China-Silicon Valley Links & Divides, Tencent Funds Live Streaming Play, Sequoia India Backs Fintech Startup, Alibaba Gets Into VR With HTC

NOTABLE
An internet split between China and the rest of the world is leading web startups to choose between developing for China’s digitally savvy market dominated by Tencent, Alibaba and Baidu or outside China, where Facebook and Google reign. Writing in The New York Times, journalist Paul Mozur observes that Chinese internet leaders have faced troubles entering the U.S. market because their product features such as mobile payment widely used in China don’t migrate easily to services outside the country. Exceptions are startups that have adapted first to the U.S. market and naturally grown in the western world such as video social network Musical.ly.   Likewise, American brands encounter challenges in breaking into the Chinese market and its own set of sites, apps and competitive forces – as Uber in China just found in selling to rival Didi. Mozur notes that Baidu, Alibaba and Tencent have opened offices in the U.S. but are primarily turning to acquisition and investments to gain a foothold.

A unique phenomenon blending Silicon Valley culture and China’s political and economic structure is taking place in China today, writes China consultant Edward Tse. While China’s hierarchical political system is inherited from a top-down planned economy, its leading entrepreneurial companies, especially young and dynamic Internet players, adopt much of their mindset, culture and organization from America’s Silicon Valley. Many are philosophically closer to Silicon Valley than they are to Beijing, notes Tse, chairman and CEO of Gao Feng Advisory Company in an article in the Nikkei Asian Review. This osmosis is changing China in a way that could lead the country into a new era.

DEALS

CHINA
Adding to its substantial presence in gaming, Tencent, along with Phoenix Capital, has led a $226 million, third round financing of Douyu TV, a leader in China’s live streaming platform market for gamers. Douyu TV, based in Wuhan and founded in 2013, drew $60 million from Tencent in an earlier round this past March of $101 million which brought in Sequoia Capital China and Nanshan Capital, a new fund founded by a former Tencent M&A director, Jason Je, to focus on entertainment investments. Douyu competes with market leader Huya TV, backed by Nasdaq-listed social entertainment company YY.

Sequoia Capital China has led a $30 million funding of big data firm MiningLamp in Beijing, founded in 2014 by former Lucent and HP software engineer Shicong Feng. The fast-growing startup serves enterprise clients including China UnionPay, CCTV and China Postal Savings Bank. Investors participating in the round were Share Capital, Surfilter Network Technology and earlier backer Heaven-Sent Capital Management Group.

Alibaba is getting into VR, partnering with HTC to accelerate the rate of widespread adoption by leveraging cloud computing. The combination of these disruptive innovation fields will focus on developing innovations in data transmission and bandwidth allocation for VR video production and broadcasting. The partnership aims to bring together industry developers to build a VR cloud ecosystem. It also extends HTC’s VR app store to Alibaba’s cloud computing platform.

JAPAN
Japanese trading company Mitsui & Co. has invested $101 million in a large and fast-growing healthcare provider in India and Southeast Asia, adding to its portfolio of healthcare-related investments. Mitsui was attracted to the healthcare service, Columbia Asia, for its centralized brand across multiple countries and its positioning for Asia’s rapidly growing middle class population with modern and efficient high-quality hospitals. Columbia Asia is part of Seattle-based Columbia Pacific Management.

SINGAPORE
Sequoia Capital India has led a $7.5 million funding of Singapore-based Funding Societies, a peer-to-peer lending marketplace modeled after Lending Club with a twist in serving small businesses in Southeast Asia. Formed by two former classmates at Harvard Business School, Kelvin Teo and Reynold Wijaya, the round in the fintech startup also included Alpha JWC Ventures in Singapore and Indonesia. The increased capital will be put to use in expanding into Malaysia.

INDONESIA
Golden Gate Ventures has led a $2.5 million initial funding of a Jakarta-based health information portal, Alodokter. Participating in the round were 500 Startups and Lim Dershing, a venture partner at Singapore-based Jungle Ventures.