The deal was led by U.S.-based Skycatcher, New York hedge fund banker Eric Mindich’s Everblue fund, and M Ventures from Los Angeles. Others in the round include Singapore’s Atlas Ventures, Lev Leviev — who is co-founder of VK.com among other things — and existing backer Global Founders Capital, which is affiliated with Rocket Internet.

“We’ve already got a good set of investors from Europe and Asia so we realized we needed networks in North America, too,” Mighty Bear CEO Simon Davis told TechCrunch in an interview.

Davis added that, beyond extending their reach for purposes like hiring, partnerships and more, they open up the potential for IP and media deals further down the road.

First thing first though: Mighty Bear is working to launch its first title, which Davis said will be an MMORPG. Right now, it is being secretly tested for scalability and technical capabilities among users in India and the Philippines with a view to a full launch on iOS and Android later this year. Davis said the company plans to launch another title, too, with both games managed concurrently.

“We’ve basically taken a genre that we know is monetized and engaged with hardcore users and tried to bring it to a large audience. Our goal is to take big desktop experiences and streamline them into five-minute bursts,” he told TechCrunch in an interview.

You may not know it, but you may have run into Mighty Bear’s concepts already even though it hasn’t fully launched a title yet. That’s because part of the research and development process includes creating and disseminating videos and advertising for mock games through channels like Facebook.

That, Davis explained, can help Mighty Bear in all manner of ways, from basics such as figuring out what kind of visuals or advertising approach gets engagement from users, to broader purposes such as understanding the types of games that people want to play.

“The process helps witter down ideas to those that will get traction with users. If a game makes it through the various internal gates we have, and to soft launch, then we have the best potential for it to perform well,” Davis said.

Developing artwork and advertising for ‘fake’ games isn’t as obscure as it may sound. While it isn’t usual for smaller studios, it’s a practice that Davis said is common at huge game development companies — that in turn is a reflection in the experience that the team at Mighty Bear has under its belt.

Korean crypto exchange Bithumb says it lost over $30M following a hack

Just weeks after Korean crypto exchange Coinrail lost $40 million through an alleged hack, another in the crypto-mad country — Bithumb — has claimed hackers made off with over $30 million in cryptocurrency.

Coinrail may be one of Korea’s smaller exchanges, but Bithumb is far larger. The exchange is one of the world’s top ten ranked based on trading of Ethereum and Bitcoin Cash, and top for newly-launched EOS, according to data from Coinmarketcap.com.

In a now-deleted tweet, Bithumb said today that 35 billion won of tokens — around $31 million — were snatched. It didn’t provide details of the attack, but it did say it will cover any losses for its users. The company has temporarily frozen deposits and trading while it is in the process of “changing our wallet system” following the incident.

Days prior to the hack, Bithumb said on Twitter that it was “transferring all of asset to the cold wallet to build up the security system and upgrade” its database. It isn’t clear whether that move was triggered by the attack — in which case it happened days ago — or whether it might have been a factor that enabled it.

[Notice for the restart of service]
We are transferring all of asset to the cold wallet to build up the security system and upgrade DB. Starting from 15:00 pm(KST), we will restart our services and notice again as soon as possible. Appreciate for your support.

— Bithumb (@BithumbOfficial) June 16, 2018

A tweet sent days before Bithumb said it had been hacked

There’s often uncertainty around alleged hacks, with some in the crypto community claiming an inside job for most incidents. In this case, reports from earlier this month that Bithumb was hit by a 30 billion won tax bill from the Korean government will certainly raise suspicions. Without an independent audit or third-party report into the incident, however, it is hard to know exactly what happened.

That said, one strong takeaway, once again, is that people who buy crypto should store their tokens in their own private wallet (ideally with a hardware key for access) not on an exchange where they could be pinched by an attacker. In this case, Bithumb is big enough to cover the losses, but it isn’t always that way and securely holding tokens avoids potential for trouble.

Google makes $550M strategic investment in Chinese e-commerce firm JD.com

Google has been increasing its presence in China in recent times, and today it has continued that push by agreeing to a strategic partnership with e-commerce firm JD.com which will see Google purchase $550 million of shares in the Chinese firm.

Google has made investments in China, released products there and opened up offices that include an AI hub, but now it is working with JD.com largely outside of China. In a joint release, the companies said they would “collaborate on a range of strategic initiatives, including joint development of retail solutions” in Europe, the U.S. and Southeast Asia.

The goal here is to merge JD.com’s experience and technology in supply chain and logistics — in China, it has opened warehouses that use robots rather than workers — with Google’s customer reach, data and marketing to produce new kinds of online retail.

Initially, that will see the duo team up to offer JD.com products for sale on the Google Shopping platform across the word, but it seems clear that the companies have other collaborations in mind for the future.

JD.com is valued at around $60 billion, based on its NASDAQ share price, and the company has partnerships with the likes of Walmart and it has invested heavily in automated warehouse technology, drones and other ‘next-generation’ retail and logisitics.

The move for a distribution platform like Google to back a service provider like JD.com is interesting since the company, through search and advertising, has relationships with a range of e-commerce firms including JD.com’s arch rival Alibaba.

But it is a sign of the times for Google, which has already developed relationships with JD.com and its biggest backer Tencent, the $500 billion Chinese internet giant. All three companies have backed Go-Jek, the ride-hailing challenger in Southeast Asia, while Tencent and Google previously inked a patent sharing partnership and have co-invested in startups such as Chinese AI startup XtalPi.

China’s Didi Chuxing continues its international expansion with Australia launch

Didi Chuxing, China’s dominant ride-hailing company, is continuing its international expansion after it announced plans to launch in Australia this month.

The company — which bought Uber’s China business in 2016 — said it will begin serving customers in Melbourne from June 25 following a month-long trial period in Geelong, a neighboring city that’s 75km away. The business will be run by a Didi subsidiary in Australia and it plans to offer “a series of welcome packages to both drivers and riders” — aka discounts and promotions, no doubt. It began signing up drivers on June 1, the company added.

The Australia launch will again put Didi in direct competition with Uber, but that is becoming increasingly common, and also Ola and Didi which both count Didi as an investor — more on that below. This move follows forays into Taiwan, Mexico and Brazil this year as Didi has finally expanded beyond its China-based empire.

Didi raised $4 billion in December to develop AI, general technology and to fund international expansion and it has taken a variety of routes to doing the latter. This Australia launch is organic, with Didi developing its own team, while in Taiwan it has used a franchise model and it went into Brazil via acquisition, snapping up local Uber-rival 99 at a valuation of $1 billion.

It is also set to enter Japan where it has teamed up with investor SoftBank on a joint-venture.

“In 2018, Didi will continue to cultivate markets in Latin America, Australia and Japan. We are confident a combination of world-class transportation AI technology and deep local expertise will bring a better experience to overseas markets,” the company added in a statement.

