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.

At Disrupt, Hans Tung and Yi Wang will talk about the startup road winding from China to the U.S.

Few investors have as deep a knowledge of the U.S. and Chinese markets as Hans Tung. For over a decade the prodigious investor (now with GGV Capital) has been racking up the miles on flights between San Francisco, Shanghai, Los Angeles, Beijing, and New York in search of startups that can span the Pacific divide […]

Few investors have as deep a knowledge of the U.S. and Chinese markets as Hans Tung.

For over a decade the prodigious investor (now with GGV Capital) has been racking up the miles on flights between San Francisco, Shanghai, Los Angeles, Beijing, and New York in search of startups that can span the Pacific divide as readily as he does.

Over time, that’s led to a portfolio that includes Sino-American sweetheart deals in companies like the multi-billion dollar retailer, Wish; the recently acquired social media sensation musical.ly; and the Shanghai social and recommendation service Xiaohongshu; along with U.S.-centric investments like OfferUp and Poshmark.

On stage at Disrupt, Tung will be joined by Yi Wang, the founder of the artificial intelligence-powered education Chinese education dynamo, LingoChamp (Liulishuo), to discuss the technologies and techniques that continue to power a cross-border technology revolution even in tumultuous times.

There could be no better pairing to lead us along the path that winds from the glass and steel campuses of Silicon Valley to the glass and steel office towers of Beijing’s technology parks.

Join us to hear how artificial intelligence is drawing investment dollars on both sides of the Pacific, and how companies are bridging the political divide with compelling new technologies.

It’s sure to be one helluva conversation.

The full agenda is here. You can purchase tickets here.

Fast-growing Chinese media startup ByteDance is raising $2.5B-$3B more

Fast-growing Chinese media startup ByteDance is looking to raise as much as $3 billion to continue growth for its empire of mobile-based entertainment apps, which include news aggregator Toutiao and video platform Tiktok. The Beijing-based startup is in early-stage talks with investors to raise $2.5 billion to $3 billion, according to a source with knowledge […]

Fast-growing Chinese media startup ByteDance is looking to raise as much as $3 billion to continue growth for its empire of mobile-based entertainment apps, which include news aggregator Toutiao and video platform Tiktok.

The Beijing-based startup is in early-stage talks with investors to raise $2.5 billion to $3 billion, according to a source with knowledge of the plans. That investment round could value ByteDance as high as $75 billion, although the source stressed that the valuation is a target and it might not be reached.

It’s audacious, but if that lofty goal is reached then ByteDance would become the world’s highest-valued startup ahead of the likes of Didi Chuxing ($56 billion) and Uber ($62 billion). Only Ant Financial has raised at a higher valuation, but the company is an affiliate of Alibaba and therefore not your average ‘startup.’

The Wall Street Journal first broke news of the ByteDance investment plan.

But there’s more: Earlier this week, the Financial Times cited sources who indicate that ByteDance is keen to go public in Hong Kong with an IPO slated to happen next year.

ByteDance is best-known for Toutiao, its news aggregator app that claims 120 million daily users, while it also operates a short-video platform called Douyin. The latter is known as TikTok overseas and it counts 500 million active users. TikTok recently merged with Musical.ly, the app that’s popular in the U.S. and was acquired by ByteDance for $1 billion, in an effort aimed at combining both userbases to create an app with global popularity.

The firm also operates international versions of Toutiao, including TopBuzz and NewsRepublic while it is an investor in streaming app Live.me.

The company’s growth has been mercurial but it has also come with problems as the company entered China’s tech spotlight and became a truly mainstream service in China.

ByteDance had its knuckles wrapped by authorities at the beginning of the year after it was deemed to have inadequately policed content on its platform. Then in April, its ‘Neihan Duanzi’ joke app was shuttered following a government order while Toutiao was temporarily removed from app stores. It returns days later after the company had grown its content team to 10,000 staff and admitted that some content it had hosted “did not accord with core socialist values and was not a good guide for public opinion.”

