News Wrap: India’s Shopclues Gains Unicorn Status, Uber China Speeds Up, Beijing To LA Gaming Deal
Indian e-commerce startup Shopclues has closed a Series D round of funding, valuing the startup at $1.1 billion post-money. Singapore sovereign wealth fund GIC (a backer of Alibaba and JD.com) led the round, with existing investors Nexus Venture Partners and Tiger Global Management. Shopclues’ valuation represents a three-fold increase since its $100 million funding in January 2015 at a $350 million valuation.
Founded by Silicon Valley-based entrepreneurs in 2011, the startup is the seventh Indian startup to reach $1 billion in valuation — and the first to do so with a female co-founder, Radhika Ghai Aggarwal, at the helm. The Gurgaon-based company is reaching for profitability and within a few years, an IPO, leaving behind the insider trading controversy of 2013 by its founder, a former Wall Street analyst. The new funds at Shopclues are earmarked for branding, advertising, technology, and acquiring smaller companies.
Shopclues joins the growing ranks of several highly valued Indian e-commerce startups, among them $3.2 billion-funded Flipkart and $1.5-billion funded Snapdeal, as well as Alibaba-backed Paytm. The market is hot: a recent report by Merrill Lynch estimates that the total value of goods sold online in India will grow to $220 billion by 2025, up from roughly $11 billion in 2015.
Flipkart and Snapdeal make most of their money selling smartphones and other electronics at discounts and burning through cash to acquire market share. In contrast, Shopclues has carved out a retail niche by selling low-cost items such as flyswatters, plastic bowls, and women’s belts to price-conscious consumers in smaller cities and villages. Shopclues also does not carry its own inventory. Gross merchandise volumes (GMV) have grown more than four times since January 2015 for Shopclues, which currently ships some 3.5 million items each month.
HNA Group Leads New Funding For Uber China, Valued at $7B
Uber China, Uber’s independent operating unit in China that launched in 2013, has raised a Series B from local investors to fund its fierce ongoing battle with local rival Didi Kuaidi. The consortium of backers, led by HNA Group (operator of China’s 4th large airline, Hainan Airlines), includes China Life Insurance, China Taiping Insurance, and investment bank Citic Securities. The funding amount is undisclosed, though the new funds add to the $1.2 billion Uber China previously raised from Chinese investors, including search giant Baidu. The ride-hailing app is now valued at $7 billion.
Hainan Airline passengers will be able to book Uber at a discount, through promotions offered globally — a strategy by Uber that falls in line with forging ties with consumer partners and influential Chinese companies, especially those with government connections.
Competition in the ride hailing app market remains fierce in China. Uber lags behind Alibaba- and Tencent-backed market leader Didi Kuaid, which has raised $4 billion.
Uber is forging ahead nonetheless, claiming that 30 percent of its trips take place in China, and that that the world’s most populous country could become its largest market in 2016.
Grindr Matches with Chinese Gaming Billionaire
Chinese game developer Beijing Kunlun Tech Company has acquired a 60 percent stake in Los Angeles-based gay social networking app Grindr, in an illustration of well-resourced Chinese Internet companies taking strategic stakes in hot apps overseas. The $93 million deal values the six-year-old startup, which has will retain its current team and operating structure, at $155 million.
Beijing Kunlun, which had previously partnered with Rovio to bring Angry Birds to China, listed in Shenzhen during 2015. Its chairman Zhou Yahui, worth some $1.7 billion, has executed seven deals for Kunlun since April 2015. The partnership with Grindr helps the gaming company to further expand beyond its core assets and markets. Kunlun claims that about 70-80 percent of its current business is in markets outside of China.
Grindr is recognized as a mainstay of gay hookup and dating culture internationally, claiming 2 million daily visitors who spend an average of 54 minutes in the app, as well as 2014 revenue of about $32 million. Grindr, which has never taken outside investment before now, bills itself as a lifestyle company.
Grindr’s biggest competitor in the Chinese market, if and when it enters the market, is gay app BlueD, funded by DCM, as well as BlueD’s rival Zank. The number of apps for the gay market in China has continued to increase since the Chinese Psychiatric Association officially de-classified being gay as a psychiatric disorder in 2001.