This international expansion has also brought a new level of confusion since Didi has cultivated relationships with other ride-hailing companies across the world while also expanding its own presence internationally.

The Uber deal brought with it a stock swap — turning Didi and Uber from competitors into stakeholders — and the Chinese company has also backed Grab in Southeast Asia, Lyft in the U.S., Ola in India, Careem in the Middle East and — more recentlyTaxify, which is primarily focused on Europe and Africa.

In the case of Australia, Didi will come up against Uber, Ola — present in Melbourne, Perth and Sydney via an expansion made earlier this year — and Taxify, too. Uber vs Didi is to be expected — that’s a complicated relationship — but in taking on Ola (so soon after it came to Australia), Didi is competing directly with a company that it funded via an investment deal for the first time.

That might be a small insight into Didi’s relationship with Ola. Unlike Grab, which has seen Didi follow-on its investments, the Chinese firm sat out Ola’s most recent fundraising last year despite making an investment in the company back in 2015.

“The ride-hailing industry is still a young business, and the potential for growth is substantial. Competition exists in ride-hailing, like in any flourishing industry. But it leads to better products and services, which ultimately benefits users,” Didi told TechCrunch in a statement when asked about its new rivalry with Ola and Taxify.

Ola declined to comment. Taxify did not immediately reply to a request for comment.

The move into Australia comes at a time when Didi is under intense pressure following the death of a passenger uses its ‘Hitch’ service last month.

The company suspended the Hitch service — which allows groups people who are headed in the same direction together — and removed a number of features while limiting its operations to day-time only. This week, it said it would resume night-time rides but only for drivers picking up passengers of the same sex.

Alibaba’s Ant Financial fintech affiliate raises $14 billion to continue its global expansion

Ant Financial, the financial services affiliate connected to Alibaba which operates the Alipay mobile payment service, has confirmed that it has closed a Series C funding round that totals an enormous $14 billion.

The rumors have been flying about this huge financing deal for the past month or so, with multiple publications reporting that Ant — which has been strongly linked with an IPO — was in the market to raise at least $9 billion at a valuation of upwards of $100 billion. That turned out to be just the tip of the iceberg here.

The money comes via a tranche of U.S. dollar financing and Chinese RMB from local investors. Those names include Singapore-based sovereign funds GIC and Temasek, Malaysian sovereign fund Khazanah Nasional Berhad, Warburg Pincus, Canada Pension Plan Investment Board, Silver Lake and General Atlantic.

Ant said that the money will go towards extending its global expansion (and deepening its presence in non-China markets it has already entered), developing technology and hiring.

“We are pleased to welcome these investors as partners, who share our vision and mission, to embark on our journey to further promote inclusive finance globally and bring equal opportunities to the world. We are proud of, and inspired by, the transformation we have affected in the lives of ordinary people and small businesses over the past 14 years,” Ant Financial CEO and executive chairman Eric Jing said in a statement.

Alibaba itself doesn’t invest in Ant, which it span off shortly before its mega-IPO in the U.S. in 2014, but the company did recently take up an option to own 33 percent of Ant’s shares.

Ant has long been tipped to go public. Back in 2016 when it raised a then blockbuster $4.5 billionlittle did we know it would pull in many multiples more — the company has been reportedly considering a public listing, but it instead opted to raise new capital at a valuation of $60 billion.

It looks like the same again, but with higher stakes. This new Series C round pushes that valuation up to $100 billion, according to Bloomberg. (Ant didn’t comment on its valuation.) So what has Ant done over the past two years to justify that jump?

It has long been a key fintech company in China, where it claims to serve offer 500 million consumers and offers Alipay, digital banking and investment services, but it has begun to replicate that business overseas in recent years. In particular, it has made investments and set up joint-ventures and new businesses in a slew of Asian countries that include India, Thailand, Korea, Indonesia, Hong Kong, Malaysia, the Philippines, Pakistan and Bangladesh.

The company was, however, unsuccessful in its effort to buy MoneyGram after the U.S. government blocked the $1.2 billion deal.

On the business-side, Ant is said to have posted a $1.4 billion profit over the last year, suggesting it is more than ready to make the leap to being a public firm.

Despite that U.S. deal setback, Ant said today that its global footprint extends to 870 million consumers. I’d take that with a pinch of salt at this point since its business outside of China is in its early stages, but there seems little doubt that it is on the road to replicating its scale in its homeland in many parts of Asia. Raising this huge round only solidifies those plans by providing the kind of capital infusion that tops most of the world’s IPOs in one fell swoop.

Google brings its ARCore technology to China in partnership with Xiaomi

Google is ramping up its efforts to return to China. Earlier this year, the search giant detailed plans to bring its ARCore technology — which enables augmented reality and virtual reality — to phones in China and this week that effort went live with its first partner, Xiaomi.

Initially the technology will be available for Xiaomi’s Mix 2S devices via an app in the Xiaomi App Store, but Google has plans to add more partners in Mainland China over time. Huawei and Samsung are two confirmed names that have signed up to distribute ARCore apps on Chinese soil, Google said previously.

Starting today, #ARCore apps are available on Mix 2S devices from the Xiaomi App Store in China. More partners coming soon → https://t.co/16QoOTgqve pic.twitter.com/lT4TYXrzwF

— Google AR & VR (@GoogleARVR) May 28, 2018

Google’s core services remain blocked in China but ARCore apps are able to work there because the technology itself works on device without the cloud, which means that once apps are downloaded to a phone there’s nothing that China’s internet censors can do to disrupt them.

Rather than software, the main challenge is distribution. The Google Play Store is restricted in China, and in its place China has a fragmented landscape that consists of more than a dozen major third-party Android app stores. That explains why Google has struck deals with the likes of Xiaomi and Huawei, which operate their own app stores which — pre-loaded on their devices — can help Google reach consumers.

ARCore in action

The ARCore strategy for China, while subtle, is part of a sustained push to grow Google’s presence in China. While that hasn’t meant reviving the Google Play Store — despite plenty of speculation in the media — Google has ramped up in other areas.

In recent months, the company has struck a partnership with Tencent, agreed to invest in a number of China-based startups — including biotech-focused XtalPi and live-streaming service Chushou — and announced an AI lab in Beijing. Added to that, Google gained a large tech presence in Taiwan via the completion of its acquisition of a chunk of HTC, and it opened a presence in Shenzhen, the Chinese city known as ‘the Silicon Valley of hardware.’

Finally, it is also hosting its first ‘Demo Day’ program for startups in Asia with an event planned for Shanghai, China, this coming September. Applications to take part in the initiative opened last week.

Southeast Asia’s Carro raises $60M for its automotive classifieds and car financing service

Carro, an automotive classifieds service and car financing startup based in Singapore, has closed a $60 million Series B round to scale its business in Southeast Asia.