AI giant SenseTime leads $199M investment in Chinese video tech startup

SenseTime may be best known as the world’s highest-valued AI company — having raised $620 million at a valuation of over $4.5 billion — but it is also an investor, too. The Chinese firm this week led a 1.36 billion RMB ($199 million) Series D funding round for Moviebook, a Beijing-based startup that develops technology to […]

SenseTime may be best known as the world’s highest-valued AI company — having raised $620 million at a valuation of over $4.5 billion — but it is also an investor, too. The Chinese firm this week led a 1.36 billion RMB ($199 million) Series D funding round for Moviebook, a Beijing-based startup that develops technology to support online video services.

Moviebook previously raised a 500 million RMB Series C in 2017, worth around $75 million. SB China Venture Capital (SBCVC) also took part in this new round alongside Qianhai Wutong, PAC Partners, Oriental Pearl, and Lang Sheng Investment.

With the investment, SenseTime said it also inked a partnership with Moviebook which will see the two companies collaborate on a range of AI technologies, including augmented reality, with a view to increasing the use of AI in the entertainment industry.

The object detection and tracking technology developed by SenseTime Group Ltd. is displayed on a screen at the Artificial Intelligence Exhibition & Conference in Tokyo, Japan, on Wednesday, April 4, 2018. The AI Expo will run through April 6. Photographer: Kiyoshi Ota/Bloomberg

In a statement in Chinese, SenseTime co-founder Xu Bing said the companies plan to use the vast amounts of video data from broadcasting, TV and internet streams to help unlock commercial opportunities in the future. He also stressed the potential to bring AI and new technologies to the entertainment industry.

This isn’t SenseTime’s first strategic investment, but it is likely to be its most significant to date. The company has previously backed startups that include 51VR, Helian Health and Suning Sports, the spinout from retail giant Suning.

SenseTime itself has raised over $1.6 billion from investors, which include Alibaba, Tiger Global, Qualcomm, IDG Capital, Temasek and Silver Lake Partners.

LemonBox brings US vitamins and health products to consumers in China

China is rising in many ways — the economy, consumer spending and technology — but still many of its population looks overseas, and particularly to the West, for cues on lifestyle and health. That’s a theme that’s being seized by LemonBox, a China-U.S. startup that lets Chinese consumers buy U.S. health products at affordable prices. […]

China is rising in many ways — the economy, consumer spending and technology — but still many of its population looks overseas, and particularly to the West, for cues on lifestyle and health. That’s a theme that’s being seized by LemonBox, a China-U.S. startup that lets Chinese consumers buy U.S. health products at affordable prices.

Indeed, the recent scare around Chinese vaccinations, which saw faulty inoculations given to babies and toddlers in a number of provinces, has only fueled demand for overseas health products which LemonBox founder Derek Weng discovered himself when his father was diagnosed as having high blood sugar levels. Weng, then working in the U.S. for Walmart, was able to look up and buy the right medicine pills for his father and bring them back to China himself. He realized, however, that others are not so fortunate.

After polling friends and family, he set up an experimental WeChat app in 2016 that dispensed health information such as articles and information. Within a year, it had racked up 30,000 subscribers and given him the confidence to jump into the business fully.

Today, LemonBox allows Chinese consumers to buy its own-branded daily vitamin packs from the U.S.. Further down the line, the goal is to expand into more specific verticals, including mother and baby, beauty and daily supplements, according to Weng, who believes that the timing is good.

“For the first time in China, people are taking a major interest in health and are working out, while society is becoming more developed,” he told TechCrunch in an interview. “We estimate that Chinese consumers are investing 30 percent of their income in health.”

The LemonBox daily pack of vitamins.

Since its full launch three weeks ago, LemonBox has pulled in 700 customers with 40 percent purchasing a three-month bundle package and the remainder a monthly order, Weng said. Typical basket size is around 300 RMB, or nearly $45.

