Chinese internet giant Tencent suffers a rare profit drop

Tencent, Asia’s most valuable tech firm, delivered a surprise drop in profit on account of lower investment gains. The firm recorded strong growth with revenue up 30 percent year-on-year to reach 73.7 billion RMB ($10.7 billion) in Q2 2018. But net profit slipped by two percent annually to reach 17.9 billion RMB, or around $2.6 billion. […]

Tencent, Asia’s most valuable tech firm, delivered a surprise drop in profit on account of lower investment gains.

The firm recorded strong growth with revenue up 30 percent year-on-year to reach 73.7 billion RMB ($10.7 billion) in Q2 2018. But net profit slipped by two percent annually to reach 17.9 billion RMB, or around $2.6 billion.

That breaks a growth streak that stretches back more than a decade and, more crucially, it comes at a time of relative crisis for Tencent. The company became Asia’s first $500 billion tech business last November, but it has endured a torrid 2018 with its share price slipping more than 25 percent since a January highcontroversy around a banned game knocked it down further this week.

Gaming has always been Tencent’s strongest point — it helped the firm log a 60 percent profit jump in the previous quarter — but there are concerns.

Sources told Bloomberg that there has been a freeze in awarding game licenses in China as part of changing within the agency that approves them. That’s impacted mobile, PC and console and it has particularly rattled Tencent, which is one of the major players.

Not only did China clamp down on popular title Monster Hunt, but Tencent’s financial results show some slowing. Its PC gaming business recorded a five percent yearly drop to 12.9 billion RMB. The smartphone games business — which includes smash hits PUBG and Fortnite — posted 19 percent year-on-year growth to hit sales of 17.6 billion RMB, but that was done 19 percent on that previous blockbuster quarter.

“In China, DAU for our smartphone games grew at a double-digit rate year-on-year, but monetization per user declined as users shifted time to non-monetised tactical tournament games,” Tencent said in a filing.

The company has vowed to “reinvigorate” the mobile games until through a mix of more monetizing, deeper engagement and widening its selection on the market. The firm also said it will push its successful China games overseas, presumably into other parts of Asia where Tencent has seen traction and revenue before.

Those strategies will take some time to generate results, but for now the company said it is happy with user engagement, and particularly the daily gamer numbers.

That hasn’t impressed investors, who sent the stock price lower following the announcement of these financials.

Uber is on a hiring spree in Singapore despite ‘exiting’ Southeast Asia

Uber agreed to sell its Southeast Asia business in March, but it isn’t leaving the region. In fact, the U.S. firm is doubling down with plans to more than double its staff in Singapore. That’s right. Uber is currently in the midst of a major recruitment drive that will see Singapore, the first city it […]

Uber agreed to sell its Southeast Asia business in March, but it isn’t leaving the region. In fact, the U.S. firm is doubling down with plans to more than double its staff in Singapore.

That’s right. Uber is currently in the midst of a major recruitment drive that will see Singapore, the first city it expanded to in Asia, remain its headquarters for the Asia Pacific region despite its local exit. Unfortunately for customers who miss having a strong alternative to Grab, Uber won’t be bringing its ride-hailing app back in Singapore or anywhere else in Southeast Asia.

Uber’s own job portal lists 19 open roles for Singapore, but the company has contacted headhunting and recruitment firms to help fill as many as 75 vacancies, three sources with knowledge of Uber’s hiring plans told TechCrunch.

The new hires will take Uber’s headcount in Singapore to well over 100 employees, the sources claimed.

Ironically, of course, Uber let most of its staff in Southeast Asia leave when it stopped serving customers across its eight markets in Southeast Asia in April — although it was forced to extend into May in Singapore. As part of its exit deal, Grab got first dibs on 500 or so Uber Southeast Asia staff but that strategy didn’t pan out as planned, as TechCrunch previously reported. Indeed, a recent report suggested that fewer than 10 percent of ‘Uberites’ moved over to become ‘Grabbers’.

And yet, here we are, Uber is aggressively hiring in Singapore — but why?

The original plan following the Grab deal was for Uber to relocate its regional headquarters to either Japan or Hong Kong, two sources told TechCrunch, but in recent months that strategy has shifted. Just weeks ago, the remaining Singapore Uber collective — which consists of managers and executives — secured budget to staff up and find a larger office in the name of creating a support team for its remaining Asia Pacific markets.