The deal was co-led by SoftBank Ventures Korea, Insignia Ventures — the firm from ex-Sequoia Asia partner Yinglan Tan — and Facebook co-founder Eduardo Saverin’s B Capital Group. Other participants include IDG Ventures India founder Manika Arora (via his family fund) and existing Carro backers Venturra,
Singtel Innov8, Golden Gate Ventures and Alpha JWC.

Carro raised a $12 million Series A round in March 2017. This latest capital takes it to $78 million from investors to date, according to Crunchbase.

The 2.5-year-old company said in an announcement that $250 million of vehicles were sold last year across its three markets: Indonesia, Thailand and Singapore. That’s more than double the $120 million it claimed in 2016. Last March, Carro introduced its Genie Finance underwriting business, and over its first year, it claims to have originated over $100 million in loans while amassing a loan book of nearly $40 million.

Carro CEO Aaron Tan previously spent time at Singtel Innov8 and is one of a trio of co-founders. Tan told TechCrunch that the capital will initially be spent growing Carro’s business in Indonesia, Thailand and Singapore, but further down the line, there’s a plan for expansion.

“The exact markets are still to be determined but it may be a small setup in Japan and other sources of cars,” he added.

Carro has already expanded in terms of services. Initially a vehicle marketplace, it launched Genie Finance and has also forayed into insurance brokerage and road-side assistance. It recently introduced a service that completes vehicle sales in 60 minutes — Carro Express — which it said is now available in 30 locations across Southeast Asia.

“We will double down on our online marketplaces and financing in emerging markets this year. Ultimately, we want to improve the experience of selling and buying a car, as well as provide access to capital to the next billion people, which will improve the quality of lives,” Tan said in a statement.

Carro is rivaled by a number of startups, including BeliMobilGue in Indonesia, Carsome, iCar Asia and Rocket Internet’s Carmudi, although with its new raise in the bank Carro is the best-funded by some margin.

iCar Asia, which is managed by Malaysian venture builder Catcha, raised $19 million last November. This year has seen Carsome — which covers Malaysia, Singapore, Indonesia and Thailand — raise a $19 million Series B, BeliMobilGue — Indonesia-only — raise $3.7 million and Carmudi land $10 million.

In the case of Carmudi, the business has retrenched itself. At its peak it covered over 20 markets worldwide across Asia, the Middle East, Africa and Latin America, but today its focus is on Indonesia, the Philippines and Sri Lanka.

Carro’s monster raise follows another notable deal in Southeast Asia today which saw Carousell close a Series C round worth $85 million. The firm added backing from new investors DBS, Southeast Asia’s largest bank, and EDBI, the corporate investment arm of Singapore’s Economic Development Board.

Xiaomi is bringing its smart home devices to the US — but still no phones yet

Xiaomi, the Chinese smartphone maker that’s looking to raise as much as $10 billion in a Hong Kong IPO, is continuing to grow its presence in the American market after it announced plans to bring its smart home products to the U.S..

The company is best known for its well-priced and quality smartphones, but Xiaomi offers hundreds of other products which range from battery chargers to smart lights, air filter units and even Segway. On the sidelines of Google I/O, the company quietly made a fairly significant double announcement: not only will it bring its smart home products to the U.S., but it is adding support for Google Assistant, too.

The first products heading Stateside include the Mi Bedside Lamp, Mi LED Smart Bulb and Mi Smart Plug, Xiaomi’s head of international Wan Xiang said, but you can expect plenty more to follow. Typically, Xiaomi sells to consumers in the U.S. via Amazon and also its Mi.com local store, so keep an eye out there.

Xiaomi just announced during #io8 that our smart home products will work with the Google Assistant. The initial selection of compatible products includes Mi Bedside Lamp, Mi LED Smart Bulb and Mi Smart Plug, which will be coming to the U.S soon! https://t.co/f65lj2jNej pic.twitter.com/nEXMiIyyZ8

— Wang Xiang (@XiangW_) May 10, 2018

Smartphones, however, are a different question.

Xiaomi CEO Lei Jun — who stands to become China’s richest man thanks to the IPO — previously said the company is looking to bring its signature phones to the U.S. by early 2019 at the latest.

There’s no mention of that in Xiaomi’s IPO prospectus, which instead talks of plans to move into more parts of Europe and double down on Russia and Southeast Asia. Indeed, earlier this week, Xiaomi announced plans to expand beyond Spain and into France and Italy in Europe, while it has also inked a carrier deal with Hutchinson that will go beyond those markets into the UK and other places.

You can expect that it will take its time in the U.S., particularly given the concerns around Chinese OEMs like Huawei — which has been blacklisted by carriers — and ZTE, which has had its telecom equipment business clamped down on by the U.S. government.

Hat tip Android Police

Job hunting service Glassdoor sold to Japan’s Recruit for $1.2 billion

U.S. job hunting service Glassdoor, which is best known for providing insight into company working cultures, has been acquired for $1.2 billion in cash by Recruit, a $39 billion Japanese corporate that specializes in HR and recruitment services.

The all-cash acquisition will see Glassdoor continue to maintain its brand, CEO Robert Hohman explained in a blog post.

“Our mission has been the same since day one: to help people everywhere find a job and company they love. That mission will not change as part of Recruit. Glassdoor will continue to operate as a distinct brand to fulfill this mission — and will be able to do so with greater speed and impact than we could achieve alone,” Hohman wrote.

Glassdoor raised a total of just over $200 million from investors, with its most recent round a $40 million Series H in March 2016. That last investment gave Glassdoor a valuation of around $1 billion. That’s not a huge amount more than what Recruit is paying, which suggests that the last couple of years haven’t been so spectacular for Glassdoor in terms of growth.

Nonetheless, this deal looks like a win for those backers, particularly the earlier stage investors such as Benchmark and Battery Ventures .

Ten-year-old Glassdoor says it is used by 59 million people each month, many of whom come to the service to read about how companies are rated by the people who work, or worked there. While it is headquartered in the U.S., Glassdoor says it has information on more than 770,000 companies across 190 countries worldwide, including 40 million reviews covering company culture, CEO ratings, salary information and more.

Glassdoor’s revenue comes from recruitment services, and it claims to work with some 7,000 employees and 40 percent of the Fortune 500.

Recruit may not be a well-known name in the U.S. but the Japanese firm is huge, and it is history as a purchaser of overseas businesses.

The firm — which was founded in 1960 — is listed on the Toyko Stock Exchange and it has 45,000 employees across 60 countries.

Beyond recruitment and HR services, it also operates in real estates, travel, dining and other segments. That’s reflected in its past acquisitions, which have included U.S. job sites Indeed.com (2012), Simply Hired (2016) and, in Europe, restaurant site Quandoo (2015)hair and beauty service Wahanda (2015) and education technology company Quipper (2015).

Southeast Asia’s ShopBack moves into personal finance with its first acquisition

Singapore-based e-commerce startup ShopBack came on the radar when it raised $25 million last November, and now the company is making its first acquisition.

