Travel activities startup KKday lands investment from Alibaba and Line

Taiwan’s KKday, a startup in the increasingly competitive travel activities space, has pulled in an undisclosed funding round that adds two strategic investors to its business: Chinese e-commerce firm Alibaba and Japanese chat app company Line.

KKday was founded in 2015 to help people who travel overseas to find and book activities, ranging from tours to tourist attraction, transportation, museums and more. The company said it offers over 20,000 “unique experiences” in over 500 cities across 80 countries. There is much potential to move into, it seems, with analyst firm Phocuswright predicting that the travel tour and activities market will grow by one-third to reach $183 billion by 2020.

Unlike Hong Kong-based regional rival Klook, which is valued at over $1 billion and has ventured into Europe and the U.S, KKday is focused on Asian markets only.

We last wrote about the startup in January when it raised a $10.5 million round led by Japanese travel operator H.I.S, and this new Series B funding round is led by Alibaba’s Taiwan-based entrepreneur fund and Line Ventures, the VC arm connected to Japan’s leading chat app.

KKday CEO Ming Chen told TechCrunch in an interview that the two will help KKday with its efforts in China and Japan. Alibaba initially made an investment in July, this new deal represents a follow-up and it’ll see more emphasis placed on KKday’s branded store on Alibaba’s Fliggy travel store in China. Interestingly, Alibaba’s fund has also invested in another Taiwan-based activities service, FunNow.

Similarly, KKday will double down on Japan, where Chen said the company has seen “huge growth” thanks in a large part to its relationship with H.I.S. — a 38-year-old firm which has offices in 150 cities and $5.5 billion in annual sales. Chen, who thinks KKday may be Japan’s largest travel activities booking platform already, said Line will introduce a dedicated ‘Travel’ account that ties into the KKday service to allow Line users to book activities and share details with friends without leaving the messaging app.

Chen and KKday CMO Yuki Huang explained that the company is always open to strategic investments where it believes it can find business value.

“We’re very focused on looking for strategic investors not just money,” Huang said.

Others in the round announced today include existing investors CDIB Capital from Hong Kong and Monk’s Hill Ventures in Southeast Asia. That, added to Alibaba in China/Taiwan and H.I.S and Line in Japan, gives KKday a balanced investor base to help its business in those regions, Huang added.

KKday’s main rival is Klook and a Taiwanese competitor is FunDay, but a plethora of companies have sprouted to offer similar services in other parts of the world. Those include Peek in the U.SCulture TripGetYourGuideHeadout and WithLocals. Still, KKday is sticking to its Asia focus for now, according to Chen and Huang.

Tencent is launching its own version of Snap Spectacles

Some were surprised to see Snap release a second version of its ‘face-camera’ Spectacles gadget, since the original version failed to convert hype into sales.

But those lackluster sales — which dropped as low as 42,000 per quarter — didn’t only fail to dissuade the U.S. social firm from making more specs, because now Tencent, the Chinese internet giant and Snap investor, has launched its own take on the genre.

Tencent this week unveiled its answer to the video-recording sunglasses, which, you’ll notice, bear a striking resemblance to Snap’s Spectacles.

Called the Weishi smart glasses, Tencent’s wearable camera sports a lens in the front corner that allows users to film from a first-person perspective. Thankfully, the Chinese gaming and social giant has not made the mistake of Snap’s first-generation Spectacles, which highlighted the camera with a conspicuous yellow ring.

Tencent, which is best known for operating China’s massively popular WeChat messenger, has been an investor in Snap for some time after backing it long before it went public. But, when others have criticized the company and its share price struggled, Tencent doubled down. It snapped up an additional 12 percent stake one year ago and it is said to have offered counsel to Snap CEO Evan Spiegel on product strategy. We don’t know, however, if the two sides’ discussions have ever covered Spectacles and thus inspired this new Tencent take on then.

The purpose behind Tencent’s new gadget is implicit in its name. Weishi, which means “micro videos” in Chinese, is also the name of the short-video sharing app that Tencent has been aggressively promoting in recent months to catch up with market dominators TikTok and Kuaishou .

TikTok, known as Douyin in China, is part of the entertainment ecosystem that Beijing-based ByteDance is building. ByteDance also runs the popular Chinese news aggregator Toutiao and is poised to overtake Uber as the world’s most-valued tech startup when it closes its mega $3 billion funding round.

Weishi’s other potential rival Kuaishou is, interestingly, backed by Tencent. Kuaishou launched its own video-taking sunglasses in July.

