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Huawei reports slowing growth as its operations ‘face significant challenges’

By Catherine Shu

Huawei announced earnings results today showing that its growth has slowed significantly this year as the Chinese telecom equipment and smartphone giant said its “production and operations face significant challenges.”

While Huawei did not specify trade restrictions in its brief announcement, the company has been hit with a series of commercial trade restrictions by the U.S. government. The full impact of those policies haven’t been realized yet, because the U.S. government has granted Huawei several waivers, including one that will delay the implementation of a ban on commercial trade with Huawei and ZTE until May 2021.

During the first three quarters of 2020, the Chinese telecoms and smartphone giant reported revenue of 671.3 billion yuan (about USD $100.7 billion), an increase of 9.9% year-over-year, with a profit margin of 8%. The company said those results “basically met expectations,” but it represents a huge drop from its performance during the same period last year, when Huawei reported 24.4% growth with a profit margin of 8.7%.

Huawei is a privately-held company and its announcement did not break down its results in terms of smartphone or telecoms equipment sales, or other details.

The company wrote that “as the world grapples with COVID-19, Huawei’s global supply chain is being put under pressure and its production and operations face significant challenges. The company continues to do its best to find solutions, survive and forge forward, and fulfill its obligations to customers and suppliers.”

Other U.S. restrictions include one that would ban Huawei from using U.S. software and hardware in certain semiconductor processes, forcing it to find other sources for chips.

In addition to the U.S., Huawei is also facing scrutiny by other countries, including the United Kingdom, which is planning to implement a new policy that will bar telecoms from buying new 5G equipment from Huawei and ZTE and require them to remove any parts from those companies that’s already been installed in U.K. 5G networks by 2027.

Replacing Huawei equipment also presents costly challenges for telecoms, because Huawei is one of the biggest suppliers in the world. Last month, the U.S. Federal Communications Commission said it would cost $1.837 billion to replace Huawei and ZTE networking equipment, with rural telecom networks facing the most financial pressure.

But 2020 has had a few bright spots for Huawei. In July, a report from Canalys found that Huawei overtook Samsung as the leader in global smartphone shipments during the second quarter of 2020, a major milestone because it marked the first time in nine years that Apple and Samsung didn’t take the top spot on Canalys’ charts. This was partly because smartphone shipments in general have been hurt during the COVID-19 pandemic, but Huawei was helped by sales within China, its domestic market.

India’s Flipkart buys $204 million stake in Aditya Birla Fashion and Retail

By Manish Singh

Flipkart is acquiring a 7.8% stake in Aditya Birla Fashion as the Walmart-owned Indian e-commerce firm makes a further push into the apparel category in one of the world’s largest retail markets.

The e-commerce group will pay $203.8 million for its stake in Aditya Birla Fashion and Retail, a conglomerate that operates over 3,000 stores, including the Pantaloons clothing chain. As part of the “landmark” strategic partnership, Flipkart will also sell and distribute various brands of Aditya Birla Fashion and Retail. (The Indian fashion retail giant owns rights to sell Forever 21 merchandise in India, for instance.)

Friday’s announcement is the latest development in the intense battle among Flipkart, Amazon and Mukesh Ambani’s Reliance Retail to command how Indians shop. While Flipkart and Amazon are racing to expand their share in India’s growing e-commerce market, Ambani’s Reliance Retail is slowly expanding to the digital space.

Reliance Retail is the largest retail chain in India — a lead it expanded after acquiring much of Future Retail, India’s second largest retail chain. Future Group and Amazon are separately fighting a legal battle over the Indian firm’s deal with Reliance Retail. Amazon alleges that Future Group selling businesses to Reliance Retail was a breach of a contract. (Amazon, which has invested in a Future Group entity, had the right of first refusal for Future Retail’s future deals.) According to local media reports, Amazon had also engaged with Aditya Birla Fashion and Retail for a stake in the Indian firm.

“This partnership is an emphatic endorsement of the growth potential of India,” said Kumar Mangalam Birla, chairman of Aditya Birla Group, which operates the fashion retail firm in a filing to the stock exchange. “It also reflects our strong conviction in the future of the apparel industry in India, which is poised to touch $100 billion in the next five years.”

He added that the company will use the fresh capital to strengthen its balance sheet. This is not the first time Aditya Birla Fashion is making a push into e-commerce. In 2015, it had launched Abof, but the venture failed to gain traction and was shut down two years later.

Kalyan Krishnamurthy, CEO of Flipkart Group, said the two companies will work toward “making available a wide range of products for fashion-conscious consumers across different retail formats across the country. We look forward to working with ABFRL and its well-established and comprehensive fashion and retail infrastructure as we address the promising opportunity of the apparel industry in India.”

Flipkart already dominates in the online sales of apparels in India, thanks in part to Myntra, a fashion e-tailer it bought it in 2014. Over the years, the Walmart-owned firm has made several more investments in strengthening its fashion category. In July, Flipkart invested $35 million in Arvind Fashions, part of a decades-old Indian retail giant.

Online sale of apparel is worth $7 billion, according to research firm Forrester. It’s the biggest category for e-commerce giants in India after smartphones.

Amazon has also made several deals with offline retail chains in India. In 2018, it acquired parts of supermarket chain More from the Birla Group. It has also bought stakes in department store chain Shoppers Stop.

Smartphone shipments rebound to an all-time high in India

By Manish Singh

Smartphone shipments reached an all-time high in India in the quarter that ended in September this year as the world’s second largest handset market remained fully open during the period after initial lockdowns due to the coronavirus, according to a new report.

About 50 million smartphones shipped in India in Q3 2020, a new quarterly record for the country where about 17.3 million smartphone units shipped in Q2 (during two-thirds of the period much of the country was under lockdown) and 33.5 million units shipped in Q1 this year, research firm Canalys said on Thursday.