ShopBack said today it has picked up Seedly, a fellow Singaporean startup that offers a personal finance service, in an undisclosed deal. The entire team will move over and Seedly will continue as a business under ShopBack’s management.

The ShopBack service is an e-commerce aggregator that helps online sellers reach customers and incentivizes consumers with cash-back rewards. Seedly, meanwhile, is designed to simplify finance for millennials and young people across Southeast Asia. It was founded two years ago and raised seed funding from East Ventures (also a ShopBack investor) and NUS Enterprise in 2016, it also graduated Singapore bank DBS’s “hotspot” pre-accelerator program.

The deal is a fairly rare example of a smaller startup in Southeast Asia being acquired by a larger one for more than just talent, and there seems to be plenty of potential synergies between the two services.

ShopBack aspires to have close touchpoints with how young consumers in Southeast Asia spend their money online, so helping them to manage it plays into that focus. Meanwhile, Southeast Asia isn’t blessed with many local consumer finance services — despite more than 330 million internet users — so the Seedly business can benefit from ShopBack’s regional presence for expansion.

The announcement of the deal comes 24 hours after ShopBack rival iPrice, which aggregates e-commerce in Southeast Asia, picked up a $4 million investment led by chat app company Line’s VC arm.

ShopBack has raised over $40 million to date from investors that include Credit Saison, AppWorks, Intouch, SoftBank Ventures Korea and Singtel Innov8.

Southeast Asia e-commerce startup iPrice raises $4M led by chat app Line’s VC arm

iPrice, a service that aggregates Southeast Asia’s e-commerce websites in a single destination, has pulled in new funding led by messaging app Line’s VC arm, Line Ventures.

The round is officially undisclosed, but TechCrunch understands from a source close to negotiations that it is worth around $4 million. Existing iPrice backers Cento Ventures (formerly known as Digital Media Partners) and Venturra Capital also took part in this round.

iPrice, which has its HQ in Malaysia, Kuala Lumpur, previously raised a $4 million Series A in late 2016. Today’s investment takes the startup to $9.7 million raised overall.

The company was started in 2015 in response to the growing number of e-commerce companies in Southeast Asia, and in particular the increasing number of vertical-specific options. Even though there are some giants, such as Alibaba’s Lazada, the region has a number of smaller players that can struggle for visibility. iPrice was initially a coupon site, before pivoting into an aggregation model which essentially acts as a destination for shoppers to then go on and purchase items from e-commerce retailers.

In a way, it is much like flight booking sites — such as Skyscanner — which ask a customer where they want to go before scouring the web for the best travel deals. iPrice does this for e-commerce in Southeast Asia. It hopes that simplifying things through a single destination portal can make it the go-to online buying site for the region, which now has over 330 million internet users — more than the population of the U.S. — according to a recent report co-authored by Google.

iPrice on the web, although its mobile app and mobile browser version are more used

Today, iPrice claims to offer over 500 million SKUs across Malaysia, Singapore, Indonesia, Philippines, Thailand, Vietnam, and Hong Kong. The company said that over 50 million people visited its site since December 2016, and this year alone it is aiming to grow to 150 million visitors.

The company said electronics has been a particular driver while, outside of working with e-commerce firms to drive business, it has developed a B2B business with media groups and brands, including Mediacorp in Singapore and Samsung in Indonesia, who pay to tailor its service. Last year, it developed an insightful report on the state of e-commerce in Southeast Asia.

The deal makes sense for Line Ventures because of the unique vantage point that iPrice occupies, while it also ties into parent company Line’s desire to go beyond being a messaging app and build out a mobile ecosystem. That’s seen it develop services such as food delivery, ride-hailing, payments and e-commerce, although it has struggled in the latter category. A relationship with iPrice might give it greater insight for future e-commerce ventures in Southeast Asia.

Xiaomi officially files for Hong Kong IPO to raise a reported $10 billion

Xiaomi’s much-speculated IPO process has kicked off officially after the Chinese smartphone giant filed to go public on the Hong Kong Stock Exchange.

The first draft of its filing does not include proposed financial details of its listing, but the South China Morning Post reports that the eight-year-old company is shooting to raise $10 billion at a valuation of $100 billion. Beyond the year’s largest IPO — and the world’s largest raise since Alibaba in New York in 2014 — the listing could make Xiaomi China’s third largest technology company based on market cap.

Xiaomi operates differently to most companies in that it sells smartphones and smart devices at waiver thin margins, relying on services and efficient use of components to pull in profit. Beyond phones, it operates its own retail business and internet services such as payments and streaming. That strategy — which CEO Lei Jun calls a “triathlon” — is focused on services for growth since Xiaomi has capped its maximum net profit for hardware at five percent.

Xiaomi said in its filing that it has over 190 million people using its MIUI version of Android — that’s a good insight into how many of its devices are in the market — while it has sold over 100 million connected devices, which include smartwatches, fitness bands, smart scales and more. The company claims its users are active on their phones for 4.5 hours per day, and that there are 1.4 million customers who own five or more connected devices.

The company is ranked fourth based on global smartphone shipments, according to analyst firm IDC, and it is one of the few OEMs to buck slowing sales in China.

The company’s financials are impressive.

The company booked sales of 114.6 billion RMB ($18 billion) in 2017, up from 68.4 billion RMB in 2016 and 66.8 billion in 2015.

Xiaomi posted a 43.9 billion RMB ($6.9 billion) loss in 2017 on account of issuing preferred shares to investors (54 billion RMB) but the growth story is healthy. Operating profit jumped to 12.2 billion RMB ($1.92 billion), up more than three-fold on the previous year.

Smartphones continue to represent the bulk of sales at 70 percent, with smart devices pulling in 20 percent more and services responsible for the remainder.

China is, as you’d expect, the primary revenue market but Xiaomi is increasingly less dependent on its homeland. For 2017 sales, China represented 72 percent, but it had been 94 percent and 87 percent, respectively, in 2015 and 2016. India is Xiaomi’s most successful overseas venture, having built the business to the number one smartphone firm based on market share, and Xiaomi is pledging to double down on other global areas.

Interestingly there’s no mention of expanding phone sales to the U.S., but Xiaomi has pledged to put 30 percent of its IPO towards growing its presence in Southeast Asia, Europe, Russia “other regions.” Currently, it said it sells products in 74 countries, that does include the U.S. where Xiaomi sells accessories and non-phone items.

Another 30 percent is earmarked for R&D and product development, while a further 30 percent will be invested in Xiaomi’s internet of things and smart product ecosystem. The remaining 10 percent is down for working capital.

Xiaomi isn’t disclosing the exact percentage stakes that its major investors hold, but CEO Lei Jun is believed to be one of the most significant shareholders. The IPO could make him China’s richest man, according to reports which suggest he controls a stake of over 75 percent.

