Alibaba’s Ant Financial and Hellobike team up on $145M e-bike battery JV

Shared e-scooters aren’t just gaining popularity in the United States; they’re hitting the streets of China, too. Recognizing the possibility that some people just don’t want to pedal that last mile, China’s transportation startup Hellobike is setting up a 1 billion yuan ($145 million) joint venture with Alibaba’s financial affiliate Ant Financial and battery maker CATL to provide battery-swapping services for scooters.

That’s according to an announcement from Hellobike on Wednesday, though it did not specify individual shares of the three partners.

Hellobike, backed by Ant Financial, has evolved from a bike sharing service into a one-stop app to include ride-hailing and other transportation means. That puts it in competition with car-hailing leader Didi Chuxing and Mobike, the bike sharing service now owned by Meituan Dianping.

Three-year-old Hellobike claims it’s now serving more than 200 million users in some 360 cities around China. It has its eye set on electric bikes for some time, especially when it comes to capturing users in smaller cities where buildings are more spread out. Its existing battery-swapping service, according to the announcement, can fulfill the energy need of more than two million bikes daily, and the JV will potentially give its network a boost.

Contemporary Amperex Technology, or CATL, seems like a key partner for Hellobike as it’s China’s largest battery maker for electric vehicles and has years of experience supplying to local carmakers as well as more recently international players Volvo and Toyota.

“China is ‘a country on two wheels,” said Yang Lei, Hellobike’s co-founder and chief executive officer, adding that there are one billion trips that are completed on two-wheelers in China each day. For some context, the country has a population of about 1.4 billion.

Many people in China own electric scooters. Food delivery workers ride them to navigate through rush hour traffic. Grandparents send their grandchildren to school on sun and rain-proof e-bikes. The problem, Hellobike claims, is that private bikes and their batteries can get stolen and charging stations are hard to find. What’s more, most batteries for scooters on the market currently fail to meet international environmental standards.

The three-way joint venture hopes to solve these issues by putting up battery-swapping infrastructure across the country. Users will scan a bar code at one of the swapping stations, take out a fresh, charged battery to replace their drained one, and pay via Ant’s e-wallet, which claims to have one billion users so most people can access the service without downloading a new app.

India’s Jumbotail raises $12.7 million to digitize convenience stores with its wholesale marketplace

With most small grocery stores in India yet to get online, startups racing to digitize them continue to see promising backing from investors. Jumbotail, an online wholesale marketplace for grocery and food items, today said it has raised $12.7 million to scale its operations.

The Series B financing round for the Bangalore-based startup was led by Heron Rock, with participation from Capria Fund, BNK Ventures and William Jarvis and existing investors Nexus Venture Partners, and Kalaari Capital . The three-and-a-half-year old startup has raised about $24 million to date.

More than 10 million grocery stores, locally known as kiranas, bridge urban cities, towns and villages in India. They control over 95% of the $350 billion food and grocery market in the nation, according to some estimates.

Jumbotail operates a marketplace that connects tens of thousands of these kirana stores with brands and traders. It offers a whole suite of services including supply chain logistics, a mobile app for placing orders, integration with point-and-sales devices, and credit solutions to shop owners that can’t easily get loan from banks.

Ashish Jhina, cofounder and COO of Jumbotail, told TechCrunch in an interview that the startup will invest the fresh capital in developing AI solutions to improve its supply chain network, and make it easier for brands to get started on the marketplace.

Jumbotail, which is only operational in Bangalore area for now, offers its mobile app and support in four languages (English, Hindi, Malayalam, and Kannada), something that is crucially important for their business.

“Our fundamental principle is to serve our customers in languages they are comfortable in. Many of these people are not using other apps. They are using smartphones for the first time. This is also their first experience with e-commerce,” he said.

Jhina added that even as Bangalore area is the only place the startup operates in, Jumbotail is on track to clock $100 million in GMV there by year-end. The startup is exploring expansion in other cities and will make moves in that space soon enough, he said, without disclosing the geography.

The startup employs about 140 people and has an additional 400 staff that work in supply chain network. It’s a small team compared to the likes of Amazon India and Walmart -owned Flipkart that are increasingly working with small retailers in the country to grow their wholesale operations. And then there is Reliance Retail, which is expanding its footprint quickly, too.

But Jhina, an alumnus of Stanford, don’t necessarily seem them as a big threat. On the contrary, he believes that since much of the market remains untapped, any player with deep pockets is helping educate the masses about the potential of e-commerce in the nation. In some ways, Jumbotail also competes with the likes of BigBasket, Grofers, Udaan, and ShopX, all of which are comparatively heavily backed.

