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Josh Horwitz from Quartz joins us in a discussion on Apple’s recent decision to invest in China’s largest ride hailing app, Didi Chuxing and the implications for Uber in their plans to conquer China and the rest of the world. We move beyond the obvious reasons, such as managing their diplomatic relations with the Chinese government, and dive into Apple’s preparation for their entrance into China similar to other automotive makers. In this episode, Josh also takes us through the intricacies of the Chinese government’s regulations of the transportation industry. Last but not least, we also discuss the power players behind Didi and Grab and how traditional “old” money are boiling into technology startups in Asia.

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Analyse Asia with Bernard Leong is a weekly podcast dedicated to the pulse of technology, business & media in Asia. They interview thought leaders and leading industry players and gain their insights to how we perceive and understand the market. Analyse Asia is a content partner of TechNode.

TechNode does not endorse any commentary made in the program.

Notes:

• Josh Horwitz, Writer from Quartz
  • What interesting news has Josh been covering in Asia recently? [1:12]
    • Alibaba is buying not building its way into Southeast Asia
    • Netflix faces rivals in India and Southeast Asia that are better adapted to local realities.
    • A brief history of Chinese accounting shenanigans in America.
• The On-Demand Transportation Wars [2:09]
  • Since our last conversation, what’s the status of the industry’s dominant players? (Uber, Didi, Ola and Grab/Go-Jek) [2:28]
  • Grab and Go-Jek founders share a common story [3:30]
  • Uber vs Google Waze: What happened when self-driving cars met on-demand transportation? [4:38]
• Apple’s US$1B investment into Didi and Didi vs. Uber in China [8:34]
  • Why did the deal happen? What are the possible reasons? [8:58]
  • Is Apple’s investment in Didi really an investment into its own future?
    • Does Didi need Apple? [13:22]
      • A symbolic appeasement with the Chinese government or a way to buy “guanxi”?
    • The Chinese government has regulated the automotive industry since the 1980s and places strict restrictions on automotive OEMs with a 50:50 joint venture.  [15:30]
    • Example of 50:50 joint ventures in China’s automotive industries: car companies with state owned enterprises in China. For example, Ford has a joint venture with Changan [17:00]
    • How Apple plans to enter China by leveraging a partnership
      • What does Apple gain from investing in Didi? Counter example: Tesla is facing problems in China without a partner to sell their electric cars. [19:11]
    • Didi used a varied interest company (VIE) business structure similar to Alibaba – how does that affect its partnership with Apple? [20:00]
    • What does this mean for Uber in the online transportation wars? [24:20]
    • The power players behind Didi vs. Uber and Grab [27:14]
      • Didi: Who is Jean Liu who did the deal with Tim Cook from Apple and Wei Zheng, founder and CEO of Didi? (she’s the daughter of the Lenovo founder, Liu Chuanzhi).
      • Uber China: Liu Zhen, director of strategy, is Jean Liu’s cousin.
      • Grab’s Anthony Tan is the grandson of the founder of Tan Chong Motors, which owns the exclusive distribution to Nissan, a Japanese automotive company.
      • Jerry Yang is an adviser to Uber and did the deal with Alibaba when he was the CEO of Yahoo! [28:50]
    • Uber and leasing out cars and controlling the supply chain [29:51]
      • Is Grab doing the same thing as Uber in controlling the supply chain with their competitive advantage with Nissan through Tan Chong Motors?

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Augmented and virtual reality startup uSens announced yesterday that they have raised a $20 million USD A round led by Fosun Kinzon Capital, followed by returning investor Maison Capital and six new backers including Great Capital.

This new investment will help uSens launch their inside-out 26 DOF (degrees of freedom) hand tracking and 6DOF head tracking tools in 2016, according to a company statement. DOF refers to the freedom of movement in three-dimensional space, where a higher number indicates an increased flexibility in positioning.

Founded in 2013, uSens is principally engaged in designing gesture recognition and hand-and-head tracking technologies and 3D ‘Human Computer Interaction’ system design. The San Jose-based startup first attracted public attention in 2015 as the developer of wireless AR/VR headset Impression Pi, a Kickstarter hit which raised over $30 million USD.

uSens is now focussing on head and hand position tracking, aiming to replace the need for peripheral devices such as game controllers.

