Dragon Power: Toutiao Set To Score $2B, Douban Heads For IPO, Tencent Inks 2 More US Deals

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Toutiao, an innovative news aggregator that relies on data mining to deliver a personalized news feed, is set to score approximately $2 billion at a valuation north of $20 billion, led by General Atlantic. The fast-growing Chinese startup claims to have reached 600 million users since its founding in 2012, and is already being described as one of the next generation BAT (Baidu, Alibaba, Tencent) – now TMD for Toutiao, Meituan-Dianping and Didi.
This new capital infusion for Toutiao is on top of a $1 billion round led by Sequoia Capital China and CCB International in April at an $11 billion valuation.
Like several other leading Chinese tech brands, the Beijing-based Toutiao has been expanding globally, acquiring video sharing platform Flipagram in the U.S. and leading a $25 million investment in Indian news aggregating app Dailyhunt. Its earlier backers are DST Global founder Yuri Milner and SIG China, dating back to 2012.

Douban, a popular Chinese social networking service with movie and book reviews, is making plans to go public overseas. Douban, which has struggled to reach profitability, last raised funds in 2011, when Bertelsmann Asia Investment Fund, Trustbridge Partners and Sequoia Capital invested $50 million in a Series C. Its earliest backer is Ceyuan Ventures, in a first round of $2 million in 2006 – one year after its start in Beijing — followed by $7 million in 2010. News of the potential IPO came from a leaked internal memo in Chinese from founder and CEO Yang Bo, reported by TechNode.

Making another two investments in the U.S., Tencent along with Amazon’s Alexa Fund are behind a $300 million funding of Smartphone startup Essential, founded by Android co-creator Andy Rubin.  And, Tencent is joining in a $50 million, Series A funding of Karius, a Redwood City-based life sciences company with technology for testing infectious diseases without the usual trial and error tests. The deal was co-led by Lightspeed Venture Partners and venture fund Data Collective, with participation by Khosla Ventures and earlier backers Innovation Endeavors and Spectrum 28.
Tencent also made a strategic investment of $23 million, into U.K. game developer Frontier Developments.

Tmall, Alibaba’s business-to-customer e-commerce platform, has invested $300 million in Yiguo.com, an online fresh food vendor. This is Alibaba’s fourth capital backing of the online grocery marketplace, as it leverages Yiguo’s delivery services across 200 Chinese cities, to expand and improve logistics for its Tmall supermarket division.

Baibu, a B2B mobile e-commerce platform for China’s textile industry, has secured $24 million in new Series B funding. Leading the round was Shanghai-based early stage VC fund Yunqi Partners, with Chengwei Capital and Sequoia-connected Source Code Capital.

Chinese ride-hailing giant Didi struck another blow against Uber by investing an undisclosed amount in Careem, Uber’s rival in the Middle East and North Africa. Didi has now invested in India’s Ola, Southeast Asia’s Grab, 99 in Brazil, and Taxify in Europe.

China’s bike sharing startup Ofo is partnering with Softbank to enter Japan as talks continue over a $1 billion new investment led by Softbank. The fast-expanding Ofo, which claims 100 million registered users and 8 million bikes, is backed with $1 billion from such powers as Alibaba, Didi Chuxing and DST Global.

Beijing NED+AR Display Technology, a Chinese maker of optical modules for AR glasses, has drawn in seed funding in RMB from Lenovo Capital and Incubator Group.

INDIA
Flipkart‘s $2.5 billion deal from Japan’s tech investor Softbank deal signals a new era for Indian startups that are increasingly attracting foreign investment. The deal comes just a few months after a $1.4 billion investment by Tencent, eBay and Microsoft. Forbes

FUNDS
Chinese Internet portal Sina Corp. is forming a $500 million VC fund to invest in Chinese fintech companies in insurance and wealth management areas. Sina’s jump into finance lags behind the majors: Alibaba, Tencent and Baidu.

M&A / Partnerships
Drone maker DJI is teaming up with its former competitor 3DR, an American drone start-up, to launch an enterprise drone platform. Meanwhile, the U.S. Army is banning use of the Chinese-made DJI drones from its units, citing “cyber vulnerabilities.”

China conglomerate HNA keeps pushing on, buying a majority 82.5% stake in Germany’s Frankfurt-Hahn airport despite pressure on debt and regulatory actions. Meanwhile, HNA is awaiting approval to acquire SkyBridge Capital, a New York-based investment fund that was partly owned by former White House communications director Anthony Scaramucci. And, HNA’s bid to buy Rezidor Hotel Group is being held by China regulators.

Baidu is reported by Bloomberg to be in talks to sell its money-losing food delivery service at a discounted price to Ele.me, a competitor backed by Alibaba.

Chinese private equity firm GSR Capital has agreed to buy Nissan Motor Co.’s electric battery business for an undisclosed amount. The deal would include manufacturing facilities in Japan, the UK and Tennessee.

NOTEWORTHY
How Baidu will win China’s AI race: and maybe the world’s, based on an interview by Wired with COO Qi Lu.

Along those lines, Anthony Mullen, a director of research at analyst firm Gartner, shares in Verge that AI is a two-horse race between China and the U.S.

Xiaomi in once again world’s biggest smartphone brand, but could it go further?  Forbes

Facebook is trying a different way into China after years of being blocked, by releasing in stealth (no longer, thanks to the  NYT!) a new local app that is a lot like Moments and is cleverly disguised as Colorful Balloons.

Beijing-based VR film startup Sandman Studios highlighted the potential of VR content when its sci-fi animation clip Free Whale scored as one of the finalists in the Venice International Film Festival, in the first-ever VR competition for films. The competition featured 22 films from around the world, three of them from mainland China.


Silicon Dragon News Digest
Edited by Rebecca A. Fannin with contributions from Shuonan Chen