Luxembourg to get €100M investment from Chinese payments startup Pingpong

For financial services firms looking to enter Europe, Luxembourg has historically been a popular anchoring point for its political and economic stability as well as a favorable regulatory environment. Another bucketload of capital is coming to the country after Chinese fintech startup Pingpong announced to invest more than €100 million ($113 million) in Luxembourg in the coming years.

Founded in 2014, Pingpong has been celebrated by its home city Hangzhou — also Alibaba’s backyard — as a pioneer in the country’s booming cross-border ecommerce sector. Backed by one of China’s largest investment banks CICC, the startup collects payments for Chinese exporters selling through Amazon, Wish, Shopee, Newegg and some other 14 ecommerce platforms around the world, which means clearing local regulatory hurdles is key to its business.

Its European ambition does not stop with Luxembourg. Luo Yonglong, a partner at Pingpong, said at a Saturday event that within three years, the company’s accumulative investment on the continent will exceed 50 billion yuan (€6.39 billion or $7.21 billion).

Pingpong unveiled the proposed infusion at the weekend event centered around the Chinese government’s Belt and Road Initiative, of which Luxembourg is a member. The financial injection provides clues to the role that private businesses play to help China link up more countries to BRI. It also seems like a timely boost to the alliance between the two countries, arriving just three months after Luxembourg agreed to join China’s ambitious global infrastructure program, and at a time when China’s trade tensions with the U.S. run high.

Pingpong’s tie-up with Luxembourg dates further back to 2017 when it secured a payments license in the putative financial gateway of Europe, thus giving it access to facilitate payment transactions between Chinese merchants and consumers throughout the continent.

“We are actively following the country’s Belt and Road Initiative to empower Chinese businesses through innovation in the cross-border ecosystem,” said Luo in a statement. “This will help companies complete their digital transformation and be more competitive abroad.”

With the mammoth funding also comes continued collaboration between Luxembourg and Pingpong on various fronts, including Chinese exports to the European Union and Pingpong’s local payments and virtual banking projects. The company also said it will work to secure an institution license for virtual currency under the purview of the EU and will set out to put up a digital payments bank.

India’s largest video streaming service, owned by Disney, breaks Safari compatibility to fix security flaw

Hotstar, India’s largest video streaming service with more than 300 million users, disabled support for Apple’s Safari web browser on Friday to mitigate a security flaw that allowed unauthorized usage of its platform, two sources familiar with the matter told TechCrunch.

The incident comes at a time when the streaming service — operated by Star India, part of 20th Century Fox that Disney acquired — enjoys peak attention as millions of people watch the ongoing ICC World Cup cricket tournament on its platform.

As users began to complain about not being able to use Hotstar on Safari, the company’s official support account asserted that “technical limitations” on Apple’s part were the bottleneck. “These limitations have been from Safari; there is very little we can do on this,” the account tweeted Friday evening.

Sources at Hotstar told TechCrunch that this was not an accurate description of the event. Instead, company’s engineers had identified a security hole that was being exploited by unauthorized users to access Hotstar’s content, they said.

Hotstar intends to work on patching the flaw soon and then reinstate support for Safari, the sources said.

The security flaw can only be exploited through Safari’s desktop and mobile browsers. On its website, the company recommends users to try Chrome and Firefox, or its mobile apps, to access the service. Hotstar did not respond to requests for comment.

Hotstar, which rivals Netflix and Amazon Prime Video in India, maintains a strong lead in the local video streaming market (based on number of users and engagement). Last month, it claimed to set a new global record by drawing more than 18 million viewers to a live cricket match.

Fintech platform Synapse raises $33M to build ‘the AWS of banking’

Synapse, a San Francisco-based startup that operates a platform enabling banks and fintech companies to easily develop financial services, has closed a $33 million Series B to develop new products and go after international expansion.

The investment was led by Andreessen Horowitz with participation from existing backers Trinity Ventures and Core Innovation Capital . Synapse — which recently rebranded (slightly) from ‘SynapseFi’ — announced a $17 million Series A back in September 2018 so this deal takes it to $50 million raised to date.

The startup was founded in 2014 by Bryan Keltner and India-born CEO Sankaet Pathak, who came to the U.S. to study but grew frustrating at the difficulty of opening a bank account without U.S. social security history. Inspired by his struggles, Synapse, which operated under the radar prior to that Series A deal, is focused on democratizing financial services.

Its approach to doing that is a platform-based one that makes it easy for banks and other financial companies to work with developers. The current system for working with financial institutions is frankly a mess; it involves a myriad of different standards, interfaces, code bases and other compatibility issues that cause confusion and consume time. Through developer- and bank-facing APIs, Synapse aims to make it easier for companies to connect with banks, and, in turn, for banks to automate and extend their back-end operations.

