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Asia Tech Review: 25 November 2019

November 25 · Issue #137 · View online
Asia Tech Review
Welcome back,
I’ve been told it’s time to fresh this newsletter up. That’s probably true. Thank you, Sai – long-time ATR reader – for the new images and your prompt.
Last week was pretty busy in Asia tech land with Alibaba finally going public in Hong Kong, Y Combinator abruptly pulling its China program, Meituan profitable in a quarter once again and Carousell announcing a major merger – more on that below. Yes, I wrote some editorial this week as well as the news recap.
Speaking of putting pen to paper, for the day job, I teamed up with The Ken Southeast Asia reporter Ka Kay Lum to analyse how VCs in Southeast Asia have grown as fast as startups. Our story went live last week: link 🔒(I have a few free read credits for non-subscribers – first come, first serve if you contact me.)
See you again next week.

Carousell evolving
Carousell, an app for selling second-hand goods, is Singapore’s startup darling. Its founding story is one the government would love to see repeated at scale: it was create in 2012 by three graduates of the National University of Singapore (NUS) who spent a year in Silicon Valley as part of the overseas program.
Its progress has gone as intended with the startup raising over $180M from big names like DBS, Sequoia Capital, Japan’s Rakuten and the corporate investment arm of Singapore’s Economic Development Board . It has rejected acquisition offers including a $100M deal that would have made CEO Siu Rui Quek (and his co-founders) “wealthy beyond his dreams.” But it wasn’t until this year that things started to get serious – Naspers, the South African investment giant famous for a lucrative early bet on Tencent, bought into the business via OLX, its online classifieds business, in April.
A little over six months later and Naspers’ fingerprints are all over its latest deal: a merger with rival 701Search, a subsidiary of Norwegian telco Telenor. The headline number – which may capture your attention – is that the combined entity is valued at $850M, up from Carousell’s April valuation of $560M. (The valuation is pretty flat since 32% of the merger business is 701Search.)
I won’t get into the deal itself – Tech In Asia has a take I mostly agree with on why you should think beyond that valuation number – what struck me is how Carousell’s strategy and leadership has shifted.
Anyone who follows Naspers will tell you that it loves the classifieds business and it loves mergers. Pull them together and you have, well, this Carousell-701Search deal.
In a little over the last year alone, Naspers has fully acquired Russia’s Avito for over $1B and ploughed $500M into US/Europe Letsgo. This chart from Dealroom shows the global battle, although it is from August 2018 so before the OLX-Carousell deal.
Carousell is now a place in play for Naspers/OLX
Carousell is now a place in play for Naspers/OLX
Quek remains CEO but there’s plenty of evidence of a power change.
Carousell’s other two founders have shifted to more general roles – chairman and mere “co-founder” – as specialists have joined in core positions like CTO. You can bet that Naspers/OLX and now Telenor people are centrally involved as Carousell moves into a new era. On paper, yes, it remains the same startup started by three plucky NUS grads, but in reality it is a pawn in a greater global battle. That’s what will dictate moves it makes in the future.
Alibaba raises nearly $13B in Hong Kong IPO
Y Combinator called off its planned China division just over a year after announcing it – it says it is a result in a change of leadership but you can always speculate over US-China relations and the challenge of being relevant in China as a US VC link
Meituan had a second consecutive quarter of profit – expect ride-hailing companies and other on-demand businesses play up their similarities to Meituan in the wake of Uber/Lyft’s struggles link
The Chinese browser that promised to legally allow users to jump the Great Firewall (per last week’s newsletter) was removed from the web just days after its announcement link
Huawei is suing critics in France over its alleged ties to the Chinese government link
How new rules will restrict China’s vaping companies, which had been allowed to operate with freedom link
A profile of Dongtu, known as China’s Giphy link
Early reports suggest the iPhone 11 is selling well in China link
Online teaching startup Vipkid, which recently raised an undisclosed Series E from Tencent, is reportedly laying off 30% of its staff link
