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.
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.
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.”
Late last year, Solugen, a startup using synthetic biology to take hydrocarbons out of the chemicals industry, decided against pursuing a new round of funding that would have valued the company at over $1 billion, TechCrunch has learned.
Instead, the Houston-based bio-manufacturing company raised an internal round of roughly $30 million from existing investors and continued working on its latest project — a new bio-based manufacturing process for a high-value specialty chemical that can act as an anti-corrosive agent.
That work represents a potentially lucrative new product line for the company and charts a course for a host of other businesses that are refashioning the basic building blocks of life in an attempt to supplant chemistry with biology for manufacturing and production.
If Solugen can get its high-value chemical into commercial production, the company can follow the path that sustainable tech companies like Tesla have mastered — moving from a pricy specialty product into the mass market. And rather than over-promise and underdeliver, Solugen wanted to get the product line right first before raising big bucks, according to people familiar with the company’s thinking.
As the world looks to move away from oil and its byproducts to reduce greenhouse gas emissions and slow down or reverse global climate change, the chemicals industry is in the crosshairs as a huge target for disruption. Vehicle electrification solves only one part of the oil problem. The extractive industry doesn’t just produce fuel, but also the chemicals that make up most of the products that defined consumer goods in the twentieth century.
Chemicals are everywhere and they’re a huge business.
Companies like Zymergen raised hundreds of millions of dollars last year to develop industrial applications for synthetic biology, and they’re not alone. Startups including Geltor, Impossible Foods, Ginkgo Bioworks, Lygos, Novomer and Perfect Day have all raised significant amounts of capital to reduce the environmental footprint of food, chemicals, ingredients and plastics through synthetic biology.
Some of these companies are seeing early success in food replacements and ingredients, but the promise of biologically based chemicals have been elusive — until now.
Solugen’s new product will produce glucaric acid, a tough-to-make chemical that can be used in water treatment facilities and as an anti-corrosive agent — and the company can make it with a zero carbon (or potentially carbon negative) manufacturing process, according to Solugen co-founder and chief technology officer, Sean Hunt.
The glucaric acid from Solugen is cheaper to produce and more environmentally friendly than existing phosphonates that are used for water treatment — and the company has the benefit of competing against chemicals manufacturers in China.
Given the continuing tensions between the two countries, the U.S. is looking to make more high-value products — including chemicals — domestically, and Solugen’s technology is a good way forward to have home-grown supplies of critical materials.
Solugen still intends to raise more capital, the company just wanted to wait until its latest production plant for the acid came online, according to Hunt.
It’s also the fruit of years of planning. The two co-founders, Hunt and Gaurab Chakrabarti, first realized they could potentially use the technology they’d developed to make specialty chemicals back in 2017, according to Hunt. But first the company had to make the hydrogen peroxide as a precursor chemical, Hunt said.
“It’s advantageous for us to focus on this,” said Hunt. “As we scale, we can enter more commodity-type markets down the road.”
It’s all part of the notable strides the entire industry is making, said Hunt. “Synthetic biology has really made significant strides,” he said. “We have our commercial plant coming online this summer [and it proves] synthetic biology has gotten to the point where we can compete on price and performance.”
So the capital infusion will come as the company gets closer to the completion of these commercial scale facilities.
“It’s not like we were sitting on a term sheet and we said no,” Hunt said. “We want to make sure that we are hitting the milestones and the goals at a commensurate pace which is this year. I’m extremely bullish and optimistic of 2021.”
Solugen’s co-founder sees the path that his company is on as one that other startups working in the synthetic biology space will pursue to bring profitable products to market at the higher end before competing with more sustainable versions of commodity chemicals.
“How do you start a company that has this level of capital intensity?” Hunt asked. “You can start in the fine chemicals space where everything sells for tens to hundreds of dollars per pound. For us, glucaric acid is that specialty chemical and then we will do commodity.”
All change in the capital as the Biden administration takes charge, and thankfully without a hitch (or violence) after the attempted insurrection two weeks earlier.
In this week’s Decrypted, we look at the ongoing fallout from the SolarWinds breach and who the incoming president wants to lead the path to recovery. Plus, the news in brief.
The cyberattack against SolarWinds, an ongoing espionage campaign already blamed on Russia, claimed the U.S. Bureau of Labor Statistics as another federal victim this week. The attack also hit cybersecurity company Malwarebytes, the company’s chief executive confirmed. Marcin Kleczynski said in a blog post that attackers gained access to a “limited” number of internal company emails. It was the same attackers as SolarWinds but using a different intrusion route. It’s now the third security company known to have been targeted by the same Russian hackers after a successful intrusion at FireEye and an unsuccessful attempt at CrowdStrike.
Today, I disclosed publicly that @Malwarebytes had been targeted by the same nation state actor that attacked SolarWinds. This attack is much broader than SolarWinds and I expect more companies will come forward soon.
— Marcin Kleczynski (@mkleczynski) January 19, 2021
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 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?'”
As fears over WhatsApp’s privacy policies send millions of users in the West to Signal and Telegram, the two encrypted apps are also seeing a slight user uptick in China, where WeChat has long dominated and the government has a tight grip on online communication.
