Pokémon Go is now live in 15 more countries in Asia, but not India or China

Pokémon Go is now live in 15 more countries in Asia, but not India or China

The wait is over for many Pokémon Go fans in Asia, after the smash hit game went live in 15 new countries in the continent.

The full list of new countries are: Brunei, Cambodia, Indonesia, Laos, Malaysia, Philippines, Singapore, Thailand, Vietnam, Taiwan, Papua New Guinea, Fiji, Solomon Islands, Federated States of Micronesia, and Palau.

Pokémon Go was initially launched in the U.S. on July 6, before subsequently rolling out to Canada and Europe later. Japan, the home of Pokémon, became its first launch in Asia on July 21 — having been delayed after word of the launch leaked out — and the game made it to Hong Kong four days later. It has also launched in Brazil, where the Olympics are currently being held, and there are more plans for Latin America.

A major expansion in Asia has been expected for some time, but three obvious countries not on the list are India, Korea and China.

In the case of India, where smartphone sales are growing in double-digital percent among its 1.2 billion population, it isn’t clear what is holding the launch up and when the game will go live.

For China, a huge gaming market for mobile, regulations and the game’s reliance on Google Maps are the challenges obstructing a launch, as Niantic CEO John Hanke told Forbes. Hanke also said that security issues with Google Maps in Korea — another lucrative spot for mobile games — have held up the launch, although it is unofficially available in some parts of the country.

Pokémon Go was initially launched in the U.S. on July 6, before subsequently rolling out to Canada and Europe later. Japan, the home of Pokémon, became its first launch country on July 21 — having been delayed after word of the launch leaked out — and the game made it to Hong Kong four days later. It has also launched in Brazil, where the Olympics are currently being held, and there are more plans for Latin America.

The game recently passed 100 million downloads and, in the U.S., its rise is being credited with doubling sales of portable smartphone battery backups. It hasn’t all been plain sailing: the game lags for many users during peak times, it looks like its lucrative revenue growth has slowed, and Niantic upset many gamers recently when it blocked third-party tracking apps.

Featured Image: Erçin Top/Anadolu Agency/Getty Images
Source: TechCrunch

Uber rival Go-Jek confirms $550M raise and hints at Southeast Asia expansion

Uber rival Go-Jek confirms 0M raise and hints at Southeast Asia expansion

Indonesia-based Go-Jek, the motorbike taxis on-demand company that competes with Uber and Grab, has confirmed that it has raised upwards of $550 million new funding. It also hinted that it may expand to other parts of Southeast Asia for the first time.

The company’s valuation was not disclosed, but we reported earlier than it values Go-Jek at $1.2 billion post-money.

The money was provided by new investors KKR, Warburg Pincus, Farallon Capital and Capital Group Private Markets. Existing investors Sequoia India, Northstar Group, DST Global, NSI Ventures, Rakuten Ventures and Formation Group also took part.

The money will be used to scale operations and, in particular, grow its services, which include a payment system, food delivery, courier services as well as regular passenger rides. Go-Jek claims to have 200,000 drivers in its fleet and 20 million app downloads to date. For its services business, it said it has 35,000 food delivery partners and 3,000 “service” providers.

The Jakarta-based firm said it may “potentially” use the new capital to expand its service across Southeast Asia, moving its rivalry with Grab and Uber into new countries.

“We are extremely humbled and excited to work with such world-class partners. KKR, Warburg Pincus, Farallon, Capital Group and other participants in this fundraise not only bring global experience in the TMT sector, but they are also experienced local partners,” Nadiem Makarim, CEO and co-founder of GO-JEK, said in a statement.

“With a rapidly expanding middle class, increasing urban density and a young demographic that is internet savvy, GO-JEK is well positioned to become the ‘go to’ platform for high frequency daily services including transport, food, logistics and payment,” Jeffrey Perlman, head of Southeast Asia for Warburg Pincus, commented.

“It has been fantastic for NSI Ventures to support Go-Jek’s talented management team since 2014. Having this new group of global investors on board will further accelerate Go-Jek’s innovation and allow Go-Jek to solidify its position as an Indonesian tech leader,” said Shane Chesson, partner of NSI Ventures, one of Go-Jek’s earliest backers.

See our earlier report for more details about Go-Jek and this round.