Xiaomi, which assumed the No.1 smartphone spot in India in late 2018, continues to maintain its dominance in the country. It commanded 26.1% of the smartphone market in India, exceeding Samsung’s 20.4%, Vivo’s 17.6%, and Realme’s 17.4%, the marketing research firm said.

Image Credits: Canalys /

But the market, which was severely disrupted by the coronavirus, is set to see some more shifts. Research firm Counterpoint said last week that Samsung had regained the top spot in India in the quarter that ended in September. (Counterpoint plans to share the full report later this month.)

According to Counterpoint, Samsung has benefited from its recent aggressive push into online sales and from the rising anti-China sentiments in India.

The geo-political tension between India and China has incentivised many consumers in India to opt for local brands or those with headquarters based in U.S. and South Korea. And local smartphone firms, which lost the market to Chinese giants (that command more than 80% of the market today) five years ago, are planning a come back.

Indian brand Micromax, which once ruled the market, said this month that it is gearing up to launch a new smartphone sub-brand called “In.” Rahul Sharma, the head of Micromax, said the company is investing $67.9 million in the new smartphone brand.

In a video he posted on Twitter last week, Sharma said Chinese smartphone makers killed the local smartphone brands but it was now time to fight back. “Our endeavour is to bring India on the global smartphone map again with ‘in’ mobiles,” he said in a statement.

India also recently approved applications from 16 smartphone and other electronics companies for a $6.65 billion incentives program under New Delhi’s federal plan to boost domestic smartphone production over the next five years. Foxconn (and two other Apple contract partners), Samsung, Micromax, and Lava (also an Indian brand) are among the companies that will be permitted to avail the incentives.

Missing from the list are Chinese smartphone makers such as Oppo, Vivo, OnePlus and Realme.

Hearings begin in Samsung vice chairman Jay Y. Lee’s accounting fraud trial

By Catherine Shu

The trial of Samsung leader Jay Y. Lee, who is accused of accounting fraud and stock price manipulating, held its first hearing today at the Seoul Central District Court.

The Seoul Central District Court denied prosecutors’ arrest warrant request for Lee in June, stating that even though they had secured a “considerable amount of evidence,” it was still not enough to detain Lee.

Lee was not present for the hearing. Vietnamese state media reported that he was in Vietnam earlier this week to discuss investments with Prime Minister Nguyen Xuan Phuc.

Prosecutors allege that the value of electronics materials provider Cheil Industries was artificially inflated before its merger with Samsung’s holding company five years ago to create a more favorable rate for Lee, who was then Cheil’s largest shareholder.

Lee is also one of eleven current and former Samsung Executives indicted by South Korean prosecutors last month over charges that they inflated the assets of Samsung BioLogics, which Cheil held a major stake in.

During the hearing today, Lee’s attorney said that the merger and accounting process were part of normal management activities, reported Channel News Asia.

If found guilty, Lee may face a jail sentence. Lee has already spent time in jail, after he was charged with bribing former President Park Geun-hye to secure support for the merger. Lee was released from prison in 2018 after serving almost a year.

Park was impeached in 2017 and sentenced to a 25-year prison term for bribery, abuse of power and embezzlement.

Netflix to test free weekend-long access in India

By Manish Singh

Netflix plans to give users in India access to its service at no charge for a weekend as part of a test to expand its reach in the country, a top company executive said Tuesday.

The American streaming giant, which today reported a slow users growth for the quarter that ended in September, recently stopped offering a first-month complimentary access to new users in the U.S. But the company plans to keep experimenting with new ways to lure potential in many parts of the world, said Greg Peters, COO and Chief Product Officer at Netflix on the company’s earnings call.

One of those new ways is giving away access to Netflix at no charge to customers for a weekend in different markets, he said. The company has picked India, where it competes with Disney, Amazon, and technically three-dozen additional services, as the first market where it will test this idea and “will see how that goes,” from there, he said.

“We think that giving away everyone in a country access to Netflix for free for a weekend could be a great way to expose a bunch of new people to the amazing stories that we have, the service and how it works … and hopefully get a bunch of those folks to sign up,” he said, without sharing exactly when the company will roll out this new test in India. (It had not at the time of publishing.)

This won’t be the first time Netflix uses India as a test bed to explore new ideas. The company first flirted with the idea of a $2.7 mobile-only monthly plan in New Delhi before introducing it as a permanent tier in the country last year and then nearly a dozen markets. It has since tested even more pricing plans in the country.

India emerged as the largest open battleground for Silicon Valley and Chinese firms searching for their next billion users in the past decade. Disney, Amazon, Google, Apple, Spotify and several other firms offer a range of their services at a much affordable price range in India, the world’s second largest internet market.

The company, which earmarked $420 million to develop and license content in India by end of 2020 last year, is also deepening its collaboration with other industry players in the country.

It recently partnered with Reliance Jio Platforms, India’s largest telecom operator, to bundle its app on the Indian firm’s fiber broadband and mobile data plans. The company has also partnered with several financial institutions in India to make payment processing easier for users in the country, it said. “We expect [more payment options] will have retention benefits. All of these initiatives are important and work in concert with our big investment in local originals to improve the Netflix experience for our members,” the company said in a letter to shareholders (PDF).

As startups accelerate in record Q3, Europe and Asia rack up huge VC results

By Alex Wilhelm

Venture capital activity in Europe and Asia saw a strong return to form in Q3, data indicates.

The two continents enjoyed more venture capital investment into their local startups than in some time, underscoring that strong VC results the United States saw in the third quarter were not a fluke, but part of a broader trend.


The Exchange explores startups, markets and money. Read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.


Data compiled by CB Insights shows a global acceleration in the number of dollars venture capitalists are putting to work around the globe as 2020 chews through its second half. The record figures that Q3 supplied stand in stark contrast to the fear that overtook startup-land in late Q1 and early Q2, when COVID-19 threw some young technology companies surprise turbulence.