Following WhatsApp’s pop-up notification reminding users that it shares their data with its parent Facebook, people began fleeing to alternate encrypted platforms. Telegram added 25 million just between January 10-13, the company said on its official Telegram channel, while Signal surged to the top of the App Store and Google Play Store in dozens of countries, TechCrunch learned earlier.
The migration was accelerated when, on January 7, Elon Musk urged his 40 million Twitter followers to install Signal in a tweet that likely stoked more interest in the end-to-end encryption messenger.
The growth of Telegram and Signal in China isn’t nearly as remarkable as their soaring popularity in regions where WhatsApp has been the mainstream chat app, but the uplift is a reminder that WeChat alternatives still exist in China in various capacities.
Signal amassed 9,000 new downloads from the China App Store between January 8 and 12, up 500% from the period between January 3 and 7, according to data from research firm Sensor Tower. Telegram added 17,000 downloads during January 8-12, up 6% from the January 3-7 duration. WhatsApp’s growth stalled, recording 10,000 downloads in both periods.
Sensor Tower estimates that Telegram has seen about 2.7 million total installs on China’s App Store, compared to 458,000 downloads from Signal and 9.5 million times from WhatsApp.
The fact that Telegram, Signal and WhatsApp are accessible in China might come as a surprise to some people. But China’s censorship decisions can be arbitrary and inconsistent. As censorship monitoring site Apple Censorship shows, all major Western messengers are still available on the China App Store.
The situation for Android is trickier. Google services are largely blocked in China and Android users revert to Android app stores operated by local companies like Tencent and Baidu. Neither Telegram nor Signal is available on these third-party Android stores, but users with a tool that can bypass China’s Great Firewall, such as a virtual private network (VPN), can access Google Play and install the encrypted messengers.
The next challenge is actually using these apps. The major chat apps all get slightly different treatment from Beijing’s censorship apparatus. Some, like Signal, work perfectly without the need for a VPN. The catch is to sign up for Signal, a user must activate their account with a phone number, and Chinese phone numbers are tied to people’s real identities. Users have reported that WhatsApp occasionally works in China without a VPN, though it loads very slowly. And Facebook doesn’t work at all without a VPN.
“Some websites and apps can remain untouched until they reach a certain threshold of users at which point the authorities will try to block or disrupt the website or app,” said Charlie Smith, the pseudonymous head of Great Fire, an organization monitoring the Chinese internet that also runs Apple Censorship.
“Perhaps before this mass migration from WhatsApp, Signal did not have that many users in China. That might have changed over the last week in which case the authorities could be pondering restrictions for Signal,” Smith added.
To legally operate in China, companies must store their data within China and submit information to the authorities for security spot-checks, according to a cybersecurity law enacted in 2017. Apple, for instance, partners with a local cloud provider to store the data of its Chinese users.
The requirement raises questions about the type of interaction that Signal, Telegram and other foreign apps have with the Chinese authorities. Signal said it never turned over data to the Hong Kong police and had no data to turn over when concerns grew over Beijing’s heightened controls over the former British colony.
The biggest challenges for apps like Signal in China, according to Smith, will come from Apple, which is constantly under fire by investors and activists for submitting to the Chinese authorities.
In recent years, the American giant has stepped up app crackdown in China, zeroing in on services that grant Chinese users access to unfiltered information, such as VPN providers, RSS feed readers and podcast apps. Apple has also purged tens of thousands of unlicensed games in recent quarters after a years-long delay.
“Apple has a history of preemptively censoring apps that they believe the authorities would want censored,” Smith observed. “If Apple decides to remove Signal in China, either on its own initiative or in direct response to a request from the authorities, then Apple customers in China will be left with no secure messaging options.”
Short, snappy, entertaining videos have become an increasingly common way for young people to receive information. Why not learn English through TikTok-like videos too? That was what prompted Angelo Huang to launch Blabla.
Originally from Taiwan, Huang relocated to Shanghai in 2019 to start Blabla after working in Silicon Valley for over a decade. A year later, Blabla was chosen as part of Y Combinator’s 2020 summer cohort. The coronavirus had begun to spread in the U.S. at the time, keeping millions at home, and interest in remote learning was reviving.
“It was my eighth time applying to YC,” Huang, who founded two companies before Blabla, told TechCrunch during an interview.
This week, Blabla announced it has raised $1.54 million in a seed round led by Amino Capital, Starling Ventures, Y Combinator, and Wayra X, the innovation arm of the Spanish telecoms giant Telefónica. While Y Combinator wasn’t particularly instrumental in Blabla’s expansion in China — one of the biggest English-learning markets — the famed accelerator was of great help introducing investors to the young company, said the founder.
The Blabla app pays native English speakers by the hour to create short, engaging videos tailored to English-learning students around the world. The content creators are aided by Blabla’s proprietary software that can recognize and tag their scenes, as well as third-party translation tools that can subtitle their videos. The students, in turn, pay a subscription fee to receive personalized video recommendations based on their level of proficiency. They can practice through the app’s built-in speech recognition, among other features like speaking contests and pop quizzes.