Featured Image: Dino Adyansyah/Flickr
Source: TechCrunch

Uber rival Grab is raising at $2.3B valuation, reportedly burning $35M a month

Uber rival Grab is raising at .3B valuation, reportedly burning M a month

Grab, the company that rivals Uber in Southeast Asia, is in negotiations to close a new round of funding that could value it as high as $2.3 billion, multiple sources close to talks told TechCrunch. Grab was valued around $1.5 billion-$1.6 billion last August when it raised $350 million.

The Wall Street Journal and Bloomberg this week reported that existing investors Didi Chuxing and SoftBank may lead a $600 million round of new financing. The sum could reach $1 billion after a second close.

Grab has been in discussions with potential investors to raise money for a number of months, but the round is not yet closed, sources told TechCrunch. That target valuation of $2.3 billion, however, is subject to some secondary share sales from existing backers, we understand, which, once blended, could lower the figure.

In the world of ride-hailing apps and fast-funding, Singapore-based Grab — which offers licensed taxis, private cars and motorbike taxis in six countries — hasn’t raised at the frequency of others. Its last financing came one year ago in August 2015 when it closed a $350 million Series E round. That included money from Didi and sovereign wealth fund China Investment Corporation (CIC) among others.

Unlike Uber, which has seen numerous investors decks and financial presentations leaked over the years, precious little is known about the internals of Grab’s business.

According to documents from Grab investors dated last year — circulated for potential secondary share sales — which were viewed by TechCrunch, the company was forecasted to burn $111 million in Q3 2015, that’s more than $35 million per month. The same data revealed that Grab had $606 million in cash on its books after it closed its Series E round.

A Grab spokesperson told TechCrunch that the company has not yet touched its Series E money.

The projections we viewed estimated that Grab would make $31 million in annual net revenue for 2015 — that’s the total amount of money it keeps from the transactions on its platform. That figure was forecast to grow to $193 million in 2016 and $526 million in 2017.

Grab has never revealed the number of trips it completes each day across Southeast Asia. The same documents forecast that the company would reach 400,000 daily trips by December with a target of 3.5 million rides per day by the end of 2017.

Grab declined to comment on the content of the documents.

An uncertain alliance

It’s notable that news is now leaking out that both Didi and Softbank are reportedly investing in this round, considering the wider state of play in Asia at the moment with both companies.

SoftBank has pulled back on its overseas deals since Masayoshi Son decide to remain head of the company longer than planned, a move that saw his once heir apparent Nikesh Arora depart. In addition to cutting back on investments in India-based startups, SoftBank sold off a portion of its stake in Alibaba and its holdings in games firms GungHo and SuperCellA big move to buy ARM was viewed by analysts as a shift in strategy to invest in proven companies.

For Didi, a further investment in Grab comes as doubts have been cast over its alliance with Grab, Lyft and Ola — the so-called Anti-Uber Alliance — following a deal to buy Uber China announced this week.

As part of that acquisition, Didi is investing a reported $1 billion into Uber’s global business, while Uber CEO Travis Kalanick and Didi Chairman Cheng Wei will join each other’s boards. That deal appears to conflict with the alliance, since their opposition to Uber is the common factor that underpins their union.

Lyft — which took a $100 million investment from Didi last year — told the Wall Street Journal this week it will “evaluate” its partnership with Didi “over the next few weeks.”

Grab took news of the Didi-Uber deal more positively, with CEO Anthony Tan telling staff it is proof that a local rival can beat the U.S. ride-hailing giant.

“They’ve lost once, and we will make them lose again,” he wrote in a company-wide memo obtained by TechCrunch.

Tan and Grab’s competition is about to get stiffer, though. We reported last week that Uber is pushing new services aggressively in Southeast Asia, a region that has been a distant priority to its businesses in China and India, and Tan himself told staff that he expects Uber to increase its focus on Grab’s home turf.

Uber is just one of the problems when it comes to Indonesia, the country Grab recently said is its largest based on rides. Motorbike taxi on-demand startup Go-Jek, which claims a fleet of 200,000 drivers, today closed $550 million in fresh investment at $1.2 billion valuation. Internal documents show the company completed 256,000 rides per day, as of April 2016.

Grab faces its own challenges, too. Tan has spoken about the difficulty of hiring talent in Southeast Asia, and retaining hires is likewise a test. Numerous former Grab staff told TechCrunch that the company is struggling to motivate and retain its workforce, particularly those in technical positions.

Specifically, the introduction of a bell curve assessment system — a model in which companies discard their least effective staff — has had a detrimental impact on morale, we were told. While popular in Silicon Valley, that style of management hasn’t been embraced by many startups in Southeast Asia.

