Southeast Asia

Razer goes big on payments with Visa prepaid card

Posted by | Asia, asia pacific, Finance, Gaming, malaysia, mobile payments, mol, online payments, Razer, Singapore, Southeast Asia, visa | No Comments

The latest pairing between a tech upstart and a financial titan is a digital prepaid card targeted at Southeast Asia’s 430 million-plus unbanked and underserved population.

On Monday, Razer, the Singapore-based company best known for its gaming laptops and peripherals, announced a partnership with Visa to develop a Visa prepaid solution. The service, which allows unbanked users to top up and cash out easily, will be available as a mini program embedded in Razer Pay, the gaming company’s mobile payments app. That means Razer’s 60 million registered users will be able to pay at any of the 54 million merchant locations around the world that take Visa.

Going virtual is the natural step given the region’s fast-growing digital population, but the pair does not rule out the possibility to introduce a physical prepaid card down the road, Razer’s chief strategy officer Li Meng Lee told TechCrunch over a phone interview.

Both parties have something to gain from this marriage. Hong Kong-listed Razer has in recent years been doubling down on fintech to prove it’s more than a hardware company. Payment services seem like an inevitable development for Razer whose users in the region are accustomed to buying in-game credits at convenience stores.

“For many years, the people who have been making digital payments before it became a sexy word in the last couple of years… [many of them] are the gamers who go to a 7-Eleven, pay in cash, and get a pin code to buy virtual skins for the games,” noted Lee. “Because of that, we’ve been able to build up more than a million service points across Southeast Asia.”

The key differentiator of Razer’s prepaid service, Lee said, is that customers paying at Visa merchants don’t have to already own a bank account, whereas that prerequisite is common for many other e-wallet services.

The Razer Pay app is handling transactions for a slew of internet services like Lazada and Grab and has made a big offline push, boasting a network of more than one million touchpoints through retailers including 7-Eleven and Starbucks where it’s accepted.

All in all, Razer Pay claimed it processed over $1.4 billion in payment value last year. It first launched in Malaysia in mid-2018 and recently branched into Singapore as its second market. Lee said the service plans to roll out in the rest of Southeast Asia soon, upon which the Visa prepaid mini app will also be available in those markets.

For Visa, the tie-up with an internet firm could be a potential boost to its reach in the mobile-first Southeast Asia where some 213 million millennials and youths live.

“This is a great opportunity for us to be working with Razer in addressing how we work to bring the unbanked and underserved population into the financial system,” Chris Clark, Visa’s regional president for the Asia Pacific, told TechCrunch. “We will be doing some work with Razer on financial literacy and financial planning to bring that education to the population across the region.”

Razer’s fintech ambition has been evident since it announced to gobble up MOL, a company that offers online and offline payments in Southeast Asia, in April 2018. Besides payments, Lee said other microfinance services such as lending and insurance are also on the cards as part of an effort to ramp up user stickiness for Razer’s fintech arm.

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CleverTap lands $26M for its mobile-focused customer marketing service

Posted by | Accel, Asia, clevertap, Facebook, Fandango, funding, Fundings & Exits, go-jek, india, Media, Mobile, rakuten, Sequoia, Sequoia India, Singapore, Southeast Asia, tiger global, United States, Viber, WhatsApp | No Comments

CleverTap, an India-based startup that lets companies track and improve engagement with users across the web, has pulled in $26 million in new funding thanks to a round led by Sequoia India.

Existing investor Accel and new backer Tiger Global also took part in the deal, which values CleverTap at $150-$160 million, the startup disclosed. The deal takes CleverTap to around $40 million from investors to date.

Founded in 2015 and based in Mumbai, CleverTap competes with a range of customer experience services, including Oracle Cloud. Its service covers a range of touchpoints with consumers, including email, in-app activity, push notifications, Facebook, WhatsApp (for business) and Viber. Its service helps companies map out how their users are engaging across those vectors, and develop “re-engagement” programs to help reactive dormant users or increase engagement among others.