The plan is for the Singapore-based employees to provide services such as HR, accounting, admin, marketing and PR across Uber APAC, which includes Hong Kong, Taiwan, Japan, Korea, Australia and India — although the latter has more sovereignty with its own president who reports into the U.S..

An Uber spokesperson acknowledged that the company is in the process of hiring in Singapore, but declined to provide further details.

Sources with knowledge of discussions inside the company told TechCrunch that the decision to stay in Singapore is down to a number of reasons.

Hong Kong, which had been a frontrunner to become Uber’s new APAC HQ, was ruled out because Uber’s legal status in the country is unclear — a number of drivers have been prosecuted — while Japan and Australia were deemed to be too remote to be regional hubs. That left Singapore, as an established city for business with an existing Uber staff, as the remaining option.

Sources also told TechCrunch, however, that a degree of self-service was involved. Those executives and managers who managed to remove themselves from the “shame” of being shipped to Grab dug their heels in to avoid relocating their lives and families elsewhere, two sources claimed.

Talking to TechCrunch, some former Uber staff questioned whether the remaining Asian markets require remote services from Singapore, which is one of the world’s most expensive cities. Together the countries are hardly huge revenue generators for Uber and could be handled locally or other global cities. There’s certainly an argument that the continued investment in Singapore is at odds with the widely-held theory that Uber left Southeast Asia, a money-losing market, to clean up its balance sheet ahead of a much-anticipated IPO next year.

One former Uber employee who did transition to Grab noticed that the U.S. firm is now hiring for their previous role. That situation is made worse by a ban that prevented Uber’s Southeast Asia employees from applying to transfer to other parts of the firm’s global business. That’s despite many being allowed to do so in the case of previous Uber exit deals in China and Russia.

The result is that Uber is hiring in Singapore, a market where it no longer offers its service and gave up most of its staff to its rival. Anything can happen in the ride-sharing space!

Y Combinator is launching a startup program in China

U.S. accelerator Y Combinator is expanding to China after it announced the hiring of former Microsoft and Baidu executive Qi Lu who will develop a standalone startup program that runs on Chinese soil. Shanghai-born Lu spent 11 years with Yahoo and eight years with Microsoft before a short spell with Baidu, where he was COO and […]

U.S. accelerator Y Combinator is expanding to China after it announced the hiring of former Microsoft and Baidu executive Qi Lu who will develop a standalone startup program that runs on Chinese soil.

Shanghai-born Lu spent 11 years with Yahoo and eight years with Microsoft before a short spell with Baidu, where he was COO and head of the firm’s AI research division. Now he becomes founding CEO of YC China while he’s also stepping into the role of Head of YC Research. YC will also expand its research team with an office in Seattle, where Lu has plenty of links.

There’s no immediate timeframe for when YC will launch its China program, which represents its first global expansion, but YC President Sam Altman told TechCrunch in an interview that the program will be based in Beijing once it is up and running. Altman said Lu will use his network and YC’s growing presence in China — it ran its first ‘Startup School’ event in Beijing earlier this year — to recruit prospects who will be put into the upcoming winter program in the U.S..

Following that, YC will work to launch the China-based program as soon as possible. It appears that the details are still being sketched out, although Altman did confirm it will run independently but may lean on local partners for help. The YC President he envisages batch programming in the U.S. and China overlapping to a point with visitors, shared mentors and potentially other interaction between the two.

China’s startup scene has grown massively in recent years, numerous reports peg it close to that of the U.S., so it makes sense that YC, as an ‘ecosystem builder,’ wants to in. But Altman believes that the benefits extend beyond YC and will strengthen its network of founders, which spans more than 1,700 startups.

“The number one asset YC has is a very special founder community,” he told TechCrunch. “The opportunity to include a lot more Chinese founders seems super valuable to everyone. Over the next decade, a significant portion of the tech companies started will be from the U.S. or China [so operating a] network across both is a huge deal.”

Altman said he’s also banking on Lu being the man to make YC China happen. He revealed that he’s spent a decade trying to hire Lu, who he described as “one of the most impressive technologists I know.”

