Chinese bike-sharing startup Ofo raises $866M in new financing led by Alibaba Group


Beijing-based bike-sharing startup Ofo has raised $866 million in new financing led by Alibaba Group to fuel its expensive competition with Mobike, which is backed by Tencent, one of Alibaba’s biggest rivals. Ofo and Mobike are the two largest bike-sharing companies in China.

Other participants in the round, which consists of equity and debt financing, included Ant Financial (Alibaba Group’s financial affiliate), Haofeng Group, Tianhe Capital and Junli Capital. Alibaba Group also led Ofo’s $700 million Series E round last year, which was announced one month after Mobike disclosed that it had received a $600 million Series E led by Tencent.

Both companies have reached valuations of more than a billion dollars and, combined, hold over 90{36b96a1f853ebc4400789db5a6750c1e4fd7f7ac668ceaf8c757e025080de237} of China’s bike-sharing market (and are also expanding into other countries). Each are reportedly suffering from cash issues, however, due largely to the high cost of sustaining their fierce rivalry with one another, as well as dozens of other bike-sharing startups that emerged over the past few years. But the market could not sustain so many competitors and China’s “bike-sharing bubble,” which at one point numbered about 60 startups, began collapsing last year.

Casulties included Bluegogo, whose operations were partly taken over by Didi, China’s largest ride-sharing company, after the startup ran out of cash at the end of last year. Didi’s presence in the bike-sharing market is another headache for Ofo and Mobike. Didi offers various bike-sharing services through its app from partners including Ofo, but that doesn’t necessarily help them. As TechCrunch’s Jon Russell pointed out, that just means commuters use Didi’s app even more and don’t have to open or even bother installing any bike-sharing apps.

One solution would be for the two companies to merge, but Alibaba and Tencent are reportedly against the deal because each wants to gain control of China’s bike-sharing market.

Featured Image: mrfiza/Getty Images

JD.com’s new accelerator focuses on blockchain startups


JD.com, one of China’s largest e-commerce companies, is launching a new Beijing-based accelerator program for artificial intelligence and blockchain startups. Called AI Catapult, its first batch includes six companies: Bankorus, CanYa, Bluezelle, Nuggets, Republic Protocol and Devery.

In an announcement, JD.com said startups will work with its operational teams to “test real-world applications of their technologies at scale.” This includes its logistics unit, which recently raised $2.5 billion and claims to run the largest last-mile logistics network in China.

Though Alibaba Group is probably better known outside of China, JD.com is a formidable rival. In 2016, it recorded 658.2 billion RMB, or about $100 billion, in gross merchandise value (JD.com will announce its full-year results for 2017 next month). JD.com and Tencent frequently partner to take on Alibaba, most recently backing several of the same online and offline retail companies, including Vipshop and Better Life. Walmart and JD.com also signed a strategic partnership in 2016 to combine their resources in China.

JD.com currently operates a sponsored AI research lab called the SAIL JD AI Research Institute with the Stanford Artificial Intelligence Laboratory. The company already uses blockchain technology in its supply chain to track products and AI in software it developed to control its logistics drones and automated package sorting centers.

Here are more details about AI Catapult’s inaugural batch:

CanYa—Based in Australia, CanYa is a peer-to-peer marketplace that lets users pay for digital or home services with cryptocurrency. During the program, CanYa will be marketed to JD.com’s customers.

Bluezelle—A Singaporean startup that provides scalable data storage and management services for decentralized apps.

Nuggets—a London-based e-commerce payments and ID platform that stores information on the blockchain to prevent data breaches.

Republic Protocol—a decentralized dark pool, or private exchange, for atomic cross-chain trading between Ether, ERC20 tokens and Bitcoin pairs.

Devery—Another Australian-based company, Devery uses blockchain tech to allow e-commerce companies to verify products through all steps of the supply chain and avoid counterfeits.

Bankorus—Formerly known as MiCai, this Chinese fintech startup claims to be the “world’s first private wealth management platform powered by AI and built on the blockchain.”