The startup is in a highly crowded space. In China, the online English-learning market is occupied by established companies like VIPKID, which is backed by Tencent and Sequoia Capital. Compared to VIPKID’s one-on-one tutoring model, Blabla is more affordable with its starting price of 39 yuan ($6) a month, Huang noted.
“The students [on mainstream English learning apps] might have to spend several thousands of RMB before they can have a meaningful conversation with their teachers. We instead recycle our videos and are able to offer lessons at much cheaper prices.”
The app has about 11,000 weekly users and 300-400 paid users at the moment, with 80-90% of its total users coming from China; the goal for this year is to reach 300,000 students. The funding will allow Blabla to expand in Southeast Asia and Latin America while Wayra X can potentially help it scale to Telefónica’s 340 million global users. It will be seeking brand deals with influencers on the likes of TikTok and Youtube. The new capital will also enable BlaBla to add new features, such as pairing up language learners based on their interests and profiles.
Blabla doesn’t limit itself to teaching English and has ambitions to bring in teachers of other languages. “We want to be a global online pay-for-knowledge platform,” said Huang.
Mobile adoption continued to grow in 2020, in part due to the market forces of the COVID-19 pandemic. According to App Annie’s annual “State of Mobile” industry report, mobile app downloads grew by 7% year-over-year to a record 218 billion in 2020. Meanwhile, consumer spending grew by 20% to also hit a new milestone of $143 billion, led by markets that included China, the United States, Japan, South Korea and the United Kingdom.
Consumers also spent 3.5 trillion minutes using apps on Android devices alone, the report found.
In another shift, app usage in the U.S. surged ahead of the time spent watching live TV. Currently, the average American watches 3.7 hours of live TV per day, but now spends four hours on their mobile device.
The increase in time spent is a trend that’s not unique to the U.S., but can be seen across several other countries, including both developing mobile markets like Indonesia, Brazil and India, as well as places like China, Japan, South Korea, the U.K., Germany, France and others.
The trend isn’t isolated to any one demographic, either, but is seen across age groups. In the U.S., for example, Gen Z, millennials and Gen X/Baby Boomers spent 16%, 18% and 30% more time in their most-used apps year-over-year, respectively. However, what those favorite apps looked like was very different.
For Gen Z in the U.S., top apps on Android phones included Snapchat, Twitch, TikTok, Roblox and Spotify.
Millennials favored Discord, LinkedIn, PayPal, Pandora and Amazon Music.
And Gen X/Baby Boomers used Ring, Nextdoor, The Weather Channel, Kindle and ColorNote Notepad Notes.
The pandemic didn’t necessarily change how consumers were using apps in 2020, but rather accelerated mobile adoption by two to three years’ time, the report found.
Investors were also eager to fuel mobile businesses as a result, pouring $73 billion in capital into mobile companies — a figure that’s up 27% year-over-year. According to Crunchbase data, 26% of total global funding dollars in 2020 went to businesses that included a mobile solution.
From 2016 to 2020, global funding to mobile technology companies more than doubled compared with the previous five years, and was led by financial services, transportation, commerce and shopping.
Mobile gaming adoption also continued to grow in 2020. Casual games dominated the market in terms of downloads (78%), but Core games accounted for 66% of games’ consumer spend and 55% of the time spent.
With many stuck inside due to COVID-19 lockdowns and quarantines, mobile games that offered social interaction boomed. Among Us, for example, became a breakout game in several markets in 2020, including the U.S.
Other app categories saw sizable increases over the past year, as well.
Time spent in Finance apps in 2020 was up 45% worldwide, outside of China, and participation in the stock market grew 55% on mobile, thanks to apps like Robinhood in the U.S. and others worldwide, that democratized investing and trading.
TikTok had a big year, too.
The app saw incredible 325% year-over-year growth, despite a ban in India, and ranked in the top five apps by time spent. The average monthly time spent per user also grew faster than nearly every other app analyzed, including 65% in the U.S. and 80% in the U.K., surpassing Facebook. TikTok is now on track to hit 1.2 billion active users in 2021, App Annie forecasts.
Other video services boomed in 2020, thanks to a combination of new market entrants and a lot of time spent at home. Consumers spent 40% more hours streaming on mobile devices, with time spent in streaming apps peaking in the second quarter in the west as the pandemic forced people inside.
YouTube benefitted from this trend, as it became the No. 1 streaming app by time spent among all markets analyzed except China. The time spent in YouTube is up to 6x that of the next closet app at 38 hours per month.
Of course, another big story for 2020 was the rise of e-commerce amid the pandemic. This made the past year the biggest ever for mobile shopping, with an over 30% increase in time spent in Shopping apps, as measured on Android phones outside of China.
Mobile commerce, however, looked less traditional in 2020.
Social shopping was a big trend, with global downloads of Pinterest and Instagram growing 50% and 20% year-over-year, respectively.
Livestreaming shopping grew, too, led by China. Downloads of live shopping TaoBao Live in China, Grip in South Korea and NTWRK in the U.S. grew 100%, 245% and 85%, respectively. NTWRK doubled in size last year, and now others are entering the space as well — including TikTok, to some extent.