Y Combinator President Sam Altman has often spoken of his desire to get into the Chinese market

Entering China as a foreign entity is never easy, and in the venture world it is particularly tricky because China already has an advanced ecosystem of firms with their own networks for founders, particularly in the early-stage space. But Altman is confident that YC’s global reach and roster of founders and mentors appeals to startups in China.

YC has been working to add Chinese startups to its U.S.-based programs for some time. Altman has long been keen on an expansion to China, as he discussed at our Disrupt event last year, and partner Eric Migicovsky — who co-founder Pebble — has been busy developing networks and arranging events like the Beijing one to raise its profile.

That’s seen some progress with more teams from China — and other parts of the world — taking part in YC batches, which have never been more diverse. But YC is still missing out on global talent.

According to its own data, fewer than 10 Chinese companies have passed through its corridors but that list looks like it is missing some names so the number may be higher. Clearly, though, admission are skewed towards the U.S. — the question is whether Qi Lu and creation of YC China can significantly alter that.

Chinese Tesla rival Nio files to raise $1.8 billion in US IPO

Tesla may be looking to go private, but Chinese rival Nio is going the other way after it filed to raise $1.8 billion in an IPO on the New York Stock Exchange. Nio was started in 2014, initially as NextCar, by Bin Li, an entrepreneur who founded online automotive services platform Bitauto. The company is backed by Chinese […]

Tesla may be looking to go private, but Chinese rival Nio is going the other way after it filed to raise $1.8 billion in an IPO on the New York Stock Exchange.

Nio was started in 2014, initially as NextCar, by Bin Li, an entrepreneur who founded online automotive services platform Bitauto. The company is backed by Chinese internet giants Baidu and Tencent among others, and it has developed two vehicles so far: the EP9 supercar and ES8.

The former is really a concept/racer car — it broke the electric vehicle speed record last year — but the ES8, pictured above, is a car designed for the masses which is priced at 448,000 RMB, or around $65,000.

Nio opened sales for the ES8 last year but it only began shipping in June. Thus, to date, it has fulfilled just 481 orders, although it claims that there are 17,000 customers who put down reservations waiting in the wings.

That means that, essentially, it is pre-revenue at this point.

The company reported revenue of $6.9 million as of the end of June — so one month of deliveries — with a total loss of $502 million for 2018 to date. Last year, Nio lost $759 million in 2017, that included no revenue and nearly $400 million spent on R&D.

Nio may be in the same space as Tesla, but its approach differs from the U.S. firm. The company operates ‘clubhouses’ where it sells to new customers and allows existing owners to come to spend time, while it also goes direct to consumer with mobile-based sales. (Not, unlike, say an early Xiaomi model.)

Nio’s pricing is more focused on mid-market and, without a charger network like Tesla (most Chinese households would struggle to charge at home), it has developed its own unique way to handle battery charging. Its vehicles support battery swapping at dedicated stations while it operates a range of roaming charging trucks can  reach users who are low on juice.

Those on-demand charging services come as part of a subscription-based package which will add further revenue beyond car sales. Further down the line, the company said its vehicles will be compatible with the national EV charging network China is developing so that’ll help on the charging front, too.

Like China’s infrastructure play, Nio itself is very much a work in progress.

Indeed, case in point, it doesn’t yet operate its own factory.

Right now, state-owned JAC Motors handles product but Nio has pledged to invest $650 million to construct its own manufacturing plant in Shanghai. Nio’s current order backlog will take six to nine months to process, according to the filing, but its own factory could mean orders are dispatched to customers within 28 days of purchase.

The interior of the NIO ES8

The company’s focus is China, but Nio has global roots. Shanghai is its headquarters and home to nearly 2,500 staff, but it also has teams in Munich (design), San Jose (software and self-driving) and London and Oxford in the UK, which handle vehicle concepts.

Its executive team is predominantly Chinese but one familiar name is Padmasree Warrior who is the head of Nio’s U.S. business. The former Motorola CTO joined the company in 2015 after calling time on Cisco, where she spent seven years and had been chief technology and strategy officer.