The company says its SDK is installed in more than 8,000 apps and its customers include Southeast Asia-based startups Go-Jek and Zilingo, Hotstar in India and U.S.-based Fandango . With a considerable customer base in Asia, CleverTap puts a particular focus on mobile because many of these markets are all about personal devices.

“Asia is mobile-first and massively growing,” CleverTap CEO and co-founder Sunil Thomas told TechCrunch in an interview. “A lot of engagement in this [part of the] world is timely… we were sort of born physically on the east side of the world, so we got to scale with all these diverse set of devices.”

That stands to benefit CleverTap as it seeks to grow market share outside of Asia, and in markets like the U.S. and Europe where mobile is — right now — just one part of the marketing and customer engagement process. The company believes that engagement by mobile has a long way to develop there.

“Engagement [in the West] is still email-heavy and not really timely,” Thomas said. “Whereas the East thinks of it as ‘Hey, let’s be proactive… instead of a user coming in to hunt for information, can I provide it when I think he or she will need it?’ ”

Of course, mobile push and in-app notifications can be easily abused.

Most people will know of an app on their phone that falls into that category. So, how does a company know what is too much or what isn’t enough?

“As long as you use push or in-app as an extension of your brand, then I think it’s extremely useful,” explained Thomas. “After all, this is a really competitive world; it isn’t just your app out there — if you can make your brand count when this person isn’t in your app, that’ll help you.”

More broadly, Thomas argued that CleverTap brings data to the table which, ultimately, “changes the whole context in real time.” So a customer can really look holistically at their online presence and figure out what is working, and with which users. In real terms, when used to acquire new users online, he said he believes that CleverTap typically doubles registration conversions and triples the buying rate.

“The cost of acquisition to first purchase is what we really effect,” said Thomas. “It’s that moment you get a new person into your house.”

CleverTap has an office in Sunnyvale and it has just landed in Singapore. Now it plans to add a location in Indonesia before the end of the year. Those expansions are centered around business development, with some customer support, since tech and other teams are in India. Already, according to Thomas, the company is looking to grow in Europe while it is weighing the potential to enter Latin America in a move that could include a local partnership.

The CleverTap CEO is also considering raising more money toward the end of the year, when he believes that the company can push its valuation as high as $400 million.

“That’s very doable based on revenue growth,” he said. “We think that the revenue will demand that valuation.”

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Snap is channeling Asia’s messaging giants with its move into gaming

Posted by | alibaba, Apps, Asia, Australia, Bitmoji, Canada, China, computing, e-commerce, epic games, Evan Spiegel, Facebook, food, France, game developers, Gaming, instagram, Instant Messaging, Japan, josh constine, Kakao, Los Angeles, messaging apps, Messenger, nhn japan, Nintendo, operating systems, player, Snap, Snapchat, Social, social media, social network, Software, Southeast Asia, Startups, Tencent, United Kingdom, United States, WeChat, WhatsApp | No Comments

Snap is taking a leaf out of the Asian messaging app playbook as its social messaging service enters a new era.

The company unveiled a series of new strategies that are aimed at breathing fresh life into the service that has been ruthlessly cloned by Facebook across Instagram, WhatsApp and even its primary social network. The result? Snap has consistently lost users since going public in 2017. It managed to stop the rot with a flat Q4, but resting on its laurels isn’t going to bring back the good times.

Snap has taken a three-pronged approach: extending its stories feature (and ads) into third-party apps and building out its camera play with an AR platform, but it is the launch of social games that is the most intriguing. The other moves are logical, and they fall in line with existing Snap strategies, but games is an entirely new category for the company.

It isn’t hard to see where Snap found inspiration for social games — Asian messaging companies have long twinned games and chat — but the U.S. company is applying its own twist to the genre.

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Razer hooks up with Tencent to focus on mobile gaming

Posted by | airasia, Android, Asia, ceo, Companies, computing, consumer electronics, Consumer Electronics Show, Earnings, Gaming, HTC, LG, malaysia, Meituan, Min-Liang Tan, mobile phones, mol, Razer, razer phone, Singapore, smartphone, smartphones, Southeast Asia, TC, Tencent, Xiaomi | No Comments

Razer is summoning a big gun as it bids to develop its mobile gaming strategy. The Hong Kong-listed company — which sells laptops, smartphones and gaming peripherals — said today it is working with Tencent on a raft of initiatives related to smartphone-based games.

