Back To Billion-Dollar Financings in China, India Cools

Super-high valuations for Chinese startups are back again as popular news aggregation app Toutiao is seeking $10 billion for a new round of financing. That’s up from $500 million valuation just two years ago.
The latest funding craze comes comes as new figures from KPMG show that VC investments globally fell 14% to $24.1 billion in the third quarter of 2016.
The app is attracting such interest because it plays into current Chinese content and advertising trends. Toutiao aggregates personalized content based on individual users’ interest by analyzing data on social networking accounts, and then selling targeted advertising against it. Users can also browse and shop directly from the app through a partnership with Chinese e-commerce website, JD.com.
Meanwhile, ByteDance, parent company of Toutiao, has recently invested into an Indian counterpart, teaming up with Sequoia and Matrix to back India’s DailyHunt.

The disruptive power of Augmented Virtual Reality can be seen in the creation of an AR-VR magazine, from HTC’s Vive. Called Vivepaper, it’s a whole new immersive reading experience that mixes in AR and VR, a cutting-edge technology that makes digital and certainly print magazines seem way out of date. Alvin Wang Graylin, Cihna regional president of Vive, demonstrated its wonders to basketball player Kobe Bryant, one of the first to try out the Vivepaper.
HTC also launched a consumer version of its Viveport M mobile VR content platform, offering more diverse and higher-quality mobile VR content and experiences and partnering with YoukuVR to deliver the best 360° videos to Viveport M users.
And, as part of Alibaba’s “Double 11” shopping festival, Vive gave consumers a chance to receive a limited edition of Vive-branded VR cardboard display by downloading two or more titles on Viveport M and sending a screenshot of the purchase to HTC Vive’s official public WeChat account. Vive also pulled off a massive demo of VR shopping in China.

Alibaba, an Amazon plus of China, dreamed up a holiday called Singles Day, 11.11, and now has broken its own records in merchandise sold on its shopping platforms. This year’s event raked in $17.8 billion worth of gross merchandise volume, up 32% from last year.
Perhaps some of that increase had to do with Alibaba offering a virtual reality shopping experience online. It also had to do with the pull of celebrities such as Scarlett Johansson, who attended the 2016 Tmall 11:11 Global Shopping Festival gala in Shenzhen.
The China-made holiday is already bigger than Black Friday, the traditional shopping mall rush after Thanksgiving, in the U.S.

A slowdown in China’s economy has not impacted e-commerce sales. Surging sales are sparked by three key factors: shopping as entertainment, shopping becoming cross border, and shopping via mobile, points out Hans Tung, a manager partner at GGV Capital, an early backer of Alibaba.
But predictions are that a Trump presidency could impact continued fast track growth of Alibaba and other China tech leaders, particularly as they expand outside China. Hans Tung, GGV Capital managing partner discusses how President-elect Donald Trump’s trade policies may impact tech. Bloomberg

What Trump’s victory means for China: in Trump Win, China hopes for U.S. retreat. For China, Hillary was a known entity. In an erratic Donald Trump, Beijing now faces both an economic threat and geopolitical opportunity. WSJ

Role reversal: China—once seen as an obstructive force in UN climate change talks—warns Trump not to abandon deal. FT.

China slowdown deepens looming pension crisis. By 2050, only two Chinese, down from nearly eight now, are expected to pay into the pension system for each person over 65.

GM Wants Cars to Talk More in China. The U.S. auto maker is introducing a technology that allows cares to communicate. WSJ.

SILICON VALLEY
VC investor Bill Tai is behind a $25M, Series C investment in Treasure Data, Inc., a cloud-based live data management platform. The startup drew capital from Softbank Investment and Innovation Network Corp. of Japan. Treasure Data has raised a total of $54 million and is backed by Jerry Yang’s AME Cloud Ventures, Scale Venture Partners and Sierra Ventures.

Tim Draper is among a group of elite Silicon Valley investors in new mobile AI startup AISense, led by Sam Song Liang and a team of tech industry veterans. AISense is using mobile AI technologies, voice-speech recognition and deep learning to developed next generation tools to enhance professional productivity.

Do social media titans Jack Dorsey and Mark Zuckerberg use their own services – Twitter and Facebook? http://nymag.com/selectall/2016/11/does-jack-dorsey-use-twitter.html

Alibaba and Intel are set to begin collaborating more closely in artificial intelligence, machine learning, the Internet of Things, and smart hardware and products.   Intel CEO Brian Krzanich was recently in Hangzhou and met with Alibaba Group CEO Daniel Zhang and got a tour of the city’s “Smart City Brain Control Center,” designed to tackle traffic congestion. He also took a ride on Alibaba’s YunOS Internet car. Earlier this year, Alibaba and Intel established a joint innovation center specializing in research and development of technology in semiconductor chips, cloud computing and the Internet of Things.

INDIA
As start-up exits continue to be elusive in India, VC firms are seeking more time from investors beyond the usual 10-year period to return their money. Several, including Nexus Venture Partners, Kalaari Capital, Matrix Partners and IDG Ventures India, are in the midst of extending the timeline of their first funds in India, starting from 2006 and 2007, by two years to return cash to their investors. Two VC firms— SAIF Partners India and Accel Partners India— both of which began investing in India before 2006, have bucked the trend, thanks to such investment gems as Myntra, Flipkart, MakeMyTrip and JustDial. Likewise, Seedfund, got good returns on its first fund of $14 million, through bets on RedBus and Carwale. The success of subsequent funds even for the best performers in India is unclear. Read full story, DealStreet Asia.
Several of the early entrants to India in search of Internet homeruns retrenched, among them Kleiner Perkins Caufield & Byers, Draper Fisher Jurvetson and Canaan Partners. Others that have stayed the course are Sequoia Capital, Matrix Partners as well as home-grown Nexus Venture and Helion Venture Partners.
Now, the rapid expansion of Amazon India and Uber India caught Flipkart, Snapdeal and Ola by surprise, and leading to upsets. Though India has been promising to be the next China in terms of stellar startups, the future of the India VC and startup scene looks shaky.

Warbug Pincus has invested $75 million for a minority stake in Indian logistics startup Rivigo, based in Guragon. India’s logistics sector is seen as a next big opportunity for investors with projections of $10 billion in revenues by 2020. VC firms investing in the sector include SAIF Partners, Sequoia Capital India and Accel India as well as Tiger.

KPMG India chief calls it a day. KPMG India chief Richard Rekhy, who was elected head of KPMG India for a second term up to Nov. 2020, has decided to retire as CEO.

SINGAPORE
Singapore is planning to ease approval times for VC financings and regulations on startups as part of a fintech push in the city that has been angling to be a creative hub.