But the dip in venture capital activity was short-lived. As many startups sold software, they found their wares suddenly in greater demand; across a host of verticals, startups benefited from an accelerated digital transformation as the world adapted to a new work environment. Aside from clear winners like video conferencing tools, other categories from remote learning to security tooling also got a bump.

The COVID-tailwind, as it is sometimes called, does not appear to be specific to the United States or North America. Instead, given what the venture capital data states, we can infer that startups the world around are enjoying a similar boost.1

Let’s get into the numbers to better understand what’s up in Europe and Asia. (As an aside, if you have data on African startups’ venture capital results, please email me as I am starting to poke around for a more global picture. Recent deal activity makes it plain that American media needs to do more and better reporting on the continent.)

A strong Q3

The venture capital world’s center of gravity still lands somewhere in the United States, but here’s how the three continents managed in Q3 2020, looking at their raised venture capital dollars:

  • North America: $37 billion
  • Asia: $24 billion
  • Europe: $9 billion

Asia’s result was its best since at least Q4 2018, as far back as our dataset goes. Europe’s total tied its high-water mark set in Q2 2019. But as a combined pair, venture capital outside North America might have just had its best quarter in years, if not ever.

Here’s the data in graphical format:

Via CB Insights, shared with permission.

Tiliter bags $7.5M for its ‘plug and play’ cashierless checkout tech

By Natasha Lomas

Tiliter, an Australian startup that’s using computer vision to power cashierless checkout tech that replaces the need for barcodes on products, has closed a $7.5 million Series A round of funding led by Investec Emerging Companies.

The 2017-founded company is using AI for retail product recognition — claiming advantages such as removing the need for retail staff to manually identify loose items that don’t have a barcode (e.g. fresh fruit or baked goods), as well as reductions in packaging waste.

It also argues the AI-based product recognition system reduces incorrect product selections (either intentional or accidental).

“Some objects simply don’t have barcodes which causes a slow and poor experience of manual identification,” says co-founder and CEO Martin Karafilis. “This is items like bulk items, fresh produce, bakery pieces, mix and match etc. Sometimes barcodes are not visible or can be damaged.

“Most importantly there is an enormous amount of plastic created in the world for barcodes and identification packaging. With this technology we are able to dramatically decrease and, in some cases, eliminate single use plastic for retailers.”

Currently the team is focused on the supermarket vertical — and claims over 99% accuracy in under one second for its product identification system.

It’s developed hardware that can be added to existing checkouts to run the computer vision system — with the aim of offering retailers a “plug and play” cashierless solution.

Marketing text on its website adds of its AI software: “We use our own data and don’t collect any in-store. It works with bags, and can tell even the hardest sub-categories apart such as Truss, Roma, and Gourmet tomatoes or Red Delicious, Royal Gala and Pink Lady apples. It can also differentiate between organic and non-organic produce [by detecting certain identification indicators that retailers may use for organic items].”

“We use our pre-trained software,” says Karafilis when asked whether there’s a need for a training period to adapt the system to a retailer’s inventory. “We have focused on creating a versatile and scalable software solution that works for all retailers out of the box. In the instance an item isn’t in the software it can be collected by the supermarket in approx 20min and has self-learning capabilities.”

As well as a claim of easy installation, given the hardware can bolt onto existing retail IT, Tiliter touts lower cost than “currently offered autonomous store solutions”. (Amazon is one notable competitor on that front.)

It sells the hardware outright, charging a yearly subscription fee for the software (this includes a pledge of 24/7 global service and support).

“We provide proprietary hardware (camera and processor) that can be retrofitted to any existing checkout, scale or point of sale system at a low cost integrating our vision software with the point of sale,” says Karafilis, adding that the pandemic is driving demand for easy to implement cashierless tech.

The startup cites a 300% increase in ‘scan and go’ adoption in the US over the past year due to COVID-19, as an example, adding that further global growth is expected.

It’s not breaking out customer numbers at this stage — but early adopters for its AI-powered product recognition system include Woolworths in Australia with over 20 live stores; Countdown in New Zealand, and several retail chains in the US such as New York City’s Westside Market.

The Series A funding will go on accelerating expansion across Europe and the US — with “many” supermarkets set to be adopt its tech over the coming months.

Eat Just partners with Proterra to launch a new subsidiary in Asia

By Catherine Shu

Eat Just, the plant-based food startup, is launching a new Asian subsidiary through a partnership with Proterra Investment Partners Asia. The agreement includes building Eat Just’s first factory in Asia, which will be based in Singapore.

As part of the deal, Proterra, which focuses on agri-tech, will invest up to $100 million in the facility, while Eat Just will invest $20 million. The new subsidiary, called Eat Just Asia, will focus on creating a fully-integrated supply chain, working with manufacturers and distributers for Eat Just’s flagship product, vegan egg substitute Just Egg, which is made from mung beans.

In addition to Just Egg, Eat Just and Proterra said they are also in talks to expand their partnership to include the development of plant-based meat alternatives.

Eat Just Asia also received support from the Singaporean government’s Economic Development Board.

Eat Just’s current distribution partners in Asia include SPC Samlip in South Korea, Betagro in Thailand and an as-of-yet undisclosed new partner in China, where Just Egg is already available on Alibaba’s Tmall and JD.com.

Based in San Francisco and formerly known as Hampton Creek, Eat Just has received total of about $220 million in funding, according to Crunchbase. Its investors include Khosla Ventures and Li Ka-Shing.

Eat Just announced in March that it will focus on global expansion this year, with partnerships in North America, Latin America, Europe and Asia.

Over the following months, it announced a succession of distribution deals for Just Egg, including ones with American food manufacturer and distributor Michael Foods, a subsidiary of Post Holdings, and European plant-based food manufacturer Emsland Group.