The collaboration will cover hardware, software and services. Some of the objectives include optimizing Tencent games — which include megahit PUBG and Fortnite — for Razer’s smartphones, mobile controllers and its Cortex Android launcher app. The duo also said they may “explore additional monetization opportunities for mobile gaming,” which could see Tencent integrate Razer’s services, which include a rewards/loyalty program, in some areas.

The news comes on the same day as Razer’s latest earnings, which saw annual revenue grow 38 percent to reach $712.4 million. Razer recorded a net loss of $97 million for the year, down from $164 million in 2017.

The big-name partnership announcement comes at an opportune time for Razer, which has struggled to convince investors of its business. The company was among a wave of much-championed tech companies to go public in Hong Kong — Razer’s listing raised more than $500 million in late 2017 — but its share price has struggled. Razer currently trades at HK$1.44, which is some way down from a HK$3.88 list price and HK$4.58 at the end of its trading day debut. Razer CEO Min Liang Tan has previously lamented a lack of tech savviness within Hong Kong’s public markets despite a flurry of IPOs, which have included names like local services giant Meituan.

Nabbing Tencent, which is one of (if not the) biggest games companies in the world, is a PR coup, but it remains to be seen just what impact the relationship will have at this stage. Subsequent tie-ins, and potentially an investor, would be notable developments and perhaps positive signals that the market is seeking.

Still, Razer CEO Min Liang Tan is bullish about the company’s prospects on mobile.

The company’s Razer smartphones were never designed to be “iPhone-killers” that sold on volume, but there’s still uncertainty around the unit with recent reports suggesting the third-generation phone may have been canceled following some layoffs. (Tan declined to comment on that.)

Mobile is tough — just ask past giants like LG and HTC about that… and Razer’s phone and gaming-focus was quickly copied by others, including a fairly brazen clone effort from Xiaomi, to make sales particularly challenging. But Liang maintains that, in doing so, Razer created a mobile gaming phone market that didn’t exist before, and ultimately that is more important than shifting its own smartphones.

“Nobody was talking about gaming smartphones [before the Razer phone], without us doing that, the genre would still be perceived as casual gaming,” Tan told TechCrunch in an interview. “Even from day one, it was about creating this new category… we don’t see others as competition.”

With that in mind, he said that this year is about focusing on the software side of Razer’s mobile gaming business.

Tan said Razer “will never” publish games as Tencent and others do, instead, he said that the focus is on helping discovery, creating a more immersive experience and tying in other services, which include its Razer Gold loyalty points.

Outside of gaming, Razer is also making a push into payments through a service that operates in Southeast Asia. Fueled by the acquisition of MOL one year ago, Razer has moved from allowing people to buy credit over-the-counter to launch an e-wallet in two countries, Malaysia and Singapore, as it goes after a slice of Southeast Asia’s fintech boom, which has attracted non-traditional players that include AirAsia, Grab and Go-Jek, among others.

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NetEase is the latest Chinese tech giant to lay off a big chunk of its staff

Posted by | alibaba, Amazon, Asia, business, China, Didi Chuxing, e-commerce, eCommerce, Gaming, JD.com, layoff, netease, public relations, Southeast Asia, Tencent | No Comments

NetEase, China’s second-biggest online games publisher with a growing ecommerce segment, is laying off a significant number of its employees, adding to a list of Chinese tech giants that have shed staff following the Lunar New Year.

A NetEase employee who was recently let go confirmed with TechCrunch that the company had fired a large number of people spanning multiple departments, including ecommerce, education, agriculture (yes, founder and executive officer Ding Lei has a thing for organic farming) and public relations, although downsizing at Yanxuan, its ecommerce brand that sells private-label goods online and offline, had started before the Lunar New Year holiday.