“Tracking is critical to ARVR experiences,” said Anli He, CEO and co-founder of uSens. “As ARVR display technologies approach mass adoption, we’re excited to bring great interactive solutions to help ARVR platforms, hardware makers, and especially content developers overcome the complicated challenges of hand and position tracking. ”

“For ARVR to achieve its potential, natural head and hand tracking is required,” said Donghui Pan, chairman and president of Fosun Kinzon Capital. “All consumers want a more immersive experience, and hand controllers simply aren’t the solution.”

“We see great potential in the future applications of uSens’ 3D HCI technology, from entertainment and gaming, to healthcare and behavioral therapy, to architecture, aeronautics, and education.” said Wenli Cui, founding partner of Maison Capital.

The current round would raise the company’s total funding to $26.7 million USD, following a $5.5 million USD Pre-A Series received in 2015 and a $1.2 million USD angel round received in 2014.

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From education to gaming, talent shows to dating, China is experiencing a love affair with live-streaming.

And now there’s a Chinese crowdfunding platform that will allow you to put your hard-earned dollars toward any livestreaming project, from language classes to low-level pyromania.

Beijing-based startup crowdfunding Qschou (轻松筹) announced on Wednesday the completion of a $20 million USD round of Series B+ funding, bringing its valuation up to an estimated $350 million USD. Their latest project? Crowdfunding livestreaming projects.

Livestreaming products vying for funding on Qschou’s platform include a live session of ‘drink mixing’, where the video host will apparently mix strange concoctions and drink them if they meet their goal funding, as well as another project entitled “I’m going to livestream while setting a soda can’s pull tab on fire to see if it explodes.”

One user on the platform teases an image of the cans he intends to set on fire if the livestreaming project reaches its funding goal.

A more rational example of how people are using Qschou’s third and latest mode of crowdfunding is teaching classes through the app. People who are interested in attending the class pay upfront by a certain date. If enough people have signed up by the time the project reaches its deadline, the teacher teaches the class.

Participating investors included IDG, DT Capital Partners, and Tencent.

“After this round of funding, Qschou will continue perfecting its product and improving its service,” Liang Yu, the CEO of Qschou, told TechNode. “In addition, we will also increase the strength of our marketing, and let more people know about how they can use the Qschou crowdfunding platform.”

According to Mr. Yu, the livestreaming feature is still undergoing internal testing. In the next version of the app, all users will be able to apply to submit livestreaming projects to Qschou’s platform.

Crowdfunding projects from left to right: 1) hand-sewn silk wedding sheets 2) a biking trip 3) a flower arrangement class

If you’re used to U.S-based crowdfunding platforms, such as Indiegogo and Kickstarter, Qschou’s livestreaming feature sounds like a far cry from the typical crowdfunding model, where donors are seen as supporters of a project, not audience members.

However, in China’s crowdfunding landscape, it’s not uncommon to see the mechanics of crowdfunding – a timeline, rewards, and donations – applied in more commercial contexts. For example, crowdfunding platforms by e-commerce giants Taobao and JD run are used for flash sales, not crowdfunding.

Qschou’s platform also includes this mode of crowdfunding, where projects are more about selling products than raising money. Most projects are homemade or homegrown products, such as Dragon Well (龙井, longjing) green tea and dried jujubes from China’s Xinjiang province. The startup’s platform also supports a type of crowdfunding similar to Indiegogo and Kickstarter, where projects are unrealized dreams that need money in order to be achieved.

Founded in 2014, Qschou claims that it has featured over 600,000 projects on its platform, with almost 100 million users contributing as project supporters. The company joins number of other crowdfunding platforms in China, including Tencent’s own crowdunding site on its Open Platform, as well as Kaistart (开始众筹) and Zhongchou.com (众筹网).

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Chinese gadget maker Xiaomi struck a deal with Microsoft to purchase around 1,500 patents from the latter for an undisclosed sum, the U.S. company announced on Wednesday. The announcement was made yesterday when Microsoft CEO Satya Nadella visited Beijing.

The sale involves patents in voice communications, multimedia and cloud computing sectors, while the licensing portion include wireless communications patents as well as other technologies, including video. The deal also covers a wider partnership that includes the cross-licensing and pre-installment of Microsoft Office and Skype onto some of Xiaomi’s devices.

