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Main article: Sequoia Capital China

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Startups Weekly: Chinese investors double down on African startups

16:00 | 30 November

Hello and welcome back to Startups Weekly, a weekend newsletter that dives into the week’s noteworthy startups and venture capital news. Before I jump into today’s topic, let’s catch up a bit. Last week, I wrote about Airbnb’s issues. Before that, I noted Uber’s new “money” team.

Remember, you can send me tips, suggestions and feedback to kate.clark@techcrunch.com or on Twitter @KateClarkTweets. If you’re new, you can subscribe to Startups Weekly here.


China’s pivot to Africa

Three African fintech startups; OPay, PalmPay and East African trucking logistics company Lori Systems, closed large fundraises this year. On their own, the deals aren’t particularly notable, but together, they expose a new trend within the African startup ecosystem.

This year, those three companies brought in a total of $240 million in venture capital funding from 15 different Chinese investors, who’ve become increasingly active in Africa’s tech scene. TechCrunch reporter Jake Bright, who covers African tech, writes that 2019 marks “the year Chinese investors went all in on the continent’s startup scene” — particularly its fintech projects. Why?

“The continent’s 1.2 billion people represent the largest share of the world’s unbanked and underbanked population — which makes fintech Africa’s most promising digital sector,” Bright notes. “In previous years, the country’s interactions with African startups were relatively light compared to deal-making on infrastructure and commodities. Chinese actors investing heavily in African mobile consumer platforms lends to looking at new data-privacy and security issues for the continent.”

Active Chinese investors in Africa include Hillhouse Capital, Meituan-Dianping, GaoRong, Source Code Capital, SoftBank Ventures Asia, BAI, Redpoint, IDG Capital, Sequoia China, Crystal Stream Capital, GSR Ventures, Chinese mobile-phone maker Transsion and NetEase .

Here’s more of TechCrunch’s recent coverage of Africa startup activity:


VC Deals

It was a short week (Happy Thanksgiving, by the way). But here’s a quick look at the top deals of the last few days.


M&A (VR edition)

Last week, Facebook announced it was buying Beat Games, the game studio behind Beat Saber, a rhythm game that’s equal parts Fruit Ninja and Guitar Hero. Heard of the company? Maybe if you’re a gamer, but if you’re readying this newsletter because of your interest in VC, this company may not have come across your radar.

Why? It’s one of virtual reality’s biggest successes today, but it’s just an eight-person team with no funding.

“I’m really proud that we were able to build the company with this mindset of making decisions based on what is good for the game and not what is the most profitable thing,” Beat Games CEO told TechCrunch earlier this year. Read about Facebook’s acquisition here and an in-depth profile of the small team here.


Equity

If you like this newsletter, you will definitely enjoy Equity, which brings the content of this newsletter to life — in podcast form! Join myself and Equity co-host Alex Wilhelm every Friday for a quick breakdown of the week’s biggest news in venture capital and startups.

This week, we discussed Weekend Fund’s new vehicle, Cocoon’s new friend-tracking app and the unfortunate demise of a startup called Omni. You can listen here.

Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple PodcastsOvercastSpotify and all the casts.

 


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Opera’s Africa fintech startup OPay gains $120M from Chinese investors

09:05 | 18 November

Africa focused fintech startup OPay has raised a $120 million Series B round backed by Chinese investors.

Located in Lagos and founded by consumer internet company Opera, OPay will use the funds to scale in Nigeria and expand its payments product to Kenya, Ghana and South Africa — Opera’s CFO Frode Jacobsen confirmed to TechCrunch.

Series B investors included Meituan-Dianping, GaoRong, Source Code Capital, Softbank Asia, BAI, Redpoint, IDG Capital, Sequoia China and GSR Ventures.

OPay’s $120 million round comes after the startup raised $50 million in June.

It also follows Visa’s $200 million investment in Nigerian fintech company Interswitch and a $40 million raise by Lagos based payments startup PalmPay — led by China’s Transsion.

There are a couple quick takeaways. Nigeria has become the epicenter for fintech VC and expansion in Africa. And Chinese investors have made an unmistakable pivot to African tech.