The pandemic also prompted increased usage of mobile ordering apps. In the U.S., Argentina, the U.K., Indonesia and Russia, the app grew by 60%, 65%, 70%, 80% and 105%, respectively, in Q4.
Business apps, like Zoom and Google Meet among others, grew 275% in Q4, for example, as remote work and sometimes school, continued.
The analysis additionally included lists of the top apps by downloads, spending and monthly active users (MAUs).
Although TikTok had been topping year-end charts, Facebook continued to beat it in terms of MAUs. Facebook-owned apps controlled the top charts by MAUs, with Facebook at No. 1 followed by WhatsApp, Messenger and Instagram.
TikTok, however, had more downloads than Facebook and ranked No. 2 by consumer spending, behind Tinder.
The full report is available only as an online interactive experience this year, not a download. The report largely uses data from both the iOS App Store and Google Play, except where otherwise noted.
Megvii, one of China’s largest facial recognition startups, is gearing up for an initial public offering in Shanghai. The company is working with CITIC Securities to prepare for its planned listing, according to an announcement posted by the China Securities Regulatory Commission on Tuesday.
The move came more than a year after Megvii, known for its computer vision platform Face++, filed to go public in Hong Kong in August 2019. At the time, Reuters reported that the company could raise between $500 million and $1 billion. However, the firm’s IPO application in Hong Kong has lapsed for undisclosed reasons and its focus is now on Shanghai’s STAR board, a person with knowledge of the matter told TechCrunch.
In 2019, China established the STAR board to attract high-growth, unprofitable Chinese tech startups after losing them to the U.S. for years. In the meantime, a domestic flotation is increasingly appealing to Chinese tech firms, especially those that count on government contracts and are caught in the U.S.-China tech competition.
Megvii and its rivals SenseTime, Yitu, and CloudWalk are collectively recognized as the “Four AI Dragons” of China for their market dominance and fundings from highflying investors. Megvii’s technology can be found powering smart city infrastructure across China as well as many smartphones and mobile apps. Alibaba, Ant Group and the Bank of China are among the group of investors who have pumped about $1.4 billion into the ten-year-old company since its inception.
The AI Dragons are less celebrated outside their home market. Last year, Megvii, Yitu and SenseTime were added to the U.S. Entity List for their alleged roles in enabling mass surveillance of the Muslim minority groups in western China. CloudWalk was subsequently added to the blacklist in 2020 and cut off from its U.S. suppliers.
According to the notice posted by China’s securities authority, Megvii plans to issue Chinese depositary receipts (CDRs), which are similar to American depositary receipts and allow domestic investors to hold overseas shares. That suggests the Beijing-based AI unicorn has not ruled out listing outside mainland China.
Currently seeking guidance in the pre-application stage, Megvii’s planned listing still needs approval from Chinese regulators.
As Chinese fitness class provider Keep continues to diversify its offerings to include Peloton-like bikes, health-conscious snacks among other things, it’s bringing in new investors to fund its ambitions.
On Monday, Keep said it has recently closed a Series F financing round of $360 million led by SoftBank Vision Fund. Hillhouse Capital and Coatue Management participated in the round, as well as existing investors GGV Capital, Tencent, 5Y Capital, Jeneration Capital and Bertelsmann Asia Investments.
The latest fundraise values the six-year-old startup at about $2 billion post-money, people with knowledge told TechCrunch. Keep said it currently has no plans to go public, a company spokesperson told TechCrunch.
Keep started out in 2014 by providing at-home workout videos and signed up 100 million users within three years. As of late, it has served over 300 million users, the company claims. It has over time fostered an ecosystem of fitness influencers who give live classes to students via videos, and now runs a team of course designers, streaming coaches and operational staff dedicated to its video streaming business.
The company said its main revenue driver is membership fees from the 10 million users who receive personalized services. It’s also expanding its consumer product line. Last year, for instance, the firm introduced an internet-connected stationary bike that comes with video instructions like Peloton . It’s also rolled out apparel, treadmills and smart wristbands.
The company launched foreign versions of its Keep app in 2018 as it took aim at the overseas home fitness market. It was posting diligently on Western social networks including Instagram, Facebook and Twitter up until the spring of 2019.
According to Keep, the purpose of the latest funding is to let it continue doing what it has focused on in recent years: improving services and products for users and serving fitness professionals against a backdrop of the Chinese government’s campaign for “national fitness.”
“We believe fitness has become an indispensable part of Chinese people’s everyday life as their income rises and health awareness grows,” said Eric Chen, managing partner at SoftBank Vision Fund .
China’s search giant Baidu is extending its car ambitions from mere software to production. The company said Monday that it will set up a company to produce electric vehicles with the help of Chinese automaker Geely. Baidu, a dominant player in China’s internet search market for the last decade or so, will provide smart driving technologies while Geely, which has an impending merger with Sweden’s Volvo, will be in charge of car design and manufacturing.
The move marks the latest company in China’s internet industry to enter the EV space. In November, news arrived that Alibaba and Chinese state-owned carmaker SAIC Motor had joined hands to produce electric cars. Ride-share company Didi and EV maker BYD co-developed a model for ride-hailing, which is already attracting customers like Ideanomics. Meanwhile, the stocks of China’s Tesla challengers, such as Xpeng, Li Auto, and NIO, have been in a steady uptrend over the past year.
