Baidu Gets Into Venture, Jack Ma Pairs Up With Spielberg, KKR Does Indian Netflix Deal

Robin Li

Baidu co-founder Robin Li

Following other Chinese tech titans into the venture capital world as it seeks to stay ahead of rapid technology advances, Baidu has set up a large $3 billion investment fund, Baidu Capital, to focus on mid and late-stage deals Internet deals. The fund will invest in yuan, US dollars and other currencies through two or three unnamed managing partners. Investment amounts will range from $50 million to $100 million. The capital is coming from institutional investors. The move follows last month’s launch of Baidu Venture, a $200 million fund to invest in the hot technologies of the moment: artificial intelligence, virtual reality and augmented reality.

GSR Ventures has invested a series C round in online education firm Xuele. The funding follows an earlier round in May led by Haitong Capital International Investment. GSR partner Allen Zhu spearheaded the deal.

Founders Factory is launching a partnership with Chinese private equity firm CSC Group to nurture AI talent in Europe and China. The incubator led by Brent Hoberman also inked a deal with British low-cost airline Easy Jet to co-create two startups per year.

FB, Anson, VR panel closerChina is fast emerging as the world’s most important VR market, thanks in part to rapid adoption by business markets. Professional use of VR by Chinese companies means that the place where the fledgling industry may make its very first fortune is the Middle Kingdom. Goldman Sachs is predicting that the global VR market could climb to $60 billion by 2025, split evenly between hardware and software. China already accounts for one-third of VR headsets sold globally this year, according to the investment bank. Other reports, by Citi, forecast that the VR and AR market together will reach $692 billion by 2025 and reach $1 trillion by the following decade – roughly the same size as the current global e-commerce and m-commerce market.
In the west, VR is mostly focused on gaming. But in China, it’s business and education applications that are the most promising. A larger mobile market where the VR technology could take hold and more places to try out VR equipment are other reasons why China is taking a lead in the adoption of VR. Read the Economist piece, Insanely Virtual.

Ma, SpielbergBridging the gap between Hollywood and China, Jack Ma strikes a deal with legendary director Steven Spielberg to bring Hollywood to China. China’s richest man is buying a stake in Spielberg’s production company Amblin Partners, in a deal they announced in Beijing to co-finance and co-produce six to nine movies per year. The deal will make films more accessible to the Chinese market through Alilbaba’s online streaming platforms. Hollywood is eager to make inroads in China, where there is a $9 billion movie market and growing demand for U.S.-made films. Alibaba will name a member to the board of Amblin. Another Chinese billionaire, Wang Jianlin, made news recently when his company, Wanda Group, bought Legendary Entertainment.

If everything goes as planned, the Philippines will soon have its first bullet train. The bullet train will connect Subic and Clark, which spans 60 kilometers. The project will be carried out through a public-private partnership with a Chinese firm.

China has edged out the U.S. as the biggest economy in the world, according to the International Monetary Fund. But that’s mostly a symbolic gain, since those figures are based on purchasing power parity. Without adjustment for living costs, the Chinese economy is still smaller than the U.S. Read more: Daily Mail.

Google is on a path to return to China and potentially seize a spot alongside Apple as one of the most profitable tech companies there. This is a likely outcome of Google’s recent announcement that it’s entering with full force the global consumer hardware industry, writes Peter Fuhrman, chairman and CEO of China First Capital, in a viewpoint for the FT. Google Pixel mobile phones, Google Home artificial intelligence-enabled speakers, Google Daydream View virtual reality headsets will be the engines of Google’s revival in China and capture Chinese consumers. Google can rely on China’s enormous grey market for electronics hardware to bring its products into China’s on-and-offline retail network. Mobile phones running Google’s Android system already dominate the Chinese market, with about 300m sold this year.

From emoji and selfies-as-stickers to filters and the “Instagrammification of everything”, there’s a new era of social self-expression happening — enabled by always-accessible cameras on smartphones, real-time computer vision/ A.I.; and social media. Several of these phenomena emerged or were popularized in Asian messaging apps before they made their way into global products. It’s very possible that China’s latest trend in mobile self expression and entertainment, livestreaming, is next. Read Connie Chan’s 16 Observations on Livestreaming in China.
Related: Check out this whirlwind tour of China digital culture with Connie Chan of Andreesen Horowitz, China culture researcher Christina Xu and podcast producer Sonal Chokshi. New podcast delves into stickers, filters, & livestreams. https://soundcloud.com/a16z/china-memes-messaging

INDIA
In an example of China and India startups growing closer, Indian news aggregator Dailyhunt drew $25 million in funding in a deal led by its Chinese peer, ByteDance. Participating in the deal were venture firms Sequoia Capital India, Matrix Partners India as well as Omidyar Network and Former CEO of Vodafone Arun Sarin.
Dailyhunt, which claims to be the most-used app for news and ebooks in India with 28 million monthly active users, had earlier raised $37.5 million in a series C round led by New York-based hedge fund Falcon Edge Capital, which joined this fourth round.
Virendra Gupta, Founder and CEO of Dailyhunt, said his team looks to learn from the ByteDance team on personalization and large-scale machine learning to continue offering a customized user experience.

KKR-backed Emerald Media, which is focused on media and entertainment sectors across Asia, has invested $50 million in Netflix rival, YuppTV in Atlanta, an Internet Pay TV platform for South Asian content that offers live TV and movies on-demand in 14 languages. YuppTV recently launched in India and is growing quickly in the market.