Chinese authorities dish out $5M in fines for developers of PUBG hack software

There has long been speculation and evidence of cheating software for PlayerUnknown’s Battlegrounds (PUBG), but action is being taken to stamp it out. The makers of the smash-hit game have confirmed that they have worked with authorities in China who have dished out over $5 million in fines to at least 15 people caught developing hacks that help players cheat.

PUBG, in case you missed it, is one of the top-grossing games in the world this year. A shoot-up battle royale game that sees players battle to survive to the end, PUBG grossed $700 million in revenue via PC sales last year and that’s only increased in 2018 as the title landed on mobile. It’s particularly big in China where internet giant Tencent is the publishing partner.

That Tencent link might have proved useful, as Bluehole — the company behind PUBG — revealed in a statement that Chinese authorities have helped it clamp down on hacking programs, handing out the huge number of fines in the process:

Here’s some translated information from the local authorities we worked with on this case:

“15 major suspects including “OMG”, “FL”, “火狐”, “须弥” and “炎黄” were arrested for developing hack programs, hosting marketplaces for hack programs, and brokering transactions. Currently the suspects have been fined approximately 30mil RNB ($5.1mil USD). Other suspects related to this case are still being investigated.

While the programs were being developed in China and there were users there too, it isn’t clear whether that reach extended to gamers in the U.S. and other countries.

Beyond just cheating, there is also a significant risk for those who use the hacked software.

Bluehole said it found evidence that the programs were used by their developers to infect host PCs in order to “control users’ PC, scan their data, and extract information illegally.” Some, it is said, used Trojan Horse software to steal user information — that could mean information from when they shop online (like credit card numbers), the content of emails, and more.

Y Combinator is going after Chinese startups with its first official event in China

High-profile U.S. startup accelerator Y Combinator is making a push to bring more China-based startups into its program after it announced its first official event in the country.

YC has made a push to include startups from outside of North America in recent years. That has seen it bring in companies from the likes of India, Southeast Asia and Africa, but China remains underrepresented. According to YC’s own data, fewer than 10 Chinese companies have passed through its corridors. YC counts over 1,400 graduates.

“Startup School Beijing” is scheduled for May 19 in the Chinese capital at Tsinghua University. The event will be free to attend — though attendees might apply for a ticket — with the goal of showing the benefits of participation in its U.S. program.

To help make its case, the organization has pulled in star graduates like Airbnb and Stripe while its president Sam Altman himself is scheduled to appear.

The event will include sessions with graduates, YC partners and “live on-stage office hours.” That’ll see three companies picked from the audience to get advice and tips from the attending partners, as happens in the program. Sessions will be in both English and Chinese with live translations available.

YC partner Eric Migicovsky, who founded Pebble, is leading the event, which will include the following speakers:

In addition to helping U.S. hardware founders, Migicovsky was brought on specifically to make inroads into China and he is optimistic that there is strong demand.

“We’re hosting Startup School in Beijing to meet local entrepreneurs and start a dialogue about how YC can help,” he told TechCrunch. “The event and the founders we meet will help to inform our strategy going forward. Naturally, we hope to find Chinese startups to apply to our core Y Combinator program in Silicon Valley.”

YC officially announced the event today but the organization’s brand is so strong that word already got out in local media once it began sending out invitations, as our Chinese partner Technode reported.

Singapore orders Grab to delay closing Uber app for an additional 3 weeks

Grab’s plan to shutter Uber’s app quickly following its merger deal in Southeast Asia has hit another snag in Singapore where the ride-hailing firm has been forced to delay closing its rival’s service until May 7.

This is the second time that Grab has pushed back the removal of Uber’s app in Singapore, which was initially scheduled for closure on April 8 but was given an additional week as part of an investigation from the Competition and Consumer Commission of Singapore (CCCS) which is assessing the merger deal. This new May 7 date is also down to the CCCS probe, with the commission issuing an ‘Interim Measures Directions’ (IMD) to Grab in order to “ensure that the market remains open and contestable.”

Those directives — which Grab said it has had a hand in formulating — include measures that prevent Grab from taking Uber’s operational data on customers and their trip history, prevent lock-in and exclusivity options for drivers that join Grab or move over from Uber’s Lion City Rental entity, and end any exclusive deals Grab has with Singapore taxi firms.

The CCCS has also ruled that Grab and the Uber service must maintain prices for passengers and drivers, and remind both that their migration to the Grab platform is optional.

The ruling impacts the Singapore market only, which is where Grab is registered. The Uber app has already been closed in six other markets where it operated in Southeast Asia, while the UberEats service will fold into GrabEats by the end of May. Elsewhere, Uber’s ride-hailing service is scheduled to be closed on April 16 in the Philippines where, like Singapore, the regulator had handed down a week-long extension while it looked into the merger deal.

In both extensions, Grab is the one footing the bill for the continued operation of Uber since the U.S. firm has already exited these markets, in terms of funding and staffing, Uber’s head of operations for Asia Pacific has said.

The CCCS previously said that it has “reasonable grounds” to suspect that the Grab-Uber deal may fall foul of section 54 of Singapore’s Competition Act. The Philippine Competition Commission is still looking into the and there’s no word on whether it will follow the CCCS’ lead and force Grab to keep the Uber app open for a longer period.

The Singapore ruling is a blow for Grab which set out an aggressive two-week timeframe for closing Uber in Southeast Asia, despite not contacting regulators in advance of the deal which sees it pick up a dominant slice of app-based taxi books across eight countries in Southeast Asia. The key question for regulators, however, appears to be whether app-based hailing is a market unto itself, or whether it is part of the wider taxi market.

If regulators chose the former option, then Uber-Grab almost certainly creates a monopoly, but since consumers can also hail apps in more traditional ways — e.g. on the street — or via taxi companies’ dedicated apps — as is the case in Singapore — then the deal hasn’t created a dominant player. It’s certainly a tricky one to assess.

Meanwhile, here is Grab’s statement on the Uber app extension and the IMD:

We appreciate that CCCS accepted our alternative interim measures. On CCCS’ request, we have agreed to extend the Uber app to 7 May to allow for a smoother transition time for riders and drivers. We trust that the CCCS’ review takes into account a dynamic industry that is constantly evolving, highly competitive, and being disrupted by technology and new services. The interim measures should not have the unintended effect of hampering competition and restricting businesses that have already been investing in the country over the years.

Grab notes the CCCS’ objective of giving drivers choice, and is fully supportive of extending our platform to all taxi drivers, including ComfortDelGro drivers who are still constrained from picking up JustGrab jobs. Grab entered Singapore five years ago with minimal resources and the goal of enabling all taxi drivers to earn a better living using our platform. We recognise CCCS’ commitment to preserving competition; all companies – no matter big or small, digital or traditional – are capable of innovation in a free market.

We’re proud to headquarter in Singapore, where the country’s free market economy and policies enable businesses to compete and innovate vigorously to solve customer needs. We trust the government will continue to be pro-business in providing a path for startups to flourish and become sustainable businesses. We will work within the set constraints and continue to focus on building better products to compete, ensuring fairness for passengers and drivers, and cultivating the local tech talent pool through our regional R&D centre in Singapore.