To get the business off the ground, Weng needed expert support and his co-founder Hang Xu — who is also LemonBox’s “Chief Nutrition Scientist” — has spent 10 years in the field of nutrition science. Xu holds a Ph.D. from Texas A&M University, is a U.S.-registered dietitian and has published over 10 research papers. The startup’s third co-founder, Eddy Meng (CMO), is a graduate of Chinese app store startup Wandoujia which sold to Alibaba two years ago.

Right now, LemonBox has offices in the U.S. and China and it is squarely focused on e-commerce but Weng said the company is looking to introduce other kinds of health services. That could include consultations with dietary experts and specific offerings for patients leaving a hospital or in other long-term care situations, as well as potentially own-label products.

“We look at Stitch Fix for inspiration,” Weng said. “Right now, it leverages data to develop its own in-house private label products that improve on margin and the accuracy of recommendations. This kind of data and further services will be the next stage for us.”

LemonBox raised a seed round in March, which included participation from Y Combinator, and as part of Y Combinator’s current program, it’ll present to prospective investors at the program’s demo day. Already, though, Weng said there’s been interest from investors which the company is thinking over.

Interestingly, it was forth time lucky entering YC for Weng, who had before applied with previous startups unsuccessfully. This time it was entirely circumstantial. He applied to be in the audience for Y Combinator’s ‘Startup School’ event that took place in Beijing in May.

Unbeknownst to him, YC picked out a handful of attendees whose companies were of interest, and, after an interview that Weng didn’t realize was an audition, LemonBox was selected and fast-tracked into the organization’s latest program. In addition, YC joined the startup’s seed funding round which had initially closed in March.

That anecdotal evidence says much of YC’s effort to grab a larger slice of China’s startup ecosystem.

The organization has aggressively recruited companies from under-represented regions such as India, Southeast Asia and Africa, but China remains a tough spot. According to YC’s own data, fewer than 10 Chinese companies have passed through its corridors. That’s low considering that the organization counts over 1,400 graduates.

With events like the one in May, which helped snare LemonBox, and a new China-centric role for partner Eric Migicovsky, who founded Pebble, YC is trying harder than ever.

There’s more: Google is also said to be developing a censored news app for China

Can Google’s week get any worse? Less than a day after the revelation that it is planning a censored search engine for China, so comes another: the U.S. firm is said to be developing a government-friendly news app for the country, where its search engine and other services remain blocked. That’s according to The Information which reports […]

Can Google’s week get any worse? Less than a day after the revelation that it is planning a censored search engine for China, so comes another: the U.S. firm is said to be developing a government-friendly news app for the country, where its search engine and other services remain blocked.

That’s according to The Information which reports that Google is essentially cloning Toutiao, the hugely popular app from new media startup ByteDance, in a bid to get back into the country and the minds of its 700 million mobile internet users. Like Toutiao, the app would apparently use AI and algorithms to serve stories to readers — as opposed to real-life human editors — while it too would be designed to work within the bounds of Chinese internet censorship.

That last part is interesting because ByteDance and other news apps have gotten into trouble from the government for failing to adequately police the content shared on their platforms. That’s resulted in some app store suspensions, but the saga itself is a rite of passage for any internet service that has gained mainstream option, so there’s a silver lining in there. But the point for Google is that policing this content is not as easy as it may seem.

The Information said the news app is slated for release before the search app, the existence of which was revealed yesterday, but sources told the publication that the ongoing U.S.-China trade war has made things complicated. Specifically, Google executives have “struggled to further engage” China’s internet censor, a key component for the release of an app in China from an overseas company.

There’s plenty of context to this, as I wrote yesterday:

The Intercept’s report comes less than a week after Facebook briefly received approval to operate a subsidiary on Chinese soil. Its license was, however, revoked as news of the approval broke. The company said it had planned to open an innovation center, but it isn’t clear whether that will be possible now.

Facebook previously built a censorship-friendly tool that could be deployed in China.

While its U.S. peer has struggled to get a read on China, Google has been noticeably increasing its presence in the country over the past year or so.