Pathak previously told us the philosophy is a “Lego brick” approach to building services. Its modules and services include payment, deposit, lending, ID verification/KYC, card issuance and investment services.

“We want to make it super easy for developers to build and scale financial products and we want to do that across the spectrum of financial products,” he told TechCrunch in an interview this week.

Synapse CEO Sankaet Pathak

“We don’t think Bank Of America, Chase and Wells Fargo will be front and center” of new fintech, he added. “We want to make it really easy for internet companies to distribute financial services.”

The product development strategy is to add “pretty much anything that we think would be an accelerant to democratizing financial services for everyone,” he explained. “We want to make these tools and features available for developers.”

Interestingly, the company has a public product roadmap — the newest version is here.

The concept of an ‘operating system for banking’ is one that resonates with the kind of investment thesis associated with A16z, and Pathak said the firm was “number one” on his list of target VCs.

With more than half of that Series A round still in the bank, Pathak explained that the Series B is less about money and more around finding “a partner who can help us on the next phase, which is very focused on expansion.”

As part of the deal, Angela Strange A16z’s fintech and enterprise-focused general partner — has joined the startup’s board. Strange, whose portfolio includes Branch, described Synapse as “the AWS of banking” for its potential to let anyone build a fintech company, paralleling the way Amazon’s cloud services let anyone, anywhere develop and deploy a web service.

Having already found a product market fit in the U.S. — where its tech reaches nearly three million end users, with five million API requests daily — Synapse is looking overseas. The first focuses are Canada and Europe, which it plans to launch in before the end of the year with initial services including payments and deposits/debit card issuance. Subsequently, the plan is to add lending and investment products next year.

Members of the Synapse team

Further down the line, Pathak said he is eager to break into Asia and, potentially, markets in Latin America and Africa, although expansions aren’t likely until 2020 at the earliest. Once things pick up, though, the startup is aiming to enter two “key” markets per year alongside one “underserved” one.

“We’ve been preparing for [global expansion] for a while,” he said, pointing out that the startup has built key tech in-house, including computer vision capabilities.

“Our goal is to be in every country that’s not at war or under sanction from the U.S,” Pathak added.

At home, the company is looking to add a raft of new services for customers. That includes improvements and new features for card issuance, brokerage accounts, new areas for its loans product, more detailed KYC and identification and a chatbot platform.

Outside of product, the company is pushing to make its platform a self-service one to remove friction for developers who want to use Synapse services, and there are plans to launch a seed investment program that’ll help Synapse developer partners connect with investors. Interesting, the latter platform could see Synapse join investment rounds by offering credit for its services.

More generally on financial matters, the Synapse CEO said the company reached $12 million ARR last year. This year, he is aiming to double that number through growth that, he maintains, is sustainable.

“If we stop hiring, we could break even and be profitable in three to four months,” said Pathak. “I like to keep the burn like that… it stabilizes us as a company.”

Amazon, reeling from recent regulatory hurdles, pumps $404M into its India business

Following months-long intense regulatory setback in India, Amazon is moving back to spending big bucks to grow its business in the world’s second largest internet market.

Amazon has infused Rs 2,999 crores ($404 million) in its India business, according to a regulatory filing published this week. Amazon periodically deploys cash to its business in India, the most recent infusion being around $315 million from its international arm six months ago.

The big spendings in India is the latest signs of how crucial the country has become for Amazon, where it entered exactly six years ago and has spent more than $5.5 billion. The bet has largely worked for Amazon, which rivals Flipkart, that was snatched by Walmart for $16 billion last year.

The fight between the two companies for the tentpole position in India’s e-commerce market took a dark turn late last year, when the government announced new policies to mandate how these two companies source goods for their marketplaces. The local law prohibits Flipkart and Amazon to stock and sell their own inventories, so their wholesale units purchase goods in bulk and sell them to resellers.

To circumvent this, the two companies had bought stakes in a number of companies that sell a range of products on their platforms. The new law, which came into effect on February 1, closed that loophole. As a result, hundreds of thousands of products disappeared from both the shopping sites overnight, according to some estimates.

Barclays claimed in a report last year, seen by TechCrunch, that Amazon was quickly closing in on the lead that Flipkart has in the e-commerce space in India.

In its six years in India, Amazon has sprawled its tentacles in many businesses other than e-commerce, including payments that recently started offering flight tickets, cloud services, video and music streaming services, and in-house products that include a lineup of handsets that it worked closely to build and sell.

