Andrew Chung Ventures Solo, Didi Does $20B, China-Hollywood Links Grow, India Service Deals Climb
Andrew Chung, a former investor at Lightspeed Venture Partners and Khosla Ventures, has launched his own VC firm, 1955 Capital, with $200 million in LP commitments. The fund seeks to bridge East and West by helping U.S. and European entrepreneurs bring their technology to China, as well as later India and other developing countries.
Named 1955 after the birth year of visionaries including Bill Gates, Steve Jobs, Eric Schmidt and Vinod Khosla, Chung explains that he intends to bring that type of innovative thinking to his firm, which will take a cross-border approach to investing in such sectors as energy, food, agriculture, health and education. Chung himself has a decade-long track record of doing cross-border, China-focused collaborative investing, and is a well-known voice in sustainable technology.
In a $20 billion valuation move, Alibaba- and Tencent-backed ride hailing giant Didi Kuaidi is securing $1 billion for its latest and reportedly oversubscribed financing round, months after the Chinese company completed a $3 billion round in September 2015 at a $16.5 billion valuation. The new valuation makes the startup, which dominates China’s ride share sector, one of the world’s most valuable un-listed technology companies. With an eye towards out-maneuvering Uber, Didi Kaudi has continued to spend heavily on adding drivers and offering competitive fare prices. At the same time, the firm claims it’s decreased spending on subsidies and increased investment in new areas including big data and driverless technologies.
In December 2015, Didi Kuaidi invested in Southeast Asia’s GrabTaxi, India’s Ola, and the U.S.’s Lyft, forming an international coalition to counter Uber’s advances in Asia. Earlier this month, Lyft announced that thanks to the partnership, users in both the U.S. and China will soon be able to summon rides without leaving their home country’s app.
Meanwhile, Uber has continued to hustle its way in Asia. Uber has recently set up a support center in Hyderabad, India, its fifth “Center of Excellence” globally slated to house 500 employees. It’s also recently kickstarted its first motorcycle-taxi service, “UberMOTO,” as a pilot in Bangkok.
In the world of film, China’s Perfect World Pictures has finalized a $250 million funding deal with Hollywood’s Universal Pictures. With the deal, the Shenzhen stock exchange-listed games and TV production group becomes the latest Chinese company to pour significant funds into a foreign entertainment giant, and invest in one of Hollywood’s hottest studios.
With the deal, Perfect World, which boasts a market cap of $1.9 billion, will be making an investment of $250 million in equity and raising $200 million to $250 million in debt, in return for a 25 percent share of most of the films released by Universal. The partnership will last five years or cover the co-financing of 50 features.
Perfect World has been active in Chinese TV production and film distribution, including serving as the Chinese co-distributor for such films as Universal’s Rush and Lionsgate’s Ender’s Game. At a time when China is the world’s fastest-growing film market, with 15 movie theaters opening daily, the partnership seems a smart move for Universal.
Huawei has publicly supported Apple CEO Tim Cook in his fight to resist FBI demands to create new software to unlock an encrypted iPhone belonging to one of the terrorists in the San Bernardino attack that killed 14 people. To date, the Chinese company is the only mobile device maker to do so.
At Mobile World Congress in Barcelona, where Huawei prominently displayed its products including smartphones, handsets and tablets, consumer business group executive Richard Yu stated: “We put a lot of investment into privacy, and security protection is key… Some things the government requires from vendors we cannot do.”
Other device makers have kept a lower profile.
Billionaire Facebook cofounder Eduardo Saverino participated in a $15 million funding round for the Indonesia-based mother and baby-focused e-commerce company Orami, formerly known as MoxyBilna. The round was led by Sinar Mas Digital Ventures (SMDV), and was also joined by Gobi Partners and Velos Partners, the latter of which was founded by Saverin and had previously invested in Bilna. Orami operates mainly in Indonesia and Thailand, with 500 employees, and plans to expand in Southeast Asia. The site sees 3 million monthly visits, and roughly three-quarters of its customers are women. Saverin, who moved to Singapore in 2012, has been increasing his investments in Southeast Asian startups. Since 2011, he has made at least 20 personal investments, including contributing to several rounds of funding for Singapore’s online retailer Redmart. Other recent bets include car rental service Silvercar and India’s shopping site Hopscotch.
Early-stage venture firm 500 Startups has launched two new micro-funds: a $25 million fintech fund and a $25 million fund for India, Sri Lanka and Bangladesh.
Along with 500 Startups cofounder Dave McClure, Sheel Mohnot will run the new 500 FinTech, which seeks to invest in around 100 startups globally in areas such as blockchain, lending, insurance and investment advice. 500 Startups has some 80 active fintech investments in 10 countries, and according to CB Insights, is the world’s most active early-stage fintech investor.
Pankaj Jain will run the India fund, named 500 Kulfi, with McClure. Interest areas include local SaaS, education, fintech, and health and wellness companies. 500 Startups has invested in over 50 startups in India, including 20 last year, and intends to back another 25 to 50 in South Asia over the next year. The fund cites India’s large young population, increasing smartphone penetration, and rising disposable income levels as qualities fueling market optimism.
South African global internet and media company Naspers plans to pour an additional $250 million into Ibibo Group, an India online travel startup in which Naspers is the majority stakeholder alongside top Chinese Internet firm Tencent.
Gurgaon-based Ibibo claims to be India’s largest online travel group, having processed 6.5 million transactions in the fourth quarter of 2015. The new funds will be used to strengthen mobile infrastructure, improve the product and expand the company’s reach to 100,000 hotels from 45,000 by 2017.
The latest deal further highlights the value of the online travel industry in India. In January, Chinese travel site Ctrip invested $180 million in convertible bonds into India’s MakeMyTrip, and Softbank led a $100 million round in Indian hotel marketplace OYO Rooms. These investments seek to tap the growing base of consumers who buy bus and air tickets on their phones. Having acquired a 46.5% stake in Tencent early on, Naspers aims to replicate its success in India. Notably, Naspers is also an investor in Flipkart, India’s largest e-commerce site.
TaskBob, a Mumbai-based on-demand home services startup that pairs customers with service workers such as cleaning, handymen and drivers, has raised $4.5 million in Series A funding. The round was led by IvyCap Ventures, with participation from existing backers Orios Ventures Partners and Mayfield, a global VC firm with a focus on U.S., India and China.
At one year old, TaskBob is the latest in India’s $7 billion home services sector to raise a first round of financing. Its chosen model of testing its business in a single city is in contrast to that of other home services players including the likes of Urbanclap (which raised $25 million from Bessemer Venture Partners in November) and Housejoy (which raised $23 million led by Amazon in December 2015). TaskBob distinguishes itself through a “full stack” approach, seeking to tightly control the customer chain and to provide quality service throughout. This strategy has helped it to hit a repeat booking rate of 70 percent.
Accel Partners has led backing of Juspay, a Bangalore-based mobile payments startup. The $5.8 million Series A round was also joined by the founders of BookMyShow, India’s biggest online movie and events ticketing site. The startup’s technology helps companies simplify payments by aggregating different services, as well as by helping merchants improve the success rate of payments. Juspay claims that its platform currently sees over 600,000 transactions a day.
Silicon Dragon weekly digest is compiled by contributor Ying-Ying Lu