Tesla’s China Rival, Stumped In China By Trump, New VC Funds For GSR And Matrix India
Taking on Tesla, LeEco (formerly Letv) is introducing its first electric car ahead of the Beijing auto show. Interestingly, the firm is also bankrolling Faraday Future, the California-based electric vehicle startup that is currently building a $1 billion factory in Nevada. As global auto executives gather for the 2016 Beijing Auto Show, a flood of money is pouring into China’s alternative energy vehicle (EV) market. Tech startups are jumping in to capitalize on a rapidly urbanizing population, and the government is providing subsidies for companies and consumers alike. Bloomberg covers the EV trend in a recent article.
Check out this smart take on China perspectives of U.S. politics in Foreign Affairs penned by Shanghai-based venture investor Eric X. Li of Chengwei Capital. He delves into how the Trump phenomenon is causing China’s conservatives and liberals alike to rethink their understanding of American democracy. Read here: Foreign Affairs.
WSJ editorial writer David Feith asserts that if Donald Trump wins the Oval Office, China may benefit greatly. The bilateral trade imbalance between the U.S. and China is an easy point to critique, but China’s “greatest theft ever” is not in the exchange of goods between Chinese sellers and American buyers; it is the “state-backed cyber pillaging of commercial intellectual property”—about which Trump is silent. As the U.S. Presidential race continues, expect to hear on the campaign trail about China, trade and cross-border business. Read Feith’s viewpoint here.
GSR Capital, affiliated with GSR Ventures, has raised an oversubscribed $1 billion fund to invest in global acquisitions of LED lighting assets. Sonny Wu, Managing Director of GSR Capital, has explained the need for Chinese enterprises to invest in building an LED enterprise to both increase efficiency and reduce overall costs.
Qiming Venture Partners plans to raise a healthcare-focused fund in the U.S., to help both China- and U.S.-based startups expand in both markets. The target size is between $100 million and $150 million.
Tencent founder Pony Ma has said that he plans to donate $2 billion worth of company shares to the firm’s charity foundation. Though China is now the country with the most billionaires, Ma’s large donation is unusual because philanthropy has yet to take off. Ma is taking a similar approach to Facebook’s Mark Zuckerberg, who along with his wife Priscilla Chan, created a fund in December that is to benefit from 99 percent of the Facebook shares he owns.
Increasingly, capital is flowing from China into the U.S. and Europe in the form of mergers and acquisitions. This infographic by PitchBook breaks down the key players and numbers behind the rise in cross-border M&A by Chinese buyers.
Wendy Su, author of the new book China’s Encounter with Global Hollywood: Cultural Policy and the Film, speaks about the “global-local interplay” between Beijing and Hollywood, in which China seeks to build up its domestic film industry with the help of Hollywood, but not at the risk of its own stability. This is the delicate dance of working together while maintaining distinct values. Indeed, the Chinese government has adapted to and integrated global capital, as well as Hollywood’s management styles, into domestic film production and distribution. China’s film sector accordingly has been transformed into that of a market-oriented cultural industry. Read more about a trend Silicon Dragon has been following in an interview by China Film Insider with Su here.
Bloomberg’s Lulu Chen (who recently moderated a corporate investors panel at Silicon Dragon Hong Kong) reports that Ant Financial, Alibaba’s finance affiliate, is planning an IPO on Shanghai’s main board. The company, which operates payment platform Alipay, meets the listing requirement of having been profitable for three years. A listing could make for China’s highest IPO valuation since 2010.
ASIA – REGIONAL
At the rate that mobile social media, including chat, is growing, phone calls may even become obsolete before too long. Data from ad agency We Are Social shows a growth rate of 17 percent last year for these apps. In Southeast Asia, as well as developing markets including the UAE, chat apps have already significantly changed communication behavior. But it’s not an easy market to break into. Most of the apps in these local markets will fail due to insufficient business models and lack of global scale, argues Tim Culpan of Bloomberg Gadfly here.
UCWeb, controlled by China’s Alibaba Group, has launched a $20 million program to promote Indian startups focused on games and apps. The program will act like an accelerator, writing checks up to $500,000 and helping the companies publish games, gain users, monetize, and promote their products. The gaming market in India will grow to over $550 million this year, predicts a research study by Newzoo and OneSky.
Matrix Partners India, a backer of several leading startups among them ride hailing service Ola, online classifieds marketplace Quikr, and local services marketplace Housejoy, has raised an additional $100 million for its second fund. The fund was originally set up in 2011 to invest in startups in fintech, e-commerce, logistics and SaaS.
Tiger Global Management has led a $30 million Series C funding of NestAway, a Bangalore-based real estate startup focused on furnished homes in cities. Other investors included IDG Ventures India, Russian DST Global founder Yuri Milner, and Flipkart president Sujeet Kumar. The round brings the startup’s total funding to $43 million.
Indian mobile game developer Nazara Games has picked up a 26 percent stake in London-based mobile studio Mastermind Sports for an undisclosed sum. Nazara has an eye on creating and publishing games in the sports category. The Indian developer recently also invested in London-based gaming studio Truly Social.
Jugnoo, an on-demand service for hailing auto-rickshaws, has raised $10 million in funding from Alibaba-backed payments firm Paytm, firms Snow Leopard and Rocketship.vc, and CEO Kunal Shah of Snapdeal-owned Freecharge. The startup claims 2.6 million users in 30 cities across India.
Indian Cross Border Angels and Investors (CBA) members have led a $1.5 million round in Finnish edtech startup Claned. The startup was the first runner up in the international startup conference, Startup India Rocks, organized by CBA’s parent company, Scaale Group.
Rakuten’s Tech Fund has participated in the $30 million strategic round of investing app Acorn, an investment led by PayPal. The app targets millennials, with 75 percent of users between the ages of 18 and 34, and seeks to disrupt financial services by taking a mobile-only approach.
The Abraaj Group has led a $30 million Series B round of fundraising for Ninja Van, a Singapore-based logistics partner that allows e-commerce companies to reach customers across Southeast Asia. Investors B Capital Group, YJ Capital, and existing investor Monk’s Hill Ventures participated in the deal. Two-year-old Ninja Van addresses the lack of last-mile logistics companies in Southeast Asia, a region with a total population of more than 550 million and an Internet-savvy emerging middle class.
Oracle has acquired three-year-old Israeli startup Crosswise for $50 million. The company creates software that helps advertisers and marketers to cross-map consumers to their devices. Previous investors include Chinese seed fund ZhenFund, New York-based Pereg Ventures, Giza Venture Capital, OurCrowd, and Horizons Ventures.
Crown Resorts, one of Australia’s largest online gaming and entertainment groups, has led a $2.8 million seed round in Tel Aviv-based Zengaming, a professional network for e-sports gamers. Other investors include Silicon Valley-headquartered accelerator NFX Guild, 500 Startups, iAngels, Foundation Capital, and angel investors Barak Rabinowitz and Shmueli Ahdut.
- Silicon Dragon weekly digest of news by contributor Ying-Ying Lu