Opera’s activity on the continent represents both trends. The Norway based, Chinese (majority) owned company founded OPay in 2018 on the popularity of its internet search engine.

Opera’s web-browser has ranked No. 2 in usage in Africa, after Chrome, the last four years.

The company has built a hefty suite of internet-based commercial products in Nigeria around OPay’s financial utility. These include motorcycle ride-hail app ORide, OFood delivery service, and OLeads SME marketing and advertising vertical.

“Opay will facilitate the people in Nigeria, Ghana, South Africa, Kenya and other African countries with the best fintech ecosystem. We see ourselves as a key contributor to…helping local businesses…thrive from…digital business models,” Opera CEO and OPay Chairman Yahui Zhou, said in a statement.

Opera CFO Frode Jacobsen shed additional light on how OPay will deploy the $120 million across Opera’s Africa network. OPay looks to capture volume around bill payments and airtime purchases, but not necessarily as priority.  “That’s not something you do ever day. We want to focus our services on things that have high-frequency usage,” said Jacobsen.

Those include transportation services, food services, and other types of daily activities, he explained. Jacobsen also noted OPay will use the $120 million to enter more countries in Africa than those disclosed.

Since its Series A raise, OPay in Nigeria has scaled to 140,000 active agents and $10 million in daily transaction volume, according to company stats.

Beyond standing out as another huge funding round, OPay’s $120 million VC raise has significance for Africa’s tech ecosystem on multiple levels.

It marks 2019 as the year Chinese investors went all in on the continent’s startup scene. OPay, PalmPay, and East African trucking logistics company Lori Systems have raised a combined $240 million from 15 different Chinese actors in a span of months.

OPay’s funding and expansion plans are also harbinger for fierce, cross-border fintech competition in Africa’s digital finance space. Parallel events to watch for include Interswitch’s imminent IPO, e-commerce venture Jumia’s shift to digital finance, and WhatsApp’s pending entry in African payments.

The continent’s 1.2 billion people represent the largest share of the world’s unbanked and underbanked population — which makes fintech Africa’s most promising digital sector. But it’s becoming a notably crowded sector where startup attrition and failure will certainly come into play.

And not to be overlooked is how OPay’s capital raise moves Opera toward becoming a multi-service commercial internet platform in Africa.

This places OPay and its Opera-supported suite of products on a competitive footing with other ride-hail, food delivery and payments startups across the continent. That means inevitable competition between Opera and Africa’s largest multi-service internet company, Jumia.

 

 

 

 

 

 


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Hyundai is launching Botride, a robotaxi service in California with Pony.ai and Via

22:24 | 25 October

A fleet of electric, autonomous Hyundai Kona crossovers — equipped with a self-driving system from Chinese autonomous startup Pony .ai and Via’s ride-hailing platform, will start shuttling customers on public roads next week.

The robotaxi service called BotRide will operate on public roads in Irvine, California, beginning November 4. This isn’t a driverless service; there will be a human safety driver behind the wheel at all times. But it is one of the few ride-hailing pilots on California roads. Only four companies, AutoX, Pony.ai, Waymo and Zoox have permission to operate a ride-hailing service using autonomous vehicles in the state of the California.

Customers will be able to order rides through a smartphone app, which will direct passengers to nearby stops for pick up and drop off. Via’s expertise is on shared rides, and this platform aims for the same multiple rider goal. Via’s platform handles the on-demand ride-hailing features such as booking, passenger and vehicle assignment and vehicle identification (QR code). Via has two sides to its business. The company operates consumer-facing shuttles in Chicago, Washington, D.C. and New York. It also partners with cities and transportation authorities — and now automakers launching robotaxi services — giving clients access to their platform to deploy their own shuttles.

Hyundai said BotRide is “validating its user experience in preparation for a fully driverless future.” Hyundai didn’t explain when this driverless future might arrive. Whatever this driverless future ends up looking like, Hyundai sees this pilot as a critical marker along the way.

Coverage area of Hyundai robotaxi pilot

Hyundai said it is using BotRide to study consumer behavior in an autonomous ride-sharing environment, according to Christopher Chang, head of business development, strategy and technology division, Hyundai Motor Company .