The move underlines Xiaomi’s efforts to acquire intellectual properties in an attempt to explore overseas business amid a saturating domestic smartphone market.

Xiaomi has been investing heavily in intellectual property over several years. Company VP Wang Xiao disclosed that they have applied for more than 3,700 patents in 2015, up from over 2,000 in 2014. In February this year, Xiaomi brought 332 U.S. patents from Intel, shortly after acquiring some wireless communication technologies from Broadcom.

For Microsoft, the move is the latest in an attempt to boost partnerships with Chinese companies. The internet giant teamed up with Chinese search engine Sogou to launch an English language search engine. Microsoft holds more than 60,000 patents, which means the patents held by Xiaomi represent a very small share of the U.S. company’s total IP pool.

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China’s internet giant Tencent Holding Ltd. and Weiying Technology announced on Tuesday the establishment of a joint venture with YG Entertainment, which oversees some of the industry’s top names, including Psy, BigBang, and 2NE1.

The announcement follows a recent $85 million USD injection of funding into the South Korea-based entertainment company. Weiying Technology and Tencent invested $55 million USD and $30 million USD, and now hold 8.2% and 4.5% stakes in YG Entertainment, respectively.

The round makes Weiyang and Tencent the third and fourth largest shareholders of the company following the founder and the top shareholder of YG Entertainment, Hyunsuk Yang, and L Capital Asia. Weiying Technology operates the mobile ticketing application called WePiao, which runs on Tencent’s platforms QQ and WeChat.

The joint venture aims to nurture local Chinese artists and serve as a launching ground for YG’s artists, actors, and actresses on the mainland.

“This move is to meet the huge appetite in China for Korean entertainment such as music, concerts and variety shows,” commented a spokesperson from Tencent in a press release.

(L-W) Lin Ning, CEO of Weiying Technology, Min-Suk Yang, CEO of YG Entertainment, Suman Wang, General Manager of Film/Drama Department and Editor in Chief of Tencent Video

YG Entertainment already serves as a content provider for Tencent. Tencent’s QQ Music previously signed an exclusive content partnership with the company. When YG’s artist BigBang held a concert in Macau, China, Tencent monetized viewers through Tencent Video’s concert live streaming function. More than 120,000 users paid for the online access to the concert, and were able to purchase virtual gifts and merchandise items on Tencent’s streaming page. On the QQ Music site, BigBang’s 2015 albums sold over 4 million copies in China through digital sales alone.

The joint venture will also work on a reality show called ‘The Collaboration’, which will feature two artists from YG and be broadcasted on Tencent Video. The two companies are also preparing other reality shows covering Korean fashion trends and beauty content.

South Korean content providers on Chinese multimedia platforms have established themselves as lucrative businesses in recent years. This year, Korean military romance drama Descendants of the Sun (太阳的后裔) was partly funded by Chinese investors and exclusively broadcasted on iQiyi, with 440 million views recorded on the video streaming site.

The patents for South Korean reality shows like Running Man (奔跑吧兄弟) and Where Are We Going, Dad? (爸爸去哪儿) have been sold to Chinese production houses, where local celebrities are cast in the Korean shows to draw the national fandom toward homemade spin-off episodes. Where Are We Going, Dad?‘s spin-off version saw an advertising revenue of 28 million yuan ($4.57 million USD) in its first season in China, along with sponsor fees surging tenfold to 310 million yuan ($47 million USD).

Image Credit: YG Entertainment

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Michael Kriak and Gwendolyn Regina from Mashable joined us for a conversation on Mashable.com and its recent strategy on video and expansion into Asia. We discussed how Mashable has built a global media platform with their proprietary technology and a strong editorial team distributed across the world. Michael and Gwen also shared interesting case studies on Mashable’s partnerships with Asia’s top social media platforms and its current footprint across Asia.

Download MP3 (22 MB) or Subscribe via RSS

Analyse Asia with Bernard Leong is a weekly podcast dedicated to the pulse of technology, business & media in Asia. They interview thought leaders and leading industry players and gain their insights to how we perceive and understand the market. Analyse Asia is a content partner of TechNode.

TechNode does not endorse any commentary made in the program.