Alongside the smart sunglasses, Tencent has also rolled out a Go Pro-like action camera that links to the Weishi app. Time will tell whether the gadgets will catch on and get more people to post on Weishi.

Snap Spectacles V1 (top) and V2

The spectacles will go on sale November 11, a date that coincides with Singles Day, the annual shopping spree that Tencent’s close rival Alibaba runs. Tencent does not make the gadget itself and instead has teamed up with Shenzhen-based Tonot, a manufacturer that claims to make “trendy” video-taking glasses. Tonot has also worked with Japan’s Line chat app on camera glasses.

“There isn’t really a demand for video-recording glasses,” says Mi Zou, a Beijing-based entrepreneur working on an AI selfie app. That’s because smart glasses are “not offering that much more to consumers than smartphones do,” she argues. Plus, a lot of people on apps like Douyin and Kuaishou love to take selfies, a need that smart glasses fail to fulfil.

“Tencent will have to work on its marketing. It could perhaps learn a few things from the Apple Watch, which successfully touts a geeky product as a fashionable accessory,” suggests Mi, who points out Snap Spectacles’ so-far dim reception.

Weishi had not responded to TechCrunch’s request for comment at the time of writing, but we’ll update this story with an additional information should the company provide it.

Hong Kong says it may regulate crypto exchanges

Hong Kong may become the next country to regulate crypto exchanges after its securities regulator announced that it is exploring ways to apply quality control and protect consumers from the volatility and uncertainties of digital currencies.

The Securities and Futures Commission (SFC) said it is “setting out a conceptual framework” that could be used to regulate crypto exchanges since they currently operate outside of current regulation, which is focused on traditional investment.

“Some of the world’s largest virtual asset trading platforms have been seen operating in Hong Kong but they fall outside the regulatory remit of the SFC and any other regulators. Owing to the serious investor protection issues identified and having regard to international developments, the SFC considers it necessary to explore in earnest whether and if so, how it could regulate virtual asset trading platforms under its existing powers,” the SFC wrote.

The commission has said it intends to work with the industry itself to define what regulation should look like.

The SFC did hedge its move, however, by saying that there is no guarantee that it will introduce licenses at the end of its research period. In particular, it voiced concern as to whether exchanges “would satisfy the expected anti-money laundering standards, given that anonymity is the core feature of blockchain.”

There’s also no immediate sign that Hong Kong will be requiring exchanges to be licensed.

“Those exchanges that want to be regulated by us will be set apart from those that don’t,” SFC CEO Ashley Alder told a conference according to a report from Reuters.

Japan is best known in crypto circles for its introduction of exchange licensing. Some in the industry have criticized the Japanese regulations as being too tight. Those voices include Binance, the world’s largest trading of cryptocurrencies, which abandoned plans to seek regulation in Japan because it placed limits on which tokens can be offered to users, its CEO Changpeng Zhao previously told TechCrunch.

Note: The author owns a small amount of cryptocurrency. Enough to gain an understanding, not enough to change a life.

Chat app Line’s games business raises $110M for growth opportunities

Messaging app firm Line has given up majority control of its Line Games business after it raised outside financing to expand its collection of titles and go after global opportunities.

The Line Games business was formed earlier this year when Line merged its existing gaming division from NextFloor, the Korea-based game publisher that it acquired in 2017. Now the business has taken on capital from Anchor Equity Partners, which has provided 125 billion KRW ($110 million) in financing via its Lungo Entertainment entity, according to a disclosure from Line.

A Line spokesperson clarified that the deal will see Anchor acquire 144,743 newly-created shares to take a 27.55 percent stake in Line Games. That increase means Line Corp’s own shareholding is diluted from 57.6 percent to a minority 41.73 percent stake.

Korea-based Anchor is best known for a number of deals in its homeland including investments in e-commerce giant Ticket Monster, Korean chat giant Kakao’s Podotree content business and fashion retail group E-Land.

Line operates its eponymous chat app which is the most popular messaging platform in Japan, Thailand and Taiwan, and also significantly used in Indonesia, but gaming is a major source of income. This year to date, Line has made 28.5 billion JPY ($250 million) from its content division, which is primarily virtual goods and in-app purchases from its social games. That division accounts for 19 percent of Line’s total revenue, and it is a figure that is only better by its advertising unit, which has grossed 79.3 billion JPY, or $700 million, in 2018 to date.