Baidu’s car push is part of its effort to diversify a business relying on search advertising revenue. New media platforms such as ByteDance’s Toutiao news aggregator and short-video app Douyin come with their own search feature and have gradually eroded the share of traditional search engines like Baidu. Short video services have emerged as the second-most popular channel for internet search in China, trailing after web search engines and coming ahead of social networks and e-commerce, data analytics firm Jiguang shows.
Baidu has been working aggressively on autonomous driving since 2017. Its Apollo ecosystem, which is billed as “an Android for smart driving,” has accumulated over a hundred manufacturing and supplier partners. Baidu has also been busy testing autonomous driving and recently rolled out a robotaxi fleet.
The new venture will operate as a Baidu subsidiary where Geely will serve as a strategic partner and Baidu units like Apollo and Baidu Maps will contribute capabilities. The firm will cover the entire industrial chain, including vehicle design, research and development, manufacturing, sales, and service.
It’s unclear how Baidu’s tie-up with Geely will affect Apollo’s operation, though Baidu promised in its announcement that it will “uphold its spirit of open collaboration across the AI technology industry, striving to work closely with its ecosystem partners to advance the new wave of intelligent transformation.”
“At Baidu, we have long believed in the future of intelligent driving and have over the past decade invested heavily in AI to build a portfolio of world-class self-driving services,” said Robin Li, co-founder and chief executive officer of Baidu.
“We believe that by combining Baidu’s expertise in smart transportation, connected vehicles and autonomous driving with Geely’s expertise as a leading automobile and EV manufacturer, the new partnership will pave the way for future passenger vehicles.”
It’s no secret that Tencent, the Chinese tech giant behind WeChat and a handful of blockbuster video games, is an aggressive investor. Even during 2020 when the pandemic slowed down economic activity in many parts of the world, Tencent was charging ahead with its investment ambitions.
During the year, the company participated in more than 170 funding rounds that amounted to a total of 249.5 million yuan ($38 million), according to the Chinese startup database ITJuzi. That made 2020 the most active year to date for Tencent’s investment team, which had been delivering superior results in the last decade.
By January 2020, over 70 of Tencent’s 800 portfolio companies had gone public and more than 160 of them surpassed $100 million in valuation, Martin Lau, Tencent’s president, told a room of investees at the time. The achievement could well place Tencent side by side with some of the world’s top venture funds.
Tencent established an investment and M&A unit back in 2008 and began to seriously ramp up financing around 2012. Since 2015, it has been funding more than 100 companies per year, ITJuzi data shows.
The social and entertainment giant has for long kept its funding activity close to its chest and data gleaned by third-party organizations like ITJuzi is often not exhaustive. The company did not immediately respond to TechCrunch’s questions about its investment in 2020, and the story draws mainly from public disclosures and interviews with people of knowledge.
While Tencent’s overall investment strategy has remained consistent — a diversifying portfolio with a focus on digital entertainment — it has quietly stepped up efforts in areas outside its main gaming arena. For instance, the firm has paid more attention to enterprise services ever since it announced a B2B pivot in 2018, putting more focus on cloud computing, fintech and the likes. The number of investments it made in enterprise software went from five in 2015 to 28 in 2020, according to ITJuzi.
In line with its new focus on enterprise, Tencent has also upped its game in fintech. In 2019 and 2020, it backed 18 and 15 fintech startups, respectively, ITJuzi shows, up from only four in 2015. The rise, though incremental, reflects the firm’s increased interest in an area that’s both hugely lucrative but also comes with many constraints.
In China, Tencent has long been competing with Ant Group, the Alibaba fintech affiliate, to court users in payments, lending, wealth management, and even insurance. The regulatory troubles facing Ant are not exclusive to the Jack Ma empire and will likely come to daunt its smaller contenders, including Tencent’s fintech segments.
That said, Tencent is “not nearly as aggressive” as Ant when it comes to strengthening its position in China’s financial market, a person who partners with Tencent’s overseas fintech business told TechCrunch.
The company is also prudent with its fintech expansion overseas in times of geopolitical tensions. So far, it’s mostly limited its ambition to providing cross-border payment services to China’s outbound tourists, rather than serving locals directly.
“There’s a lot of scrutiny around what Tencent and Alibaba are doing within the United States and that presents challenges,” said the CEO of a Tencent-backed startup based in the U.S. who declined to be named.
Through investments, however, Tencent has familiarized itself with the foreign financial markets. In 2015, the company made one fintech investment outside China. In 2020, it funded eight, according to public data collected by Crunchbase.
A significant portion of Tencent’s outside investments doesn’t bear strategic significance, and the company tends to let its portfolio startups operate autonomously. Partly for that reason, Tencent was slammed for prioritizing investment and financial return over product development and innovation in a viral article in 2018, titled ominously “Tencent Has No Dream.” The hands-off attitude is a stark contrast to the stranglehold practice of Alibaba, which prefers buying controlling stakes in businesses and shaking up their top management, as it did for Lazada.