WeWork confirms deal to buy Naked Hub, one of its main competitors in China

WeWork is buying up one of its largest competitors in China after it announced a deal to acquire Naked Hub.

The deal was widely reported by Chinese media yesterday, but WeWork has now confirmed it through a blog post from its CEO Adam Neumann. Terms of the transaction are not disclosed but Bloomberg reported that it is worth around $400 million.

Naked Hub is an offshoot of China-based luxury resort company Naked Group that was started in 2015 by Grant Horsfield and Delphine Yip-Horsfield. The company is primarily anchored in China, with most of its locations in Beijing and Shanghai, but it has expanded into Australia, Hong Kong and Vietnam. All told, it claims to have 10,000 members across its 24 office locations.

Even though a deal to merge with Singapore-based JustCo was called off, Naked Hub had emerged as one of WeWork’s fiercest competitors in China with the ambition to continue that battle in Southeast Asia and other markets, as I wrote last year.

WeWork isn’t commenting at this point about how it plans to integrate the two brands, but its CEO Neumann paid tribute to the Naked Hub business.

“We have found an equal who shares our thinking about the importance of space, community, design, culture, and technology. Together, I believe we will have a profound impact in helping businesses across China grow, scale, and succeed,” he wrote.

“China-born naked Hub and WeWork may come from vastly different backgrounds, but there is more that binds us than separates us. The values we share toward creating a vibrant community for our members by using design, technology, and hospitality are core to how both companies are successful,” said Horsfield, Naked Group’s founder and chairman.

Naked Hub may be a growing threat to WeWork China, but it is far from the only major competitor. Unicorn Ucommune — which changed its name from URwork following a lawsuit from WeWork — is perhaps the largest profile Chinese challenger.

WeWork launched in China in 2016 via Shanghai. Today it said it has 13 locations in Greater China with plans to increase that to more than 40 by the end of this year. That’s a move that it said will quadruple its membership numbers in China from 10,000 to 40,000.

The deal is WeWork’s second acquisition of a competitor in Asia, its first being a deal to buy SpaceMob, a then 1.5-year-old company in Singapore, last year.

The company has been lining its pockets to fuel a big push into Asia.

Last year, the firm span out a WeWork China entity backed by $500 million from investors, while capital also went to WeWork Japan — a unit that investor SoftBank owns half of — and WeWork Pacific, its business focused on Southeast Asia and other parts of the region which also got a $500 million to spend. All of that capital was part of a $4.4 billion investment round in WeWork from SoftBank.

China’s SenseTime, the world’s highest valued AI startup, raises $600M

The future of artificial intelligence (AI), the technology that is seen as potentially impacting almost every industry on the planet, is widely acknowledged to be a war between tech firms in America and China.

In a notable side-note to that battle, China now has the world’s highest-valued AI startup after SenseTime, a company founded in 2014, announced a $600 million Series C investment round. A source with knowledge of discussions told TechCrunch that the round values the company at over $4.5 billion, while it is also raising an extension to this round. That marks a hefty increase on the company’s most recent $1.5 billion valuation when it raised a $410 million Series B last year.

SenseTime CEO Li Xu said the company plans to use the capital to expand its presence overseas and “widen the scope for more industrial application of AI.”

Beyond the high figures involved — the round is a record fundraising for an AI company worldwide — SenseTime’s investment efforts are notable because of the names that have backed it.

Principally that’s Alibaba, the $429 billion e-commerce giant, which led this Series C round and is reportedly now SenseTime’s largest single investor, according to Bloomberg.

Beyond that, U.S. chipmaker giant Qualcomm signed up last year — seemingly as an early participant in this round — while Singapore’s sovereign fund Temasek and China’s largest electronics retailer Suning, which has taken investment from Alibaba, entered the round as new backers. Indeed, Suning’s push to for its store of the future, which was started by that Alibaba investment, uses SenseTime to power its facial recognition payment at staff-less checkouts and also for customer analysis using big data systems.

“SenseTime is doing pioneering work in artificial intelligence. We are especially impressed by their R&D capabilities in deep learning and visual computing. Our business at Alibaba is already seeing tangible benefits from our investments in AI and we are committed to further investment,” said Joe Tsai, Alibaba’s executive vice chairman.

SenseTime said it has more than 400 customers across a range of verticals including fintech, automotive, fintech, smartphones, smart city development and more that include Honda, Nvidia, China’s UnionPay, Weibo, China Merchants Bank, Huawei, Oppo, Vivo and Xiaomi.

Perhaps its most visible partner is the Chinese government, which uses its systems for its national surveillance system. SenseTime process data captured by China’s 170 million CCTV cameras and newer systems which include smart glasses worn by police offers on the street.

China has placed vast emphasis on tech development, with AI one of its key flagposts.

A government program aims to make the country the world leader in AI technology by 2030, the New York Times reported, by which time it is estimated that the industry could be worth some $150 billion per year. SenseTime’s continued development fees directly into that ambition.

“AI is really changing every profession and every industry. There’s almost nothing that won’t be touched by AI,” investor Kai-Fu Lee, formerly the head of Google in China, said at a TechCrunch event back in 2016.

Even two years ago, the potential was evident, with Lee explaining that teaching, medicine and healthcare were obvious areas for disruption.

Perhaps the main difference between the state of AI development in the U.S. and China is that, in America, much of the technology is being developed in big tech firms like Amazon and Google. In China, however, companies like SenseTime and its rival Megvii (which develops the Face++ platform) are independent entities that operate with the financial backing of giants like Alibaba.

Crypto exchange Coincheck, still recovering from $400M hack, sold to online brokerage

Japanese crypto exchange Coincheck, made famously after hackers made off with more than $400 million in digital token NEM, has been acquired.

The company announced today (in Japanese) that Tokyo-based online brokerage Monex Group will buy it in full. The transaction will see Coincheck become a wholly owned subsidiary of Monex.

The deal is a reaction of the NEM hack, with Coincheck recognizing that it needs to strengthen its management system and organization as a whole. That’s in direct response to Japan’s Financial Services Agency, which requested that the exchange make changes in the wake of the January hack — which saw Coincheck reimburse affected users.

Japan is the world’s first market to regulate cryptocurrencies, and the country has given its approval to over 26 exchanges that operate there, both locally and international. The Coincheck incident seems to serve as a wakeup call, however, and authorities clamped down on six others who were told to beef up their organizations to prevent more scandals or security issues. Added that, a number of regulated exchanges have announced plans to team up to create a self-regulatory body to add further scrutiny.

Editor’s note: The author owns a small amount of cryptocurrency. Enough to gain an understanding, not enough to change a life.

Chinese bike-sharing pioneer Mobike sold to ambitious Meituan Dianping for $2.7B

Meituan Dianping, the fast-growing Chinese firm valued at $30 billion, is buying Mobike, a Chinese startup that helped pioneer bike-sharing services worldwide, in a major piece of consolidation.