“The BotRide pilot represents an important step in the deployment and eventual commercialization of a growing new mobility business,” said Daniel Han, manager, Advanced Product Strategy, Hyundai Motor America.

Hyundai might be the household name behind BotRide, but Pony.ai and Via are doing much of the heavy lifting. Pony.ai is a relative newcomer to the AV world, but it has already raised $300 million on a $1.7 billion valuation and locked in partnerships with Toyota and Hyundai.

The company, which has operations in China and California and about 500 employees globally, was founded in late 2016 with backing from Sequoia Capital China, IDG Capital and Legend Capital.

It’s also one of the few autonomous vehicle companies to have both a permit with the California Department of Motor Vehicles to test AVs on public roads and permission from the California Public Utilities Commission to use these vehicles in a ride-hailing service. Under rules established by the CPUC, Pony.ai cannot charge for rides.

 


0

From the NBA to Sequoia to TikTok and more, a week of national security concerns with China

18:11 | 25 October

It has been a tough week for China-U.S. relations. Vice President Mike Pence ratcheted up the administration’s rhetoric yesterday, calling the NBA “a wholly owned subsidiary of the authoritarian regime” in China while the league’s commissioner Adam Silver continued to try to tamp down the intensity of criticism over the league’s business, saying in an interview with the Wall Street Journal that “We have no choice but to engage and to attempt to have better understanding of other cultures and try to work through issues.”

The NBA was hardly the only challenge between the U.S. and China. This week saw the intensification of two threads of national security concerns continue to get airtime on Capitol Hill that could have massive ramifications for startups.

The first and potentially most potent thread is swirling around TikTok, the epically popular social video app that also happens to be owned and operated by China-based ByteDance. This week, senate majority leader Chuck Schumer and senator Tom Cotton of Arkansas circulated a bipartisan letter requesting an assessment of TikTok’s national security risks.

ByteDance remains the world’s highest-valued unicorn (which, perhaps in the wake of WeWork’s collapse the past two weeks, is not an epithet that any startup wants to actually hold these days). It has received major funding from the likes of Sequoia Capital China, and is currently valued at $75 billion.

Sequoia is clearly preparing for the worst around these national security reviews. Last week, the firm confirmed to The American Lawyer that Donald Vieira, a partner at top law firm Skadden, would be joining the venture firm as chief legal officer. Vieira has spent the last few years working on cases surrounding CFIUS, the Committee on Foreign Investment in the United States (WTF is CFIUS?), and earlier, was chief of staff of none other than the Department of Justice’s national security division.

That expertise will be critical as Sequoia potentially faces a tough reception for ByteDance in the national security circuit on Capitol Hill. Earlier this year, CFIUS required video game publisher Beijing Kunlun to retroactively divest itself of its purchase of gay-dating app Grindr over concerns that the app’s user data could provide Chinese intelligence and law enforcement officials with compromising material that would allow for individual blackmail.

While Grindr’s text messages may be far more compromising than the average TikTok viral video, the app’s small user base is dwarfed by TikTok, which has seen more than 100 million downloads in the U.S. alone. That potentially wide surveillance net is of acute concern for U.S. intelligence officials.

On top of that, of course, is the media’s heightened discussion the past few weeks that ByteDance could carefully calibrate the virality of videos on TikTok to hew toward Beijing’s censorship dictates. That has led to some teens posting various memes about the Hong Kong protests to see how far they can push the platform’s red lines (as teens are wont to do).

Strategically, the China angle has become very useful for Facebook, who faces a viable threat in TikTok’s popularity according to my colleague Josh Constine. Mark Zuckerberg has made China’s potential censorship within TikTok a major speaking point, which he emphasized in a major policy speech at Georgetown:

While our services, like WhatsApp, are used by protesters and activists everywhere due to strong encryption and privacy protections, on TikTok, the Chinese app growing quickly around the world, mentions of these protests are censored, even in the US.

Is that the internet we want?

Facebook’s strategic messaging starts to lead us to the other national security thread happing these days in DC. There have been wide concerns over the past few months on Capitol Hill over bids for subway, rail, bus, and other transit contracts from Chinese companies like state-owned CRRC and electric bus and battery manufacturer BYD . There have been motions to ban federal transit funding for projects that use vehicles from Chinese-subsidized sources.