Other sources called Grab’s management ineffective and their policies haphazard, and claimed that the office it opened in Seattle in January is symptomatic of its struggle to attract and retain talent in Southeast Asia.

Another challenge for the company is that it started out offering rides with licensed which are significantly less lucrative than Uber’s rides for example. For its ‘GrabTaxi’ licensed taxi ride service, Grab charges only a booking fee of $1-2 with the driver keeping the fare in full. Uber takes a variable cut of each ride it facilities, typically as much as 30 percent.

Grab addressed this gap when it started a private car business — Grab Car — three years ago which uses Uber-style pricing, however it is somewhat cannibalized by the GrabTaxi service. According to data shared by Grab investors, GrabTaxi service accounted for 70 percent of all Grab trips taken in July 2015. The figures will have changed since then although the lower-profit taxi business is likely still dominant.

Grab said last month that its GrabCar and GrabBike services account for “the vast majority” of trips it processes in Indonesia. The company did not provide a raw figure to support that statement, and it said that it does not break down out its ride per day or revenue figures across the region.

Source: TechCrunch

Xiaomi announces its first VR headset — but you can’t buy it yet

Xiaomi announces its first VR headset — but you can’t buy it yet

Xiaomi is broadening its already expansive range of products by venturing into virtual reality for the first time.

The company today announced the ‘Mi VR Play’, an “entry-level” virtual reality headset that the company hopes can open this new exciting medium up to new audiences. That’s the same thesis behind most of its competitively-priced products, including the $550/750 notebook announced last week that will rival Apple’s Macbook in China.

This new device recalls Google’s super cheap and super simple Cardboard VR headset. It is fairly basic in nature, you pop a smartphone into the lycra-built body and then open Xiaomi’s Mi VR app, which contains VR content from selected partners that include Conde Nast Traveler and YouKu, ‘China’s YouTube’. Xiaomi pledged to invest $1 billion in video content, including VR, last year so that library is sure to get bigger over time.

Here’s how Xiaomi describers the headset:

Mi VR Play has significantly improved upon the design typically used in similar VR products — it is wrapped in lightweight, durable Lycra for long-lasting comfort. In the future, Mi VR Play will also be available in a selection of bold prints and colours for even more stylish options. The unique two-way zipper helps to ensure compatibility, providing a secure grip on a wide range of 4.7- to 5.7-inch smartphones. At the same time, the dual openings on the front allow for slight positioning adjustments and ventilation.

Sounds good so far?

Here’s the catch — you can’t go and buy one, even if you’re in China.

Xiaomi is making it available to a limited number of beta test users, who signed up on August 1 when Xiaomi put out a call for volunteers. One million users signed up in just eight hours, the company said, but Xiaomi has selected just a fraction of those — likely “tens of thousands”, a representative told TechCrunch.

For those lucky ones accepted into the test program, the Mi VR Play will cost just RMB 1 ($0.15).

Xiaomi told us that it has plans to make the headset more widely available in the future, but there’s no schedule for that right now. Along those lines, it isn’t clear how much the headset will cost once it is on sale to all. We suspect it won’t be RMB 1, sadly.

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Source: TechCrunch

Indonesia’s Go-Jek raises $550 million to battle Uber and Grab

Indonesia’s Go-Jek raises 0 million to battle Uber and Grab

Go-Jek, the motorbike taxi on-demand service that rivals Uber and Grab in Indonesia, has closed $550 million in new funding, a source close to the company told TechCrunch. The deal values Go-Jek at $1.3 billion and could be announced as soon as this week, we understand.

Go-Jek did not respond to a request for comment or confirmation.

The company plans to spend the money growing its services businesses, and continuing to compete with its fierce rivals in Indonesia. It doesn’t appear that this round will fund an expansion outside of Indonesia, according to our source.

The Wall Street Journal last month reported that Go-Jek was in talks to raise $400 million, with KKR and Warburg Pincus among the potential new backers. The startup’s existing investors include Sequoia Capital, DST Global and Singapore-based NSI Ventures.

The deal makes Go-Jek one of the few unicorns in Southeast Asia. Others tech companies valued in excess of $1 billion include games firm Garena ($3.75 billion), Go-Jek rival Grab (estimated $1.5 billion-$1.6 billion) and Amazon-like shopping site Lazada ($1.5 billion valuation).

Go-Jek was founded in 2010 but it didn’t begin to take off in major way until 2014, as this profile explains. It then grew faster after it introduced a mobile booking app in early 2015.