In Asia, demand for plant-based protein foods grew during the COVID-19 pandemic, due in part to concerns about the safety of meat and other animal products. In an April 2020 Reuters article, Eat Just said sales of Just Egg on JD.com and Tmall had grown 30% since the beginning of the coronavirus outbreak.

Other plant-based food startups focusing on Asian markets include Impossible Foods, which announced funding of $500 million in March to expand in Asia; Karana, a Singaporean startup that makes meat substitutes from jackfruit; and Malaysian-based Phuture Foods, which uses a variety of plants to make pork substitutes.

Intel agrees to sell its NAND business to SK Hynix for $9 billion

By Catherine Shu

SK Hynix, one of the world’s largest chip makers, announced today it will pay $9 billion for Intel’s flash memory business. Intel said it will use proceeds from the deal to focus on artificial intelligence, 5G and edge computing.

“For Intel, this transaction will allow us to to further prioritize our investments in differentiated technology where we can play a bigger role in the success of our customers and deliver attractive returns to our stockholders,” said Intel chief executive officer Bob Swan in the announcement.

The Wall Street Journal first reported earlier this week that the two companies were nearing an agreement, which will turn SK Hynix into one of the world’s largest NAND memory makers, second only to Samsung Electronics.

The deal with SK Hynix is the latest one Intel has made so it can double down on developing technology for 5G network infrastructure. Last year, Intel sold the majority of its modem business to Apple for about $1 billion, with Swan saying that the time that the deal would allow Intel to “[put] our full effort into 5G where it most closely aligns with the needs of our global customer base.”

Once the deal is approved and closes, Seoul-based SK Hynix will take over Intel’s NAND SSD and NAND component and wafer businesses, and its NAND foundry in Dalian, China. Intel will hold onto its Optane business, which makes SSD memory modules. The companies said regulatory approval is expected by late 2021, and a final closing of all assets, including Intel’s NAND-related intellectual property, will take place in March 2025.

Until the final closing takes places, Intel will continue to manufacture NAND wafers at the Dalian foundry and retain all IP related to the manufacturing and design of its NAND flash wafers.

As the Wall Street Journal noted, the Dalian facility is Intel’s only major foundry in China, which means selling it to SK Hynix will dramatically reduce its presence there as the United States government puts trade restrictions on Chinese technology.

In the announcement, Intel said it plans to use proceeds from the sale to “advance its long-term growth priorities, including artificial intelligence, 5G networking and the intelligent, autonomous edge.”

During the six-month period ending on June 27, 2020, NAND business represented about $2.8 billion of revenue for its Non-volatile Memory Solutions Group (NSG), and contributed about $600 million to the division’s operating income. According to the Wall Street Journal, this made up the majority of Intel’s total memory sales during that period, which was about $3 billion.

SK Hynix CEO Seok-Hee Lee said the deal will allow the South Korean company to “optimize our business structure, expanding our innovative portfolio in the NAND flash market segment, which will be comparable with what we achieved in DRAM.”

ShopUp raises $22.5 million to digitize millions of mom-and-pop shops in Bangladesh

By Manish Singh

A startup that is aiming to digitize millions of neighborhood stores in Bangladesh just raised the country’s largest Series A financing round.

Dhaka-headquartered ShopUp said on Tuesday it has raised $22.5 million in a round co-led by Sequoia Capital India and Flourish Ventures. For both the venture firms, this is the first time they are backing a Bangladeshi startup. Veon Ventures, Speedinvest, and Lonsdale Capital also participated in the four-year-old ShopUp’s Series A financing round. ShopUp has raised about $28 million to date.

Like its neighboring nation, India, more than 95% of all retail in Bangladesh goes through neighborhood stores in the country. There are about 4.5 million such mom-and-pop stores in the country and the vast majority of them have no digital presence.

ShopUp is attempting to change that. It has built what it calls a full-stack business-to-business commerce platform. It provides three core services to neighborhood stores: a wholesale marketplace to secure inventory, logistics (including last mile delivery to customers), and working capital, explained Afeef Zaman, co-founder and chief executive of ShopUp​, in an interview with TechCrunch.

Image Credits: ShopUp

These small shops are facing a number of challenges. They are not getting inventory on time or enough inventory and they are paying more than what they should, said Zaman. And for these businesses, more than 73% (PDF) of all their sales rely on credit instead of cash or digital payments, creating a massive liquidity crunch. So most of these businesses are in dire need of working capital.

Zaman declined to reveal how many mom-and-pop shops today use ShopUp, but claimed that the platform assumes a clear lead in its category in the country. That lead has widened amid the global pandemic as more physical shops explore digital offerings to stay afloat, he said.

The number of neighborhood shops transacting weekly on the ShopUp platform grew by 8.5 times between April and August this year, he said. The pandemic also helped ShopUp engage with e-commerce players to deliver items for them.

“Sequoia India has been a strong supporter of the company since it was part of the first Surge cohort in early 2019 and it’s been exciting to see the company become a trailblazer facilitating digital transformation in Bangladesh,” said ​Klaus Wang, VP, Sequoia Capital, in a statement.

The startup has no intention to become an e-commerce platform like Amazon that directly engages with consumers, Zaman said. E-commerce is still in its nascent stage in Bangladesh. Amazon has yet to enter the country and increasingly Facebook is filling that role.

ShopUp sees immense opportunity in serving neighborhood stores, he said. The startup plans to deploy the fresh capital to deepen its partnerships with manufacturers and expand its tech infrastructure.

It opened an office in Bengaluru earlier this year to hire local tech talent in the nation. Indian e-commerce platform Voonik merged with ShopUp this year and both of its co-founders have joined the Bangladeshi startup. Zaman said the startup will hire more engineering talent in India.

SAIF Partners rebrands as Elevation Capital, secures $400 million for its new India fund

By Manish Singh

SAIF Partners has raised $400 million for a new fund and rebranded the 18-year-old influential venture capital firm as it looks to back more early-stage startups in the world’s second largest internet market.

