Is China Really Crushing Silicon Valley?

Silicon Dragon’s recent article in CNBC.com about how China venture capital is catching up to Silicon Valley stirred up some controversy. That’s mainly because of the headline:

China’s Secret Goal Is To Crush Silicon Valley.

Well, that’s a bit of an exaggeration. But it’s true that China’s Silicon Valley is catching up to the original. (Stay tuned for the CNN interview.)

To recap:

America’s wide lead in venture capital is fading, threatened by Asia and its rising brain center: China.
A surge of new money from China and the rest of Asia helped drive funding to the stratosphere and transformed the venture landscape. Last year Asia directed 40 percent of the global total versus 44 percent from the U.S. China’s share was 24 percent, up from about 5 percent a decade ago.
That tidal wave of Chinese cash into promising new start-ups could herald a shift in who controls innovation and the world’s technological advantage.
Already the trend playing out in CNBC’s 2018 Disruptor 50 list, and also played out on the Forbes Midas list of top 100 VCs.
For the first time, two of the unicorns on the list are mammoth Chinese unicorns – Didi Chuxing and Xiaomi – each of which has attracted billions in equity financing.

 

BLOCKCHAIN BELIEVER

Silicon Dragon ventured to Sand Hill Road to interview David Chao of DCM Ventures and the founder of a crypto-related startup his firm has backed, crypto portfolio tracker Blockfolio. It‘s designed to take the noise out of the crypto social media world and send signals directly to digital coin holders with portfolio updates. You can hear founder Edward Machado (formerly a professional poker player!) and David Chao here at Silicon Dragon podcast, episode 3.
Blockchain Believer

Of note: Chao says he is a big believer in crypto and that blockchain is the next big thing after the Internet and mobile.  That’s why his firm has backed several crypto startups.  We’ll be talking more crypto stuff at Silicon Dragon NY 2018.

 

You can now click on Silicon Dragon’s article in Techonomy magazine about the rise of China’s BAT, and why it matters.
See China’s Tech Dragon.
Isolated from American competition, China’s Baidu, Alibaba, Tencent have chalked up double-digit growth for a decade, and are hardly stopping. Getting into U.S. markets is tough, but Southeast Asia looks very promising for the BAT.

 

WOMEN UPGRADE
Women are moving up the ranks of Silicon Valley venture firms. Here are 3 during May alone!

Greylock has promoted Sarah Guo to general partner
NEA has promoted Carmen Chang to general partner
Lightspeed brings Natalie Luu on as investing partner
(notice any particular pattern here?)

 

DEALS 
Alibaba fintech affiliate Ant Financial has reportedly raised $10 billion, valuing the firm at $150 billion, compared with $60 billion after its previous fund-raising in April 2016. 

There’s a lot of history behind Ant Financial and its on-again, off-again capital ties with Alibaba and Jack Ma.

This is the same company that was blocked from buying money transfer company MoneyGram this year over U.S. security and privacy concerns.

In other Ant Financial news, it’s funded Chinese catering company Xiyun with $200 million, along with CDH. No relation to finance that we can see, but then again Alibaba has morphed into all kinds of retail businesses.

Exclusive peak: Alibaba is making an investment in an Israeli database company. More details on this deal in my column at Forbes, Wednesday.

This fits well with the growing Israel-China alliance we’ve been covering.  The Israeli company is heading to China for sales!

Biotech startups in China continue to be hot. The latest deals are a $300 million, Series C funding led by Ally Bridge Capital in Tencent-backed cancer detection company Grail. 

Another Tencent-backed healthcare company in China has raised funding. We Doctor Holdings drew in $500 million in a pre-IPO round led by insurer AIA Company and its Hong Kong affiliate.

Sinovation Ventures has put $5.8 million in fresh produce retailer Yonghui Superstore in China. Any connection to tech?

FUNDS
Artificial intelligence in China just got a boost with news of a $391 million fund set up in Guangzhou by none other than Kai-Fu Lee‘s Sinovation Ventures.

INDIA
Lots going on in India, deal-wise: 

Tencent (again!) has led a $50 million, series C financing of NewsDog (like the name!), an app that’s imitating China’s popular AI news aggregator Toutiao.
Remember that my second book, Startup Asia, predicted that the China trends would move to India and SEA.

Amazon, which has turned its sights to India from China, has led a $12 million investment in digital insurance startup Acko, which provides policies online. Amazon is building out its ecosystem beyond e-commerce in the Indian market, which has heated up with WalMart’s entree via its purchase of Flipkart.

 

SOUTHEAST ASIA
Singaporean startup Haulio has raised seed financing to scale up its tech-driven truck-sharing platform, thanks to 500 Startups. 

 

NOTEWORTHY

There’s a China connection to the grand reopening of Cellini, the New York-based jewelry and watch retailer that graced the Waldorf-Astoria for 40 years but had to leave with new Chinese owner’s renovation. Cellini has found a new home on Park and 56th. Very swanky.

Antique watches from Bovet show Chinese influences – and check out that 50 carat diamond (in the vault!)