Go-Jek claims 200,000 motorbike drivers — known as “ojeks” in Indonesia — in its fleet across Indonesia, which is the world’s fifth largest country with a population of over 250 million people.

The company is best known for hailing motorbike taxis on demand, a type of transportation popular in parts of Southeast Asia where heavy urban traffic makes two wheels faster than four. Demand is particularly high in Jakarta, which is home to some 30 million people and one of the planet’s most congested cities. In addition to regular rides, Go-Jek offers on-demand services like food, shopping and package deliveries.

The company said recently that it processed 20 million booking requests in June 2016, or around 667,000 per day. Internal documents seen by TechCrunch show it fulfilled 256,000 rides per day, as of April 2016.

Grab introduced a similar service — GrabBike — to Indonesia last year, and Uber’s UberMoto competitor showed up in the country this year, but Go-Jek is widely acknowledged to be leading the pack in Indonesia.

This new fund raising comes at an interesting time for Southeast Asia’s on-demand services. Uber’s decision to sell its China operations to Didi Chuxing is likely to mean that the U.S. company — valued at $66 billion — will divert more resources into Southeast Asia and India, potentially increasing the competition with Grab in its six markets and Go-Jek in Indonesia. Uber has already started launching new services across Southeast Asia and reached operational profitability in two countries.

Grab meanwhile welcome Didi’s deal with Uber as evidence that the U.S. ride-hailing giant can be defeated by local rivals. The Didi-Uber deal seemed to throw Grab’s alliance with Didi, which invested in the Singapore-based company last year, into jeopardy but Didi is reportedly leading a new round of investment in Grab, according to both Bloomberg and the Wall Street Journal. That round could reportedly rise to $1 billion, while Grab has said that it is still to touch the $350 million Series E round that it raised one year ago.

Internal documents viewed by TechCrunch show that Go-Jek had $104 million in cash on its books as of March and that it spent $73 million over the previous six month period. Given the increased competition it is likely to face, this new raise is hugely important if it is to continue to compete with its cash-rich rivals on subsidies and marketing.

Featured Image: Dimas Ardian/Getty Images
Source: TechCrunch

Uber’s deal with Didi is a win-win for everyone — except the ‘Anti-Uber Alliance’

Uber’s deal with Didi is a win-win for everyone — except the ‘Anti-Uber Alliance’

Many in the media and tech industry see Uber’s decision to sell its Chinese business unit to rival Didi Chuxing as a failure for the U.S. ride-hailing giant. It’s easy to believe that the sale of Uber China’s operations to its closest rival is a face-saving exercise, an inevitable outcome for a U.S. company that tried to beat the odds and succeed in China.

But, the more you chew over the finer points of the deal, the more it looks like an astute piece of business for both parties.

Don’t believe that this deal was created in haste. The rumor of a merger had circulated for a month — with both sides denying it — and one source close to negotiations told TechCrunch that the two parties had tried to engineer a deal two previous times without success. So it was third time lucky but, more importantly, ongoing discussions suggest that this is more than Uber saving face — this is an alliance.

Likewise, don’t believe that Didi acted out of kindness. The company could have let Uber continue to spend billions in China and wither — Didi showed it can raise capital easily when it closed a colossal $7.3 billion funding round that even included money from Apple — but it wanted something from Uber, to remove its threat from China and perhaps elsewhere. This was two-way, not merely a tactical Uber exit.

So, how does the deal play out?

Firstly, and most obviously, Uber swaps its capital intensive business unit China that its own CEO said was costing it $1 billion per year, for a (potentially) near-20 percent stake in China’s dominant ride-sharing company, valued at $35 billion. That’s a near-11 fold increase on Didi’s valuation when it was formed by a merger in 2015.

But there’s certain to be a lot more growth.

Earlier this summer, Li Zijian, senior director for international strategy at Didi, estimated that his company is taking just 1.1 percent of China’s taxi market. China’s new regulations, which will legalize Uber and Didi from November, combined with this merger are sure to mean that Didi’s business grows multiples more — all with Uber as its largest single shareholder.

That stake not only allows Uber to move towards a much-anticipated IPO by removing the China cash burn from its balance sheet, but it is likely to be a very lucrative holding in a business with vast potential to grow. Even if Didi has so far denied reports of IPO plans of its own.

There are some who argue that Uber could have saved time and money and simply invested in Didi earlier if it wanted this kind of financial return potential. For one thing, it would have needed to chose between Didi Kuaidi and Didi Dache, which eventually merged. But, more than that, it is foolish to believe that Didi Chuxing would have grown into the company that it is today without rivalry from Uber.