Despite an international setup, there’s no word in the filing on whether Nio has a timeframe for selling vehicles outside of China. For now, the company cites analyst data claiming that “China is a clear leader in the global EV market” with sales growing from 21,800 in 2013 to 740,900 units last year. That’s despite the Chinese government cutting back on some of its generous subsidies aimed at encouraging early ownership of EVs and eco-friendly hybrid cars.

Singapore’s Openspace Ventures closes new $135M fund for Southeast Asia

It seems like everyone is out there raising new funds in Southeast Asia. Weeks after we reported Golden Gate Ventures hit a first close on its third fund aimed at $100 million, so Openspace Ventures — the Singapore-based firm formerly known as NSI — has announced a final close of $135 million for its second […]

It seems like everyone is out there raising new funds in Southeast Asia. Weeks after we reported Golden Gate Ventures hit a first close on its third fund aimed at $100 million, so Openspace Venturesthe Singapore-based firm formerly known as NSI — has announced a final close of $135 million for its second fund.

Founded in 2014 by entrepreneur Hian Goh and finance exec Shane Chesson, Openspace is best known for being an early backer of Indonesian ride-hailing unicorn Go-Jek. A selection of its other investments includes fintech startup FinAccel, e-commerce player Love Bonito, restaurant booking service Chope, health-focused insurance brokerage CXA Group, and bread maker Rotimatic.

Openspace specializes in Series A with a typical check size of $3 million to $5 million, and capital for follow-on deals. Goh told TechCrunch around the time of the first close that the plan is to expand the focus on startups operating marketplaces and/or the e-commerce space to cover emerging verticals such as fintech, health tech and education.

Chesson, his partner, said that in areas like healthcare, progress from startups has been “remarkable” while he sees “great opportunities” to develop new kinds of consumer-centric brands in e-commerce, both B2C and B2B.

Beyond vertical expansion, the firm may also seek opportunities in new geographies — it invested alongside Go-Jek in Bangladesh-based on-demand service Pathao, for example. It also plans to utilize local teams in Thailand, Indonesia and Vietnam and perhaps expand its network to more markets, too.

The target for the capital is Southeast Asia, a region of more than 650 million consumers where rising internet access is creating new opportunities for tech startups and internet-based businesses.

A report co-authored by Google last year forecast the region’s internet economy reaching $200 billion per year by 2025, up from $31 million in 2015. Already, Southeast Asia has more internet users than the U.S. population, and the total value of its digital economy was said to reach $50 million in 2017.

Between 2016 and 2017, investors pumped over $12 billion into Southeast Asia-based startups. It’s an impressive stat, but most of the capital was captured by the largest businesses and that’s why more seed and early-stage funds are needed — and are arriving — in the region.

The Openspace Ventures team

At investor level, there certainly seems to be a growing appetite among global LPs, the investors who fund the funds.

Openspace, for example, was originally targeting a $125 million raise, but the firm said it saw significant interest and so raised the additional figure to “embed deeper regional and operating capabilities” into its team.

Singapore sovereign fund Temasek and U.S. PE firm StepStone Group are among the named LPs. Openspace said others include pension funds, university endowments, insurance companies and family offices across the U.S., Europe, Japan, China and Australia.

“For most of these LPs, Openspace is their first and only investment in this region. For some, they have returned and increased their commitment since fund one,” Chesson told TechCrunch via email. “It has taken some time for LPs of this caliber to get comfortable with the region, but we are pleased that we now have the track record at the fund and the interest in the region to bring them on board.”

“This is a big change from a few years back and is a testament to all the entrepreneurs and ecosystem partners who have developed this market so rapidly. There is still much work to be done though in fulfilling the promise, realizing gains, filling in gaps in the regional capability set and we look forward to being part of this,” he added.

This second pot has already been open and, combined with a $90 million debut fund, the firm has backed 19 startups to date. That portfolio, it said, has raised over $2.6 billion in follow-on capital which, even without $2 billion from Go-Jek, is pretty impressive. Indeed, Openspace says its inaugural fund is ranked the third best performing VC fund in the 2003-2015 bracket, according to investment tracking service Preqin.

China’s Didi beefs up its newly-independent car services business with an acquisition

A week after spinning out its driver services business and giving it $1 billion in investment capital, Didi Chuxing has added to it through an acquisition. Xiaoju Automobile Solutions (XAS), which the Didi spinout is called, announced today it has bought Hiservice, a three-year-old company that provides after-service care for car owners using a digital platform. […]

A week after spinning out its driver services business and giving it $1 billion in investment capital, Didi Chuxing has added to it through an acquisition.

