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Leverage Edu raises $6.5 million to help Indian students land in top colleges abroad

By Manish Singh

Each year, millions of students in India rush to get an admission in universities abroad. Often they don’t know which program they should focus on, or the college that is right for their skillset and ambition.

Scores of legacy and newfound firms are attempting to offer counselling to these students. But despite India accounting for more students than any other country, most firms aiming to address this challenge are not focused on India, and struggle to understand some unique problems students from the world’s second most populous country face.

An Indian startup that is bridging this gap on Thursday said it has raised $6.5 million in a new financing round as it looks to scale its platform in the world’s second largest internet market.

Leverage Edu said Tomorrow Capital led the Gurgaon-headquartered startup’s Series A financing round. Existing investors Blume Ventures and DSG Consumer Partners also participated in the round.

Akshay Chaturvedi, founder and chief executive of Leverage Edu, told TechCrunch in an interview that he believes that eventually the firm that is going to serve the students best and emerge most successful will be the one that is physically closer to them, and not to the universities.

Chaturvedi, 30, has been experimenting with the right model for his startup for over five years. One of the earliest iterations of Leverage Edu offered mentorship to students and rewarded counselors with points.

Today, the startup offers a broad range of services in addition to offering personalized mentorship. Through its workshops, it helps students find the right college, guides them with complex applications and grade conversions, as well as assists with education loan, VISA, and accommodation. “It’s one digital dashboard. You get everything from flight ticket to local phone number, to education loan in one place,” he said.

“We believe it is inevitable that the next stellar brand in the global cross-border education space will be a home-grown one. We have a great belief in Akshay as a founder – he has a fantastic roadmap for scaling the business and the passion to build a truly global Indian edtech brand – and are excited about working with the Leverage Edu team on this journey,” said Rohini Prakash, chief executive of Tomorrow Capital, in a statement.

Leverage Edu helps students land admission in the most prestigious colleges, but also works with those that didn’t score the most marks and find high-profile colleges.

“Students going to the top colleges is just 10% of the potential audience,” explained Chaturvedi, who spent his teen years attending talks from startup founders and also made money by bringing more people to those talks.  “There are many universities that don’t have the best branding. To connect them with students, we have Univalley.com,” he said.

The startup plans to deploy the fresh capital to help students find colleges in more geographies including UK and Australia, he said.

“We want to focus on a few things and do them really really well. There is also this myth around foreign education being expensive that we’ve been busting for last four years. 18 months from now, we want to be among the top study abroad companies in India, both by number of students and a roof-hitting NPS – because a happy student is why we are all really motivated everyday to do this!”, he added.

With over 1.3 million users, Nigerian-based fintech FairMoney wants to replicate growth in India

By Tage Kene-Okafor

There are over 1.7 billion underbanked people globally, the majority of which are from emerging markets. For them, accessing loans can be difficult, which is a problem fintechs try to solve. One way they do this is by promoting financial inclusion by underwriting credit via a proprietary algorithm.

One such company is FairMoney, which describes itself as “the mobile banking revolution for emerging markets.” FairMoney, founded by Laurin Hainy, Matthieu Gendreau and Nicolas Berthozat, is a licensed online lender that provides instant loans and bill payments to underserved consumers in emerging markets.

Three years after launching its mobile lending service in Nigeria, the company set up shop in India, Asia’s second-most populous country in August 2020.

Before expanding, FairMoney experienced exponential growth in Nigeria in terms of loans disbursement. Last year, it disbursed a total loan volume of $93 million, representing a 128% increase from 2019 and a staggering 3,189% growth rate from its first year of operation in 2018. As it stands, the company is projecting a $140 million loan disbursement volume by the end of 2021. 

“I think we’ve been able to disburse 25-30% more than some of our competitors and I think we’re a market leader,” Hainy, the company’s CEO told TechCrunch. But compared with traditional banks, it was the seventh-largest digital financial services provider in that area.

FairMoney has come a long way since its Nigeria launch in 2017. In its first year of operation, the company had little over 100,000 users. Now, it claims to have 1.3 million unique users who have made over 6.5 million loan applications. FairMoney offers loans from ₦1,500 ($3.30) to ₦500,000 ($1,110.00) with its longest loan facility standing at 12 months. Annual percentage rates fall within 30% to 260% — the high APR, Hainy says, is due to higher default rates in Nigeria. That said, FairMoney also claims to have an NPL ratio lower than 10%. 

According to the CEO, data-driven insights was behind the choice to expand to India. The Indian market is quite similar to Nigeria’s. In the Asian country, only 36% of adults have access to credit, leaving an untapped market of about 141 million people microfinance banks do not serve. But unlike Nigeria, India has better unit economics for the lending business and a more friendly regulatory environment.

“If our ambition is to build the leading mobile bank for emerging markets, we need to start with very large markets,” Hainy said. “We tested our products in 10 different markets checking out for things like what the yield economics is like, NPLs, cost of risk, customer acquisition cost, cost of infrastructure and India stood out to us.”

FairMoney Nigeria team

Following its expansion six months ago, FairMoney claims to have processed more than half a million loan applications from over 100,000 unique users. This number trickles down to 5,000-6,000 loan applications per day with APR standing at 12-36%. Hainy says the company has achieved this with zero ad spend or marketing. 

Due to the daunting logistics behind international expansions, it’s challenging for an African-based startup to expand outside the shores of the continent. Although a rarity, there are a couple of startups to have undertaken such a task. Last year, Nigerian fintech Paga with 15 million users and a network of over 24,000 agents acquired Ethiopian software company Apposit to fast-track its expansion into Ethiopia and Mexico. 

FairMoney is on a similar path, as well. And with over 100 staff spread across Nigeria, France, and Latvia, the company hopes to build an engineering and marketing team in India.

Last month, it hired the services of Rohan Khara to become its chief product officer (CPO) and facilitate the expansion. Khara was the former head of product for financial services for Indonesian super app Gojek and held senior roles at Microsoft, Quikr and MobiKwik. Hainy says with Khara’s wealth of experience building consumer products in large emerging markets — India and Indonesia — FairMoney is poised for massive growth in Nigeria and India.

“We both share the vision that financial services in emerging markets need fixing and for us, Rohan brings the expertise to see FairMoney scale from almost a million users to 10 or 20 million users.”

FairMoney French team

Born in Germany to a Nigerian father and German mother, Hainy began his entrepreneurial journey in 2015 by launching a food delivery company in Sweden. Seven months later, he founded Le Studio VC, a Paris-based startup studio and €15 million fund he ran as CEO for three years.

“After those three years, I realised that being an investor wasn’t for me yet. I felt I was too young and I wanted to build something myself,” he said.

Neobanks like Revolut in the UK and N26 in Germany were picking up across Europe. Hainy wanted to create such for Nigeria after noticing how much people lacked access to affordable financial services during a visit.