But many Tencent investments do add value to its business, even when the press announcements leave out the potential strategic synergies. Over the years, Tencent has made a series of small investments in the U.S. and other Western countries. Few of them appear to bring collaborative opportunities in the near term, but Tencent would still invite executives from these companies to China where they would learn from each other.
“Tencent made those investments really just to kind of learn what people are doing in the U.S. and how it might be able to be applied in China,” said the executive from the Tencent-backed startup.
“We don’t have any near term plans to do anything in China. But Tencent is a very reputable name, whether it’s in China or the U.S. And you know, it’s good to have the option to be able to do something more strategic in partnership with Tencent down the road.”
Tencent’s fintech investments outside China could also be conducive to the firm’s gaming expansion overseas, according to a Hong Kong-based fund manager. The goal is to have half of its gamers to be overseas users, Tencent pleged in 2019.
“For the gaming industry in Latin America and Southeast Asia, the biggest bottleneck is, surprisingly, not hardware but payments,” the fund manager told TechCrunch. “Of course, localization and compatibility are also important.”
Eat Just, a food startup from San Francisco making chicken-less eggs, has ambitions to crack the Chinese market where consumer appetite for plant-based food is growing and other Western vegan substitute brands like Beyond became available in recent quarters.
The startup said this week it will be suppling to fast-food chain Dicos, a local rival to McDonald’s and KFC in China. The agreement will see Eat Just add its plant-based eggs to the restaurant’s breakfast items across more than 500 locations. The eggs are derived from a legume called mung beans, which have long been a popular ingredient for soup, noodles and dessert in China.
At Dicos in major Chinese cities, consumers will find Eat Just eggs in breakfast burgers, bagel sandwiches and Western-style breakfast plates. That diversifies the Dicos plant-based menu which already includes a vegan chicken burger supplied by local startup Starfield. Dicos also offers a gateway into China’s low-tier cities where it has built a stronghold and can potentially help evangelize plant-based proteins in communities beyond China’s urban yuppies. The chain operates a total of 2,600 stores in China and serves 600 million customers a year.
Eat Just first entered China in 2019 and currently generates less than 5% of its revenue from the country, Andrew Noyes, head of global communications at Eat Just, told TechCrunch. But over time, the company expects China to account for more than half of its revenue. Ten of its 160 employees are based in China.
Eat Just’s vegan egg recipe / Photo: Eat Just
“We have been intentional about starting small, going slow and hiring people who know the market and understand how to build a sustainable business there. We’ve also been focused on finding the right partners to work with on downstream manufacturing, sales and distribution, and that work continues,” said Noyes.
The partnership with Dicos arrived on the heels of Eat Just’s announcement to set up an Asia subsidiary. The nine-year-old company, formerly Hampton Creek, has raised over $300 million from prominent investors including Li Ka-Shing, Peter Thiel, Bill Gates and Khosla Ventures. It was last valued at $1.2 billion.
Before its tie-up with Dicos, Eat Just had already been selling online in China through Alibaba and JD.com among other retail channels. Its China business is currently growing by 70% year-over-year.
While there’s no shortage of strong competition in the plant-based food race in China, Eat Just claims it’s taken a unique angle by zeroing in on eggs.
“Plant-based meat companies offer products that pair deliciously with Just Egg,” the brand name of the startup’s main product, Noyes noted.
“Plant-based foods are increasing in popularity among Chinese consumers and more sustainable eating is becoming part of a national dialogue about the feeding of the country in the future. China produces about 435 billion eggs per year and demand for protein is increasing.”
Indeed, Euromonitor predicted that China, the world’s largest meat-consuming country, would see its “free from meat” market size grow to $12 billion by 2023, compared to $10 billion in 2018.
The New York Stock Exchange announced this morning that it will be delisting three major Chinese telecom companies, a move that it first announced last week before seeming to reverse course on Monday.
This is all happening in response to the Trump administration’s broader order barring U.S. investment in companies that support the Chinese military. (Trump has been trying to ban TikTok through a separate order.)
Why the double reversal? To be fair to the NYSE, in its first reversal, the exchange had only said it would allow the telecoms to continue trading while it evaluates whether the executive order applies to them.
Now it seems that the further evaluation is complete. In today’s announcement, the NYSE said it’s making the decision after receiving “new specific guidance” confirming that yes, the executive order does apply to China Telecom, China Mobile and China Unicom.
As a result, trading of all three stocks will be suspended on the exchange as of 4 a.m. Eastern time on Monday, January 11. The move is seen as largely symbolic, as the telecoms’ trading volume via the NYSE only represents a small percentage of their total tradable shares.
The world’s attention is on Jack Ma’s whereabouts after reports noted the billionaire founder of Alibaba and Ant Group had been absent from public view since late October.
On October 24, Ma delivered fiery remarks against China’s financial system to an audience of high-ranking officials. Days later the Chinese authorities abruptly halted Ant’s initial public offering, an act believed to be linked to Ma’s controversial speech. The Chinese government subsequently told the fintech behemoth, which had thrived in a relatively lax regulatory environment, to “rectify” its business according to the law. The future of Ant hangs in the air.