Even for a heavily-funded company like Amazon, India has emerged as a very competitive market in recent years. In addition to Flipkart getting the backing of global retail giant Walmart, startups such as BigBasket, Grofers, Swiggy, and Dunzo are quickly changing the way millions of Indians shop. And they have successfully courted major backers with deep pockets, too.

And then there is the ever lingering Reliance Industries, the biggest industrial house in India owned by Mukesh Ambani, the richest man in the country. Earlier this year, Ambani said that Reliance Retail, the largest retailer in India will join forces with Reliance Jio, a telecom operator that has disrupted the local market, to create an e-commerce platform.

Line teams up with Visa to boost its mobile payment service

Messaging app Line has partnered with Visa to bring traditional financial clout to its mobile payment service.

The deal will see Line Pay become compatible with Visa’s 54 million merchant partner locations worldwide, boosting the service outside of its native Japan, where it has been pitched heaviest so far and where Line claims 80 million users.

The tie-up will allow Line users to use the app’s payment system even where Line Pay isn’t accepted. That’s through a ‘virtual’ visa card that’ll show up in the chat app.

Beyond that, the two sides said they will explore “ways for merchants to interact with the Line Pay service” and its digital wallet. That’s pretty lukewarm, and it’s hard to imagine that it’ll make much of a dent outside of Japan. Line’s three other major markets, in terms of users, are in Asia: Thailand (44 million), Taiwan (21 million) and Indonesia (19 million.)

One intriguing element of the deal involves blockchain, which Line has jumped into with its own crypto token (Link) and a blockchain investment arm. Line said it’ll work with Visa around “new experiences based on blockchain” that could include international money transfers among other things.

Finally, as is often the case with Japanese tech deals, there’s also an Olympics focus — with Tokyo scheduled to host the summer games in 2020.

Mobile payments are one of the Japanese government’s big focuses ahead of the games — organizing its taxis through tech, is another — and, thus, Visa and Line said they plan to heavily promote their ‘cashless’ alliance ahead of 2020.

Line and Visa are far from the first to combine traditional and new payments. Paytm and Uber rival Ola in India have both launched cards in partnership with banks, while cross-border payment companies like TransferWise, Monzo and others have tie-ups with Visa and Mastercard to enable spending.

Pratilipi, a ‘YouTube for writers’ storytelling platform in India, raises $15 million

Pratilipi, an app that is uniting writers in India and encouraging others to try their hand at storytelling, has just raised $15 million to expand its network in the nation.

The Series B financing round was led by Qiming Venture Partners. Existing investors Nexus Venture Partners, Omidyar Network India, Shunwei Capital, Contrarian Vriddhi Fund, and WEH Ventures also participated in the round. The five-year-old startup has raised about $21 million to date.

Ranjeet Pratap Singh, CEO of Pratilipi, describes his platform as “YouTube for writers.” In an interview with TechCrunch, he said more than 100,000 writers are active on the platform and it has amassed over 5.2 million monthly active readers.

Pratilipi mostly focuses on text and audio storytelling in Indian languages, a niche space but one that also remains largely untapped. Singh said that the platform has managed to attract a very loyal reader base. An average reader spends about 53 minutes on the app, while web users spend about 15 minutes there.

As people from smaller cities and towns in India come online for the first time, there has been a huge surge in the demand for content in local languages in recent years. Ankush Sachdeva, CEO and cofounder of social networking platform ShareChat, said earlier this year that he was surprised to see how quickly ShareChat had built a community with tens of millions of users by just offering content in Indian languages.

Pratilipi currently serves no ads to its users, but writers on the platform also do not have a way to directly monetize their content. That’s part of what Singh intends to change with the fresh capital.

He said that Pratilipi will soon begin to purchase rights to some stories and help writers secure deals with movie and web series studios and publishing houses. A significant portion of the capital will go into engineering to improve stories recommendations that populate the platform.

“Pratilipi is well positioned to capture the next wave of internet users in India, who prefer to consume content in their own vernacular languages. The company has already built a strong community of readers and writers, and network effects provide strong barriers to entry,” said Helen Pei-Hua Wong, Partner at Qiming Venture Partners.

“In China, we have seen the fast growth of user-generated content platforms, some of which became the main source of entertainment for millions of internet users. We hope to share our experiences in China to help the company grow,” she added.

Pratilipi competes with YourQuote, which has raised about $1 million to date. YourQuote runs short stories on its app and organizes open mic events across various cities and towns for writers and poets. In many ways, it also competes with ShareChat, Helo, and Vmate, all of which have built social networks around text and media content.