The games business is currently focused on Japan, Korea, Thailand and Taiwan, but it said that the new capital will go towards finding new IP for future titles and identifying games with global potential. It is also open to more strategic deals to broaden its focus.

While Line has always been big on games, Line Games isn’t just building for its own service. The company said earlier this year that it plans to focus on non-mobile platforms, which will include the Nintendo Switch among others consoles.

That comes from the addition of NextFloor, which is best known for titles like Dragon Flight and Destiny Child. Dragon Flight has racked up 14 million users since its 2012 launch, at its peak it saw $1 million in daily revenue. Destiny Child, a newer release in 2016, topped the charts in Korea and has been popular in Japan, North America and beyond.

Line went public in 2016 via a dual U.S.-Japan IPO that raised over $1 billion.

Note: the original version of this article was updated to clarify that Lungo Entertainment is buying newly-issued shares.

AnyMind, which uses AI for advertising, marketing and HR, raises $13.4M

AnyMind Group, a Singapore-based company that uses AI in online advertising, HR and marketing, has pulled in a strategic $13.4 million investment to go after growth in Japan and other Asian markets.

This Series B round was led by Line, the Japanese messaging app firm, and Mirai Creation Fund, which is backed by Toyota among others. Previous backers JAFCO and Dream Incubator also took part.

AnyMind Group is a holding group formed this year to manage its initial venture AdAsia — which uses AI to offer ad solutions to publishers and advertisers — and its newer businesses TalentMind (HR) and CastingAsia, influencer marketing. AdAsia previously raised $12 million last year before it added a strategic investment from Japanese news app Gunosy three months later.

The business was founded in April 2016 by Japanese duo CEO Kosuke Sogo, the former managing director of Japan’s MicroAd in APAC, and COO Otohiko Kozutsumi, who had been with MicroAd Vietnam — and both men are ambitious with their plans to grow.

Indeed, despite being less than three years old, AnyMind says it has been profitable since early 2017. It said total revenue for 2017 was $26 million, up from $12.9 million one year previous.

Today, the company has 12 offices — including a product development center in Vietnam — and its services are present in 11 markets across Asia. It has some 330 staff, up from 90 just 18 months ago.

AnyMind founders Kosuke Sogo (left) and Otohiko Koztusumi (right)

While it doesn’t appear to need the money, AnyMind said it is keen on the connections that this investment can bring. That will include working with Line — which is Japan’s largest messaging app and popular across Southeast Asia — on digital advertising opportunities, and tapping into the Mirai fund’s portfolio companies to offer advertising and marketing programs.

“We have experienced great growth in the past 2.5 years, and are now looking to enter our next phase of progress — expanding market share in the geographies and industries we’re in. As we’ve been operating at a profit since January 2017, our focus for this round was to select investors that could take us to that next level,” Sogo, AnyMind’s CEO, said in a statement.

Saudi Arabia’s sovereign fund will also invest $45B in SoftBank’s second Vision Fund

The sovereign fund of Saudi Arabia plans to invest $45 billion into the second SoftBank Vision Fund, two years after putting the same amount into the original $100 billion Vision Fund, Saudi Arabia Crown Price Mohammed bin Salman told Bloomberg in an interview on Friday.

When the first Vision Fund was announced, it was by far the biggest private equity fund ever created, but if SoftBank Group CEO Masayoshi Son’s plans come to fruition, it will not be the last. Son told Bloomberg Businessweek last month that he wants to raise a new $100 billion fund every two or three years.

Saudi Arabia’s Public Investment Fund is anticipating a fresh influx of $170 billion over the next three to four years after selling its stake in Saudi Basic Industries, as well as the upcoming IPO of state-owned Saudi Aramco, said Prince Mohammed, who is also the PIF’s chairman. The PIF, which has also made investments in Uber, Tesla and Lucid, has enjoyed a “huge benefit” from the first Vision Fund, he told Bloomberg.

“We would not put, as PIF, another $45 billion if we didn’t see huge income in the first year with the first $45 billion,” Bin Salman said. He added that its investment in the first Vision Fund will help PIF achieve its new target of $600 billion in assets by 2020, up from the almost $400 billion it currently holds.

SoftBank Group has been contacted for comment.

SoftBank Group and Saudi Arabia’s other partnerships include a deal to build the world’s biggest solar plant for $200 billion. The PIF said earlier this month the plant is still going ahead despite a Wall Street Journal report that it had been shelved.

First DJI, now Bang & Olufsen gets Line Friends-themed products

Line is a pretty busy company. Beyond a messaging app that claims over 160 million users, the company operates service like music streaming, manga, food delivery, games and it is also venturing into crypto.