But despite studying other neobank models, Hainy and his team couldn’t replicate them in a developing market like Nigeria. Credit was still significantly underserved by Nigerian banks because of the strict methodology employed in allocating loans. Sensing an opportunity, they launched FairMoney as a neobank by leveraging a credit-first model. Like Nubank in Brazil, FairMoney started off offering loans to solve the access to credit problem. But its broader vision is not to be just a digital bank but also a commercial bank.

The company is working towards getting a microfinance bank license to operate as the former in Nigeria. However, according to the CEO, the commercial bank license will take longer maybe five to ten years. 

“In the next five to ten years, I’d like to think two out of the five largest commercial banks in Nigeria will be neobanks. We want FairMoney to be one of them,” he said.

The Lagos and Paris-based company raised $11 million Series A in 2019. Between now and the time it will get a commercial bank license, Hainy says the company would’ve raised its Series B round to position itself for that task.

After India, which emerging market will FairMoney expand to next? There’s none in sight at the moment, the CEO says. The company plans to move from a credit-led value proposition to a full financial service provider, deepen its verticals, and replicate Nigeria’s growth in India for now.

TikTok’s China twin Douyin has 550 million search users, takes on Baidu

By Rita Liao

The advance of short videos is reshaping how information is created, disseminated and consumed online. Snappy 15-second videos aren’t just for entertainment. On Chinese short-video apps Douyin and Kuaishou, people can get their daily dose of news, learn to cook, practice English, hunt for jobs, and seek practically any type of information from the platforms’ quickly expanding content library.

While people are increasingly used to being fed by machine-recommended videos, many users still have the urge and need for active searching. Douyin understood that and incorporated a search function back in mid-2018. More than two years later, the feature reached 550 million monthly active users. There’s still room for Douyin’s search feature to grow, as the app last reported 600 million daily users in September, so its monthly user base should be above that.

Kelly Zhang, the young product manager credited for the rise of Douyin, TikTok’s Chinese version, disclosed Douyin’s search user figure for the first time this week on her microblogging account. Search is a territory that had long been dominated by Baidu in China. As of December, Baidu’s flagship app had 544 million monthly active users, so it’s safe to say as many people are searching on Douyin as on Baidu.

Zhang’s remark is telling of Douyin’s ambition in conquering the online video sector, and eventually how people receive information: “I have said this before: I hope Douyin could become the video encyclopedia for human civilization. Video search is, therefore, the index of the book, the gateway to finding answers and reaping new knowledge.”

She further added that Douyin’s search engine is hiring for research and development, product, and operational roles in the upcoming year (China has just observed the Lunar New Year) as the video app continues to ramp up investment in search capabilities.

Short video platforms are already the second-most popular method for Chinese users to search online, trailing only after general search engines like Baidu and coming ahead of social networks and e-commerce, data analytics firm Jiguang said in a report last December. Baidu’s command of search is increasingly limited by the walled gardens built up by Chinese tech titans who block one another from free access to its sites and data. The status quo harms user experience but bodes well for vertical search engines on apps like Douyin and Alibaba’s Taobao marketplace, and consequently revenues from ad sponsorships.

ByteDance cut its teeth on using machine learning algorithms to recommend content through services like Douyin, TikTok and news aggregator Toutiao. The model proved highly efficient and lucrative, prompting its predecessors from Baidu to Tencent to introduce similarly algorithm-powered content feeds. ByteDance’s move into search, a realm with a longer history, is an intriguing yet natural step. The firm is just completing the puzzle for its digital media empire, giving people another option to find information. Users can receive machine recommendations and subscribe to content creators if they want. They can as well put in a search keyword if they have one in mind, the good old way.

Indian trader group calls for ban on Amazon following damning report

By Manish Singh

An influential India trader group that represents tens of millions of brick-and-mortar retailers called New Delhi to ban Amazon in the country after a report claimed that the American e-commerce group had given preferential treatment to a small group of sellers in India, publicly misrepresented its ties with those sellers, and used them to circumvent foreign investment rules in the country.

The Confederation of All India Traders (CAIT) on Wednesday “demanded” serious action from the Indian government against Amazon following revelations made in a Reuters story. “For years, CAIT has been maintaining that Amazon has been circumventing FDI [Foreign Direct Investment] laws of India to conduct unfair and unethical trade,” it said.

Praveen Khandelwal, Secretary General of CAIT, which claims to represent 80 million retailers and 40,000 trade associations in India, said, “It’s an open and shut case that Amazon is wilfully playing with rules. What more we are waiting for. It should be banned in India with immediate effect.”

CAIT has for years expressed concerns over what they allege are unlawful business practices employed by Amazon and Walmart-owned Flipkart in the country. They say these actions are posing existential threats to small merchants.

India is a key overseas market for Amazon, which has committed to invest over $6.5 billion in its operations in the world’s second largest internet market.

In a statement, an Amazon spokesperson said the company cannot confirm the veracity or otherwise information and claims made in the Reuters story as it has not seen the documents. “The article appears to be based on unsubstantiated, incomplete, and/or factually incorrect information, likely supplied with the intention of creating sensation and discrediting Amazon,” the spokesperson said.

“Amazon remains compliant with all Indian laws. In the last several years, there have been number of changes in regulations governing the marketplaces and Amazon has, on each occasion taken rapid action to ensure compliance. The story therefore seems to have outdated information and does not show any non-compliance. We continue to focus on delivering first class service to India’s consumers, and helping India’s manufacturers and SMB’s reach customers across India and around the world,” it added.

Long-standing laws in India have constrained Amazon and other e-commerce firms to not hold inventory or sell items directly to consumers. To bypass this, the company has operated through a maze of joint ventures with local companies that operate as inventory-holding firms. India got around to fixing this loophole in late 2018.

Citing private company documents, Reuters said that Amazon had exercised significant control over the inventory of some of the biggest sellers. The report claimed that 33 Amazon sellers accounted for about a third of the value of all goods sold on Amazon, and two sellers in which Amazon had an indirect stake accounted for around 35% of the platform’s sales revenue in early 2019.

The new report — and its potential repercussions — is just the latest headache for Amazon in India.

Zolve raises $15 million for its cross-border neobank aimed at global citizens

By Manish Singh

Millions of students and professionals leave their home nation each year for work and pursue higher education. Even after spending months in the new country, they struggle to get a credit card from local banks, and have to pay a premium to access a range of other financial services.

Banks in the U.S., or in most other countries for that matter, rely on local credit score to determine the worthiness of potential applicants. Even if an individual had a great credit score in India, for instance, that wouldn’t matter to banks in other countries.

That was the takeaway Raghunandan G, the founder of ride-hailing firm TaxiForSure (sold to local giant Ola), returned to India with after a trip. After doing more research and assembling a team, Raghunandan believes he has a solution.

On Wednesday, he announced Zolve, a neobanking platform that is aimed global citizens. The startup works with banks in the U.S., India and other countries to provide consumers access to financial products seamlessly and without paying any premium.

In an interview with TechCrunch, Raghunandan said the startup underwrites the risks, which has enabled banks in foreign countries extend their services to Zolve customers. “Consumers can open an account with us and access all banking services as if they are banking with their national bank,” he said.