Xiaoju Automobile Solutions (XAS), which the Didi spinout is called, announced today it has bought Hiservice, a three-year-old company that provides after-service care for car owners using a digital platform.

The deal was undisclosed, but XAS said that Hiservice will be combined with its maintenance and repair division to form a new unit that’s focused on car-owner services such as maintenance, parts and components. That’ll be called Xiaoju Auto Care (小桔养车) for those of you who are keeping up with the names of these Didi subsidiaries.

That auto care business will be jointly run by Yinbo Yi, who had run Didi’s auto care business, and Hiservice founder Cheng Qian, Didi confirmed. The new business claims 28 physical maintenance centers across seven cities in Asia.

Didi’s move to create XAS, which removes an asset-heavy business from the core Didi books, is seen by many as a sign that the company plans to go public soon. Unsurprisingly, Didi isn’t commenting on that at this point. The company was last valued at $56 billion when it raised a $4 billion round late last year — it has since added a $500 million strategic investment from travel company Booking Holdings.

While it is organizing its China-based business, Didi has also spent this year expanding into new markets. It has launched in Mexico, Australia and Taiwan while it acquired Uber rival 99 in Brazil. It is also edging close to launching a taxi-booking service in Japan via a joint venture with SoftBank.

WeWork China rival Ucommune raises $43.5M more at a $1.8B valuation

Barely weeks after WeWork China raised $500 million, one of its main rivals is refueling its tanks too. Ucommune — the company formerly known as UrWork until a WeWork lawsuit forced a rebrand — announced its $43.5 million Series C round. Beijing-based Ucommune’s new round was led by real estate-focused investment firms Prosperity Holdings and RK […]

Barely weeks after WeWork China raised $500 million, one of its main rivals is refueling its tanks too. Ucommune — the company formerly known as UrWork until a WeWork lawsuit forced a rebrand — announced its $43.5 million Series C round.

Beijing-based Ucommune’s new round was led by real estate-focused investment firms Prosperity Holdings and RK Properties. The company said the deal gives its business a $1.8 billion post-money valuation. to date, it has raised around $450 million from investors, according to Crunchbase data. For comparison, WeWork China has pulled in $1 billion overall since being spun out of WeWork’s global business one year ago.

Both investors are strategic, according to Ucommune. It said that its partnership with Prosperity, in particular, will help it expand its presence in Southeast Asia, where it has a presence in Singapore and an investment in Indonesia. While it will work with RK Properties to upgrade its existing office spaces, perhaps in the style of WeWork’s ‘Powered By We’ program.

In total, Ucommune claims to manage 160 locations in over 35 cities. That’s primarily China but outside of Asia its reach does include New York, London, Hong Kong and Taiwan, too.

News of this new funding comes one day after another Chinese co-working brand, My Dream, raised $120 million.

Three big names is nothing though, the field used to be comprised of dozens of players. Some have died out but the market has also seen plenty of consolidation. WeWork bought its closest rival Naked Hub in a deal reportedly worth $400 million. Meanwhile, Ucommune has made four acquisitions this year, including Workingdom for around $45 million this summer.

Observe.AI raises $8M to use artificial intelligence to improve call centers

Being stuck on the phone with call centers is painful. We all know this. Observe.AI is one company that wants to make the experience more bearable, and it’s raised $8 million to develop an artificial intelligence system that it believes will do just that. The funding round was led by Nexus Venture Partners, with participation from MGV, Liquid 2 […]

Being stuck on the phone with call centers is painful. We all know this. Observe.AI is one company that wants to make the experience more bearable, and it’s raised $8 million to develop an artificial intelligence system that it believes will do just that.

The funding round was led by Nexus Venture Partners, with participation from MGV, Liquid 2 Ventures and Hack VC. Existing investors Emergent Ventures and Y Combinator also took part — Observe.AI was part of the YC’s winter 2018 batch.

The India-U.S. startup was founded last year with the goal of solving a very personal problem for founders Swapnil Jain (CEO), Akash Singh (CTO) and Sharath Keshava (CRO): making call centers better. But, unlike most AI products that offer the potential to fully replace human workforces, Observe.AI is setting out to help the humble customer service agent.