Multiple Chinese media outlets covered the layoff on Wednesday. According to a report from Caijing Magazine, Yanxuan fired 30-40 percent of its staff; the agricultural brand Weiyang got a 50 percent cut; the education unit downsized from 300 to 200 employees; and 40 percent of NetEase’s public relations staff was gone.

A spokesperson from NetEase evaded TechCrunch’s questions about the layoff but said the company is “indeed undergoing a structural optimization to narrow its focus.” The goal, according to the person, is to “boost innovation and organizational efficiency so NetEase can fully play to its own strengths and adapt to market competition in the longer term.”

NetEase CEO Ding Lei pictured picking Longjing tea leaves in Hangzhou. Photo: NetEase Yanxuan via Weibo

Oddly, ecommerce and education appear to be some of NetEase’s brighter spots. The company singled them out alongside music streaming during its latest earnings call as the three sectors that saw “strong profit growth potential” and “will be the focus of [the company’s] next phase of strategic growth.” The staff cuts, then, may represent an urgency to tighten the purse strings for even NetEase’s rosiest businesses.

The shakeup fits into market speculation about company staff cuts to save costs as China copes with a weakening domestic economy. JD.com, a rival to Alibaba, is firing 10 percent of its senior management to cut costs, Caixin reported last week. Ride-hailing giant Didi Chuxing plans to let go 15 percent of its staff this year as part of a reorganization to boost internal efficiency, though it’s adding new members to focus on more promising segments.

Alibaba took an unexpected turn, announcing last week that it will continue to hire new talent in 2019. “We are poised to provide more resources to our platforms to help businesses navigate current environment and create more job opportunities overall,” the firm said in a statement.

2018 was a tough year for China’s games companies of all sorts. The industry took a hit after regulators froze all licensing approvals to go through a reshuffle, dragging down stock prices of big players like Tencent and NetEase. These companies continue to feel the chill even after approvals resumed, as the newly minted regulatory body imposes stricter checks on games, slowing down the application process altogether and delaying companies’ plans to monetize lucrative new titles.

That bleak domestic outlook compelled NetEase to take what Ding dubs a “two-legged” approach to game publishing, with one foot set in China and the other extending abroad. Tencent, too, has been finding new channels for its games through regional partners like Sea’s Garena in Southeast Asia.

NetEase started in 1997 and earned its name by making PC games and providing email services in the early years of the Chinese internet. More recently the company has intended to diversify its business by incubating projects across the board. It has so far enjoyed growth in segments like music streaming and ecommerce (which is reportedly swallowing up Amazon China’s import-led service) while stepping back from others such as comics publishing, an asset it is selling to youth-focused video streaming site Bilibili.

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Selfie app maker Meitu eyes overseas gaming market with $340 million deal

Posted by | Asia, Beijing, China, Gaming, Garena, hardware, huawei, meitu, netease, New York, smartphone, smartphones, Southeast Asia, spokesperson, Tencent, Xiaomi | No Comments

China’s largest selfie app maker Meitu has been busy working to diversify itself beyond the beauty arena in China. On Wednesday, the Hong Kong-listed company announced in a filing that it has agreed to pay about HK$2.7 billion ($340 million) for a 31 percent stake in game publishing company Dreamscape Horizon.

Dreamscape Horizon, a subsidiary of Hong Kong-listed games group Leyou, specializes in making video games for personal computers and consoles, and owns 97 percent of Canada-based studio Digital Extremes. This global connection will potentially hasten Meitu’s overseas expansion, and the foray into games, on the other hand, will help the Xiamen-based firm capture more male users. (Operating out of Xiamen might have also been convenient for Meitu to meet the coastal city’s booming hub of game developers.) Out of Meitu’s 110 million monthly active users overseas, only 30 million are male.

“The collaboration with Leyou is not only focused on mainland China but also the global market,” says a Meitu spokesperson in a statement. “Mainland China currently accounts for the majority of Meitu’s earnings. The acquisition will broaden our business scope and diversify the geographic streams of our income.”