The company has long been known for its playful characters — Line Friends — which are a core part of its sticker sets, but now the zany cartoons are making their way to real-life products. Line has its own Echo-style smart speaker, and off the back of its Brown Bear-themed DJI drone, it is announcing a Line Friends Bang & Olufsen speaker.

Like the DJI Spark drone, the Bang & Olufsen speaker takes a well-known and popular product and appends Line’s cartoon characters in the name of sales through cuteness.

The speaker — ‘Beoplay B2 Brown Limited Edition’ — will go on sale from October 4 in Korea, U.S, Japan, China, Taiwan and Hong Kong via Line’s online store and its offline retail outlets. Pricing, it seems, is TBC.

The product may seem frivolous but it plays into a major strategy from Line, which has seen user growth of its core messaging app stagnate over the past 18 months. Line’s Friends characters have long helped it make sales — its sticker packs make over $250 million per year — so it makes sense to monetize them beyond digital sales and into physical products, which includes tie-ins with major consumer brands.

That’s a big part of Line’s success. While growth has topped out, Line is adept at finding new ways to make money from the users it already has. Revenue in its recent Q2 2018 was up 20 percent year-on-year despite monthly active user count falling by five million to reach 164 million in the quarter.

Chat app Line to raise $1.33BN via convertible bonds to double down on financial services

Move over stickers and games: Japanese messaging app firm Line has announced it’s raising around 148.1 billion yen ($1.33BN) through convertible bonds to fund aggressive expansion into the financial services business, Reuters reports. 

Line said it plans to spend most of the money on promoting its Line Pay service and for other new financial services by the end of 2021.

The messaging platform has been involved in payment offerings for some years, launching Line Pay at the end of 2014 — to let users make payments through the app at affiliated online and offline stores by registering their credit cards.

Line Pay also supports p2p payments between users of the platform, which has some 164M monthly active users in Japan, Taiwan, Thailand and Indonesia.

While popular in parts of Asia, the messaging platform has failed to grow usage beyond its core regions — unsurprisingly given how fiercely competitive the space is — with the likes of China’s WeChat and Facebook owned WhatsApp standing in its way. But while user growth has stalled, Line has managed to grow revenue from its existing user base. And doubling down on financial services looks to be its growth strategy going forward.

It has recently started experimenting with crypto — announcing the forthcoming launch of a cryptocurrency token (called Link) late last month, and developing its own blockchain to power it, in what looks to be a bid to drive user engagement on its platform. Though it has long used a digital currency (Line Coins) on its platform.

Earlier this year Line also announced the launch of a Singapore-based crypto exchange, called BitBox.

It’s not doing an Initial Coin Offering (ICO) for the Link token launch, presumably to side-step the legal questions around token sales. So the convertible bond sale looks to be its alternative (traditional) route for raise funds for the push to grow its financial services business.

In a statement today Line said it would issue zero coupon convertible bonds maturing in 2023 and 2025.

Reuters reports that a portion of the bonds will be issued to its South Korea-based parent Naver Corp to maintain its ownership above a certain level.

It added that Naver’s stake would fall to 70.42 percent from the current 72.86 percent when all the bonds are converted into stock.

Chat app Line hopes its own crypto token can solve its user growth problem

Line, the Japanese messaging app firm that’s best known for its cutesy characters and stickers, is pushing deeper into crypto after it launched its own token to help grow its stagnant user base.

Line went public two years ago with 218 million monthly active users, but it hasn’t been able to kick on. The company no longer gives out its worldwide user number, but the number of active users in its four biggest markets has fallen from 169 million in Q2 2017 to 164 million in its recent Q2 2018 period.

Link — Line’s token — isn’t being minted through an ICO, instead, it’ll be given out to Line users as an incentive for using certain services. Line hasn’t said exactly how it can be earned yet, although it is likely that it’ll be tied to specific activities to promote engagement.

Line plans to use Link to incentive user activity on its messaging app and other services

The token will be listed on Bitbox — Line’s crypto exchange — and it’ll be used it to buy content like stickers and webcomics, as well as other Line services. It’ll also be possible to use Link to get a lower commission rate on trading in the same way that Binance, the world’s largest exchange, uses its BNB token.

Line currently has a virtual currency for its in-app content and services, and you’d imagine that Link will replace it in the future.