The company’s first product is an AI that assists call center workers by automating a range of tasks, from auto-completing forms for customers to guiding them on next steps in-call and helping find information quickly. Jain told TechCrunch in an interview that the product was developed following months of consultation with call center companies and their staff, both senior and junior. That included a stint in Manila, one of the world’s capitals for offshoring customer services and a city well known to Keshava, who helped healthcare startup Practo launch its business in the Philippines’ capital.

That effort to know call center operates directly has also shaped how Observe.AI is pitching its services. Rather than going to companies, it is tapping the root of the tree by offering its services to the call centers who manage customer support for well-known businesses behind the curtain. Uber, for example, is one of many to use Philippines-based support centers, but the Observe.AI thesis is that going directly to the source is easier than navigating large companies for business.

One such partner is Concentrix, one of the world’s largest customer support providers with over 100,000 staff and offices dotted around the globe, while the startup said it has tapped Philippines telco PLDT for infrastructure.

In addition to helping understand the problems and generating business, working directly with these companies also gives Observe.AI access to and use of data, which is essential for developing any AI and natural language processing-based systems.

Beyond improving its customer service assistant — which Jain likens to an ‘Alexa for call centers’ — Observe.AI is working to develop a virtual assistant of its own that can handle the more basic and repetitive calls from customers to help free up agents for callers who need a human on the other end of the line.

“We aim to eventually automate a large part of the call center experience,” Jain explained in an interview. “A good set [of customer calls] are complex but a large set can be fairly automated as they are simple in nature.”

The startup is aiming to introduce ‘voicebots’ before March 2020, with a beta launch targeted at the end of 2019.

“The kind of company that will disrupt call centers will come from the east — we truly understand the call center life,” Jain told TechCrunch.

He explained that, while Silicon Valley is a hotbed for tech development, understanding the problems that need to be solved requires spending time in markets like India and the Philippines.

“That knowledge is super, super valuable… someone in the U.S. can’t even think about it,” he added.

That said, Observe.AI is headquartered in the U.S., in Santa Clara. That’s where Keshava, the company CRO, is based with a growing team that is dedicated pre- and post-sales and to building relationships with major software platforms used by call center companies. The idea with the latter is that they can provide an avenue into new business by working with Observe.AI to add AI smarts to their product.

In one such example, Talkdesk, a U.S. startup that offers cloud-based contact center services, has added Observe.AI’s services to what it offers to its customers. Talkdesk CEO Tiago Paiva called the addition “a huge opportunity for call center efficiency and improving the caller experience.”

The startup’s India-based team is Bangalore and it handles technology, which includes the machine learning component. Total headcount is 16 people right now but the founding team expects that will at least double before the end of this year.

India’s budget hotel network OYO moves into wedding banquet services

OYO Rooms, the India-based budget hotel network that’s backed by SoftBank’s Vision fund, has prioritized expansion into China this year but that’s not all it’s up to. Back home in India, it just moved into the event hosting space through the acquisition of a wedding banquet company. Today, OYO said it has acquired Weddingz.in, a three-year-old company that […]

OYO Rooms, the India-based budget hotel network that’s backed by SoftBank’s Vision fund, has prioritized expansion into China this year but that’s not all it’s up to. Back home in India, it just moved into the event hosting space through the acquisition of a wedding banquet company.

Today, OYO said it has acquired Weddingz.in, a three-year-old company that claims to be India’s largest wedding planner with 4,000 venues across 15 cities. The company had raised over $1 million from investors, and it says that it handles 1,500 weddings per quarter.

The deal is undisclosed and it is OYO’s third acquisition to date, all of which have come this year. Previously it snapped up a boutique apartment operator and then IOT startup AblePlus, but this transaction marks its first move outside of its core hotels and homes segment. The company said it is making the move because wedding banquets are “a fragmented, low yield, broken customer service business” that OYO believes matches with its experience of digitizing hotels and real estate.

“At OYO, our experience ranges from end-to-end management of homes, villas, small asset to hotels with 100+ rooms while running successful businesses for our asset partners and all these facets will be of utmost importance while operating in the wedding industry that in the dire need of fundamental changes and improvements,” OYO CSO Maninder Gulati said in a statement.