Uber, for example, pioneered peer-to-peer in China when it introduced People’s Uber in late 2014. It hadn’t been done before at scale. Didi was unprepared and late to the party, introducing its take on the service some six months later. The company started out working exclusively with licensed taxis and this example shows that competition with Uber clearly sharpened its business and helped shape its growth.

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Uncertainty for Didi’s allies

The real negative here looks to be for Didi’s allies: Lyft in the U.S., Ola in India and Grab in Southeast Asia.

The four companies formed a coalition, dubbed the ‘Anti-Uber Alliance’, last year for business synergies such as enabling users to roam between services when they travel, and sharing know-how. Alongside that, Didi made investments in its three allies: putting $100 million in Lyft, and contributing undisclosed minority amounts to Ola’s $500 million round last year, and Grab’s most recent $350 million raise one year ago.

While it often seemed like a PR play, the coalition does give Didi’s cohorts solidarity and support, and likely increased confidence to investors, all of which is important when you are battling a global giant like Uber, which is seemingly capable of raising billions in fresh funding on a whim.

Well, that alliance looks uncertain at best, or messy at worst, following Uber’s deal with Didi.

Not only has Didi struck a deal with the sworn enemy and given it a sizable chunk of its business, but it made an undisclosed investment in Uber’s global business which Bloomberg pegged at $1 billion. That’s a drop in the ocean for Uber given the numbers it has raised, but, if the figure is correct, then that investment is multiples larger than the money Didi put into its fellow alliance members.

Not only that, but Uber CEO Travis Kalanick will sit on the Didi board, no less, while Didi Chairman Cheng Wei will join the Uber board.

Many, including yours truly, saw the alliance and those Didi investments as a possible first step to acquisitions to expand Didi overseas as and when it saw fit. But this deal with Uber throws all of that into contention. Who is to say that, in Southeast Asia, for example, Didi will back Grab with any vigor now that it is also aligned with Uber. It could let the market play out and then befriend the company that wins.

That’s a hypothetical scenario, of course, but it was unthinkable prior to yesterday.

The responses

Grab was bullish on the news, with CEO Anthony Tan coming out positively before the deal was even confirmed. Tan said in a company-wide memo that we obtained that Uber’s exit was proof a regional rival could defeat Uber.

“They’ve lost once, and we will make them lose again,” he told his staff.

Fighting words indeed, but the conditions that forced Uber’s exit from China simply don’t exist in Southeast Asia which weakens the comparison. The subsidies war is almost certainly multiples more modest than China, and Uber is only just getting round to putting the pedal to the floor in the region.

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While Tan publicly rallied his troops, you’d imagine that he was privately disappointed at the way this incident has played out.

Lyft, for one, was more measured with its comment on the Uber-Didi deal.

“Over the next few weeks, we will evaluate our partnership with Didi,” a spokesperson told the Wall Street Journal. “We always believed Didi had a big advantage in China because of the regulatory environment.”

Ola of India declined multiple requests to comment publicly on the deal.

It’ll take some time before the smoke clears and we understand more about how this deal impacts the global ride-sharing economy, but right now it looks like Uber is sitting a lot prettier than many people believe.

Source: TechCrunch

Southeast Asia-based Carousell raises $35M for its social commerce app

Southeast Asia-based Carousell raises M for its social commerce app

Carousell, a four-year-old startup from Singapore behind a listings app that enables peer-to-peer selling in Southeast Asia, has closed a $35 million Series B round to grow its reach into new countries and increase product development.

The company is seen as one of the darlings of Singapore’s nascent startup ecosystem, given that founding trio Lucas Ngoo, Marcus Tan and Siu Rui Quek all graduated NUS (National University of Singapore) while in their early twenties having spent some time in ‘regular’ jobs. Added to that, this is certainly one of the more notable (largest) Series B rounds for a startup out of Singapore.

The financing was led by existing investor Rakuten Ventures, with participation from returning backers Sequoia (via its India fund which is used for Southeast Asia deals), Golden Gate Ventures and 500 Startups. The startup previously raised a $6 million Series A round in 2014, and an $800,000 seed round in 2013, so a new round was seemingly on the cards before too long.

Indeed, TechCrunch last December reported that Carousell was trying to raise as much as $50 million from investors for this round. The company declined to comment then and, this time around, all Quek (CEO) would say of that report is that Carousell is “super grateful and happy that we have the support of our existing investors.”