The new fund is SAIF Partners’ seventh for early-stage startups in India. Its previous two funds were each $350 million in size, and the firm today manages more than $2 billion in assets.

SAIF Partners started investing in Indian startups 18 years ago. The firm began as a joint venture with SoftBank and its first high-profile investment was Sify. But the two firms’ joint venture ended more than a decade ago, so the firm is now getting around to rebranding itself, Ravi Adusumalli, the managing partner of SAIF Partners, told TechCrunch in an interview.

The firm — which has seven unicorns in its portfolio, including Paytm’s parent firm One97 Communications, food delivery startup Swiggy and online learning platform Unacademy — is rebranding itself as Elevation Capital.

“Elevation reflects our investment ethos and re-emphasises our commitment to the founders who help redefine our future. For our existing partners, it is a commitment of continued collaboration on our path-breaking journeys together. For our new partners, it is a promise to do all we can to achieve great heights together, from day one,” said Adusumalli.

SAIF Partners has backed more than 100 startups to date. The venture firm makes long-term bets on founders and backs young firms beginning their early years when they are raising their seed, pre-Series A and Series A financing rounds.

The venture firm invests in startups operating in a wide-range of sectors and plans to continue this strategy and add more areas of interest, said Deepak Gaur, a managing director at Elevation Capital, in an interview with TechCrunch.

“Enterprise SaaS is one area where we are spending a lot of resources,” he said. “We believe the time has come for this sector and we will see many global companies emerge from India.”

More than 15 startups in Elevation Capital’s portfolio are projected to become a unicorn in the next few years, according to Tracxn, a firm that tracks startups and investments in India. These include app-based platform to book home services Urban Company, insurance tech startup Acko, digital loan platform Capital Float, and real estate property marketplace NoBroker.

A number of SAIF Partners-backed startups, including IndiaMART, MakeMyTrip and Justdial, have become publicly listed companies, too.

Mukul Arora, a managing director at SAIF Partners, said that the state of the Indian startup ecosystem has changed for the better in the past decade. “A few years ago, we were seeing many startups replicate a foreign company’s play in India. Today, we are seeing our ideas being replicated outside of the country. Someone is building a Meesho for Brazil,” he said.

The founders have also grown more sophisticated, said Mayank Khanduja, a managing director at Elevation Capital. Elevation Capital has over three dozen employees, with about two-dozen focused on the investment size.

Elevation Capital’s new fund comes at a time when many established venture capital firms have also closed their new funds for India in recent months. In July, Sequoia Capital announced two funds — totaling $1.35 billion in size — for India. A month later, Lightspeed raised $275 million for its third Indian fund. Accel late last year closed its sixth fund in India at $550 million.

All of the LPs participating in Elevation Capital’s new fund, as was the case with previous funds, are U.S.-based, and the vast majority of them are nonprofits, said Adusumalli. Without disclosing any figures, he said the firm’s previous funds have performed very well.

OnePlus co-founder Carl Pei confirms he has left the company

By Manish Singh

OnePlus co-founder Carl Pei has left the company, he confirmed on Friday. Pei, 31, said he plans to take some time off before pursuing his next step. “After nearly 7 years at OnePlus, I’ve made the difficult decision to say goodbye,” wrote Pei in a post on OnePlus forum.

TechCrunch reported earlier this week that Pei was leaving the company to start a new venture. Pei, who co-founded OnePlus in late 2013 with Pete Lau, has been the public face of the company ever since. He played an instrumental role in designing the OnePlus smartphone lineup over the years, and also how the company marketed them and itself.

“The world didn’t need another smartphone brand in 2013. But we saw ways of doing things better and dreamt of shaking things up. Better products. Built hand in hand with our users. At more reasonable prices. Fast forward to today, and OnePlus is a strong force to be reckoned when it comes to flagship smartphones. And the new Nord product line, this success will continue into new market segments,” Pei wrote in the post.

Pei’s departure comes in the same week as OnePlus launches its new flagship smartphone, the OnePlus 8T. TechCrunch reached out to OnePlus for comment on Monday and has yet to hear back.

News outlet AndroidCentral speculated earlier this week that Pei was leaving the firm possibly because of an alleged “internal power struggles” between him and Lau, 45. Lau took an additional role of SVP at Oppo. BBK Group owns OnePlus, Realme, Oppo, and Vivo. OnePlus has always avoided questions about its ownership structure.

“I am eternally grateful to Pete for taking a chance in this kid without a college degree, with nothing to his name but a dream. The trust, mentorship, and camaraderie will never be forgotten. Thanks for the opportunity of a lifetime,” Pei wrote.

Pei said he was leaving the company because OnePlus had been his singular focus for the last seven years. “I’ve never regretted trusting my gut feeling, and this time it’s no different. These past years, OnePlus has been my singular focus, and everything else has had to take a backseat. I’m looking forward to taking some time off to decompress and catch up with my family and friends,” he wrote. “And then follow my heart on to what’s next.

Miniso, the Japanese-looking variety store from China, sees shares jump in US IPO

By Rita Liao

Investors are jumping aboard a value store chain that is bringing Japanese-inspired lifestyle goods to consumers around the world. The company, Miniso, raised $608 million from an initial public offering in New York on Thursday. It debuted at $24.40, above its pricing range of $16.50 to $18.50, and finished the day up 4.4%.

Everything about the seven-year-old firm — from its name, branding, products, to its website — suggests it is Japanese, except in fact it was born and bred in China. It bears a striking similarity to Muji, Uniqlo and dollar store Daiso in many ways, and has been called a copycat of its Japanese lifestyle predecessors.