As part of the announcement, Raghunandan said Zolve has raised $15 million in a Seed financing round led by Accel and Lightspeed. Blume Ventures and several high-profile angel investors including Kunal Shah (founder of Cred), Ashish Gupta (formerly the MD of Helion), Greg Kidd (known for his investments in Twitter and Ripple), Rahul Mehta (Managing Partner at DST Global), Rahul Kishore (Senior Managing Director of Coatue Capital, also participated in the round. So did Founder Collective (which has backed Airtable and Uber), in what is its first investment in an Indian startup.

“Individuals with financial identities in multiple geographies need seamless global financial solutions and we believe the team’s strong identification with the problem will enable them to deliver compelling and innovative financial experiences,” said Bejul Somaia, Lightspeed India Partners, in a statement.

Before starting Zolve, Raghunandan founded TaxiForSure, a ride-hailing firm, that he later sold to Ola for $200 million.

The startup plans to offer a range of services including a credit card and insurance to its customers later this year. It has already amassed over 5,000 customers, said Raghunandan.

Zolve offers a range of compelling features even for those who don’t plan visit a foreign land. If you’re in India, for instance, you can use Zolve to buy shares of companies listed at U.S. exchanges. You can also buy bitcoin and other cryptocurrency from exchanges based in the U.S. or Europe, said Raghunandan.

“It is an absurd reality that global citizens have to rebuild their financial profile when they move to a new country. Zolve solves this problem by helping them get fair access to a suite of modern financial tools so they can participate in the new economy on an equal footing from day one,” said David Frankel, Managing Partner at Founder Collective.

“The global citizen community is largely underserved in terms of access to financial services and we believe that there is a huge market opportunity for Zolve. Raghu has a proven track record as a founder and we are delighted to partner with him again, on his latest venture. The team’s passion and commitment are commendable and we are positive that Zolve will create tremendous value for this community,” said Anand Daniel, partner at Accel, in a statement.

This is a developing story. More to follow…

Redefine Meat is moving plant-based proteins from patties to steaks

By Jonathan Shieber

The Israeli startup Redefine Meat, which has developed a manufacturing process to make plant-based proteins that more closely resemble choice cuts of beef than the current crop of hamburger-adjacent offerings, has gotten a big vote of confidence from the investment arm of one of Asia’s premier food brands.

The company has raised $29 million in financing from Happiness Capital, the investment arm backed by the family fortunes of Hong Kong’s Lee Kum Kee condiment dynasty, and Hanaco Ventures, an investment firm backing startups in New York and Israel.

Investors have stampeded into the plant-based food industry, spurred by the rising fortunes of companies like Beyond Meat, which has inked partnerships with everyone from Pepsico to McDonald’s, and Impossible Foods, which counts Burger King among the brands boosting its plant-based faux meat.

While these companies have perfected plant patties that can delight the taste buds, the prospect of carving up a big honkin cut of pea protein in the form of a ribeye, sirloin or rump steak, has been a technical hurdle these companies have yet to overcome in a commercial offering.

Redefine Meat thinks its manufacturing processes have cracked the code on the formulation of plant-based steak.

They’re not the only ones. In Barcelona, a startup called Novameat raised roughly $300,000 earlier this year for its own take on plant-based steak. That company raised its money from the NEOTEC Program of the Spanish Center for Industrial Technological Development.

Both companies are using 3-D printing technologies to make meat substitutes that mimic the taste and texture of steaks, rather than trying to approximate the patties, meatballs, and ground meat that companies like Beyond Meat and Impossible have taken to market.

Backing Redefine’s path to market are a host of other investors including Losa Group, Sake Bosch, and K3 Ventures.

The company said it would use the new funding to expand its portfolio and support the commercial launch of its products. Redefine aims to have a large-scale production facility for its 3-D printers online before the end of the year, the company said in a statement.

In January, Redefine Meat announced a strategic agreement with the Israeli distributor Best Meister and the company has been expanding its staff with a current headcount of roughly 40 employees.

“We want to change the belief that delicious meat can only come from animals, and we have all the building blocks in place to make this a reality: high-quality meat products, strategic partnerships with stakeholders across the world, a large-scale pilot line under construction, and the first-ever industrial 3D Alt-Meat printers set to be deployed within meat distributors later this year,” said Eschar Ben-Shitrit, the company’s chief executive, in a statement. 

 

Tata Group reaches agreement to buy majority stake in BigBasket

By Manish Singh

Indian conglomerate Tata Group has reached an agreement to acquire a majority stake in grocery delivery startup BigBasket, a source familiar with the matter told TechCrunch.

The salt-to-software giant is buying over 60% stake in BigBasket, valuing the Indian startup between $1.8 billion to $2 billion, the source said, requesting anonymity as the deal is still private. BigBasket has raised more than $750 million prior to the deal with Tata.

Indian news network ET Now reported on Tuesday that the two firms were in advanced talks, signals of which began to emerge in local media two quarters ago. Two BigBasket co-founders and Tata Group did not respond to a request for comment.

Chinese internet giant Alibaba, which owns nearly 30% stake in BigBasket, and a handful of other investors are getting a near complete exit from the startup as part of the deal with Tata Group, the source said. New Delhi introduced restrictions last year that made it difficult for Chinese investors to write checks to Indian firms.

The move comes as Mumbai-headquartered Tata Group, which reported a revenue of $113 billion in 2019 and operates several popular brands such as Jaguar Land Rover and tea maker Tetley, looks to expand to more consumer businesses and works to develop a so-called super app in the world’s second-largest internet market.

Bangalore-headquartered BigBasket, which competes with SoftBank-backed Grofers and Reliance’s JioMart, operates in over two dozen cities in India and turned profitable months into the coronavirus pandemic as sales skyrocketed on the platform.

BigBasket and Grofers’s userbases skyrocketed by as much as 80% last year, analysts at Citi Bank estimated in recent note, adding that JioMart, run by India’s richest man Mukesh Ambani, had already started to pose serious competition.

In a recent note to clients, Bank of America analysts estimated that the online grocery delivery market could be worth $12 billion in India by 2023.

“Competition is high in the sector with large verticals like BigBasket/Grofers and horizontal like Amazon/Flipkart trying to convert the unorganized market to organized one. Till recently the No 1 player in the space was BigBasket, with it hitting $1 billion annualized GMV & selling over 300,000 orders every day. Reliance Industries also threw its hat with the company launching its JioMart app in May-20 across 200 cites,” they wrote.

The expansion of Reliance Industries, one of India’s largest industrial houses, in e-commerce last year may have prompted Tata Group to accelerate its digital efforts. Ambani raised more than $26 billion for his telecom and retail empires Jio Platforms and Reliance Retail last year from a roster of marquee investors including Facebook and Google.

Tata Group was working to expand to several consumer-facing digital services as early as 2016, but a boardroom coup put all those plans on the back burner, The Information reported in December.

India lifts restrictions on mapping and surveying to help local firms

By Manish Singh

India said on Monday local firms will no longer need license or other permission to collect, generate, store and share geospatial data of the country, bringing sweeping changes to its earlier stance that it admitted hindered innovation.