The app started out in Singapore as “a passion project to solve our own problems,” Quek said in an interview with TechCrunch. The simplest way to describe Carousell is a Craiglists for mobile via its iOS and Android apps. It uses a chat-style interface with photo uploading options to connect consumers who are interesting in buying-selling items together. The onus is on the individuals to arrange the sale and payment, since, right now, Carousell does not make money from its service.

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The company claims to have 35 million listings on its service with 70 new listings added per minute and active users spending 17 minutes inside its app on average. (Not bad, Facebook recently revealed its users spend an average of 50 minutes a day across its core app, Instagram and Messenger, and that’s three apps.)

Today, Carousell spans five countries — Singapore, Hong Kong, Taiwan, Malaysia and Indonesia — with plans to increase that footprint further. That may also include a foray outside of its existing focus on Southeast Asia, Quek said.

“The problem we are solving is a truly global one,” he explained. “So we’re not bound by any region per se. Other markets [that we expand to] will be outside of Southeast Asia, but we’re doing work to finalize those.”

The company nabbed JJ Chai, who was running Airbnb’s business in Southeast Asia, earlier this year to manage its international expansion plans.

There’s plenty of competition for e-commerce dollars in Southeast Asia, a market where online is estimated to account for less than three percent of all commerce. Aside from Lazada, which took a $1 billion investment from Alibaba this year, there are country-specific players like SoftBank-backed Tokopedia and Matahari Mall, run by retail conglomerate Lippo, in Indonesia, while informal commerce on social networks has grown to the point that even Facebook has dived in. The U.S. giant is testing a social payment system that, alongside a new Facebook Shop feature, encourages users in Southeast Asia to buy and sell items without leaving Facebook’s walls.

Also, somewhat bizarrely, Rakuten, the parent of Rakuten Ventures, has its own Carousell-like social commerce app in Southeast Asia called Rakuma.

“We did not know about the launch of Rakuma,” Quek previously told me. “Rakuten is an investor through their venture capital arm. Rakuten Ventures’ investment in Carousell is non-strategic in nature. We operate independently and are not aware of their strategic plans.”

Tough competition indeed, so perhaps it isn’t surprising that Carousell isn’t thinking about money too much right now. Quek said that the company (and its investors) are focused on scaling its app and that, while open to monetization potential in the future, there’s no immediate plan to do at this point.

He did however emphasize that he is bullish that, once the time comes, Carousell won’t have problems bringing in cash.

“The Carousell business model is essentially the classifieds model, which traditionally has [around] 50 percent margins,” he said. “We’re not reinventing the business model just reimagining the experience. We will eventually bring in monetization.”

“Our immediate focus is on channeling all our energy to expanding internationally and making sure we have a strong product and engineering team,” he added.

On that last note, Carousell currently has over 90 staff of whom around 24 are engineers. Quek said he hopes to double that engineering headcount by the end of this year. The big focuses for that team, he said, included improved search and buyer-selling matching, and a reduction in spam listings.

As for an eventual exit strategy, such as Southeast Asia’s first notable startup IPO? You guessed it, no comment on that for now.

“We haven’t really discussed exit options, the focus is always on making the largest impact,” Quek told TechCrunch. “We’re just getting started, international expansion will be one of our top most focuses.”

Source: TechCrunch

Didi Chuxing confirms it is buying Uber’s business in China

Didi Chuxing confirms it is buying Uber’s business in China

China’s Didi Chuxing has confirmed that it has agreed to buy Uber China in a deal that had been heavily speculated earlier today. Uber is set to make its own announcement via a blog post.

Didi said in an announcement that Uber will be given a 5.89 percent stake in the newly merged entity, with preferential equity that is equal to a 17.7 percent economic interest in Didi Chuxing. It explained that existing Uber China investors, which include China’s dominant search firm Baidu, will get 2.3 percent of the new business.

Bloomberg first broke news of the deal, which it reported will include Didi making a $1 billion investment in Uber’s global business. Didi, which claims 15 million drivers and 300 million users in China, simply said it will “obtain a minority equity interest in Uber”.

There’s also some people moving around, too. The deal will see Cheng Wei, founder and chairman of Didi Chuxing, join Uber’s board, with Uber CEO Travis Kalanick joining Didi’s board in return.

Other items to note from the deal include: Uber will maintain its branding, app and business operations, but Didi will “integrate the managerial and technological experience and expertise of the two teams.”