A new report published this morning by Radarlock, a data-driven research organization, argues that Beijing is using access to these contracts to enhance its ‘civil-military fusion,’ by which China means learning how to manufacture and build leading global supply chains that help it in both private sector competitiveness and in military superiority. As the research leads Emily de La Bruyère and Nathan Picarsic write:

Through both data collection and technology, CRRC contributes to Beijing’s military and military-civil fusion [“MCF”] projects: Explicitly declaring, in its company documents, a role in the military-civil fusion strategy, CRRC has set up an investment fund dedicated to MCF; operates in MCF industry zones; shares technology, resources, and data with military-and MCF-affiliates; and assigns the MCF label to high-profile projects and centers.

Like Facebook though, these results are being highlighted by industry sources, with Politico Pro noting that Securing America’s Future Energy and the Alliance for American Manufacturing have been pushing the report around DC.

And that gets back to the challenges of future economic ties between the two superpowers, notwithstanding the latest developments in the trade war negotiation (which seem as likely to conclude as Brexit is to happen).

National security policy is increasingly being used by incumbent players as a cudgel to stifle competition. Many of those national security concerns are valid — and sometimes acutely so — but we also need to be extraordinarily clear that like any market restriction, there is ultimately a consumer cost to these initiatives as well. The Chinese may go without star-studded basketball as much as Americans will go without working subway cars, and that’s the cost of a relationship that has never been built on a foundation of trust.

 


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Sydney’s AirTree Ventures closes $275M fund as Aussie unicorns gather pace

19:35 | 21 October

The Australian scene industry has, in the last few years, started to generate a swathe of startups that have broken through internationally. Prior to this current era, Australia was scene has very much a local market in tech terms, with only occasional breakouts, like Atlassian . In fact, it’s now gaining a reputation as a serial producer of high-quality tech platforms, the hottest of which right now is Canva, which recently raised an additional $85 million to bring its valuation to $3.2 billion, up from $2.5 billion in May. Investors in the company include Bond, General Catalyst, Bessemer Venture Partners, Blackbird and Sequoia China. Notably, Sydney-based AirTree Ventures also invested early.

So that momentum is further confirmed by the news that Airtree has closed its 3rd fund of $275m. This new fund comes after AirTree’s $250m fund in 2016 and a $60m fund in 2014. You can clearly see the buildup in these numbers.

John Henderson, Partner said: “The interest from investors in our fund is a stunning reflection on the performance of the entrepreneurs we’ve been lucky enough to back. We were humbled by overwhelming demand, but felt it was the right thing for our investors to maintain discipline and a consistent fund size across vintages.”

Australian venture capital was less than fashionable after the dotcom boom and bust, and local institutional capital in Australia and New Zealand all but disappeared, hence why we saw so few startups form the region.

AirTree’s $60m fund in 2014, broke that drought and Australia now boasts over 50 tech startups valued at $100 million, 14 over $500 million and produces one ‘unicorn’ per year on average.

Airtree has gone on to invest in Australian and Kiwi startups like Canva, Prospa, Secure Code Warrior, Athena, Flurosat, Brighte, Joyous, Thematic and A Cloud Guru. Prospa, Australia’s main online lender to small businesses, IPO’ed on the Australian Stock Exchange in June 2019.

Airtree can invest as little as $200k, but now has the firepower to own the pipeline all the way up the investment stack.

Craig Blair, Managing Partner commented: “As ex-founders, we have experienced the tough, lonely road ourselves. This empathy with the founder journey helps us focus on when to provide support and when to get out of the way. In our next fund, we’ll be expanding our suite of services and our network of connections, all designed to give our founders an unfair advantage.”

The VC also announced two promotions and a new executive hire:

• Elicia McDonald promoted to Principal, with a mandate to lead new investments
• Emily Close joining the investment team, promoted to Associate
• Melissa Ran leading AirTree’s Community and Advocacy efforts

AirTree’s latest fund is backed by six institutional investors from Australia including AustralianSuper, SunSuper and Statewide. The rest of the new fund comes from a range of successful entrepreneurs and family offices.