Until now, New Delhi required Indian firms to seek licenses and additional approvals to create and publish topographical data. India’s Prime Minister Narendra Modi said today’s “deregulation” step will help the country become more self-reliant and reach its $5 trillion GDP goal.

“The regulations that apply to geospatial data and maps henceforth stand radically liberalised. The Department of Science and Technology is announcing sweeping changes to India’s mapping policy, specifically for Indian companies. What is readily available globally does not need to be restricted in India and therefore geospatial data that used to be restricted will now be freely available in India,” New Delhi said in a statement.

In its guidelines, New Delhi said local firms will be permitted access to “ground truthing/verification” that includes access to Indian ground stations and augmentation services for real-time positioning. Indian firms will also be provided access to terrestrial mobile mapping survey, street view survey and surveying in Indian territorial waters.

New Delhi said in the guidelines that only Indian firms shall be permitted access to the aforementioned surveys. Google has previously made unsuccessful attempts to launch its Street View service in India. A Google spokesperson told TechCrunch that the company was reviewing the guidelines and had no immediate comment to offer.

“Foreign companies and foreign owned or controlled Indian companies can license from Indian Entities digital Maps/Geospatial Data of spatial accuracy/value finer than the threshold value only for the purpose of serving their customers in India. Access to such Maps/Geospatial Data shall only be made available through APIs that do not allow Maps/Geospatial Data to pass through Licensee Company or its servers. Re-use or resale of such map data by licensees shall be prohibited,” the guidelines added.

Devdatta Tengshe, who works in the GIS space, told TechCrunch that the government’s move today was significant for the local ecosystem including citizens as previous restrictions had created an uncertainty on what precisely was permitted.

“Today’s announcement makes it explicitly clear that Indian entities can perform any location data collection and we can collect data on our own,” he said. “Additionally, the location data from agencies like municipality will be made available to Indian entities.”

Flipkart-backed 25-year-old firm MapMyIndia said today’s move by the government is “historic” as it opens up maps and the geospatial sector and ushers the self-reliance era in “strategic areas of maps to empower all 1.3 billion Indians and give unprecedented opportunities and growth for Indian companies.”

Modi said: “The reforms will unlock tremendous opportunities for our country’s start-ups, private sector, public sector and research institutions to drive innovations and build scalable solutions. India’s farmers will also be benefited by leveraging the potential of geo-spatial & remote sensing data. Democratizing data will enable the rise of new technologies & platforms that will drive efficiencies in agriculture and allied sectors. These reforms demonstrate our commitment to improving ease of doing business in India by deregulation.”

Coupang files for mega US IPO

By Alex Wilhelm

Earlier today, South Korean e-commerce and delivery giant Coupang filed to go public in the United States. As a private company, Coupang has raised billions, including capital from American venture capital firm Sequoia and Japanese telecom giant SoftBank and its Vision Fund.

Coupang’s revenue growth is nothing short of fantastic.

Coupang’s offering, coming amidst the public debut of a number of well-known technology brands, will be a massive affair. Its first S-1 filing indicates that its IPO will raise capital in the range of $1 billion, far larger than the $100 million placeholder that is more common.

But the company’s scale makes its lofty IPO fundraising goals reasonable. Coupang is huge, with revenues north of $10 billion in 2020 and in improving financial health as it scales. And its revenue growth has accelerated.

Perhaps that explains why the company is reportedly targeting a valuation of $50 billion.

This afternoon, let’s dig into the company’s historical growth, its improving cash flow and its narrowing losses. Coupang’s debut will create a splash when it lands, so we owe it to ourselves to grok its numbers.

And as there are other e-commerce brands with a delivery function waiting in the wings to go public — Instacart comes to mind — how Coupang fares in its IPO matters for a good number of domestic startups and unicorns.

Coupang’s surging scale

The company’s growth across the last half-decade is impressive. Observe its yearly revenue totals from 2016 through 2020:

  • 2016: $1.67 billion.
  • 2017: $2.4 billion (+43.7%).
  • 2018: $4.05 billion (+68.8%).
  • 2019: $6.27 billion (+54.8%).
  • 2020: $11.97 billion (+90.9%).

Sure, some of that 2020 growth is COVID-19 related, but even taking that into account, Coupang’s revenue growth is nothing short of fantastic. And what’s better is that the company has cut its losses in recent years:

How VCs invested in Asia and Europe in 2020

By Alex Wilhelm

Wrapping our look at how the venture capital asset class invested in 2020, today we’re taking a peek at Europe’s impressive year, and Asia’s slightly less invigorating set of results. (We’re speaking soon with folks who may have data on African VC activity in 2020; if those bear out, we’ll do a final entry in our series concerning the continent.)

After digging into the United States’ broader venture capital results from last year with an extra eye on fintech and unicorn investing, at least one trend was clear: venture capital is getting later and larger (as expected).

Record dollar amounts were being invested, but across falling deal volume. More money and fewer rounds meant larger rounds, often going to the late and super-late stage startups in the market.

Unicorns are feasting, in other words, while some younger startups struggle to raise capital.


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


There have been some encouraging signs of seed activity, mind, but full-year data made it clear that in America, the more mature startups had the best of it.

But what about the rest of the world? After parsing KPMG data concerning both how VCs invested in Europe (here) and Asia (here) last year, there are clear echoes. But not entire reproductions.

Let’s discuss key data points from the two reports. This will be illustrative, brief and painless. Into the data!

European VCs: Rich, but not evenly distributed

Compared to historical investment levels, KPMG’s European VC report describes a venture capital scene at its peak. Q4 2020 saw $14.3 billion invested into EU startups across 1,192 deals, the highest dollar amount charted and a modest besting of the previous record set in Q3 2020.

However, despite impressive investment totals, the number of deals that the money was spread over proved lackluster.

The Q4 2020 deal count was the lowest on record since the continent’s deal peak in Q1 2019. Squinting at the provided chart, it appears that deal volume in Europe has fallen from around 2,200 in that peak quarter, to Q4’s fewer than 1,200 deals.

Didi to subsidize trips for vaccinations with $10M global fund

By Rita Liao

As countries around the world prepare to vaccinate people against the coronavirus, tech companies are rushing to demonstrate their willingness to help fight the deadly virus. China’s ride-hailing leader Didi Chuxing is pledging a $10 million fund to support COVID-19 vaccination efforts in 13 markets outside its home country China, the company said on Friday.

The multi-purpose fund will be used to reduce fees for passengers going to vaccination appointments and frontline healthcare workers traveling to vaccination locations. It will also sponsor future measures based on a market’s local needs, Didi said, adding that it will continue working with the respective governments.

It’s still unclear how the company plans to allocate the funds across the dozens of markets, which are Brazil, Mexico, Chile, Colombia, Costa Rica, Panama, Peru, the Dominican Republic, Argentina, Australia, Japan, Russia and New Zealand.

“We will share more details locally as vaccinations roll out and our local support plans are finalized,” said a spokesperson for the company.