Concurrently, Chinese regulators have launched an unprecedented probe into Alibaba over suspected monopolistic behavior.
Ma is known for his outspoken personality and love for the limelight, so it’s no surprise that his missing from recent events, including the final episode of an African TV program he created, is sparking widespread chatter. From economists to journalists, the Twitter world has tuned in:
Chinese billionaire Jack Ma is missing after criticizing the Chinese government. Wow. This would be like the U.S. government kidnapping Jeff Bezos or Mark Zuckerberg to teach them a lesson. https://t.co/AREly0Ba7M
— Matt Stoller (@matthewstoller) January 4, 2021
Billionaire Jack Ma (@JackMa) suspected to be missing shortly after criticizing China’s government.
Chinese authorities launched an anti-monopoly investigation into Alibaba in late December and told Ant Group to restructure its operations.
— Anonymous (@YourAnonCentral) January 4, 2021
Where is Chinese billionaire Jack Ma? He has not made any public appearance in 2 months. He criticised Chinese regulators and state-owned banks in Shanghai in October. https://t.co/SyIZZOYMqn
— Smita Prakash (@smitaprakash) January 4, 2021
“Regarding the Africa’s Business Heroes competition, Mr. Ma had to miss the finale due to a schedule conflict,” an Alibaba spokesperson said.
While China’s Twitter equivalent Weibo has not blocked searching for “Jack Ma missing,” the posts it surfaced barely have any likes or reposts. Elsewhere on the Chinese internet, users are speculating inside WeChat groups that Ma was either “made vanished” or has fled the country.
It’s worth noting that Ma has long stepped back from day-to-day operations at Alibaba. In September 2019, he officially handed his helm as the company’s chairman to his successor Daniel Zhang. That said, the billionaire still holds considerable sway over the e-commerce business as a lifetime partner at the so-called Alibaba Partnership, a group comprising senior management ranks who can nominate a majority of the directors to the board.
It’s not unusual to see Chinese tycoons choosing to lie low in tough times. After Richard Liu was accused of rape, the flamboyant founder of JD.com, Alibaba’s archrival, skipped a key political event in China last year. Tencent founder Pony Ma, who already keeps a low profile, has been absent from the public eye for about a year, though the cause is his chronic “back problems,” a source told TechCrunch, and the tech boss has made virtual appearances at events by sending voice messages in the past year.
Lalamove will extend its network to cover more small Chinese cities after raising $515 million in Series E funding, the on-demand logistics company announced on its site. The round was led by Sequoia Capital China, with participation from Hillhouse Capital and Shunwei Capital. All three are returning investors.
According to Crunchbase data, this brings Lalamove’s total raised so far to about $976.5 million. The company’s last funding announcement was in February 2019, when it hit unicorn status with a Series D of $300 million.
Bloomberg reported last week that Lalamove was seeking at least $500 million in new funding at $8 billion valuation, or four times what it raised at least year.
Founded in 2013 for on-demand deliveries within the same city, Lalamove has since grown its business to include freight services, enterprise logistics, moving and vehicle rental. In addition to 352 cities in mainland China, Lalamove also operates in Hong Kong (where it launched), Taiwan, Vietnam, Indonesia, Malaysia, Singapore, the Philippines and Thailand. The company entered the United States for the first time in October, and currently claims about 480,000 monthly active drivers and 7.2 million monthly active users.
Part of its Series D had been earmarked to expand into India, but Lalamove was among 43 apps that were banned by the government, citing cybersecurity concerns.
In its announcement, Lalamove CEO Shing Chow said its Series E will be used to enter more fourth- and fifth-tier Chinese cities, adding “we believe the mobile internet’s transformation of China’s logistics industry is far from over.”
Lalamove’s (known in Chinese as Huolala) Series E announcement said the company experienced a 93% drop in shipment volume at the beginning of the year, due to the COVID-19 pandemic, but has experienced a strong rebound, with order volume up 82% year-over-year even before Double 11.
When Chi Xu left Magic Leap and returned to China, he had big ambitions. He believed China would have its own augmented and virtual reality giants, just as how the domestic smartphone industry birthed global leaders like Huawei, Oppo and Xiaomi that rival Apple today.
Xu, now chief executive of Nreal, one of China’s highest-funded AR startups, is among a group of entrepreneurs uniquely positioned to build world-class hardware. The young generation is well-versed in both worlds, with work experience in Silicon Valley and often an Ivy League degree. They are also well-connected to capital and supply chains in China, which would support them through cycles of iteration to deliver powerful yet affordable products.
Although China has been calling for more indigenous innovation, most of the advanced technologies found in AR and VR are still in the hands of foreign tech behemoths.
They might be proud of China’s technological progress, but they recognize supremacy doesn’t come overnight. More importantly, their firms often have intricate ties to the U.S., whether it’s for sourcing core parts or testing an early market.
Despite Beijing’s push for technological “self-reliance,” Chinese AR and VR companies still depend on imported chips like their smartphone counterparts. Because the industry is so young and no one really has a proven model for monetization, few investors and startups in China are willing to splurge on basic research.