Henderson added: “An important portion of our portfolio is already in New Zealand and we remain very focused on supporting that market. We’ve been investing meaningful resources and funds in New Zealand since 2014 and we’ll have more Kiwi news to share soon.”

The fund raise follows news that AirTree portfolio company Property-tech start-up :Different has raised a second round of capital from AirTree, alongside Brisbane-based real estate fund PieLAB, as it expands into Queensland.

 


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China’s growing digital influence in Africa

21:29 | 1 October

There’s been a heap of China in Africa coverage over the last decade, but very little of it is focused on tech. In part, because the country’s engagement with African startups is light compared to its deal-making on infrastructure and commodities. Now, that all looks to be shifting.

TechCrunch has tracked moves by a number of Chinese actors in Africa’s tech sector over the past year. This could signal the next chapter in China’s influence in Africa — one more digital than bricks and mortar.

Primer on China in Africa

To the former, the government of China has designated Africa a strategic priority in its foreign relations and has pursued policies and programs accordingly.

 


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Kurly, a grocery e-commerce startup in Korea, closes upsized $113M Series B round

10:07 | 30 May

Kurly, a startup that operates a grocery delivery service in Korea, said today that it has closed an upsized Series D round that reached a total of $113 million.

The company announced the round in April when it was $88 million led by investors that include Sequoia China, however it has now increased by $25 million. That’s thanks to an injection from China’s Hillhouse Capital, a firm which counts Tencent, Meituan and JD.com among its most successful investments.

Launched in 2015 by former Goldman Sachs and Temasek analyst Sophie Kim, its Kurly Market service is designed to provide groceries and produce to customers who don’t have the time or interest to visit regular retail stores for their shopping.

Kurly Market delivers orders by 7am each morning with customers given until 11pm the previous day to place their order.

Korea is the place for speedy deliveries, if that’s your thing. Coupang, a company backed by SoftBank’s Vision Fund that’s widely seen as ‘the Amazon of Korea’ — and valued at $9 billion, to boot — has built out an impressive network that allows same- and next-day delivery for its “millions”of customers.

Coupang CEO Bo Kim told TechCrunch last year that his company was “approaching” $5 billion in revenue for 2018 with 70 percent annual growth. Additionally, he said, one in every two adults in Korea have the Coupang app on their phone and, having started out in Amazon-like areas, Coupang is doubling down on fresh produce with its own cold chain logistics network.

That represents a direct challenge to Kurly, which differentiates itself by operating through its own brands, unlike Coupang, which runs using a marketplace model to connect retailers with consumers. Kurly is also focused on convenience over cost savings, indeed its service began in Seoul’s high-end Gangnam neighborhood but has since expanded more widely.

Kurly Market products are focused on quality and convenience over price

Still, investors are bullish on Kurly and its laser focus on produce and groceries.

Kurly said its revenue grew three-fold year-on-year to reach $131 million in 2018, although it did not provide profit/loss figures.

“The latest round of investment is a major endorsement of the progress we’ve made differentiating ourselves in the market through our cold-chain fulfillment infrastructure and unique offering of premium, curated products. Our focus is on further strengthening our relationships with our suppliers, developing our fulfillment infrastructure and continually improving our customer experience,” Kim said in a statement.

 


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The Crunchbase Unicorn Leaderboard is back, now with a record herd of 452 unicorns

20:09 | 29 May

We are very pleased to announce that the new and improved Crunchbase Unicorn Leaderboard re-launched today after nearly a year’s absence from TechCrunch.

Venture investors did a lot of handwringing in the past year over rising valuations, but that did not slow the unicorn juggernaut, as 2018 outstripped all previous years in terms of the number of unicorns created and venture dollars invested. Indeed, 151 new unicorns joined the list in 2018 (compared to 96 in 2017), and investors poured more than $135 billion into those companies, a 52% increase year over year and the biggest sum invested in unicorns in any one year since unicorns became a thing.

Back in 2013, Cowboy Ventures’ Aileen Lee coined the term “unicorn” in a piece on TechCrunch with her report stating “39 companies belong to what we call the ‘Unicorn Club’ with four unicorns born per year in the past decade, … with Facebook being the breakout ‘super-unicorn’ (worth >$100 billion).” A lot has changed in six years.