OYO hinted in its announcement today that it has other real estate projects in mind to expand further beyond hotels. That core focus is its affordable hotel network that it says spans 5,500 exclusive hotels in over 160 cities across India, China, Malaysia and Nepal.

OYO announced its move into China this summer and in two months it claims to have reached 1,000 chains across 28 locations in the country with a focus on serving middle-income customers.

The company has been linked with an investment from internet giant Tencent to push on in China, but so far nothing has been confirmed. OYO does count NASDAQ-listed China Lodging, which was formerly known as Huazhu Hotels and is valued at $6.8 billion, as a strategic partner on the ground there though. China Lodging invested $10 million last year as a follow-on to OYO’s $250 million Series D, which was led by SoftBank’s Vision Fund.

Three Indonesian tech unicorns unite to back digital insurance startup

It’s almost unheard of to see three unicorns join forces to fund a startup, but that’s exactly what has happened in Indonesia. Ride-hailing company Go-Jek, e-commerce firm Tokopedia and travel booking startup Traveloka — each of which is valued in the billions of U.S. dollars — have come together to provide a Series A funding […]

It’s almost unheard of to see three unicorns join forces to fund a startup, but that’s exactly what has happened in Indonesia.

Ride-hailing company Go-Jek, e-commerce firm Tokopedia and travel booking startup Traveloka — each of which is valued in the billions of U.S. dollars — have come together to provide a Series A funding round for PasarPolis, a digital insurance startup in Indonesia aiming to tap Southeast Asia’s growing internet economy.

PasarPolis started out as an insurance comparison site but today it offers micro- and modular-insurance online. Go-Jek, Tokopedia and Traveloka are three of its major clients through which it offers ‘click box’ policies that are bundled with ride-hailing trips, e-commerce sales and travel deals.

The round itself is undisclosed but TechCrunch understands that it is in range of $5-8 million, as was earlier reported by Deal Street Asia.

PasarPolis founder and CEO Cleosent Randing told TechCrunch in an interview that the deal was strategic and aimed at developing new products with the three companies, which he estimates provide “access to 100 million insurable hits per month.” He said that the startup could be picky because it is already cash flow positive.

“We were very very selective with this round, it’s something we are keeping quite low profile,” he explained. “It’s more of how we can be the provider of choice for the largest digital companies in Indonesia… we feel it’s a strategic investment and collaboration to advance micro insurance via the internet.

“Do they believe in the vision and can they help make the vision a reality but giving customers much cheaper, more modular insurance which is more relevant in today’s digital economy?” he added.

[Left to right:] Tokopedia COO Melissa Siska Juminto, Go-Jek chief human resources officer Monica Oudang, PasarPolis founder & CEO Cleosent Randing, Minister of Communications and Informatics Rudiantara, and Traveloka SVP of business development Caesar Indra

Beyond obvious consumer-focused products, PasarPolis has developed programs such as life insurance for Go-Jek drivers, and health care initiatives for SMEs that sell product on Tokopedia. In the travel space, he pointed out that growth in insurance revenue for companies like Expedia is outstripping ticket sale growth which bodes well for Traveloka.

PasarPolis is currently waiting on the result of an application for an insurance license which will give it new options for products beyond its current setup of working with insurers on underwriting. That’ll take some time, however, and right now the focus is on developing new insurance products, cementing its position in the market and also expanding into new markets in Southeast Asia — which now has more internet users than the entire population of the U.S., according to a report co-authored by Google.

Its work with Go-Jek will take it into markets like Vietnam and Thailand — where Go-Jek is expanding its ride-hailing business — but Randing said he is also in talks with other companies and insurance providers to offer more modular options for consumers. That could take the form of usage-based car insurance, or cover for public transport-based delays, he explained.

“Our goal is to make insurance less expensive than half of cup of a Starbucks coffee,” Randing said. Adding that the company may look for new funding in early 2019 as it grows its regional footprint.

Interestingly, PasarPolis has already gone overseas by tapping India for talent — which is something Go-Jek and others have also done. Randing said the company has 15-20 engineers in Bangalore, while the core team, partner support and tech integration staff are housed in Indonesia.