Peter Thiel’s Founders Fund Makes Its 1st Indian Startup Investment

[Silicon Dragon Digest, Week of May 23, 2016]

INDIA
Peter Thiel’s Founders Fund has made its first investment in an Indian startup, ClearTax, which aims to make it easier to file taxes through the Internet in India. The $2 million funding, shortly after the startup attracted angel money, was notable too for the participation of Sequoia Capital. Founders Fund made the investment through FF Angel, its seed-stage fund. Founder and CEO Archit Gupta has raised a total of $3.3 million in seed funding in a round tht he was oversubscribed. As India increasingly goes digital, ClearTax is on a major expansion spree in India, hiring engineers away from FlipKart and seeking to have 7 million Indian taxpayers on its tax return platform by the end of 2017, up from 3 million by the end of this year.

Sequoia Capital and Matrix Partners-backed Tiny Owl has reportedly stopped service in all cities except for Mumbai. The startup is one of several food delivery startups in India that have recently run into operational troubles, with issues including high cost of logistics and an overly saturated market.

NEW ZEALAND
The New Zealand Venture Investment Fund and its Taiwan counterpart are among the investors in a new $36 million VC fund launched in New Zealand. The Global from Day One Fund II is to contribute investments of between $500,000 and $2.5 million in pre-Series A and Series A rounds, mostly in New Zealand and Taiwanese startups. Both markets are in need of more capital for startups.

CHINA CROSS-BORDER
Bloomberg’s China-US Equity Index has dropped 10 percent in the six months leading up to May 20. Tim Culpan explores the performance of China stocks in the U.S., including impact of buyout offers, Beijing’s efforts to curb capital outflows, and Chinese companies’ initiatives in stock repurchases in a May 23 post titled “The (U.S.) China Stocks Party Goes On.”

Author and consultant Edward Tse writes his latest column about the logic of Apple’s $1 billion investment in Didi Chuxing. He focuses on Apple’s motivations for the deal, centered on ensuring that it will have access to China’s dynamic Internet and mobile ecosystem through Didi’s technology-enabled platform: “Apple gains a Chinese partner not only with a strong mobility services brand, but also with a proven market sensing capability and keen understanding of how to address mobility pain points.” Tse compares the Apple-Didi deal with LeEco’s alliance with Chinese car-hailing app Yidao Yongche, noting that more cross-industry, cross-border collaborations within automotive innovation will be in the works.

For a look at Alibaba’s financial challenges following recent news of its SEC investigations, read this Forbes post by Mike Ozanian. Drawing on data from past annual reports, he concludes that Alibaba’s earnings quality “is suspect and future earnings may be less than currently anticipated by analysts.” He compares Alibaba and Amazon annual reports, and comes up with several points to ponder.

Recent cross-border collaborations between Chinese filmmakers and Western distributors have been magnifying the reach of domestic storytellers. The struggle to create work that can survive cultural translation and pass official censorship is ongoing, however. Patricia Aufderheide writes about a trend Silicon Dragon has been watching, in a recent article for the International Documentary Association titled “The New Chinese Documentary: Building the Bridge between East and West.”

Tencent is in talks with Japan’s Softbank to buy the Japanese telecommunications giant’s majority stake in Supercell, the Finnish gaming company. Though talks are still early, if the deal is to go through, it would alter the gaming industry landscape by creating a dominant global games publisher.

A group of Chinese investors led by the Fujian Grand Chip Investment Fund are to acquire Aixtron, a German provider of semiconductor equipment. The purchase would allow Aixtron access to the Chinese market, along with funding to further develop its product portfolio.

CHINA DOMESTIC
Xiaomi-backed Bluetooth music player and smart car charger Roidmi is in the midst of an Indiegogo campaign for the Roidmi 2S. The successful campaign shows that crowdfunding is one way in which Xiaomi has been pursuing an unconventional global strategy. At the same time, Indiegogo has been paying more attention to China recently, having launched a China pilot program in late 2015.
The pursuits come at an interesting time, with recent reports of Xiaomi’s sales revenues being flat in 2015. The stagnation represents a dramatic shift for what has been known as China’s hottest startup, with sales growth reaching 135% in 2014.