Like other tech firms, Didi has responded swiftly to the COVID-19 outbreak by offering relief measures. It said it has so far funded more than six million free or discounted rides and meals for frontline healthcare workers and distributed more than six million masks and sanitation kits to driver and courier partners in its international markets.

In China, the ride hailing company has made similar efforts, including financial assistance like insurance plans for drivers with confirmed cases or those undergoing quarantine.

“The vaccination support initiative is a crucial step in our local recovery effort across the world,” said Jean Liu, president of Didi.

“The incredible commitment and agility of Didi teams, together with a safety system built for complex mobility scenarios, play a critical role in protecting our people and ensuring essential services throughout these challenging times. We will continue to stand by our partners and communities to get our cities moving again.”

To ensure passenger and driver safety, the company rolled out a mask detection technology last year for in-car cameras across China and some of its overseas markets.

The SoftBank-backed company took a hit when it temporarily suspended its popular and lucrative carpooling service following two passenger incidents in 2018. The startup remains one of China’s most valuable private tech companies and rumors have swirled for a few years that it is planning an initial public offering, which the company has denied.

In all, Didi has garnered over 550 million users across the Asia Pacific, Latin America and Russia by offering taxi hailing, private car hailing, rideshare, buses, bikes and e-bikes, and it enables more than 10 billion passenger trips a year as of late. Outside China, it has over 20 million users and 2.8 million drivers and couriers.

The company has a nascent autonomous driving arm backed by SoftBank and is among a group of Chinese upstart AI companies aggressively developing and testing autonomous vehicles. It’s also working with China’s electric carmaking giant BYD to co-design a model tailored for ride-hailing.

The story was updated with more details of the fund on January 22, 2021.

China’s draft payments rules put Ant, Tencent on notice

By Rita Liao

A string of recent events in China’s payments industry suggests the duopoly comprising Ant Group and Tencent may be getting a shakeup.

Following the abrupt call-off of Ant’s public sale and a government directive to reform the firm’s business, the Chinese authorities sent another message this week signaling its plan to curb concentration in the flourishing digital payments industry.

The set of draft rules, designed to regulate non-bank payments and released by the People’s Bank of China (PBOC) this week, said any non-bank payments processor with over one-third of the non-bank payments market or two companies with a combined half of the market could be subject to regulatory warnings from the anti-monopoly authority under the State Council.

Meanwhile, a single non-bank payments provider with over one half of the digital payments market or two companies with a combined two-thirds of the market could be investigated for whether they constitute a monopoly.

The difference between the two rules is nuanced here, with the second stipulation focusing on digital payments as opposed to non-bank payments in the first.

Furthermore, the rules did not specify how authorities measure an organization’s market share, say, whether the judgment is based on an entity’s total transaction value, its transaction volume, or other metrics.

Alipay processed over half of China’s third-party payments transactions in the first quarter of 2020, according to market researcher iResearch, while Tencent handled nearly 40% of the payments in the same period.

 

As China heightens scrutiny over its payments giants, it’s also opening up the financial market to international players. In December, Goldman Sachs moved to take full ownership of its Chinese joint venture. This month, PayPal became the first foreign company with 100% control of a payments business in China after it bought out the remaining stake in its local payments partner Guofubao.

Industry experts told TechCrunch that PayPal won’t likely go after the domestic payments giants but may instead explore opportunities in cross-border payments, a market with established players like XTransfer, which was founded by a team of Ant veterans.

Ant and Tencent also face competition from other Chinese internet firms. Companies ranging from food delivery platform Meituan, e-commerce platforms Pinduoduo and JD.com, to TikTok’s parent firm ByteDance have introduced their own e-wallets, though none of them have posed an imminent threat to Alipay or WeChat Pay.

The comprehensive proposal from PBOC also defines how payments processors handle customer data. Non-bank payments services are to store certain user information and transaction history and cooperate with relevant authorities on data checks. Companies are also required to obtain user consent and make clear to customers how their data are collected and used, a rule that reflects China’s broader effort to clamp down on unscrupulous data collection.

JustKitchen is using cloud kitchens to create the next generation of restaurant franchising

By Catherine Shu

JustKitchen operates cloud kitchens, but the company goes beyond providing cooking facilities for delivery meals. Instead, it sees food as a content play, with recipes and branding instead of music or shows as the content, and wants to create the next iteration of food franchises. JustKitchen currently operates its “hub and spoke” model in Taiwan, with plans to expand four other Asian markets, including Hong Kong and Singapore, and the United States this year.

Launched last year, JustKitchen currently offers 14 brands in Taiwan, including Smith & Wollensky and TGI Fridays. Ingredients are first prepped in a “hub” kitchen, before being sent to smaller “spokes” for final assembly and pickup by delivery partners, including Uber Eats and Foodpanda. To reduce operational costs, spokes are spread throughout cities for quicker deliveries and the brands each prepares is based on what is ordered most frequently in the area.

In addition to licensing deals, JustKitchen also develops its own brands and performs research and development for its partners. To enable that, chief operating officer Kenneth Wu told TechCrunch that JustKitchen is moving to a more decentralized model, which means its hub kitchens will be used primarily for R&D, and production at some of its spoke kitchens will be outsourced to other food vendors and manufacturers. The company’s long-term plan is to license spoke operation to franchisees, while providing order management software and content (i.e. recipes, packaging and branding) to maintain consistent quality.

Demand for meal and grocery deliveries increased dramatically during the COVID-19 pandemic. In the United States, this means food deliveries made up about 13% of the restaurant market in 2020, compared to the 9% forecast before the pandemic, according to research firm Statista, and may rise to 21% by 2025.

But on-demand food delivery businesses are notoriously expensive to operate, with low margins despite markups and fees. By centralizing food preparation and pickup, cloud kitchens (also called ghost kitchens or dark kitchens) are supposed to increase profitability while ensuring standardized quality. Not surprisingly, companies in the space have received significant attention, including former Uber chief executive officer Travis Kalanick’s CloudKitchens, Kitchen United and REEF, which recently raised $1 billion led by SoftBank.

Wu, whose food delivery startup Milk and Eggs was acquired by GrubHub in 2019, said one of the main ways JustKitchen differentiates is by focusing on operations and content in addition to kitchen infrastructure. Before partnering with restaurants and other brands, JustKitchen meets with them to design a menu specifically for takeout and delivery. Once a menu is launched, it is produced by JustKitchen instead of the brands, which are paid royalties. For restaurants that operate only one brick-and-mortar location, this gives them an opportunity to expand into multiple neighborhoods and cities (or countries, when JustKitchen begins its international expansion) simultaneously, a new take on the franchising model for the on-demand delivery era.

One of JustKitchen's delivery meals, with roast chicken and vegetables

One of JustKitchen’s delivery meals. Image Credits: JustKitchen

Each spoke kitchen puts the final touches on meals before handing them to delivery partners. Spoke kitchens are smaller than hubs, closer to customers, and the goal is to have a high revenue to square footage ratio.