The deal was heavy rumored yesterday and TechCrunch has today confirmed with two sources that it has been concluded at a price of $2.7 billion.

TechCrunch understands that the deal will be officially announced today, but already key personnel have let the cat out of the bag on social media. Mobike President and co-founder Hu Weiwei posted a cryptic WeChat message about “a new beginning,” as our Chinese partner Technode noted, while SCMP reported that Meituan CEO Wang Xing said the company will “build a new future with Mobike.”

Representatives from Meituan Dianping and Mobike did not respond to requests for comment.

Meituan Dianping is best known for food deliveries via electric bike, but that is just one part of its platform which connects local retailers to consumers via a so-called offline to online, or O2O, platform. The company was formed through a multi-billion dollar merger between China’s largest group buying services in 2015 and it has since raised boat-loads of capital from investors, including $4 billion last October, to expand into new areas.

Transportation is a major focus for Meituan Dianping. The firm began offering ride-hailing services earlier this year and it has invested in Go-Jek in Southeast Asia, so adding Mobike to its stables makes perfect sense on that front, not to mention potential synergies with its core delivery business, too.

These new forays might lead to an IPO. A host of Chinese firms have jumped into the public markets lately, and Bloomberg recently reported that Meituan Dianping hopes to join them with a listing that could value it as high as $60 billion.

The deal will also be a major win for Tencent against its long-time foe Alibaba.

Tencent is an investor in Meituan Dianping and Mobike, and unifying the two could help Meituan Dianping battle Ele.me, the $9.6 billion delivery service that Alibaba just bought in full last week. Indeed, Caixin reports that Tencent CEO Pony Ma himself brokered the deal.

Mobike and Ofo pioneered bike-sharing in China and the rest of the world. Mobike raised nearly $1 billion from investors that, Tencent aside, include Temasek, Foxconn, Hillhouse Capital and Vertex Ventures.

Mobike has been an investment and acquisition target for many.

Last year, a deal to merge with close rival Ofo was widely speculated. Ultimately, reports suggest that it fell through out of fear that Didi Chuxing, the ride-hailing giant that invested in Ofo, would become too powerful if the two bike-sharing firms tied up. That theory seemed to have its merits after Didi rolled out a hostile bike-sharing platform that sits inside its hugely popular ride-hailing app and is aimed at extinguishing the threat of Ofo, Mobike and others by simply turning them into features rather than fully-fledged rivals.

Insider raises $11M to help internet marketers do better internet marketing

Insider, a service that aims to help brands go about their internet marketing with greater efficiency and success, has landed an $11 million investment led by Sequoia India.

The startup is originally from Turkey where it began life in 2012 as a platform that helped optimize online marketing campaigns. Now at 240 staff across 16 markets, it recently moved HQ to Singapore and today it launches its new ‘Growth Management Platform.’

Those three words together don’t really tell much about Insider’s new product, the aim of which is to help brands, marketers and website owners generally serve dynamic content that is tailored to their visitors. The idea according to Insider CEO Hande Cilingir — who is one of six co-founders of the business — is to give a visitor the most optimized version of the site based on who they are. In many ways, it is similar to LiftIgniter, the U.S. startup that raised $6.4 million last year and was a finalist at TechCrunch Disrupt London 2016.

Insider goes about that task by collecting pieces of data about the visitor — the 90-odd parameters include obvious things include location, the website they are visiting from, the device they are on, etc — all of which is used to showcase the most relevant content or information to ensure that this visitor gets the best experience. Insider said it uses artificial intelligence and machine learning to boost its model, too, helping match potential similarities between users to build a wider and more intelligent picture about the type of people visiting a website.

The goal is really quite simple: keep people more engaged on a website and help website owners with their call to action, whatever that may be. Insider believes it can help lower customer acquisition costs through increased efficiency, while also boost existing conversion rates through customization.

Insider’s six co-founders

In the case of internet marketing, it is most often to e-commerce or other types of purchases.

That’s strongly reflected in the customer base that Insider claims. The company has put a big focus on Asia’s growing internet market — hence the move to Singapore — and publicly-announced clients for the startup include Singapore Airlines, Indonesian e-commerce firm Tokopedia, UNIQLO, Samsung, McDonald’s, Nissan and CNN.

Sequoia could help open doors, too, since the firm has invested in major consumer names in Asia such as Go-Jek, Carousell and Zomato.

“We were impressed with Insider’s AI platform, and the profound impact on their customer’s key metrics: lower customer acquisition costs, higher retention, faster growth. These customers quickly started to use more and more products from the Insider platform. That has put Insider on a fast growth trajectory, especially in Asia,” said Pieter Kemps, principal at Sequoia India.

Cilingir said the new funds will go towards expanding Insider’s sales team and hiring data scientists and machine learning engineers to develop the platform. The headquarters may be in Singapore now, but Istanbul remains the base for product development while the company’s core tech team is located in Ukraine.

The team is firmly focused on developing its business in Southeast Asia, she added, but it is also eying potential expansions with China and the U.S. among the more audacious new markets that it is considering at this point.

Already, Cilingir said the startup is on track to hit $100 million in annual recurring revenue by the end of 2018 while it is bullish that there’s more to come. Marketing giant Group M predicts that this is the year that online advertising spend overtakes TV for the first time in 17 countries worldwide and she’s optimistic that there will be a greater need for Insider’s products among brands and major consumer names worldwide.

Alongside Sequoia, Insider said that its existing investors Wamda Capital and Dogan Group also took part in the newest round, which is its Series B. The company previously raised a $2.2 million Series A in September 2016 to fund its initial foray into emerging markets.

Uber CEO says there will be no more global exit deals

Uber has exited three global markets by selling to rivals, but enough is enough after its deal with Grab so says CEO Dara Khosrowshahi.

Following today’s announcement with Grab which sees Uber leave Southeast Asia hot on the heels of exits in China (2016) and Russia (2017), Khosrowshahi told employees that there will be no more repeats under his leadership.

It is fair to ask whether consolidation is now the strategy of the day, given this is the third deal of its kind, from China to Russia and now Southeast Asia. The answer is no.

One of the potential dangers of our global strategy is that we take on too many battles across too many fronts and with too many competitors. This transaction now puts us in a position to compete with real focus and weight in the core markets where we operate, while giving us valuable and growing equity stakes in a number of big and important markets where we don’t.

Rather that deals, the Uber CEO said he plans to develop the business organically via “growth that comes from building the best products, services and technology in the world.”

Since SoftBank’s investment in Uber closed in January there has been heightened speculation about potential consolidations in emerging markets, where the ride-hailing business is further from profitability than more developed markets like Europe and the U.S.. Indeed, SoftBank itself has called for Uber to focus on more financially-sustaining regions of the world.