The company, backed by Tencent and Hillhouse Capital, seems to intentionally, albeit misleadingly, brand itself as Japanese. In its public messaging, such as this press release and its country-specific site, it describes itself as a firm co-founded by Chinese entrepreneur Ye Guofu and Japanese designer Miyake Junya in Tokyo in 2013. But its Japanese origin is nowhere to be seen in its IPO prospectus.

Instead, the document lists the southern Chinese metropolis Guangzhou as the firm’s first base and Ye as the sole founder and current chief executive. All key directors and executives appear to be Chinese.

Branding confusion aside, there’s no denying Miniso has successfully wooed many young, price-sensitive consumers who welcome choice overload. Over 80% of its store visitors in China are under the age of 40. As of June, more than 95% of its products in China were below 50 yuan or $7.08 — thanks to the vicinity of abundant manufacturers — and the firm prides itself on the goal to launch 100 new SKUs every seven days.

Miniso’s revenue reached $1.4 billion in 2019, compared to $17.85 billion for 71-year-old Uniqlo and $4.17 billion for 39-year-old Muji. It recorded a loss of $44 million last year. 

The firm’s retail stores, decorated by its iconic bright red color reminiscent of the Uniqlo brand, span over 80 countries today. 40% of its 4,200 stores are outside of China. Over 90% of its outlets are franchise stores, one reason why it’s able to expand rapidly, but the model also means Miniso has limited control over its large network of third-party operators.

Uber is hiring hundreds of engineers in India to cut costs

By Manish Singh

Uber said on Thursday it is working to hire 225 engineers in India, strengthening its tech team in the key overseas market months after it eliminated thousands of jobs globally.

The ride-hailing firm, which competes with Ola in India, said today it has hired Manikandan Thangarathnam, who spent nearly 13 years as a director of engineering at Amazon, to lead the company’s rider and platform engineering teams in Bangalore. (Last month, Uber announced it would hire 140 engineers in India. Today it said it was in the process of hiring an additional 85 engineers.)

The move comes as several high-profile engineers have left Uber India in recent months to join Google and Amazon among other tech giants. A senior engineer, who recently left Uber, told TechCrunch that many of his peers had lost confidence in Uber’s future prospects in the country.

Uber said its tech expansion plans in India were in line with its vision to make mobility and delivery “more accessible” and becoming the “backbone” of transportation in thousands of cities across the globe.

The company recently also hired Jayaram Valliyur as a senior director to lead its global finance technology team. Prior to this role, Jayaram, too, worked at Amazon, where he spent 14 years.

In July, news outlet The Information described Uber chief executive Dara Khosrowshahi’s plan to move engineering roles to India as a cost saving measure. The report said Khosrowshahi’s plan had sparked internal debates.

Thuan Pham, Uber’s longtime chief technology officer, who left the company earlier this year, reportedly cautioned that hiring more engineers so quickly in India would “require accepting lower-quality candidates.”

Uber and Ola both claim to be the No. 1 ride-hailing service in India. But Rajeev Misra, the chief of SoftBank Vision Fund which is a common investor in both the companies, said last month that Ola maintained a “small lead” over Uber in India.

Alibaba-affiliated marketplace to leave Taiwan, again

By Rita Liao

Separated by a strait, the internet in Taiwan and mainland China are two different worlds. Even mainland tech giants Alibaba and Tencent have had little success entering the island, often running into regulatory hurdles.

Less than a year after Taobao launched on the island through an Alibaba-backed joint venture, the marketplace announced it will cease operations by the end of this year, the platform said in a notice to customers on Thursday.

The decision came two months after the Investment Commission under Taiwan’s Ministry of Economic Affairs ruled that Taobao Taiwan is a Chinese-controlled company and required the firm to either leave or re-register under a different corporate structure. Under Taiwanese law, Chinese investors must obtain permission from the government to directly or indirectly acquire a stake of more than 30% in any Taiwanese company.

Taobao Taiwan is owned and operated by British-registered Claddagh Venture Investment, which is 28.77% owned by Alibaba. Nonetheless, the investment regulator ruled that the one with de facto control over Taobao Taiwan is Alibaba, which has “veto power” over Claddagh’s board decisions.

The app is currently the most downloaded shopping app in the Taiwanese Google Play store, according to app tracking firm App Annie. Unexpectedly, the Chinese edition of Taobao comes in sixth in the iOS shopping category, where Shopee tops.

Taobao Taiwan is separate from Alibaba’s main marketplaces, which last boast 874 million mobile monthly users. Most of Alibaba’s shoppers are in mainland China, though customers in Hong Kong and Taiwan have long been able to shop on the Chinese Taobao app and have the goods imported to them with extra fees.

Taobao Taiwan, on the other hand, established to attract local vendors in a market of around 24 million people, competing with popular alternatives like Singapore-headquartered Shopee and the indigenous PChome 24.

This isn’t the first time Taobao has been hit by local law. In 2015, the authority ordered Taobao Taiwan, at the time set up by a Hong Kong entity of Alibaba, to leave because of its Chinese association. Even Shopee wasn’t exempt and was under investigation in 2017 for Tencent owned around 40% of its parent company Sea.

“We respect the decision by Claddagh,” an Alibaba representative said in a statement to TechCrunch. “Alibaba businesses are operating as normal in the Taiwan market, and we will continue to serve local consumers with quality products through our Taobao app.”

It’s unclear how Claddagh came to decide on its retreat rather than restructuring the joint venture. The firm has not responded to TechCrunch’s request for comment.

South Korean startup Cochlear.ai raises $2 million Series A to detect the sounds missed by speech recognition

By Catherine Shu

Sit quietly for a moment and pay attention to the different sounds around you. You might hear appliances beeping, cars honking, a dog barking, someone sneezing. These are all noises Cochlear.ai, a Seoul-based sound recognition startup, is training its SaaS platform to identify. The company’s goal is to develop software that can identify almost any kind of sound and be used in a wide range of smart hardware, including phones, speakers and cars, co-founder and chief executive Yoonchang Han told TechCrunch.