“The thesis in general is how do you get economies of scale or a large volume at the hub, or the central kitchen where you’re making it, and then send it out deep into the community from the spokes, where they can do a short last-mile delivery,” said Wu.

JustKitchen says it can cut industry standard delivery times by half, and that its restaurant partners have seen 40% month on month growth. It also makes it easier for delivery providers like Uber Eats to stack orders, which means having a driver pick up three or four orders at a time for separate addresses. This reduces costs, but is usually only possible at high-volume restaurants, like fast food chain locations. Since JustKitchen offers several brands in one spoke, this gives delivery platforms more opportunities to stack orders from different brands.

In addition to partnerships, JustKitchen also develops its own food brands, using data analytics from several sources to predict demand. The first source is its own platform, since customers can order directly from Just Kitchen. It also gets high-level data from delivery partners that lets them see food preferences and cart sizes in different regions, and uses general demographic data from governments and third-party providers with information about population density, age groups, average income and spending. This allows it to plan what brands to launch in different locations and during different times of the day, since JustKitchen offers breakfast, lunch and dinner.

JustKitchen is incorporated in Canada, but launched in Taiwan first because of its population density and food delivery’s popularity. Before the COVID-19 pandemic, food delivery penetration in the U.S. and Europe was below 20%, but in Taiwan, it was already around 30% to 40%, Wu said. The new demand for food delivery in the U.S. “is part of the new norm and we believe that is not going away,” he added. JustKitchen is preparing to launch in Seattle and several Californian cities, where it already has partners and kitchen infrastructure.

“Our goal is to focus on software and content, and give franchisees operations so they have a turnkey franchise to launch immediately,” said Wu. “We have the content and they can pick whatever they want. They have software to integrate, recipes and we do the food manufacturing and sourcing to control quality, and ultimately they will operate the single location.”

Chinese esports player VSPN closes $60M Series B+ round to boost its international strategy

By Mike Butcher

eSports “total solutions provider” VSPN (Versus Programming Network) has closed a $60 million Series B+ funding round, joined by Prospect Avenue Capital (PAC), Guotai Junan International and Nan Fung Group.

VSPN facilitates esports competitions in China, which is a massive industry and has expanded into related areas such as esports venues. It is the principal tournament organizer and broadcaster for a number of top competitions, partnering with more than 70% of China’s eSports tournaments.

The “B+” funding round comes only three months after the company raised around $100 million in a Series B funding round, led by Tencent Holdings.

This funding round will, among other things, be used to branch out VSPN’s overseas esports services.

Dino Ying, Founder, and CEO of VSPN said in a statement: “The esports industry is through its nascent phase and is entering a new era. In this coming year, we at VSPN look forward to showcasing diversified esports products and content… and we are counting the days until the pandemic is over.”

Ming Liao, the co-founder of PAC, commented: “As a one-of-its-kind company in the capital market, VSPN is renowned for its financial management; these credentials will be strong foundations for VSPN’s future development.”

Xuan Zhao, Head of Private Equity at Guotai Junan International said: “We at Guotai Junan International are very optimistic of VSPN’s sharp market insight as well as their team’s exceptional business model.”

Meng Gao, Managing Director at Nan Fung Group’s CEO’s Office said: “Nan Fung is honored to be a part of this round of investment for VSPN in strengthening their current business model and promoting the rapid development of emerging services and the esports streaming ecosystem.”

Digital securities platform iSTOX closes $50 million Series A to make private equity accessible to more investors

By Catherine Shu

Oi Yee Choo, chief commercial officer of digital securities platform iSTOX

Oi Yee Choo, chief commercial officer of digital securities platform iSTOX

iSTOX, a digital securities platform that wants to make private equity investment more accessible, has added new investors from Japan to its Series A round, bringing its total to $50 million. Two of its new backers are the government-owned Development Bank of Japan and JIC Venture Growth Investments, the venture capital arm of Japan Investment Corporation, a state-backed investment fund.

Other participants included Juroku Bank and Mobile Internet Capital, along with returning investors Singapore Exchange, Tokai Tokyo Financial Holdings and Hanwha Asset Management.

Founded in 2017 and owned by blockchain infrastructure firm ICHX, iSTOX’s goal is to open private capital opportunities, including startups, hedge funds and private debt, that are usually limited to a small group of high-net-worth individuals to more institutional and accredited investors. (It also serves accredited investors outside of Singapore, as long as they meet the country’s standards by holding the equivalent amount in assets and income.) iSTOX’s allows users to make investments as small as SGD $100 (about USD $75.50) and says it is able to keep fees low by using blockchain technology for smart contracts and to hold digital securities, which makes the issuance process more effective and less costly.

iSTOX’s Series A round was first announced in September 2019, when the company said it had raised an undisclosed amount from Thai investment bank Kiatnakin Phatra Financial Group while participating in the Monetary Authority of Singapore (MAS) FinTech Regulatory Sandbox. The Singaporean government has been especially supportive of blockchain technology, launching initiatives to commercialize its use in fintech, data security, logistics and other sectors.

iSTOX completed the sandbox program in February 2020, and was approved by the MAS for the issuance, custody and trading of digitized securities. The new funding will be used for geographical expansion, including in China, where it already has an agreement in the city of Chongqing, and Europe and and Australia, where it is currently working on issuance deals. iSTOX also plans to add new investment products, including private issuances that investors can subscribe to in “bite-size portions.”

In a press statement, iSTOX chief commercial officer Oi Yee Choo said, “Capital markets are transforming rapidly because of advancements in technology. The regulator MAS and our institutional investors have been far-sighted and progressive, and they support the change wholeheartedly.”

The company is among several Asia-based fintech platforms that want to democratize the process of investing. For retail investors, there are apps like Bibit, Syfe, Stashaway, Kristal.ai and Grab Financial’s investment products.

Since iSTOX works with accredited and institutional investors, however, its most direct competitors include the recently-launched DBS Digital Exchange, which is also based in Singapore. iSTOX’s advantage is that it offers more kinds of assets. Right now, it facilitates the issuance of funds and bonds, but this year, it will start issuing private equity and structured products as well. The company’s securities are also fully digitized, which means they are created on the blockchain, instead of being recorded on the blockchain after they are issued, which means iSTOX is able to offer faster settlement times.

Indian stock exchanges approve $3.4B Reliance and Future deal in setback for Amazon

By Manish Singh

Indian stock exchanges approved the $3.4 billion deal between retail giants Reliance Retail and Future Group on late Wednesday in yet another setback for Amazon, which has invested over $6.5 billion in the world’s second largest internet market and sought to block the aforementioned deal.

The Bombay Stock Exchange said in a notification that it had spoken with India’s markets regulator, the Securities and Exchange Board of India (SEBI), and had no objection or adverse observation on the deal.

Wednesday’s notification is the latest setback for Amazon, which had written to SEBI and Indian antitrust watchdog to block the multi-billion deal between Future Group and Reliance Retail, the two largest retail chains in India. Last year, India’s antitrust group gave a go ahead to the deal to the Indian firms.