Featured Image: Bloomberg/Getty Images

Annual smartphone shipments in China declined for the first time in 2017


China’s smartphone market is no longer growing after it witnessed its first annual decline in shipments during 2017, according to new figures released today.

The writing was on the wall with a market decline first noted in Q2 but this is the first time a drop has been sustained over a twelve-month period. That’s according to data from analyst firm Canalys which reported that total smartphone shipments dipped four percent year-on-year to reach 459 million units in 2017. In particular, the numbers in Q4 were down 14 percent on one year previous with 113 million units shipped.

Despite evidence of buyer saturation, Huawei continued its impressive growth spurt with 24 million shipments in the final quarter of 2017, growing its numbers nine percent above the market.

Sister companies Oppo and Vivo have exploded on to the global stage with strong sales in emerging markets in Asia, but, in China, their numbers fell 16 percent and 7 percent, respectively, with 19 million and 17 million shipments, according to Canalys.

Finally, the launch of the iPhone X and iPhone 8 helped Apple pip Xiaomi to fourth place with 13 million shipments in Q4 2017.

Slowing growth at home has prompted Chinese phone brands to look overseas, with many turning to India where they have long beaten out the local competition and nascent markets like Indonesia, which could grow significantly.

Xiaomi, in particular, which beat Samsung to the top spot in India in Q4, has also made moves into Spain, Mexico, Russia and parts of Africa, too.

The U.S. has proven a tougher market to crack. Xiaomi has sold accessories there for some time, but it is yet to make the leap of smartphones despite many public declarations of intent.

Those that have been more aggressive have met tough pushback. AT&T, the second-largest U.S. carrier, canceled plans to carry the Huawei Mate 10 Pro following reports of pressure from the government. There are also rumors that Verizon is facing pressure over its plan to stock the device, which has already seen its launch pushed back from an original summer timeline.

Huawei instead plans to sell the Mate 10 Pro unlocked and it recruited Wonder Woman actress Gal Gadot to front its campaign as its “Chief Experience Officer.” But carrier deals remain a key way to reach users without an upfront price that can near the quadruple digits. Huawei has distribution with key retailers like Best Buy and Amazon, but the company ultimately won’t penetrate the market the way it hopes without that extra push.

Featured Image: Russell Monk/Getty Images

AI voice assistant developer Rokid raises $100M Series B extension to build its US presence

Rokid founder and CEO Mingming Zhu

Rokid, a Chinese startup that makes an AI voice assistant and smart devices, just raised a Series B extension round led by Temasek Holdings, with participation from Credit Suisse, IDG Capital and CDIB Capital. The size of the round was not released, but a source familiar with the deal told TechCrunch that it is $100 million.

The company’s previous funding was its Series B round, which was announced in November 2016. Founder and chief executive officer Mingming Zhu says Rokid raised a Series B+ instead of a C round because the company, which is based in Hangzhou, China with research centers in Beijing and San Francisco that develop its proprietary natural language processing, image processing, face recognition and robotics technology, is still in its early stages. Rokid wants to focus on gathering more resources and bringing in strategic investors like Temasek Holdings before moving on to a Series C. An investment holding company owned by the Singaporean government, Temasek Holdings counts artificial intelligence and robotics among its main investment areas and its other portfolio companies include Magic Leap.

Rokid Glass

The company’s product lineup already includes smart speakers called Rokid Pebble and Alien, which are currently sold in China. During CES, Rokid debuted its newest offering, Rokid Glass, augmented glasses created specifically for consumer use, as well as an open-source platform, called the Rokid Full Stack Open Platform. Created in partnership with Alibaba, the platform gives third-party hardware developers who use Rokid’s voice assistant access to free resources, including software blueprints and content for IoT devices. Rokid hopes that both will help build its name recognition and presence in the United States.

Reynold Wu, Rokid’s director of product management, describes the Full Stack Open Platform as a turnkey solution that not only gives developers access to Rokid’s AI technology, but also hardware solutions and services. Released with Aliyun, Alibaba’s cloud computing business, the cloud platform opened to third-party developers in China earlier this year, and will launch in the U.S. soon.