Cochlear.ai announced it has raised $2 million in Series A funding, led by Smilegate Investment, with participation from Shinhan Capital and NAU IB Capital. This brings its total funding so far to $2.7 million, including a seed round from Kakao Ventures, the investment arm of the South Korean internet giant. Cochlear.ai will use its Series A on hiring over the next 18 months and to increase the dataset of sounds used to train its deep learning algorithms.

The company was founded in 2017 by a team of six music and audio research scientists, including Han, who completed his PhD in music information retrieval at Seoul National University. While working on his doctorate, Han found “that everyone was really focusing on speech recognition systems. There are so many companies for that, but analyzing other kinds of sounds are technically quite different from speech recognition.”

Speech recognition technology usually recognizes one or two voices at a time, and assumes that people are engaging in a conversation, instead of talking over one another. It also uses linguistic knowledge in post-processing to increase accuracy. But with music or environmental noises, different types of sounds usually overlap.

“We have to take care about all different frequency ranges, and there are not only voices, but really thousands of sounds out there,” Han said. “So we think this will be the next generation of sound recognition, and that was the motivation for our startup.”

Cochlear.ai’s SaaS, called Cochl.Sense, is available as a cloud API and edge SDK, and can currently detect about 40 different sounds, which are grouped into three categories: emergency detection (including glass breaking, screaming and sirens), human interaction (which includes using finger snaps, claps or whistles to interact with hardware) and human status (to identify sounds like coughing, sneezing or snoring for use cases like patient monitoring or automatic audio captioning).

Han said the company also plans to add new functionality to Cochl.Sense for use in homes (including smart speakers), vehicles and music analysis. Cochl.sense’s flexibility means it can potentially fit many use cases, including turning a smart speaker into a “control tower” for home appliances by detecting the noises they make, or helping hearing impaired people by sending alerts about noises, like car horns, to wearable devices including smart watches.

The sound recognition landscape

Han notes that over the past three years or so, there has been a shift from focusing on speech recognition technology to other sounds as well.

For example, more major tech companies, like Amazon, Google and Apple, are adding context-aware sound recognition to their products. For example, both Amazon Alexa Guard and Nest Secure detect the sound of glass breaking, while iOS 14’s sound recognition enabled it to add new accessibility features.

Han said the launches by major tech companies is a boon for Cochlear.ai, because it means that the market for sound recognition technology is growing. The startup plans to work with many different industries, but is currently focused on smart consumer devices and automotive because that is where the most interest for its software is coming from. For example, Cochlear.ai is currently working on a project with Daimler AG to include its sound recognition in cars (for example, alerts if a child is locked inside), in addition to collaborations with major electronic, telecommunications and consumer good companies.

Software that can identify sounds like gunshots, glass breaking and other noises for emergency detection has been around for decades, but conventional technology often resulted in false alarms or required the use of specific microphones and other hardware, Han said.

Other companies dedicated to improving sound recognition technology include Cambridge, England’s Audio Analytica, which focuses on context-based sound intelligence, and Netherlands-based Sound Intelligence, which develops software for emergency alert and healthcare systems.

Cochlear.ai plans to differentiate by building software that can be used with a wide array of microphones, including in low-end smartphones or USB microphones, without needing to be fine-tuned, instead relying on deep learning to refine its algorithms and reduce false positives.

During the early stages of building a dataset for a specific sound, Cochlear.ai’s team records many audio samples by themselves using older smartphone models and USB microphones, to ensure that their software will work even without high-quality microphones.

Other samples are gathered from online sources. Once the sound’s initial learning model reaches a certain level of accuracy, it is then able to search online by itself for more of the same kind of audio clips, exponentially increasing the speed of data training. Cochlear.ai’s Series A will enable it to build datasets of audio samples more quickly, allowing it to add more sounds to its software.

“All of our co-founders are researchers in this field, so signal processing and machine learning techniques–we are trying many different algorithms, because every sound has different characteristics,” said Han. “We have to try many different things to make one single model that can identify all different sounds.”

WarnerMedia to discontinue HBO and WB TV channels in India, and select other South Asia markets

By Manish Singh

WarnerMedia will discontinue HBO and WB TV channels in India, Pakistan, Maldives, and Bangladesh later this year as the entertainment conglomerate struggles to find a sustainable business model in South Asian despite operating in the region for over a decade.

The company said it will end HBO and WB TV channels in the aforementioned markets, where a cable subscription costs about $4 to $5 a month, on December 15. In India, for instance, it costs less than 25 cents to subscribe to both HBO (in HD) and WB atop a monthly cable plan, which costs about $2.

While HBO is a household name in the U.S. and several other developed markets, in India and other South Asian nations, its audience size remains tiny. Times Internet’s Movies Now, Star Movies, and Sony Pix had a considerably larger viewership than HBO in India last month, according to Broadcast Audience Research Council, India’s ratings agency.

Warner Media cited a dramatic market shift in the pay-TV industry for its decision. It said it will continue to offer Cartoon Network and Pogo in India, and distribute CNN International in the country.

“After 20 years of successes for the HBO linear movie channel in South Asia and more than a decade with the WB linear movie channel, this was a difficult decision to make. The pay-TV industry landscape and the market dynamics have shifted dramatically, and the Covid-19 pandemic has accelerated the need for further change,” said Siddharth Jain, SVP and Managing Director of WarnerMedia’s entertainment network in South Asia, in a statement.

HBO also maintains a content syndication partnership with Disney’s Hotstar in India. So the streamer will continue to offer HBO’s shows such as “Curb Your Enthusiasm” and “Last Week Tonight With John Oliver” — hopefully without any censorship — in the country.

“WarnerMedia has a strong interest in India and are committed to assessing optimal opportunities to serve valued customers here,” said Jain.