“We hereby advise that we have no adverse observations with limited reference to those matters having a bearing on listing/de-listing/continuous listing requirements within the provisions of Listing Agreement, so as to enable the company to file the scheme with Hon’ble NCLT [National Company Law Tribunal],” the notification read. SEBI has advised Future to share various aspects of its ongoing litigation with Amazon to NCLT, whose approval for the deal is pending.

Amazon bought 49% stake in one of Future’s unlisted firms in 2019 in a deal that was valued at over $100 million. As part of the deal, Future could not have sold assets to rivals, Amazon has said in court filings.

Things changed last year after the coronavirus pandemic starved the Indian firm of cash, Future Group chief executive and founder Kishore Biyani said at a recent virtual conference. In August, Future Group said that it had reached an agreement with Ambani’s Reliance Industries, which runs India’s largest retail chain, to sell its retail, wholesale, logistics and warehousing businesses for $3.4 billion.

Amazon later protested the deal by reaching an arbitrator in Singapore and asked the court to block the deal between the Indian retail giants. Amazon secured emergency relief from the arbitration court in Singapore in late October that temporarily halted Future Group from going ahead with the sale.

The two estranged partners also fought at the Delhi High Court last year, which in a rare glimmer of hope for the American giant rejected Future’s plea for an ad-interim injunction to restrain Amazon from writing to regulators and other authorities to raise concerns over — and halt — the deal between the two Indian giants.

An Amazon spokesperson told TechCrunch that the firm will continue to pursue legal remedies. “The letters issued by BSE & NSE clearly state that the comments of SEBI on the ‘draft scheme of arrangement’ (proposed transaction) are subject to the outcome of the ongoing Arbitration and any other legal proceedings. We will continue to pursue our legal remedies to enforce our rights,” the spokesperson said.

At stake is India’s retail market that is estimated to balloon to $1.3 trillion by 2025, up from $700 billion in 2019, according to consultancy firm BCG and local trade group Retailers’ Association India. Online shopping accounts for about 3% of all retail in India.

Alibaba shares jump on Jack Ma’s first appearance in 3 months

By Rita Liao

Alibaba’s billionaire founder resurfaced as he spoke to 100 rural teachers through a video, three months after his last public appearance in October, sending the e-commerce firm’s shares up more than 8% in Hong Kong.

The video was first posted on a news portal backed by the government of Zhejiang, the eastern province where Alibaba is headquartered, and the clip was verified by an Alibaba spokesperson.

Speculations swirled around Ma’s whereabouts after media reported in December that he skipped the taping of a TV program he created. Ma, known for his love for the limelight, has seen his e-commerce empire Alibaba and fintech giant Ant Group increasingly in the crosshairs of the Chinese authorities in recent months.

Ma last appeared publicly at a conference where he castigated China’s financial regulatory system in front of a room of high-ranked officials. His controversial remark, according to reports, prompted the Chinese regulator to abruptly halt Ant’s initial public offering, which would have been the biggest public share sale of all time.

Ant has since been working on corporate restructuring and regulatory compliance under the directions of the government. Alibaba, China’s largest e-commerce platform, also came under scrutiny as market regulators opened an investigation into its alleged monopolistic practices.

Some argue that the recent clampdown on Jack Ma’s internet empire signals Beijing’s growing unease with the super-rich and private-sector power brokers.

“Today, Alibaba and its archrival, Tencent, control more personal data and are more intimately involved in everyday life in China than Google, Facebook and other American tech titans are in the United States. And just like their American counterparts, the Chinese giants sometimes bully smaller competitors and kill innovation,” wrote Li Yuan for the New York Times.

“You don’t have to be a member of the Communist Party to see reasons to rein them in.”

In the 50-second video, Ma talked directly into the camera against what appears to be decorative paintings depicting a water town typical of Zhejiang. An art history book is shown amid a stack of books, alongside a vase of fresh flowers and a ceramic figurine of a stout, reclining man, looking relaxed and content.

Ma addressed the 100 teachers receiving the Jack Ma Rural Teachers Award, which was set up by the Jack Ma Foundation to identify outstanding rural teachers every year. The video also briefly shows Ma visiting a rural boarding school in Zhejiang on January 10. The award ceremony was moved online this year due to the pandemic, Ma told the teachers.

When Ma announced his retirement plan, he pledged to return to his teaching roots and devote more time to education philanthropy, though the founder still holds considerable sway over Alibaba. The legendary billionaire began his career as an English teacher in Hangzhou, and on Weibo, China’s Twitter equivalent, he nicknames himself the “ambassador for rural teachers.”

WeChat advances e-commerce goals with $250B in transactions

By Rita Liao

WeChat continues to advance its shopping ambitions as the social networking app turns 10 years old. The Chinese messenger facilitated 1.6 trillion yuan (close to $250 billion) in annual transactions through its “mini programs,” third-party services that run on the super app that allow users to buy clothes, order food, hail taxis and more.

That is double the value of transactions on WeChat’s mini programs in 2019, the networking giant announced at its annual conference for business partners and ecosystem developers, which normally takes place in its home city of Guangzhou in southern China but was moved online this year due to the pandemic.

To compare, e-commerce upstart Pinduoduo, Alibaba’s archrival, saw total transactions of $214.7 billion in the third quarter.

WeChat introduced mini programs in early 2017 in a move some saw as a challenge to Apple’s App Store and has over time shaped the messenger into an online infrastructure that keeps people’s life running. It hasn’t recently disclosed how many third-party lite apps it houses, but by 2018 the number reached one million, half the size of the App Store at the time.

From Tencent’s strategic perspective, the growth in mini program-based transactions helps further the company’s goal to strengthen its fintech business, which counts digital payments as a major revenue driver.

A big proportion of WeChat’s mini programs are games, which the app said exceeded 500 million monthly users thanks to a boost in female and middle-aged users, as well as players residing in China’s Tier 3 cities, WeChat said.

The virtual conference also unveiled a set of other milestones from China’s biggest messaging app, which surpassed 1.2 billion monthly active users last year.

Among its monthly users, 500 million have tried the WeChat Search function. The Chinese internet is carved into several walled gardens controlled by titans like Tencent, Alibaba and ByteDance, which often block competitors from their services. When users search on WeChat, they are in effect retrieving information published on the messenger as well as Tencent’s allies like Sogou, Pinduoduo and Zhihu, rather than the open web.

WeChat said 240 million people have used its “payments score.” When the feature debuted back in 2019, there was speculation that it signaled WeChat’s entry into consumer credit finance and participation in the government’s social credit system. WeChat reiterated at this year’s event that the WeChat score does neither of that.

Like Ant’s Sesame Score, the rating system works more like a royalty program, “designed to build trust between merchants and users.” For instance, people who reach a certain score can waive deposits or delay payments when using merchant services on WeChat. The score, WeChat said, helped users save more than $30 billion in deposits a year.

WeChat’s enterprise version has surpassed 130 million active users. Its biggest rival, Dingtalk, operated by Alibaba, reached 155 million daily active users last March.