Crypto mining chip company Caanan raised $90M in a US IPO – had previously tried and failed to go public in Hong Kong link
PDD’s shares got hit (down over 20%) wiping off $11B in market cap following unexpectedly high losses – PDD says it is still growing though link
Informative podcast on Kuaishou – which started out as a GIF making tool and is now one of China’s top short video and live-streaming services link
Over 500 hotels in India have reportedly ditched OYO
Paytm announced a $1B Series G led by T Rowe Price, the valuation is $16B which makes it India’s highest-valuation private tech company link
Japan’s Credit Saison launches $55M early stage fund for India link
Binance acquired India-based WazirX in a deal said to be worth $5-$10M link
How Chinese VCs tempt India startups by offering a network as well as money link
What happens if Vodafone goes bust? link 🔒
Marie Kondo adds an e-commerce shop to her website
News reader app SmartNews raised $92M at a valuation of $1.2B link
Telco NTT Docomo is offering $1M+ per year salaries for top scientists for its push into cloud and other non-telecom services link
Palantir entered Japan through a $150M joint venture link
Southeast Asia
Tokopedia is reportedly in talks to raise up to $1.5B
Gojek is spinning out its payment business link
It is also reapplying for a license to operate in the Philippines link
Vietnamese e-commerce startup Sendo raised $61 million from investors including EV Growth and Thailand’s Kasikorn Bank link
Ant Financial is reportedly planning to bid for a virtual banking license in Singapore link
Singapore-based Lucence raised $20M for a non-invasive cancer screening technology – a spinout from Singapore’s Agency of Science, Technology and Research (A*STAR) link
Coda Payments, which helps monetise apps and games, raised over $20M link
Huawei is lobbying hard to build Thailand’s 5G network link
Financial comparison startup GoBear lost two co-founders and is reportedly closing its Indonesia operations link
Outside of Asia tech
This is probably the best thing you’ll read all week, hard to do it justice with a description: “The Jungle Prince of Delhi” link
Data leak reveals how China ‘brainwashes’ Uighurs in prison camps link
Platforms and publishers: The end of an era – a deep report from the Tow Center for Digital Journalism at Columbia Journalism School that I’m still going through link
Atomico’s annual ‘State of European Tech’ report link
And finally: CEOs behaving madly on Twitter
I don’t tend to dive into crypto, but it was impossible to miss the stand-off between news site The Block and Changpeng Zhao, the CEO of Binance, over a report that claimed the crypto exchange shut its office in Shanghai following a police raid.
Zhao denies Binance ever had a Shanghai office, a claim that runs counter to his own company’s statements from the past.
The Block claimed the office was closed following a “police raid,” a claim that it later retracted in a clarification story. It also replaced “raid” with “visit” in the headline of its original story.
The Block should have been accurate on that detail, but what caught my attention was that Zhao, seemingly buoyed by affirmations from his Twitter followers, said Binance would sue The Block. It’s unclear where and how that would happen, or what a best case outcome would look like for Binance, but never mind. Zhao even teamed up with his friend Justin Sun, the CEO of Tron who is best known for calling off a dinner with Warren Buffet that he paid over $1M for. Together, they pledged $1M to create a fund to fight fake news stories. Less than 24 hours passed before Zhao appeared to drop his plan to sue The Block.
This reminded me of when Zhao, inspired by suggestions from Twitter, said he would consider rolling back the bitcoin blockchain to reverse the damage after hackers stole $40M in crypto from Binance. The idea was so farfetched that he quickly made an about-turn after being widely ridiculed – on Twitter, of course.
Neeraj K. Agrawal
As I’ve said before, 99% of modern comms is keeping your ceo from tweeting stupid shit
Photo of the week
Jon Russell
@kakayy @TheKenWeb This chart from @prajektor really shows the immense growth in Southeast Asia's startup VC scene.

Early funds have grown over 20X in size, new entrants have raised massive funds and now some firms are even getting into the growth-stage capital game.
Self-promotional, but it was a quiet week for notable images… plus this chart from my colleague Prajakta Pratil is one of the best visualisations I’ve seen of Southeast Asia’s crazy VC growth. Sorry/not sorry.
That's all for now, see you next week!
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