The company has opened an AI lab in Beijing, been part of investment rounds for Chinese companies, including a $550 million deal with JD.com, and inked a partnership with Tencent. It has also launched products, with a file management service for Android distributed via third-party app stores and, most recently, its first mini program for Tencent’s popular WeChat messaging app.

As for Google, the company pointed us to the same statement it issued yesterday:

We provide a number of mobile apps in China, such as Google Translate and Files Go, help Chinese developers, and have made significant investments in Chinese companies like JD.com. But we don’t comment on speculation about future plans.

Despite two-for-one value on that PR message, this is a disaster. Plotting to collude with governments to censor the internet never goes down well, especially in double helpings.

Starbucks partners with Alibaba on coffee delivery to boost China business

Starbucks is palling up with Alibaba as it seeks to rediscover growth for its business in China. China has been a bright spot for some time for the U.S. coffee giant, but lately it has struggled to maintain growth — its China business dragged on its Q3 financials — and it is up against some […]

Starbucks is palling up with Alibaba as it seeks to rediscover growth for its business in China.

China has been a bright spot for some time for the U.S. coffee giant, but lately it has struggled to maintain growth — its China business dragged on its Q3 financials — and it is up against some ambitious new rivals, including billion-dollar startup Luckin Coffee.

One-year-old Luckin recently raised $200 million from investors and it has already built quite a presence. It claims over 500 outlets across China and it taps into the country’s mobile trends, with mobile payments and orders and delivery, too. Then there are some deep discounts aimed at getting new users, as is common with food, cars and other on-demand services.

In response, Starbucks is injecting some of that ‘New Retail’ strategy into its own China presence — and it is doing so with none other than Alibaba, the company that coined the phrase, which signifies a marriage between online and offline commerce.

The partnership between Alibaba and Starbucks is wide-ranging and it will cover delivery, a virtual store and collaboration on Alibaba’s “new retail” Hema stores.

The delivery piece is perhaps most obvious, and it’ll see Starbucks work with Ele.me, the $9.5 billion food delivery platform owned by Alibaba, to allow customers to order and receive coffee without visiting a store. The service will start in September in Beijing and Shanghai, with plans to expand to 30 cities and over 2,000 stores by the end of this year.

Starbucks is also building its app into Alibaba’s array of e-commerce sites, including its Tmall brand e-mall and Taobao marketplace. That’s a move that Starbucks President and CEO Kevin Johnson told CNBC would operate “similar to the mobile app embedded right into that experience” and open Starbucks up to Alibaba’s 500 million-plus users.

Finally, Starbucks is bringing its own “Starbucks Delivery Kitchens” to Alibaba’s Hema stores, which feature robots and mobile-based orders, that will combine Starbucks stores to boost its delivery capacity and speed.

Starbucks, as mentioned, needed a boost in China but the deal is also a major coup for Alibaba, which is battling JD.com on the new retail front as well as ambitious on-demand service Meituan. The latter is reported to have recently filed for an IPO in Hong Kong that could raise it $4 billion.

Google is reportedly planning a censorship-friendly search service for China

Google’s search service could be poised to make a dramatic return to China next year, according to an explosive report from The Intercept. Google yanked its search service from China in 2010 in the face of pressure over censorship, but now the publication reports that it has developed a censored version that could launch in […]

Google’s search service could be poised to make a dramatic return to China next year, according to an explosive report from The Intercept.

Google yanked its search service from China in 2010 in the face of pressure over censorship, but now the publication reports that it has developed a censored version that could launch in the country in six to nine months, according to information supplied by a source with knowledge of the plans. The alleged product would block Western services already outlawed in China, including Facebook, Twitter and Instagram, and also scrub results for sensitive terms, such as the Tiananmen Square massacre, and international media including the BBC and New York Times.

Google didn’t explicitly deny the report in a statement:

“We provide a number of mobile apps in China, such as Google Translate and Files Go, help Chinese developers, and have made significant investments in Chinese companies like JD.com . But we don’t comment on speculation about future plans,” a spokesperson told TechCrunch.