Rokid wants the platform to serve as a bridge between the two countries by giving U.S. developers an easy way to enter the Chinese market and also encouraging the development of more content for devices running Rokid’s technology, which founder and chief executive officer Mingming Zhu says is vital to attracting consumers.

“AI products are born to be global, not just for local market,” explains Zhu. “The only issue for Rokid is that we’re not ready for the U.S. market because the most important thing is content and we are not ready if there is only local content or services.”

The Pebble and Alien will be up against Google Home and Amazon Echo, which have become almost synonymous with “smart speaker” in the minds of many consumers, while Rokid Glass will inevitably be compared to Google Glass. The success of the Pebble and Alien hinge not only on how well users think Rokid’s voice assistant compares to Google Assistant and Amazon Alexa, but also the library of content and apps that the startup is able to build for its smart speakers.

While Google Glass flopped among consumers, but saw more success as an enterprise device. Rokid hopes its smart glasses, which run on its proprietary AI voice and imaging algorithms, will be able to succeed where Google Glass wasn’t because it was designed specifically for consumer applications. Early reviews from CES say the Rokid Glass is promising and praised features like face recognition, but said it still needs work to become more responsive. Once it goes on sale, the Rokid Glass will compete with smart glasses from Vuxiz, Sony and Epson. Its price hasn’t been revealed yet, but Zhu says it will be sold at a consumer-friendlier price point than its competitors (many augmented reality smart glasses from Rokid’s rivals are currently priced in the range of $600 to $1,500).

“I think we are the only product that is really consumer-centric in not only design and weight, but also energy use,” says Wu. “A lot of players design for the enterprise market first and then try consumer opportunities, but we have developed consumer products over the past three years. All of them have entered the market successfully and we have users because of that, so we have confidence in our consumer products.”

Featured Image: Rokid

China’s second largest e-commerce firm just showed Alibaba has serious competition


Alibaba invented China’s biggest shopping day — 11/11 aka Single’s Day — and it dominates the headlines with record sales year-on-year, but another company just stepped out to remind us that others are busy trying to close the gap.

JD.com, the perennial challenger to Alibaba’s e-commerce empire in China, just revealed its 11/11 figures for the first time. While not as high as Alibaba’s 163.8 billion RMB ($25.3 billion) the company did process an impressive 127.1 billion RMB in GMV, which works out to around $19.14 billion.

There’s no direct comparison but the figure is a touch above Alibaba’s 2016 11/11 sales GMV of RMB 120.7 billion. The figure is also higher than the $17.6 billion that JD.com grossed for its own 6/18 sales event — which commemorates the date of its founding — although that bonanza lasts for 18 days rather than just one like Single’s Day.

JD.com was previously fairly guarded over Single’s Day data — instead choosing to talk up percentage growth — but with this announcement today it has reminded people that it is indeed a close challenger to Alibaba.

On consumer e-commerce marketshare, iResearch puts JD.com’s reach at around 25 percent, while Alibaba is said to have just over 55 percent but there’s more to it than that.

The main difference between the two is that Alibaba operate’s a marketplace approach with its e-commerce businesses, whereas JD.com opted for an Amazon-like vertical approach to sales.

There is also a disparity in size.

Alibaba sits on the New York Stock Exchange with a market cap of $477 billion. JD.com, meanwhile, is listed on the NASDAQ and valued at around $57 billion. Still impressive, for sure, but a small fraction of Alibaba.

Nonetheless, long-time Alibaba CEO Jack Ma noticed the potential of the rival early on.

The Information reported this week that back in 2011 Ma wanted JD.com founder Richard Liu to open a store on Alibaba’s platform to avoid the potential of direct competition. Liu rejected the offer has gone about making his company, which was then less established, Alibaba’s chief rival through a different approach to e-commerce, and by embracing technology such as drones and robots faster.

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