Notes:

• Introduction to Michael Kriak, the chief operating officer and chief financial officer of Mashable, and Gwendolyn Regina, director of strategy and business development, Asia Pacific
  • What brought Mike to Singapore? [1:11]
  • How did Gwen end up joining Mashable to set up their operations in Asia? [2:03]
  • How did Michael get started in his career and eventually come to Mashable? [2:57]
• Mashable and their footprint in Asia Pacific [4:06]
  • Introduction to Mashable [4:06]
    • What is the mission and vision of Mashable, founded by Pete Cashmore? [4:29]
    • Mission: “a global, multi-platform media and entertainment company. Powered by its own proprietary technology, Mashable is the go-to source for tech, digital culture and entertainment content for its dedicated and influential audience around the globe”. 45M monthly uniques, 28M social media followers & 7.5M shares per month.
    • How does Mashable extend their mission through their proprietary technology, for example, Velocity with both its brand partners & editorial team as one of the world’s leading digital publishers? [6:58]
    • Velocity’s ability to track and monitor social media with multiple languages. [8:05]
    • How does Mashable create premium content for the digital generation? How does Mashable leverage the other social platforms to distribute and build out content, for example, Facebook, Youtube, Instagram and YouTube? [8:43]
    • Does Mashable experiment their content distribution with social media platforms dominant in Asia, for example, messaging apps (Kakao Talk, Wechat, LINE), video streaming (Youku)?  [10:48]
    • Are there any interesting stories in Asia which has come out of Mashable? What kind of stories work in Asia? [11:30]
    • Example of LGBT articles that illuminate interesting cultural stories across Asia. [12:30]
    • How does cultural nuances factor into the stories which Mashable publishes? [14:48]
    • Recently, Mashable has shifted its major focus towards video, what is the line of thinking behind the video strategy? [15:45]
    • Can you talk about the thinking behind why Mashable decide to expand their footprint in Asia? [18:50]
    • What is the current footprint of Mashable in Asia? Where are the countries you have already started covering? [21:51]

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Chinese gay flirting app Blued announced on Wednesday the completion of a Series C and C+ round led by Ventech and China and Vision Knight Capital respectively. The startup said the funding size is in the hundreds of millions of RMB, without disclosing the specific amount.

Founded as a virtual community for gay men in 2000, Blued has grown rapidly along with changing public attitudes toward gay people. The app now claims to have 27 million users as of February this year, of which 20%, or 6 million, come from overseas markets. The company claims to dominate nearly 90% of China’s gay instant messaging market.

Blued, which already available in 9 languages, is now eying an international expansion to compete with the likes of highly-popular U.S. app Grindr, which recently sold a stake to Chinese firm Beijing Kulun. The proceeds from Blued’s latest injection are earmarked for building offices in more countries, recruitment, localization and acquisitions.

The investment will also be used for boost its commercialization initiative through mobile marketing and video streaming. The company told Technode their revenue is expected to hit the hundreds of millions [RMB] in 2016, of which video streaming is major source.

Blued’s goal for the long-term is pretty clear: to raise money by going public and become the number one global player in the industry, said Geng Le, founder of the company.

It seems that Geng isn’t talking about something far-reaching. Blued has overtaken Grindr as the world’s largest same-sex matchmaking app in 2014, while the user metrics for the two companies were 15 million and 10 million, respectively.

Blued has been aggressively raising new funds over the past three years. The company landed three rounds of financing previously, including a 3 million RMB angel round from Zhonglu Capital in 2013, an eight-digit A round from Crystal Stream and a $30 million USD B round led by DCM China in 2014.

Blued’s top rival Zank secured an eight-digit RMB Series B funding last week to develop an e-commerce platform and video streaming business aimed at the gay market.

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China’s cutthroat education system is a breeding ground for Chinese K-12 education startups. The country’s exam-heavy system particularly gives rise to startups that focus on helping students improve their test scores.

Online education startup Yuanfudao (猿辅导), which targets China’s middle school and high school test takers, announced a $40 million USD boost from Chinese tech giant Tencent on Tuesday.

Last March, the Beijing-based startup raised a $60 million USD round of Series D funding from Matrix Partners, New Horizon Capital and CMC Capital Partners.

“Over the the past four years, with continuously improved adaptive learning algorithms, Yuanfudao has gained a massive amount of data in terms of our students’ practice behavior, which we have used to build online tutoring courses,” said Li Yong, Yuanfudao’s CEO, the company’s press release.

