Sogou Gets Set For Nasdaq, HK Bike-Sharing Startup Snares $9M, Vertex Aces WeWork-Spacemob Deal

FacebookTwitterGoogle+LinkedInEmailPrint

Silicon Dragon Weekly News Digest: August 5, 2017

IPOs

Sogu IPO Sogu founder
Sogou
, China’s fast-growing, second-largest mobile search provider, gets set to kick off a Nasdaq IPO. The subsidiary of Chinese Internet pioneer Sohu aims to invest more in artificial intelligence and catch up with its rival Baidu in artificial intelligence, according to CEO Wang Xiaochuan.   The IPO loops in Tencent, Sogou’s largest shareholder through a 2013 merger with Tencent search business Soso and subsequent investment that raised its stake in Sogou to 40 percent. It was 12 years ago, August 2005, that Baidu went public on Nasdaq, back when AI was not so hot as it is now and search was not yet on mobile!

VENTURE DEALS
Hong Kong’s Gobee has raised a $9 million Series A round to try to take on China’s bike-sharing unicorns worldwide, backed by Grishin Robotics, an internet-of-things fund led by Mail.Ru co-founder Dmitry Grishin, along with Alibaba’s Hong Kong entrepreneurship fund. Gobee previously got a pre-launch seed round led by Swiss Founders Fund.

DotC United, a mobile application developer in Shanghai, has drawn in $350 million in Series B funding led by Zeus Entertainment

Shopex, an e-commerce software and services company in Shanghai, has pulled in $105 million in Series D funding led by Joy Capital, with participation from K2VCNew Alliance CapitalTianxing CapitalGopher Asset Management and CBC Capital.

Dianrong, a China-based peer-to-peer lending platform, has snared $220 million in funding led by Singapore’s GIC.

Shiyunji, a Chinese tech-enabled food court operator, has lured in “tens of millions of U.S. dollars” in Series A funding. Bertelsmann Asia Investments and Qiming Venture Partners co-led the round, and were joined by Zhen Fund, Lishi Venture Capital, Tongkong Investment Group and Canbailian.

Meican, an online food ordering and delivery platform in Beijing for corporate customers, has raised an undisclosed amount of Series D funding led by Goldman Sachs Investment Partners. Earlier backers participated, including include KPCB China, Nokia Growth Partners and Trustbridge Partners.

Yiguo, a Shanghai-based e-commerce platform for fresh produce, has pulled in $300 million from Tmall, Alibaba’s business-to-consumer platform.

Chinese VC-funded unicorn Xiaomi got a $1 billion loan from 18 banks across Europe, the Middle East, India, China, Hong Kong, and Taiwan for international and retail growth.

FUNDS
Blue Lake Capital, an early-stage venture capital firm in Shanghai led by former Sequoia Capital and GGV Capital execs, is seeking to raise $200 million for its second fund, investing in consumer and enterprise Internet sectors.

M&A
SpaceMob
WeWork is acquiring Singapore’s Spacemob as a way to angle into the Southeast Asian co-working market and gain competitive advantage in this booming region. The deal gives Vertex VC and Alpha JWC Ventures  a good return. These Southeast Asian venture firms backed Spacemob with seed financing of $5.5 million in Dec. 2016.
See Spacemob founder  Turochas “T” Fuad (left), who set up the WeWork clone in 2016 and now becomes WeWork’s Southeast Asia general manager.

U.S.-listed tech company Snap Inc. is reportedly in acquisition talks with China-based drone maker Zero Zero Robotics, best known for the Hover Camera drone designed for taking aerial selfies, for a deal in the range of $150 million to $200 million. TechCrunch

Anbang, the Chinese conglomerate whose U.S. holdings include the Waldorf Astoria hotel, has been asked by Chinese regulators to sell its assets outside of China, per Bloomberg. The company itself noted on Wechat that it has no plans to sell.