The overseas move appears to be a tactical one as the domestic gaming market is crowded with established players like Tencent, NetEase and hundreds of smaller contenders. The local environment has also turned hostile to gaming companies as Beijing steps up scrutiny amid concerns of titles being violent and harmful to young players. The result was a months-long halt in game approvals that dragged down Tencent’s stock prices and prompted a major reshuffle in the giant. And before long, Tencent announced it would deepen its ties with Garena to distribute games in Southeast Asia. The hiatus ended in December, but companies are still feeling the chill as China is reportedly mulling a further pause this week.

Meitu is most famous for its suite of photo-editing and beautifying apps, but hardware has been its major income source for years. For the first half of 2018, the company generated 72 percent of its revenues from selling smartphones optimized for taking selfies, a category proven popular in a country where touched-up photos have become the norm. But Meitu’s hardware business is shrinking as smartphone shipment slows in China and phones from mainstream brands like Xiaomi and Huawei now come equipped with filters. It has, however, found a new home for its barely mainstream smartphone brand after Xiaomi gobbled it up in November to lure more female users.

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First China, now Starbucks gets an ambitious VC-funded rival in Indonesia

Posted by | alibaba, alibaba group, Android, Apps, Asia, carsharing, China, East Ventures, funding, Fundings & Exits, go-jek, Google, grab, Indonesia, Insignia Ventures Partners, internet access, Jakarta, JD.com, managing partner, mcdonalds, online food ordering, online marketplaces, pizza hut, Singapore, Southeast Asia, starbucks, temasek, Tencent, United States, WeWork | No Comments

Asia’s venture capital-backed startups are gunning for Starbucks .

In China, the U.S. coffee giant is being pushed by Luckin Coffee, a $2.2 billion challenger surfing China’s on-demand wave, and on the real estate side, where WeWork China has just unveiled an on-demand product that could tempt people who go to Starbucks to work or kill time.

That trend is picking up in Indonesia, the world’s fourth largest country and Southeast Asia’s largest economy, where an on-demand challenger named Fore Coffee has fueled up for a fight after it raised $8.5 million.

Fore was started in August 2018 when associates at East Ventures, a prolific early-stage investor in Indonesia, decided to test how robust the country’s new digital infrastructure can be. That means it taps into unicorn companies like Grab, Go-Jek and Traveloka and their army of scooter-based delivery people to get a hot brew out to customers. Incidentally, the name “Fore” comes from “forest” — “we aim to grow fast, strong, tall and bring life to our surrounding” — rather than in front of… or a shout heard on the golf course.

The company has adopted a similar hybrid approach to Luckin, and Starbucks thanks to its alliance with Alibaba. Fore operates 15 outlets in Jakarta, which range from “grab and go” kiosks for workers in a hurry, to shops with space to sit and delivery-only locations, Fore co-founder Elisa Suteja told TechCrunch. On the digital side, it offers its own app (delivery is handled via Go-Jek’s Go-Send service) and is available via Go-Jek and Grab’s apps.

So far, Fore has jumped to 100,000 deliveries per month and its app is top of the F&B category for iOS and Android in Indonesia — ahead of Starbucks, McDonald’s and Pizza Hut .

It’s early times for the venture — which is not a touch on Starbuck’s $85 billion business; it does break out figures for Indonesia — but it is a sign of where consumption is moving to Indonesia, which has become a coveted beachhead for global companies, and especially Chinese, moving into Southeast Asia. Chinese trio Tencent, Alibaba and JD.com and Singapore’s Grab are among the outsiders who have each spent hundreds of millions to build or invest in services that tap growing internet access among Indonesia’s population of more than 260 million.

There’s a lot at stake. A recent Google-Temasek report forecast that Indonesia alone will account for over 40 percent of Southeast Asia’s digital economy by 2025, which is predicted to triple to reach $240 billion.

As one founder recently told TechCrunch anonymously: “There is no such thing as winning Southeast Asia but losing Indonesia. The number one priority for any Southeast Asian business must be to win Indonesia.”