China has been confidently touting its vision of “Internet sovereignty” as a model for the world, and certainly it towers in size. China’s internet reaches about 700 million users, or nearly 25 percent of the world’s population. Moreover, China is the world’s leader in e-commerce, with sales volume accounting for 40 percent of the global total—double that of the U.S. China also boasts four of the top 10 Internet companies in the world, as ranked by market capitalization. As part of a series examining the impact of China’s Great Firewall in the Washington Post, China Bureau Chief Simon Denyer examines these trends and more.

Walden International and SoftBank are among the investors in CloudMinds, a Beijing- and Shenzhen-based company that creates “cloud robots,” or robots with cloud-enabled intelligence engine and a network of mobile sensors. By 2025, the startup seeks to create a cloud computing-controlled housekeeping robot to service individual families. Other investors include Hon Hai Precision Industry and Kaixuan Capital.

HONG KONG
Biotech startup Vitargent has completed its Series B financing, led by Nan Fung Group. Read Silicon Dragon founder Rebecca Fannin’s coverage of the biotech startup’s round, and check out Vitargent founder Eric Chen’s interview at Silicon Dragon’s 2016 forum in Hong Kong.

KOREA
500 Startups is among the investors in Althea, a Korea-based site that sells cosmetics and beauty products to Southeast Asian markets. Other investors in the $3.5 million Series A round include Mirae Asset Ventures, Posco Ventures, Tekton Ventures and Cherubic Ventures. The startup claims more than 500,000 monthly active users and 30 percent monthly growth, and currently operates in four major markets: Indonesia, Malaysia, Singapore and the Philippines.

JAPAN
Tokyo-based Creema, an online marketplace for handmade goods, has raised roughly $10 million from Globis Capital Partners and existing backer KDDI Open Innovation Fund. Founded in 2010, the site claims 2.4 million listings and 60,000 sellers.

MALAYSIA
Singaporean VC firm DMP led the $3 million Series A funding of Jirnexu, a Malaysia-based provider of customer acquisition technology solutions. DMP was joined by Celebes Capital, NTT DOCOMO Ventures, Nullabor, Tuas Capital Partners and Anfield Equities.

SINGAPORE
SportsHero, formed under Singapore’s MyHero, has launched with $2.4 million in new funding led by Australia-based Nevada Iron. Taking aim at Asia’s e-sports markets, the real-time fantasy sports app and social prediction platform allows sports fans to make better guesses on the outcomes of games by looping in gamification and community validation.

Singapore-based private investment firm Shanda Group has purchased an 11.7% share in Lending Club, the largest P2P lender in the world. Shanda Group is controlled by Chinese Internet entrepreneurs including billionaire Chen Tianqiao, founder of Shanda Interactive. The investment is part of a series of moves in the U.S. in which the firm seeks to diversity from Chinese mobile and games. Shanda recently invested in asset management firm Legg Mason and art auctioneer Sotheby’s.

ISRAEL
Volkswagen, the latest company to take up an interest in ride-hailing services, has invested $300 million in Tel Aviv-headquartered startup Gett, an on-demand ride booking service that operates in 60 cities worldwide. Gett is similar to Didi Chuxing, Uber, and Lyft, though uses taxis and black cars. The investment opens the doors to Volkswagen and Gett potentially working together on automotive technologies.

Baxter Ventures, the venture arm of American healthcare company Baxter International, has put an undisclosed amount of Series B funding into Medasense Biometrics, an Israel-based developer of pain monitoring devices. Medasense had previously raised $8 million from Benslie International.

Hong Kong’s CE Ventures has led the $5 million funding round of Saguna Networks, a mobile edge computing platform. The startup plans to use the funds to expand its offerings and global presence.

Silicon Dragon digest by Ying-Ying Lu