Apple’s Overtures to China, Tencent Leads Mega-Funding for Indian App Hike
Apple’s Tim Cook arrived in China to debut plans to open a R&D center within the next year, a move that seemingly endorses China’s climb up the innovation ladder. His visit, the second in China within four months, comes as American tech brands continue to face challenges in entering the large Chinese market. The outreach comes as Apple faces a sales decline of 30 percent in the most recent quarter due in part to increased competition for lower-priced local brands such as Xiaomi and Huawei.
Apple’s overtures to China include its recent $1 billion strategic investment in China’s leading ride sharing app Didi, now owner of Uber in China, for tech advancements in transport including possibly an Apple car.
News reports are surfacing that the Chinese government has approved the formation of a state-owned $30 billion VC fund in Shenzhen, with an initial sum of $15 billion. The fund is geared for funding technological innovation from China, once again showing the seriousness of China’s ambition to get ahead in a tech economy.
It’s back to business as usual for Nasdaq-listed, China social app Momo as a go-private deal that included Matrix Partners China and Sequoia Capital China has been withdrawn. The Beijing-based company has been compared with dating site Tinder listed on Nasdaq in December 2014. Its moved to privatize is in line with a trend over the last few years of U.S.-listed Chinese companies seeking to privatize and re-list for higher stock prices on mainland Chinese exchanges.
Just as Facebook and Uber have faced challenges in China, Chinese tech upstarts encounter hurdles in getting into the U.S. market. One startup that is mastering this China-to-U.S. exercise is Shanghai-based Musical.ly, an app that combines social media and music. Musical.ly gets around China’s walled-off Internet by letting users post recordings on Western sites such as Instagram, WhatsApp or Facebook. Naturally, the founder of Musical.ly, Alex Zhu is comfortable in both cultures, having graduated from a Chinese university and worked in the U.S. for major software company SAP. He now runs Musical.ly, formed in 2013, from Shanghai. See The New York Times article, Chinese Tech Firms Forced to Choose Market: Home or Everywhere Else.
AP photo
Chinese swimmer Fu Yuanhui made headlines at this year’s Rio Olympics by being one of the first Chinese athletes to take the Olympic Games as lightly as games. Read about Fu’s charm and candid remarks in this New Yorker piece.
INDIA
India’s leading rival to social messaging service WhatsAp, Hike, has raised a mega sum of $175 million from Tencent, the makers of China’s leading WeChat, at a $1.4 billion valuation. The deal echoes what’s been happening with cross-market China-India deals in the ride sharing app market focused on Didi in China and Ola in India.
Besides Tencent, Taiwan’s Foxconn Technology Group participated in the financing for the Delhi-based startup that began four years ago. Hike’s earlier venture backers include Tiger Global and Softbank.
Accel India, one of the country’s leading venture investors, is planning to raise $500 million for a fifth India fund, according to the Economic Times. The plans come just 18 months after the Bangalore-based firm raised a fourth India fund of $350 million. The new capital is intended as follow-on investment for its most promising portfolio companies. Accel India is best known for its high-achieving investment in e-commerce leader Flipkart.