The one-day event concluded with the much-anticipated appearance of Allen Zhang, WeChat’s creator. Zhang went to great lengths to talk about WeChat’s nascent short-video feature, which is somewhat similar to Snap’s Stories. He didn’t disclose the number of users on short videos because “the PR team doesn’t allow” him to, but said that “if we set a goal for ourselves, we will have to achieve it.”

Zhang also announced the WeChat team is weighing up an input tool for users. It’d be a tiny project given Tencent’s colossal size, but the project reflects Zhang’s belief in “privacy protection,” despite public skepticism about how WeChat handles user data.

“If we analyze users’ chat history, we can bring great advertising revenue to the company. But we don’t do that, so WeChat cares a lot about user privacy,” asserted Zhang.

“But why do you still get ads [related to] what you have just said on WeChat? There are many other channels that process your information, not just WeChat. From there, our technical team said, ‘Why don’t we create an input tool ourselves?'”

India asks WhatsApp to withdraw new privacy policy over ‘grave concerns’

By Manish Singh

India has asked WhatsApp to withdraw the planned change to its privacy policy, posing a new headache to Facebook-owned service that identifies the South Asian nation as its biggest market by users.

In an email to WhatsApp head Will Cathcart, the nation’s IT ministry said the upcoming update to the app’s data-sharing policy has raised “grave concerns regarding the implications for the choice and autonomy of Indian citizens… Therefore, you are called upon to withdraw the proposed changes.”

The ministry is additionally seeking clarification from WhatsApp on its data-sharing agreement with Facebook and other commercial firms and has asked why users in the EU are exempt from the new privacy policy but their counterpoint in India have no choice but to comply.

“Such a differential treatment is prejudicial to the interests of Indian users and is viewed with serious concern by the government,” the ministry wrote in the email, a copy of which was obtained by TechCrunch. “The government of India owes a sovereign responsibility to its citizens to ensure that their interests are not compromised and therefore it calls upon WhatsApp to respond to concerns raised in this letter.”

Through an in-app alert earlier this month, WhatsApp had asked users to agree to new terms of conditions that grants the app the consent to share with Facebook some personal data about them, such as their phone number and location. Users were initially provided until February 8 to comply with the new policy if they wished to continue using the service.

“This ‘all-or-nothing’ approach takes away any meaningful choice from Indian users. This approach leverages the social significance of WhatsApp to force users into a bargain, which may infringe on their interests in relation to informational privacy and information security,” the ministry said in the email.

The notification from WhatsApp prompted a lot of confusion — and in some cases, anger and frustration — among its users, many of which have explored alternative messaging apps such as Telegram and Signal in recent weeks.

An advertisement from WhatsApp is seen in a newspaper at a stall in New Delhi on January 13, 2021. (Photo by Sajjad HUSSAIN / AFP) (Photo by SAJJAD HUSSAIN/AFP via Getty Images)WhatsApp, which Facebook bought for $19 billion in 2014, has been sharing some limited information about its users with the social giant since 2016 — and for a period allowed users to opt-out of this. Responding to the backlash last week, the Facebook-owned app, which serves more than 2 billion users worldwide, said it was deferring the enforcement of the planned policy to May 15.

WhatsApp also ran front-page ads on several newspapers in India, where it has amassed over 450 million users, last week to explain the changes and debunk some rumors.

New Delhi also shared disappointment with the timing of this update, which to be fair WhatsApp unveiled last year. The ministry said that it was reviewing the Personal Data Protection Bill, a monumental privacy bill that is meant to oversee how data of users are shared with the world.

“Since the Parliament is seized of the issue, making such a momentous change for Indian users at this time puts the cart before the horse. Since the Personal Data Protection Bill strongly follows the principle of ‘purpose limitation,’ these changes may lead to significant implementational challenges for WhatsApp should the Bill become an Act,” the letter said.

On Tuesday, India’s IT and Law Minister Ravi Shankar Prasad also offered a loud advice to Facebook. “Be it WhatsApp, be it Facebook, be it any digital platform. You are free to do business in India but do it in a manner without impinging upon the rights of Indians who operate there.”

➡ Be it WhatsApp, Facebook or any other digital platform they are free to do business in India but it should be done in a manner without impinging upon the rights of Indians who operate it. The sanctity of personal communications needs to be maintained: @rsprasad at #15IDS pic.twitter.com/p33qynU6Ur

— RSPrasad Office (@OfficeOfRSP) January 19, 2021

Qualcomm-backed chipmaker Kneron nails Foxconn funding, deal

By Rita Liao

A startup based out of San Diego and Taipei is quietly nailing fundings and deals from some of the biggest names in electronics. Kneron, which specializes in energy-efficient processors for edge artificial intelligence, just raised a strategic funding round from Taiwan’s manufacturing giant Foxconn and integrated circuit producer Winbond.

The deal came a year after Kneron closed a $40 million round led by Hong Kong tycoon Li Ka-Shing’s Horizons Ventures. Amongst its other prominent investors are Alibaba Entrepreneurship Fund, Sequoia Capital, Qualcomm and SparkLabs Taipei.

Kneron declined to disclose the dollar amount of the investment from Foxconn and Winbond due to investor requests but said it was an “eight figures” deal, founder and CEO Albert Liu told TechCrunch in an interview.

Founded in 2015, Kneron’s latest product is a neural processing unit that can enable sophisticated AI applications without relying on the cloud. The startup is directly taking on the chips of Intel and Google, which it claims are more energy-consuming than its offering. The startup recently got a talent boost after hiring Davis Chen, Qualcomm’s former Taipei head of engineering.

Among Kneron’s customers are Chinese air conditioning giant Gree and German’s autonomous driving software provider Teraki, and the new deal is turning the world’s largest electronics manufacturer into a client. As part of the strategic agreement, Kneron will work with Foxconn on the latter’s smart manufacturing and newly introduced open platform for electric vehicles, while its work with Winbond will focus on microcontroller unit (MCU)-based AI and memory computing.

“Low-power AI chips are pretty easy to put into sensors. We all know that in some operation lines, sensors are quite small, so it’s not easy to use a big GPU [graphics processing unit] or CPU [central processing unit], especially when power consumption is a big concern,” said Liu, who held R&D positions at Qualcomm and Samsung before founding Kneron.

Unlike some of its competitors, Kneron designs chips for a wide range of use cases, from manufacturing, smart home, smartphones, robotics, surveillance, payments, to autonomous driving. It doesn’t just make chips but also the AI software embedded in the chips, a strategy that Liu said differentiates his company from China’s AI darlings like SenseTime and Megvii, which enable AI service through the cloud.

Kneron has also been on a less aggressive funding pace than these companies, which fuel their rapid expansion through outsize financing rounds. Six-year-old SenseTime has raised about $2.6 billion to date, while nine-year-old Megvii has banked about $1.4 billion. Kneron, in comparison, has raised just over $70 million from a Series A round.

Like the Chinese AI upstarts, Kneron is weighing an initial public offering. The company is expected to make a profit in 2023, Liu said, and “that will probably be a good time for us to go IPO.”

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