From 19 new unicorns in 2013, roughly two each month, we now see a new unicorn coming into being every two working days. In 2019 so far, 42 new unicorns have joined the unicorn leaderboard, and by next week that number will have jumped again.

The Unicorn Leaderboard now lists 452 companies, which have collectively raised $345 billion and represent a cumulative valuation of $1.6 trillion. Go back to February 2018 and there were just 279 companies, with $206 billion raised and valued at $1 trillion. In just 15 months 170+ companies reached unicorn status, raised $140 billion more and added $600 billion in company valuations.

View by investor, sector and country

On the new leaderboard, it’s possible to filter by investor, lead investor, market sector and country. The unicorn leaders are the U.S. with 196 companies, China with 165, India with 19 and the U.K. with 12.

Leading investors

Three well-known venture firms, Sequoia Capital, Accel and Andreessen Horowitz, have invested in the most unicorn rounds. The investors that actually led the most rounds are corporate investor Tencent Holdings, venture firm Sequoia Capital and private equity firm Tiger Global Management. The rise of Tencent Holdings and Tiger Global Management reflect the prominence of China-based unicorns, as well as the increase in investment from corporate and alternative investors.

Emerging unicorns

The leaderboard also hosts a list of companies that have disclosed valuations between $500 million and > $1 billion and may well reach unicorn status with their next capital raise, unless, of course, they exit before then.

Unicorn exits

The majority of these 452 companies are in the U.S. or China, and most will plan to exit (go public or get acquired) within the next five to eight years.

2018 was also the best year ever for unicorn exits, as 39 unicorns went public while 14 were acquired. This year so far, six U.S.-based unicorns have gone public, namely, Uber, Lyft, Pinterest, Zoom, PagerDuty and Beyond Meat, representing $131.5 billion in public valuations, with Uber at  $82.5 billion and Lyft at $24 billion. The first Africa-based unicorn to go public is Jumia Group, an e-commerce company that operates in 14 African countries. Four China-based unicorn companies went public so far this year: Maoyan, an online movie ticketing service; mobile stock investing service Tiger Brokers; Lakala, a fintech platform; and, most recently, Luckin Coffee, a retail coffee brand. Hong Kong-based Futu Holdings, an online stock platform, also went public this year.

More than a one-third of all unicorn exits took place in 2018. The exited unicorns section of the Crunchbase Leaderboard lists 144 companies; roughly two-thirds of these companies (98) went public and the balance (46) were acquired.

Is 2018 the peak?

2018 might well be the peak, but 2019 is still strong, with 42 new unicorns announced this year so far, and $33.6 billion invested in this cohort of private companies. With the record of 452 unicorns, $345 billion currently invested, $1.6 trillion in captured value and an average age of 8.2 years since being founded, 2019 will be the year we watch the IPO market closely.

Credit: Steven Rossi who manages the board, Santosh Ankola on the TechCrunch product team and Human Made Design for their work on recreating the board.

 


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CFIUS Cometh: What this Obscure Agency Does and Why It Matters to Your Fund or Startup

21:00 | 24 May

Evan J. Zimmerman Contributor
Evan J. Zimmerman is an entrepreneur, investor, and writer. He is the Chairman of Jovono and Chairman of the Clinton Health Access Initiative technology council. He is a partner and director in Mighty Mug/Mighty Products, Inc, and chairman of Brush Up Club, an innovative oral health company.

On January 12, 2016, Grindr announced it had sold a 60% controlling stake in the company to Beijing Kunlun Tech, a Chinese gaming firm, valuing the company at $155 million. Champagne bottles were surely popped at the small-ish firm.

Though not at a unicorn-level valuation, the 9-figure exit was still respectable and signaled a bright future for the gay hookup app. Indeed, two years later, Kunlun bought the rest of the firm at more than double the valuation and was planning a public offering for Grindr.

On March 27, 2019, it all fell apart. Kunlun was putting Grindr up for sale instead.