The impact of protectionism and relevant regulatory measures is clearly seen on M&A deals this year. China has been in the forefront, cracking down on domestic acquisitions of foreign assets, including Hollywood studios such as Dick Clark Productions.  Reuters  India is in motion too, planning to stop China’s Fosun International from buying local drugmaker Gland Pharma for $1.3 billion. Business Times In the U.S., there’s stepped-up action too, largely in major increases in security reviews by CFIUS (Committee on Foreign Investment in the United States). Wilmer Hale

 TECH TRENDS
Huawei is gaining on Apple as the world’s second-largest smartphone maker, as growth of 20 percent boosts it closer to grabbing Apple’s second place while Samsung hangs on the world’s largest seller of smartphones. China’s Oppo and Xiaomi, in fourth and fifth spot, are putting the competitive pressure on too, with gains of 44 percent and 52 percent, respectively. VentureBeat

For the Chinese bike-sharing market, profit is taking a backseat to growth, as investors pump billions into leading players to fuel rapid expansion plans.  Chinese shared bike startup Ofo made a deal with Adyen, a payment technology company in the Netherlands, where Ofo’s users will be able to enjoy bike riding in markets covered by Adyen by using a single set of payment information. Ofo has reached 150 cities in five countries so far, and plans to enter 20 countries and deploy in 200 cities by the end of 2017. CTN Its competitor Mobike just announced its entry into the Italian market with Florence and Milan as its first stops in Continental Europe, which is Mobike’s fourth overseas market following Singapore, UK, and Japan. CTN

Baidu and PayPal have partnered so that Chinese consumers, particularly users of Baidu Wallet, can now make payments to PayPal’s 17 million U.S. and international merchants. TechinAsia
Meanwhile, Beijing leads the way for China’s cashless generation, followed by Shenzhen, Guangzhou and Shanghai. Chinese consumers are using e-wallets everywhere from vegetable markets to hotels. SCMP

Tencent is creating a new game platform, WeGame, in the mold of Steam. Given that mobile and online gaming are the single biggest segment of Tencent’s revenues, it’s a significant move. VentureBeat

INDIA
Jon MedvedIndia and Israel are going to collaborate on startups. Maybe it’s about time more investors see beyond China.
OurCrowd sees big opportunities to invest in Indian startups as founder Jon Medved (left) visits this Silicon Tiger market. In quick order, India’s Reliance Group has partnered with OurCrowd to create a high-tech incubator in Jerusalem and OurCrowd is now collaborating with India’s crowd-funding platform Let’s Venture to fund both Israeli and Indian startups. This follows OurCrowd’s first investment in India, in Bangalore ride-sharing startup ZoomCar

India’s tech ecosystem, which has been on a slow-growth mode over the past couple of years, is now on a surge. Driven by an upbeat economic climate and improved business conditions, Indian startups have filed for 10 IPOs so far in 2017, the most in a single year since 2012. Most are within India rather than the higher-powered US IPOs in India’s earlier startup era.   CBInsights

Paytm, India’s top digital payment firm valued at $8 billion, plans to rival WhatsApp by expanding its services into person-to-person communication, games and other mobile content.  TechCrunch

Southeast Asia
Touch n Go, a subsidiary of Malaysia’s large bank CIMB Group, is doing a joint venture in Malaysia with Alipay.  CTN

Africa
Taxify, an Uber-like service that operates in Europe and Africa, has raised an undisclosed amount of funding from China’s expansion-oriented Didi Chuxing. Taxify, based out of Estonia, also has plans to launch in London later this year.

Noteworthy
Finding the Silicon Valley of the East: Has China become an ideal destination for global entrepreneurs?  China Tech Insights
Quote from Hans Tung, GGV Capital: “Foreign leadership is normally alien to the Chinese market while headquarters normally would not be comfortable with a too-localized Chinese CEO. This contradiction has led to a lot of problems.”

How U.S. tech giant Qualcomm is backing China’s tech ambitions. NYT

Amazon has followed Apple in implementing China’s ban on virtual private network software used to bypass the Great Firewall. Amazon Web Services’ partner in China instructed cloud-computing customers to delete illegal virtual private networks — less than a week after Apple removed VPNs from its app store in China. It’s all part of Beijing’s broad crackdown on content as well as U.S. companies giving in to demands from this huge consumer market. Reuters

Market cap for Tencent and Alibaba are both creeping up to $400 billion. Only three years ago, WSJ noted that Tencent surpassed $150 billion, surpassing Intel, Cisco and Hewlett-Packard.

 

Silicon Dragon weekly news digest
Contact news@silicondragonventures.com
Contributor: Shuonan Chen
Editor: Rebecca Fannin