It’s worth noting, however, that Link hasn’t launched in Japan yet. That’s because Line is awaiting regulatory approval for its token and exchange, so, for now, those in Japan — which is Line’s largest market — will earn virtual tokens which can be traded for Link in the future.

Line is struggling to grow its user numbers

Link will launch next month, and it follows the announcement of BitBox in July and the launch of a dedicated crypto fund in early August.

Line has dodged the legal questions around token sales by not holding an ICO, and the fact it is using the currency to incentivize user engagement and activity isn’t a huge surprise. Line went public in a dual U.S-Japan IPO that raised over $1 billion in 2016 but, despite user numbers declining, it has grown its revenue through additional services.

Increased competition from the likes of Facebook Messenger and WhatsApp is likely its biggest threat, so incentivizing users is a logical strategy. Of course, that depends on how useful Link becomes. If users can exchange it for a decent amount of cash or credits inside Line’s platform it may gain appeal, but if they just pick up trivial amounts, it may be less interesting to them. The bigger picture will be when Link replaces Line’s virtual currency for all purchases but that alone isn’t likely to boost user engagement.

Despite declining user numbers, Line has grown revenue by pushing out services that connect to its messaging platform.

Line also plans to use Link — and the blockchain it has developed to power it — to host decentralized applications (dapps) that will connect to its messaging platform. The company already does a lot more than messaging — for example payments, ride-hailing, music and videos — and it plans to tap third-party developers to build dapps. Generally, though, dapps haven’t taken off. The collectibles game Cryptokitties did blow up late last year, but studies have suggested user activity is massively down this year as the fad has slowly worn off.

Crypto enthusiasts will no doubt take positives from Line’s latest move — it is arguably the largest company to embrace crypto, in terms of end-user audience reach — but it remains to be seen whether Link and its dapps platform can help it crack its user growth and retention issues.

“Over the last seven years, Line was able to grow into a global service because of our users, and now with Link, we wanted to build a user-friendly reward system that gives back to our users. With Link, we would like to continue developing as a user participation-based platform, one that rewards and shares added value through the introduction of easy-to-use dapps for people’s daily lives,” said Line CEO Takeshi Idezawa in a statement.

Unlike Bitcoin, which is mined, Line has minted a total of one billion Link tokens which it said will be “gradually issued according to how this ecosystem develops.” The company plans to keep 200 million tokens, with the remaining 800 million made available as user rewards.

Note: The author owns a small amount of cryptocurrency. Enough to gain an understanding, not enough to change a life.

Japanese fintech startup Paidy lands strategic investment from Visa

A month after announcing its $55 million Series C, Japanese fintech startup Paidy has snagged a strategic investment from payment giant Visa.

Paidy didn’t disclose how much Visa put into its business, which has raised over $80 million to date, but it did say that it will work with the credit card giant to develop “new digital payment experiences” in Japan.

For those in need of a refresher, the Paidy service is aimed at making it easier to shop online in Japan, where credit card penetration is high but many consumers still opt for cash on delivery.

The startup asserts that cash accounts for some 40 percent of the country’s 16.5 trillion yen ($15 billion) annual e-commerce spend because credit card payments are cumbersome and cash is just more simple. It’s certainly true that whipping out your card and keying in digits is a pain, while Japanese systems layer on other security checks that make the process more tedious.

Paidy’s answer is an account tied to a customer’s phone number or email address that sits as a payment option at e-commerce checkouts. Payment itself requires entry of a confirmation code, and that’s it. Added to the simplicity, Paidy also offers various payback options to effectively give users the features of a credit card.

The company claims there are 1.5 million active Paidy accounts and it is aiming to grow that figure to 11 million by 2020. The main rocket for reaching that ambitious target is onboarding large retailers who integrate the service into their online sales process. That’s a tactic that has worked well for Paidy so far, but it’s also clearly an area where Visa’s network can be massively beneficial, especially if they are joint products on offer.

With Paidy operating like a virtual credit card system that rivals plastic cards, Visa has seen enough to warrant coming on board the project, according to Chris Clark, Visa’s Asia Pacific regional president.

“We have been following Paidy’s progress and the enhanced shopping experience they provide at the time of purchase. In Japan there is enormous opportunity to bring consumers more options to pay, whether all at once or in instalments, especially when shopping across multiple channels,” Clark said in a statement.

Paidy counts Itochu Corporation, Goldman Sachs, Eight Roads — the investment arm of Fidelity — SBI Holdings, SBI’s FinTech Business Innovation LPS, Arbor Ventures and SIG Asia as existing investors.