Southeast Asia, where SoftBank has backed Grab, was a prime candidate for consolidation while India, where SoftBank-backed Ola competes with Grab, is another.

Just weeks ago, Khosrowshahi said Uber would invest to compete aggressively in Southeast Asia and yet this deal has been completed. Time will tell if this new denial of future deals will ring true, or whether SoftBank and others seeking consolidation will ring out.

Kyklo is bringing the billion-dollar electromechanical industry into digital sales

The electromechanical industry may not be the kind of sexy tech that you’ll regularly read about in TechCrunch, but we like solutions to problems, and that is why I am about to write about a company in the aforementioned industry. Add in that the startup is based in Asia — Thailand, to be precise — and we have the recipe for a young company to keep an eye on.

Kyklo is the company and it is aimed at bringing the electromechanical space, which is worth over $1 trillion per year across 100,000s of distributors and retailers worldwide, into the digital era. The company operates a service that brings sales channels, inventory and networks online to replace the existing system, which is largely offline.

As of now, for example, if an OEM is selling air conditioning units for a new building development — the industry touches 5-20 percent of every new building via electrical equipment — the process will typically be handled by a reseller who presents a paper-based inventory to the buyer. Kyklo is proposing to take things online by allowing OEMs to lay out their inventory in a web-based shop — like Shopify — which can then be used by the reseller to solicit sales.

The idea may seem elementary, but the benefits go beyond ease of use — a website obviously has plenty of benefits over a physical sales catalog — including increased visibility to the OEM, who previously relied on the reseller for sales data. Resellers themselves also have a more dynamic catalog of products to share with prospective sales leads, which is also designed to feature highly in search engine rankings to help bring in inbound sales leads.

Kyklo began as a Shopify-like solution when it was founded in 2015 by two former employees of Schneider Electric, the $50-billion electric and energy company that is listed in Paris, France. Over the past year, however, the startup refocused into a sales lead and management tool for both OEMs and resellers.

CEO Remi Ducrocq — who started Kyklo with fellow co-founder and CTO Fabien Legouic — told TechCrunch that there was an expectation that simply by launching a store sales leads would land. While Kyklo does optimize search ranking, it works best as an aid for teams by helping coordinate sales leads, giving greater transparency on data — for future sales predictions — making it easy to add new products quickly, and automating much of the process for repeat customers.

Kyklo CEO Remi Ducrocq and CTO Fabien Legouic (left and right) both formerly worked for Schneider Electric

Rather than spending time requests from existing customers with phone calls and emails, resellers can simply provide a link to the catalog and enable customers to handle the re-purchasing process by themselves. That frees up resources to chase new sales and more.

“When we pitch distributors on why they should digitize their sales operations, it is first about how you get your existing customers online. So you shift your business from offline to online and by doing so you’ll get better satisfaction and you’ll be able to saturate your customer base,” Ducrocq said, pointing out that the service has helped some customers add 20 percent more sales from existing customers.

“Considering a distributor has 10 sales guys covering 1,000 customers, the truth is they only spend time with 50 guys who do 80 percent of the orders,” Ducrocq added. “On existing customers, a lot of the work is really admin [so] that’s something you can take off by making it digital.”

Kyklo’s customer base includes Schneider Electric and Thailand-based Interlink, the latter of which told TechCrunch in a statement that it grew revenue from its online business five-fold “in a matter of months” after coming on the Kyklo platform.

The benefit for OEMs is obvious, but initially some resellers were initially unsure of allowing a third-party into the relationship with their supplier (OEM). Kyklo CEO Ducrocq said his company has no interest in entering the reseller space. In fact, it has field agents who accompany resellers to meetings with their major buyers to help them come aboard while it jointly works on data and statistics to help reseller teams target new sales opportunities.

While it is sticking firmly to its position in the sales cycle, the startup does, however, have designs on international expansion. Right now, has customers in seven markets in Asia — Ducrocq is half-French, half-Thai hence the initial location in Bangkok — but already it is casting eyes on the European and North American markets.

U.S.-based Handshake, a B2B sales platform that has raised over $20 million from investors, is perhaps one of the most notable competitors it would come up against, but Kyklo believes its focus on the electromechanical space can help it conquer its niche. The startup is also looking to expand its relationship with existing global customers who it services in Asia to cover new markets that will give it a rolling start to its expansions.

“Right now we’re looking at which two countries we will do in Europe, and where we will go in the U.S.,” Ducrocq said.

In order to aid that expansion, Kyklo has raised funding from investors that include Singapore-based duo SeedPlus and Wavemaker Partners. Ducrocq declined to provide financial details of the round, while he also declined to give financial details on Kyklo’s business.

The company currently has 40 staff in its Bangkok HQ, with a number of remote business development and sales executives. While it plans to increase the number of staff it has outside of Thailand, there is no plan to relocate its main office from Bangkok.

The Kyklo office in Bangkok

Alibaba doubles down on Lazada with fresh $2B investment and new CEO

Alibaba is increasing its control of Lazada, its e-commerce marketplace in Southeast Asia it acquired control of in 2016, after it injected another $2 billion into the business and replaced its CEO with a long-standing Alibaba executive.

Alibaba’s first investment came in April 2016 when it bought 51 percent of Lazada for $1 billion, and it added another $1 billion last summer to increase its equity to around 83 percent. With today’s news, Alibaba has invested $4 billion to date which it said will “accelerate the growth plans” and help further tie the Lazada business into Alibaba’s core e-commerce service.

There’s already been plenty of evidence of increased ties between Alibaba and Lazada. The latter began offering products from Alibaba’s Taobao marketplace across Southeast Asia last year, and Alibaba has replaced Lazada’s tech team leadership with executives of its own. The latest shakeup is the appointment of Lucy Peng as Lazada’s new CEO to replace Max Bittner, who was installed by former owner Rocket Internet back in 2012.

Peng, who is one of Alibaba’s original 12 founders, has been Chairwoman of Lazada and is executive chairman of Ant Financial, Alibaba’s fintech affiliate company. Bittner will remain involved as “senior advisor to Alibaba Group” and apparently involved in future strategy, including further international expansion opportunities.

Lazada has progressed significantly since Alibaba’s first investment — which came at a time when the business had been close to running out of money — but the reality in Southeast Asia is that e-commerce in the region is a loss-making industry with plenty of competition.

Amazon entered the foray last year, but it remains only in Singapore, while Shopee is a two-year-old entrant bankrolled by Sea, formerly Garena, which raised over $1 billion in a U.S. IPO last year.

Alibaba hasn’t just limited its Southeast Asia approach to backing Lazada. The firm also invested $1.1 billion in Tokopedia which competes with Lazada in Indonesia, Southeast Asia’s largest economy and the world’s fourth most populous country.

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Alibaba invests another $1.3 billion into its offline retail strategy

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Toyota invests $69M in Japanese Uber rival backed by the taxi industry

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Kazuo Hirai is standing down as Sony CEO

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