Didi is an investor in Lyft (U.S.), Ola (India) and Grab (Southeast Asia) which also rival Uber worldwide, but the Chinese company said it will “continue to work with global partners” following this deal with Uber.

Now, some of the money quotes from the announcement.

Didi CEO Cheng:

Didi Chuxing and Uber have learned a great deal from each other over the past two years in China’s burgeoning new economy. As a technology leader deeply rooted in China, Didi Chuxing is constantly pushing the frontier of innovation to redefine the future of human mobility. This agreement with Uber will set the mobile transportation industry on a healthier, more sustainable path of growth at a higher level. Didi Chuxing commits all our energy to work with regulators, users and partners to meet the transportation, environmental and employment challenges of our cities.More to follow

Didi President Jean Liu:

Over 15 million drivers and 300 million registered users have joined DiDi’s open, sharing-based ecosystem that connects people, cars and lifestyles. With the addition of the strong talents and experience of the Uber China team, Didi Chuxing will be even better-positioned to serve the Chinese people. Didi Chuxing will also continue to expand its international strategy. We look forward to working with our partners at home and abroad to create more value for drivers, passengers and communities.

TechCrunch has obtained a copy of a blog post from Uber CEO Travis Kalanick:

Today we’re announcing our intention to merge Uber China with Didi Chuxing.
Three years ago I traveled to China with a small group of people to see if we might be able to launch Uber there. It was an ambitious idea, given that we were still a relatively small start-up and no one there had ever heard of the company. Most of the people we asked for advice thought we were naive, crazy—or both.

I came away with a different view. First, that China is an amazing country and if you aspire to make “transportation as reliable as running water, everywhere for everyone” you can’t ignore a fifth of the world’s population. And second, as an entrepreneur, if you have the opportunity to build both Amazon and Alibaba at the same time, you’d be crazy not to try.

Fast forward to today and Uber China—in just two years—has exceeded even my wildest dreams. We’ve grown super fast and are now doing more than 150 million trips a month. This is no small feat given that most U.S technology companies struggle to crack the code there. That’s why I’m so proud of what our amazing China team has accomplished.

However, as an entrepreneur, I’ve learned that being successful is about listening to your head as well as following your heart. Uber and Didi Chuxing are investing billions of dollars in China and both companies have yet to turn a profit there. Getting to profitability is the only way to build a sustainable business that can best serve Chinese riders, drivers and cities over the long term.

I have no doubt that Uber China and Didi Chuxing will be stronger together. That’s why I’m so excited about our future, both in China—a country which has been incredibly open to innovation in our industry—and the rest of the world, where ridesharing is increasingly becoming a credible alternative to car ownership.

More to follow

Featured Image: Julien GONG Min/Flickr UNDER A CC BY 2.0 LICENSE
Source: TechCrunch

Grab CEO: Didi victory shows we can beat Uber in Southeast Asia

Grab CEO: Didi victory shows we can beat Uber in Southeast Asia

Didi Chuxing’s proposed acquisition of Uber’s Chinese business hasn’t even been confirmed, but the significance of the deal has already prompted responses from others in the global ride-hailing industry.

Anthony Tan who is the CEO of Grab, the company that rivals Uber in Southeast Asia and took investment from Didi last year, told his staff today that reports of a merger to create a $35 billion ride-sharing giant in China are proof that local competitors can beat Uber.

“After more than a year of intense competition, our investor and global partner Didi has effectively won the battle for market share dominance in China,” Tan wrote in a company-wide email obtained by TechCrunch.

“Didi’s success reinforces what we have believed all along,” he added. “That we live in a very diverse world and there is no one-size-fits-all answer. Localized solutions best solve local problems. Like Didi did in China, we make sure that the unique pain points of users in Singapore or Jakarta or Manila will get addressed because they are prioritised over the competing needs of users in New York or London or Istanbul.”

We reported last week that Uber’s operations in Southeast Asia are already profitable in two markets — Singapore and the Philippines — and that the U.S. firm is making a major move to launch new products across the region. That strategy makes more sense now given today’s reports of a China exit.

Along those lines, Tan cautioned that Uber’s withdrawal from China will likely mean that the company significantly ups its game in Southeast Asia.

“With the deal in China, we expect Uber to turn more attention and divert resources to our region,” he told Grab staff.

“But we have seen that when the local champion stays true to their beliefs and strengths, they can prevail. We see this happening in China, and it will be the same here. They’ve lost once, and we will make them lose again.”