Gogoro’s Eeyo 1s e-bike goes on sale in France, its first European market

By Catherine Shu

Gogoro announced today that its Eeyo 1s is now available for sale in France, the smart electric bike’s first European market. Another model, the Eeyo 1, will launch over the next few months in France, Belgium, Monaco, Germany, Switzerland, Austria and the Czech Republic.

In France, the Eeyo 1s can be purchased through Fnac, Darty or, in Paris, Les Cyclistes Branchés. The Eeyo 1s is priced at €4699 including VAT, while the the Eeyo 1 will be priced at €4599, also including VAT.

The weight of Eeyo bikes is one of their key selling points and Gogoro says they are about half the weight of most other e-bikes. The Eeyo 1s weighs 11.9 kg and the Eeyo 1 clocks in at 12.4 kg.  Both have carbon fiber frames and forks, but the Eeyo 1s’ seat post, handlebars and rims are also carbon fiber, while on the Eeyo 1 they are made with an alloy.

Based in Taiwan, Gogoro first introduced its Eeyo lineup in May. The e-bikes are the company’s second type of vehicle after its SmartScooters, electric scooters that are powered by swappable batteries. The Eeyo bike’s key technology is the SmartWheel, a self-contained hub that integrates its motor, battery, sensor and smart connectivity technology so it can be paired with a smartphone app.

In an interview for the Eeyo’s launch, Gogoro co-founder and chief executive Horace Luke said the company began planning for Eeyo’s launch in 2019, before the COVID-19 pandemic. While sale of e-bikes were already growing steadily before COVID-19, the pandemic has accelerated sales of e-bikes as people avoid public transportation and stay closer to home. Several cities have also closed some streets to car traffic, making riders more willing to use bikes for short commutes and exercise.

Founded in 2011 and backed by investors including Temasek, Sumitomo Corporation, Panasonic, the National Development Fund of Taiwan and Generation (the sustainable tech fund led by former vice president Al Gore), Gogoro is best known for its electric scooters, but it is also working on a turnkey solution for energy-efficient vehicles to license to other companies, with the goal of reducing carbon emissions in cities around the world.

Huawei plans to divest budget phone unit Honor: reports

By Rita Liao

Besieged by U.S. tech sanctions, Huawei may be looking to shake up its smartphone business that has taken a hit after losing core semiconductor parts and software services.

The Chinese giant is in talks with Digital China Group to sell parts of Honor, its low-end, budget phone unit for 15-25 billion yuan ($2.2-3.7 billion), Reuters reported on Wednesday. 

A Hong Kong-listed firm, Digital China is a spinoff from the Legend Group (later Lenovo) and a major distributor and close ally of Huawei.

Smartphone sales and other consumer-facing electronics today make up the bulk of revenue for Huawei, which began by selling telecommunications gear in the late 1980s.

The news came days after a Chinese tech news blogger claimed Huawei is planning to sell Honor. Respected Apple analyst Ming-Chi Kuo also noted in a report that it’s in Huawei’s benefit to divest Honor so the business could be free of trade restrictions and Huawei gets to focus on high-end phones under its namesake brand.

Sources close to Huawei denied the planned sale of Honor, Tencent News reported last week. A Huawei representative contacted by TechCrunch declined to comment.

Huawei rolled out independent brand Honor in 2011 as Xiaomi’s low-budget phones were taking China by storm. Like Xiaomi, Honor started out by focusing on online sales and young consumers. BBK Group’s Oppo, Vivo and Realme have since made significant inroads into the budget phone market.

Honor’s brand, research and development capabilities and related supply chain management business could be for sale, sources told Reuters. The tech news blogger said Honor will operate and procure independently after the sale.

Other bidders include Xiaomi and TCL, according to Reuters, as well as Gree and BYD, according to the tech news blogger.

More to come…

OnePlus co-founder Carl Pei leaves the company to start a new venture

By Manish Singh

Carl Pei, who co-founded the smartphone giant OnePlus in his 20s, is leaving the company, two sources familiar with the matter told TechCrunch.

Pei played an instrumental role in designing the OnePlus smartphone lineup over the years, including the recently launched OnePlus Nord, which has been the company’s biggest hit to date. Outside Shenzhen, China, where OnePlus is headquartered, Pei has also been the face of the Chinese firm, appearing at trade conferences, interacting with loyal customers and giving interviews to the media.

In the early years of OnePlus, Pei devised various marketing strategies for best positioning the company’s products and creating hype about them. In 2014 and 2015, when OnePlus struggled with scaling its inventories, the company sold its phones through invites and several other clever marketing techniques, including one in which people were required to destroy their current phones to buy a new OnePlus smartphone.

In the early days of OnePlus, Pei lived almost exclusively in low-cost hotels in China and India to better understand the market and easily travel to new cities. OnePlus is now one of the most successful premium smartphone makers in India and several other markets.

“We didn’t have proper product management. What we lacked in experience, we made up in hours,” he said in an earlier interview. He talked more about the company’s early days and the state of the smartphone market at Disrupt 2019.

Once he publicly asked Samsung to hire him so that he could learn more about overseeing operations and logistics. “So, Samsung, today I have a proposal for you: let me be your intern. Seriously. I would be honored to learn from your team about how you’ve been able to scale, run, and manage your business so successfully,” he wrote on his personal blog.

Pei reached out to Pete Lau in 2012 through social media. The two started OnePlus a year later. “He said, ‘I want to change the world.’ I thought this kid has ambitious thoughts and dreams. I think it comes from the heart and it’s very important. I think he has tenacity,” Lau recalled in an interview in 2015.

Years before they started OnePlus, Pei collaborated with a friend and sold white-labeled MP3 players in China.

Pei, 31, is not joining Samsung, but has clarity on what he wishes to do next. He is starting his own venture and is in talks with investors to raise capital, according to one of the sources who requested anonymity, as they are not authorized to speak to the media. Pei did not respond to a request for comment early Monday.

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