Currently, Yuanfudao has three products, but their online tutoring platform, also named Yuanfudao or “Ape Tutor” (our translation), will be the main beneficiary of the $40 million USD injection. As far as products go, Yuanfudao’s tutoring app is pretty straightforward – it connects students with tutors, who livestream through the app. Students can choose one-one-one tutoring services or join a group class. Some tutors teach a series of classes, typically on exam-specific material, while others teach one-off courses that are priced as low as 1 RMB ($0.15 USD) for a one hour lecture.

From left to right: 1) different course offerings on Yuanfudao 2) a list of classes, each 199 RMB 3) a description for a group class (maximum of 2000 students) that covers the Chinese language and literature section of China’s national college entrance exam

Yuanfudao’s product is aimed at easing China’s buke (补课) bottleneck, which affects middle school and high school students all over China. In China, buke refers to remedial classes that are taught outside of normal class hours. However, unlike remedial classes in other countries, buke is not just for students who have missed class or need to make up coursework. In China, buke classes are largely attended by students who want to improve their test scores.

Due to the competitive and do-or-die nature of China’s exam system – students can only attend schools that they test into – buke classes are a lucrative business. According to Yuanfudao, Chinese families spend an average of 3,820 CNY (about $580 USD) per year on their child’s buke classes, with some families spending as much as 80,000 RMB (about $12,149 USD) a year. By moving buke sessions online, Yuanfudao claims it can cut at least 70% of the cost and distribute buke tutors and services more fairly across different regions of China.

In addition to Yuanfudao’s tutoring platform, the company has two other products: Yuantiku (猿题库), an app that helps middle school and high school students cram for national exams by serving practice problems from an adaptive database, and Xiaoyuansouti (小猿搜提), an app that lets students  search for homework answers and one-on-one help by uploading pictures of homework problems.

Though the three apps operate independently at the moment, it’s not hard to imagine possible synergies between them. Already, Yuanfudao has a unified account system that recognizes users based on their phone number across its different apps. In China’s crowded education market, Yuanfudao’s product suite could give it the competitive edge it needs over similar products, like Xuebajun (学霸君), which is almost identical to Yuanfudao’s Xiaoyuansouti.

Yuanfudao joins a number of other education startups in Tencent’s investment portfolio, including Enjoy Learning, a private tutor marketplace, and ABC360, an English language learning startup based in Hangzhou. In addition to funding, Yuanfudao’s press release hinted that it would “cooperate with [Tencent] on a more strategic level.”

The company’s PR spokesperson did not respond to requests for more details.

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Building a startup is hard enough, but going solo in China without a Chinese co-founder? That’s the story of this week’s guest speaker, Ronan Berder, the CEO and founder of Wiredcraft. In this episode, we talk about how Ronan bootstrapped his company from the ashes of a failed startup into a global DevOps company with huge international clients such as the UN, CNN, Starbucks and the Worldbank.

Embracing the path less traveled, Ronan shares his struggles, the pivots, and staying lean as a start-up, and how he lived out of a dufflebag in different Airbnbs for 3 years. He also takes us through the impact that investment decisions have on startups’ growth processes, as well as his latest success powering the recent election in Myanmar.

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China Startup Pulse is a weekly podcast designed to give startup enthusiasts around the world a behind the scenes and on-the-ground understanding of what’s happening in China’s startup ecosystem. Founded and hosted by Ryan Shuken and Todd Embley, and produced by Vivian Law, China Startup Pulse is sponsored by Chinaccelerator, People Squared, and TechNode.

TechNode does not endorse any commentary made in the program.

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Building a startup is hard enough but going solo in China, without a Chinese co-founder, is exactly what Ronan Berder, CEO and Founder of Wiredcraft, did. This week we talk about how he bootstrapped his company from the ashes of a failed startup into a global DevOps company, with huge international clients such as the UN, CNN, Starbucks and the Worldbank.

Embracing the path less travelled, Ronan shares his struggles, the pivots, and staying lean as a start-up, and how he literally lived out of a dufflebag in AirBnBs for 3 years. He also takes us through how investment decisions effect your growth process and his latest success powering the recent election in Myanmar.

Thanks as always to our sponsors Chinaccelerator, People-Squared, and our syndication partner TechNode. A huge thanks to our Producer Vivian Law and Production Editor David Xu

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