Uber is widely believed to be leaving China after finding the country to be unsustainable due, in a major part, to Didi’s significant warchest which has funded a subsidy war that has reportedly cost Uber $2 billion to date. It looks like CEO Travis Kalanick has called time on that battle, perhaps to focus on an IPO next year.

The stakes are not so high in Southeast Asia, where online commerce and digital spending is far lower, but a cumulative population of more than 600 million makes it a region that could be hugely significant as its digital economy matures. So, while it isn’t surprising that Tan is rallying his troops with this message, it isn’t clear just how much intel from Didi’s ‘win’ can be applied to Grab’s own battle with Uber.

Grab has raised over $650 million to date, including its most recent Series E round of $350 million one year ago at a valuation of around $1.6 billion. It covers 30 cities across Southeast Asia’s six largest countries where it claims 19 million app downloads and 350,000 drivers. Uber is in 16 cities but it doesn’t release figures. Southeast Asia has generally been a lower priority to its efforts in China and India.

Tan’s full memo is below:

Dear Grabbers,

There has been a development in the global ride-hailing space that I’d like to share with you.

Didi Chuxing and Uber are rumored to announce a deal very soon in China. After more than a year of intense competition, our investor and global partner Didi has effectively won the battle for market share dominance in China.

Didi’s success reinforces what we have believed all along.

That we live in a very diverse world and there is no one-size-fits-all answer. Localized solutions best solve local problems. Like Didi did in China, we make sure that the unique pain points of users in Singapore or Jakarta or Manila will get addressed because they are prioritised over the competing needs of users in New York or London or Istanbul.

That a team that lives and breathes the markets it operates in makes a difference. Because our users are also people whom we care about – our families, our neighbours, our friends. And not just some digits presented on a business dashboard at the other side of the world in a different time-zone.

That we are here for the masses and hence a broad selection of transport options is needed to serve their diverse needs – from the businessmen arriving for a meeting in style on GrabCar+, to the students using GrabBike to beat congestion and reach classes on time; from drivers depending solely on Grab to feed their families, to the car-owners using GrabHitch to subsidise their driving costs and to make new friends. Because we know that we are not here to only serve a privileged segment of users who can afford surge-pricing.

These beliefs have served us well. We are everywhere in our region, serving many many people in our cities everyday in our countries and communities. We are driven by the purpose to improve the lives of people in Southeast Asia. We have built a strong team that connects with our region, a team that firmly believes in “Your problem is my problem”.

With the deal in China, we expect Uber to turn more attention and divert resources to our region. But we have seen that when the local champion stays true to their beliefs and strengths, they can prevail. We see this happening in China, and it will be the same here. They’ve lost once, and we will make them lose again.

Let us seize this opportunity. More than ever before, we must continue to leverage on our strengths. To listen and to put ourselves in the shoes of our users and partners. And ultimately deliver the best passenger transport solution that this region has ever had.

God speed
Anthony

Source: TechCrunch

Uber China will reportedly merge with archrival Didi Chuxing

Uber China will reportedly merge with archrival Didi Chuxing

Huge news for China’s ride-sharing industry, it appears that Didi Chuxing will gobble up rival Uber China in a merger deal that will value the combined entity in China at $35 billion.

The rumor has being doing the rounds for around a month now, with both sides denying but it looks like a deal is happening. Both Bloomberg and the Wall Street Journal cited sources claiming that a deal has been agreed. The timing is interesting, too, since last week the Chinese government released proposed regulations that will make taxi-hailing services legal from November 1.

Bloomberg reports that the deal will see Didi, which has more than $7 billion in cash on hand after extensive fundraising, will invest $1 billion into Uber’s global business in exchange for Uber China’s operations. In exchange, Uber China and its investors, which include Baidu, will take a 20 percent stake in the newly-merged company in China.

We’ve contacted Uber and Didi for comment and will update this story accordingly.

This is not the first mega merger in China’s ride-hailing space, Didi Chuxing itself was created when Didi Dache and Didi Kuaidi called a truce on their capital intensive subsidies war in a merger last year that was valued at around $6 billion.

Uber has spent billions in China — a Bloomberg source said it is losing $2 billion per year in the country — so it looks like the same reasons are behind this second merger deal, albeit that the potential repercussions are very different. Offloading its Chinese unit could put Uber on track to finally list as a public company. The company said last month that it is already profitable in Western markets and, with China its biggest money-drainer and weakest market from a competitive stand point, a major question mark around its business will be removed if this deal goes through.

More to follow

Source: TechCrunch