The insider claims that the search product is codenamed Dragonfly and that knowledge of it is limited to a handful of high-level Google executives, including CEO Sundar Pichai . The company is said to plan to operate a joint venture in China with an unnamed local company.

The Intercept said its source got in touch out of concern that the project “will set a terrible precedent for many other companies who are still trying to do business in China while maintaining the principles of not succumbing to China’s censorship.”

There’s been plenty of speculation over the years that Google will re-enter China with a meaningful product. That has tended to focus on the Play Store, but it looks like the search product has already gained considerable momentum. The Intercept reports that it has been demonstrated to Chinese government officials, with Pichai himself having attended at least one meeting with authorities.

Internal documents seen by The Intercept show that an Android app is the initial focus, but there could be scope for a desktop version and more further down the line. The current concern, according to the publication, is ensuring that the service gains Chinese government approval and is good enough to compete with what is already available to internet users in China.

The Intercept’s report comes less than a week after Facebook briefly received approval to operate a subsidiary on Chinese soil. Its license was, however, revoked as news of the approval broke. The company said it had planned to open an innovation center, but it isn’t clear whether that will be possible now.

Facebook previously built a censorship-friendly tool that could be deployed in China.

While its U.S. peer has struggled to get a read on China, Google has been noticeably increasing its presence in the country over the past year or so.

The company has opened an AI lab in Beijing, been part of investment rounds for Chinese companies, including a $550 million deal with JD.com, and inked a partnership with Tencent. It has also launched products, with a file management service for Android distributed via third-party app stores and, most recently, its first mini program for Tencent’s popular WeChat messaging app.

The Intercept suggests that these dealings are a prelude to introducing Dragonfly in a bid to capture a chunk of the 700 million internet user market that grown quickly since Google’s search business left the country.

WeWork China raises $500M to triple the number of cities it covers

WeWork’s China business is getting a fresh injection of capital after it raised $500 million. The company entered China two years ago and today it covers Beijing, Shanghai and Chengdu with nearly 40 locations. It claims 20,000 members, and it is also active in Hong Kong, which technically falls under ‘Greater China.’ The new capital […]

WeWork’s China business is getting a fresh injection of capital after it raised $500 million.

The company entered China two years ago and today it covers Beijing, Shanghai and Chengdu with nearly 40 locations. It claims 20,000 members, and it is also active in Hong Kong, which technically falls under ‘Greater China.’

The new capital comes from Trustbridge Partners, Singapore’s Temasek, SoftBank, SoftBank’s Vision Fund and Hony Capital. WeWork said it’ll be used for expansion into six new cities: those are Shenzhen, Suzhou, Hangzhou, Chengdu, Nanjing, and Wuhan. This new raise is a Series B, WeWork China previously scored a $500 million Series A last year, which was also when the Chinese entity was founded.

The company has been pretty busy over that 12-month period, most notably it scooped up its largest rival, Naked Hub, in an acquisition deal that is worth a reported $400 million and massively grew its reach.

Naked Hub builds on WeWork’s presence in Greater China by adding 24 office locations and a further 10,000 members. That’s why WeWork China’s figures are so impressive for just two years of operations. Now, this new capital will put WeWork’s own DNA into that network through this planned expansion spree.

“This investment will help WeWork fuel our mission to support creators, small businesses, and large companies across China,” WeWork CEO and co-founder Adam Neumann said in a statement. “WeWork has built an incredible team in China that supports our members every day, serving as a bridge for local companies who want to reach the world as well as for global companies that want to enter the Chinese market.”

Outside of China, WeWork is also making inroads in India — where it launched in 2017 — Korea, Japan (where it operates a joint venture with SoftBank) and Southeast Asia, where it made an acquisition to kick-start its presence. Indeed, WeWork has a float of around $500 million for its operations in Southeast Asia and Korea, although the total pot for India is unknown at this point.

WeWork China’s big raise comes days after Hong Kong’s Campfire pulled in $18 million and Awfis in India raised $20 million.