But China has one important strength, said the founder of a Chinese AR startup who declined to be named: “In cutting-edge sectors, China has always lacked the talent to take things from ‘zero to one.’ However, China has the mass production and supply chain capabilities necessary for taking things from ‘one to n.'”
That was the case with smartphones. Once Apple demonstrated the technological and financial possibilities of handsets and gave rise to a production ecosystem around iPhones — in other words, catapulted the industry from zero to one — Chinese counterparts took cues from the American giant, made use of homegrown manufacturing resources and began delivering cheaper and even more powerful alternatives.
“I can’t imagine any Chinese corporations willing to invest in AR and VR as heavily as Microsoft, Apple or Facebook today,” said the founder, whose company sells headsets both in and outside China.
“On the contrary, China is good at playing catch-up by spending money on a race with a clear finish line. For example, chips. If there are already contestants in the area, so long as [Chinese firms] ramp up investment and follow the direction, they can deliver results.”
Although China, for the last decade, has been calling for more indigenous innovation, most of the advanced technologies found in AR and VR are still in the hands of foreign tech behemoths, several industry experts told TechCrunch. Qualcomm’s Snapdragon chips are used almost exclusively by serious players, from Facebook’s Oculus Quest in the U.S. to Pico and Nreal in China. Advanced optical solutions, on the other hand, mainly come from Japanese and Taiwanese firms.
Attendees stand in line to try out the new Oculus Quest Virtual Reality (VR) gaming system at the Facebook F8 Conference at McEnery Convention Center in San Jose, California, on April 30, 2019. Image Credits: AMY OSBORNE/AFP/Getty Images
That’s not to say Chinese companies don’t innovate. Prominent venture capitalist and AI expert Kai-Fu Lee famously argued in his book “AI Superpowers” that while the U.S. has an edge in fundamental research, China is stronger on implementation and commercial application.
“It’s true that the more experimental efforts are happening in the U.S., though I’m not sure if any of those are mature already,” Tony Zhao, founder and chief executive of real-time video API provider Agora and a veteran from WebEx, told TechCrunch. “For Chinese companies, there are more opportunities in [user experience].”
As AR and VR come of age, Zhao’s company is devising a toolkit to let developers and organizations stream and record AR content from devices. Use cases by China’s educators have particularly impressed Zhao. One client, for example, built a tool allowing a teacher to interact with a student through a virtual store, where the two speak English while they respectively act as the cashier and the customer.
“I think it’s very revolutionary because a lot of kids are going to be very excited to learn from those kinds of tools. It’s more like a real experience and would be more natural for students to learn to use a language instead of just know the grammar,” said Zhao.
“These solutions are already creative, but also very practical.”
The Chinese market offers other aspects that can keep investors excited. As Gavin Newton-Tanzer, president of Sunrise International, Asia producer of the “mixed reality” (XR) conference AWE, pointed out to TechCrunch:
“Many like to say that in the U.S., Magic Leap sucked all the air out of the room. They raised tons of money and as a result, few wanted to fund [other smart glass startups]. It’d be like funding a competitor to Didi in China or funding a competitor to Uber in the U.S. … Few felt like anyone else could meaningfully compete.”
Singapore on Friday granted four firms, including Ant Group and Grab, licenses to run digital banks in the Southeast Asian country, in a move that would allow the tech giants to expand their financial services offerings.
The nation’s central bank, Monetary Authority of Singapore (MAS), said it applied a “rigorous, merit-based process” to select a strong slate of digital banks. As these digital banks start their pilot operations, MAS said it will review whether more companies could be granted this license.
A total of 21 firms, including TikTok-parent firm ByteDance, had applied to get a digital license, of which 14 met the eligibility criteria, MAS said. Tech giants see a major opportunity in expanding to financial services as a way to supercharge their revenue in the rapidly growing region.
The other two licenses went to an entity wholly owned by internet giant Sea, and a consortium of Greenland Financial Holdings, Linklogis Hong Kong and Beijing Cooperative Equity Investment Fund Management.
Like traditional banks, Grab-Singtel and Sea will be able to offer customers banking accounts, debit and credit cards and other services. Digital wholesale banks — the licenses of which went to Ant-owned entity and Greenland Financial consortium — will serve small and medium-sized businesses. None of them will be required to have a physical presence.
“We expect them to thrive alongside the incumbent banks and raise the industry’s bar in delivering quality financial services, particularly for currently underserved businesses and individuals,” said MAS MD Ravi Menon in a statement. A handful of countries, including the U.K., India and Hong Kong, have streamlined their regulations in recent years to grant tech companies the ability to operate as digital banks.
Ride-hailing firm Grab and telecom operator Singtel formed a consortium last year to apply for the digital full bank license. Their combined experience and expertise “will further our goal to empower more people to gain better control of their money and achieve better economic outcomes for themselves, their businesses and families,” said Anthony Tan, Group CEO & co-founder of Grab, in a statement Friday.
“Over the years, Ant Group has accumulated substantial experience and proven success, especially in China where we work with partner financial institutions to serve the needs of SMEs,” Ant Group said in a statement. “We look forward to building stronger and deeper collaborations with all participants in the financial services industry in Singapore.”