What went wrong? It wasn’t that Grindr’s business ground to a halt. By all accounts, its business seems to actually be growing. The problem was that Kunlun owning Grindr was viewed as a threat to national security. Consequently, CFIUS, or the Committee for Foreign Investment in the United States, stepped in to block the transaction.

So what changed? CFIUS was expanded by FIRRMA, or the Foreign Risk Review Modernization Act, in late 2018, which gave it massive new power and scale. Unlike before, FIRRMA gave CFIUS a technology focus. So now CFIUS isn’t just an American problem—it’s an American tech problem. And in the coming years, it will transform venture capital, Chinese involvement in US tech, and maybe even startups as we know it.

Here’s a closer look at how it all fits together.

What is CFIUS?

Image via Getty Images / Busà Photography

CFIUS is the most important agency you’ve never heard of, and until recently it wasn’t even more than a committee. In essence, CFIUS has the ability to stop foreign entities, called “covered entities,” from acquiring companies when it could adversely affect national security—a “covered transaction.”

Once a filing is made, CFIUS investigates the transaction and both parties, which can take over a month in its first pass. From there, the company and CFIUS enter a negotiation to see if they can resolve any issues.

 


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Vue.ai raises $17M to equip online retailers with AI smarts

19:55 | 24 April

Vue.ai, a U.S/India startup that develops an AI platform to help online retailers work more efficiently and sell more, has announced a $17 million Series B round.

The investment is led by Falcon Edge Capital with participation from Japan’s Global Brain and existing backer Sequoia Capital India. Parent company Mad Street Den was founded in 2014 and it raised $1.5 million a year later, Sequoia then bought into the business via an undisclosed deal in 2016. Vue.ai is described as an “AI brand” from Mad Street Den and, all combined, the two entities have now raised $27 million from investors.

In an interview with TechCrunch, Vue.ai CEO and co-founder Ashwini Asokan — who started Mad Street Den with her husband Anand Chandrasekaran — explained that Vue.ai is a “retail vertical” of Mad Street Den that launched in 2016, she said that the company may add “another vertical in a year or two.”

Vue.ai is solely focused on working with online retailers, predominantly in the fashion space, and it does so in a number of ways. That includes expected areas such as automating product tagging and personalized recommendations (based on that tag library), as well as visual search using photos as input and tailored product discovery.

Areas that Vue.ai also plays in which surprised me, at least, include generating human models who wear clothing items — thus saving considerable time, money and effort on photo shoots — and an AI stylist that doesn’t take human form but does learn a user’s style and help them outfit themselves accordingly.

Tagging and visuals may appear boring, but these are hugely important areas for retailers who have huge amounts of SKUs, items for sale, on their site. Making sure the right person finds the right item is critical to making a sale, and Vue.ai’s goal is to automate as much of that heavy-lifting as possible. Even tagging is essential because it needs to be done consistently if it is to work properly.

Ashwini Asokan, CEO and Founder of Vue.ai

More than just working correctly, Vue.ai aims to help online retailers, who often run a tight ship in terms of profitability, save money and get new product online and in front of consumer eyeballs quickly.

“These are solutions that optimize the bottom line for retail companies,” said Asokan, who spent over a decade working in the U.S before returning home in India in 2015. “We are digitizing products 10X faster than you did before… you cannot afford to lose productivity and efficiency, online retail is not somewhere you can lose money.”

“We want to be that data brain mapping digital products,” she added.

Vue.ai is now pushing into new areas, which include advertising and development of videos and marketing content.

“The future of retail is entertainment and the experience economy is the small start of that era,” Asokan said, reflecting on the trend of social media buying through platforms like Instagram and the rise of live-streaming e-commerce in China.

“The electricity that powers all of these complicated retail interactions is content; we need to understand content and every customer style profile and merchandise,” she added.

Some of Vue.ai’s public customers include Macy’s and Diesel in the U.S, Latin American e-commerce firm Mercadolibre and Indian conglomerate Tata .

Vue.ai is headquartered in Redwood City with an office in Chennai, India. Asokan said it is planning to expand that presence with new locations in Seattle, for tech hires, and Japan and Spain to help provide closer support for customers. The company doesn’t disclose raw numbers, but it said that annual revenue grew by four hundred percent in 2018, which was its third year since incorporation.

 


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