This entrepreneur is donating unwanted bike-sharing cycles to underprivileged students in Myanmar

What is the world to do with the graveyards of dockless bicycles left over after China’s bike sharing startups retreated from global markets?

One man has come up with the best idea to date: donate them to students who need them.

Entrepreneur Mike Than Tun Win has bought 10,000 bikes from bike-sharing companies which he plans to provide to school children across Myanmar, many of who walk miles to school and, more broadly, lack transportation for their families.

“It’s a common sight to see lines and lines of students walking long distances from home to school in rural villages,” Than explained. “Some students can walk up to one hour from home to school and the families can hardly afford a simple form of transport like bicycle or motorcycle… a school bus is almost unheard of to the students in rural villages.”

To bridge the gap, Than — whose companies include tech entrepreneurship project 8bod.com and travel startup flymya.com — created a non-profit organization called LessWalk which is buying up the bikes and making them suitable for students.

That means fitting them with a second seat, switching the QR code-scan lock for a regular key lock and then shipping them to Myanmar. Many of the bikes have been bought from liquidators — who took control of oBike’s shuttered business in Singapore and inherited Ofo’s abandoned fleets — which makes their acquisition cheaper than regular bikes. But still, the fixes and shipping costs are estimated at around $35-$40 per bike.

FreeWalk is modifying bikes to make them suitable for underprivileged students who walk to school in Myanmar

Than described those prices as “a rare once in a lifetime opportunity” to make a positive impact, but there’s still a significant cost attached to the project.

Than told TechCrunch that the project is funded with around $400,000 in capital, half of which has come from donations and sponsors with Than himself providing the rest.

Suddenly, there was an opportunity to buy [these bikes] at fraction of price,” he said in an interview. “The benefit it can develop is well beyond that cost.”

Right now, Than said that he has received around 4,000 bikes, which are currently warehoused in Myanmar. Rather than sad, well-used or damaged cycles, LessWalk has bought itself unused, new-generation products that hadn’t been deployed to the streets. Once sitting in a warehouse awaiting a rollout with startups, the adapted bikes will be distributed to students this year.

LessWalk has around 4,000 former bike sharing cycles in its warehouse in Myanmar

But giving out thousands of bicycles is no easy feat given that Myanmar has a population of over 50 million people and more than nine million students.

Than said he’s currently in contact with government organizations and civic groups in Myanmar to identify potential beneficiaries. The primary focus is students aged 13-16 who walk 2km or more to school each day and part of families without transport. He envisages that bikes will be given out in batches every two weeks for two or three months with support from volunteer groups and the government, but a lot of the operational approach is still to be defined.

“I’m only halfway through the journey. The remaining 50 percent is making sure we have an impact,” Than told TechCrunch.

Volunteers from LessWalk move former Ofo bikes into storage ahead of their distribution to students in Myanmar

Further down the line, he is hopeful that he can inspire “global friends” to follow his lead and set up similar donation programs that will put the hundreds of thousands of abandoned bikes to work, instead of creating yet more urban trash. Already, Than said he is fielding interest from Vietnam, Thailand and Indonesia.

Donations aren’t the only sustainable future for fleets of former Mobike and Ofo bikes, in some cases the people who ran the services are taking control. Indeed, a number of Mobike executives got together to buy out the company’s European business from Meituan — the on-demand giant that owns Mobike — for $20 million. That deal is scheduled to close this month.

China grants first 5G licenses amid Huawei global setback

It’s official. After much anticipation, China named the first companies to receive 5G licenses for commercial use on Thursday.

The announcement from the Ministry of Industry and Information Technology, the country’s telecoms authority, came as Huawei, the Chinese company that captured nearly 30% of the world’s telecom gear revenues in 2018, faces mounting scrutiny in the west over potential security concerns.

The greenlight arrived months ahead of the long-expected due date for China’s 5G licenses, which was said to be late 2019. The acceleration clearly demonstrates Beijing’s ambition to race ahead in the global 5G industry where the United States and South Korea already had a head start in commercial deployment.

The MIIT approved three network operators — China Telecom, China Mobile, China Unicom — and cable network company China Broadcasting Network to run the next-gen cellular connectivity.

Other players in 5G, including network equipment makers, smartphone manufacturers, chip makers and apps creators, are also gearing up. Over the last few months, Samsung, Oppo, Xiaomi and Huawei have each announced plans to bring 5G into their handsets.

In the meantime, internet giant Tencent has been quietly testing cloud-based games with Intel, and Netflix-like iQiyi has joined hands with China Unicom to make virtual reality products, representing just two of the many applications that rely on 5G-enabled low latency and higher bandwidth to work.