Forecasts from a recent Google-Temasek report suggest that Indonesia is the key market in Southeast Asia

This new money comes from East Ventures — which incubated the project — SMDV, Pavilion Capital, Agaeti Venture Capital and Insignia Ventures Partners, with participation from undisclosed angel backers. The plan is to continue to invest in growing the business.

“Fore is our model for ‘super-SME’ — SME done right in leveraging technology and digital ecosystem,” Willson Cuaca, a managing partner at East Ventures, said in a statement.

There’s clearly a long way to go before Fore reaches the size of Luckin, which has said it lost 850 million yuan, or $124 million, inside the first nine months in 2018.

The Chinese coffee challenger recently declared that money is no object for its strategy to dethrone Starbucks. The U.S. firm is currently the largest player in China’s coffee market, with 3,300 stores as of last May and a goal of topping 6,000 outlets by 2022, but Luckin said it will more than double its locations to more than 4,500 by the end of this year.

By comparison, Indonesia’s coffee battle is only just getting started.

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Indonesian fintech startup Moka raises $24M led by Sequoia India

Posted by | Android, Asia, East Ventures, eCommerce, fenox, Finance, funding, Fundings & Exits, Indonesia, moka, PayPal, softbank ventures korea, Southeast Asia, Vertex Ventures | No Comments

Indonesia’s Moka, a startup that helps SMEs and retailers manage payment and other business operations, has pulled in a $24 million Series B round for growth.

The investment is led by Sequoia India and Southeast Asia — which recently announced a new $695 million fund — with participation from new backers SoftBank Ventures Korea, EDBI — the corporate investment arm of Singapore’s Economic Development Board — and EV Growth, the later stage fund from Moka seed investor East Ventures. Existing investors Mandiri Capital, Convergence and Fenox also put into the round.

The deal takes Moka to $27.9 million raised to date, according to data from Crunchbase.

Moka was started four years ago primarily as a point-of-sale (POS) terminal with some basic business functionality. Today, it claims to work with 12,500 retailers in Indonesia and its services include sales reports, inventory management, table management, loyalty programs, and more. Its primary areas of focus are retailers in the F&B, apparel and services industries. It charges upwards of IDR 249,000 ($17) per month for its basic service and claims to be close to $1 billion in annual transaction volume from its retail partners.

That’s the company’s core offering, a mobile app that turns any Android or iOS device into a point-of-sale terminal, but CEO and co-founder Haryanto Tanjo — who started the firm with CTO Grady Laksmono — said it harbors larger goals.

“Our vision is to be a platform, we want to be an ecosystem,” he told TechCrunch in an interview.

That’s where much of this new capital will be invested.

Tanjo said the company is opening its platform up to third-party providers, who can use it to reach merchants with services such as accounting, payroll, HR and more. The focus is initially on local services that cater to SMEs in Indonesia, but as Moka targets larger enterprises as clients, he said that it will integrate larger, global solutions, too.

Moka offers services beyond point-of-sale, but the core offering is turning any smart device into a cash machine

Moka itself is expanding its capabilities on the payment side.

Indonesia, the world’s fourth largest country based on population and Southeast Asia’s largest economy, is in the midst of a fintech revolution with numerous companies pioneering mobile-based wallet services aimed at ending the country’s fixation on cash-based transactions. That’s mean that there are a plethora of options available today. Tanjo said Moka is working to support them all in order to help its merchants grow their businesses and consumers to have easier lives.

There are so many wallets here in Indonesia,” he said. “There are more than 10 right now and maybe in the next few months there’ll be 15-20, we want to be the platform that works with all of them.”

Already it works with the likes of OVO, T-Cash and Akulaku, and e-wallets including DANA and Kredivo. The startup is also working in another area of fintech: loans.

As an extension of its platform, it has tied up with SME loan companies who can reach out to Moka businesses using its platform. With the merchant’s consent, Moka can provide business data — including revenue, profit, etc — to help provide data to assess a loan application. That’s important because the process is particularly challenging in Southeast Asia, where few organized credit checking facilities exist — it makes sense that Moka — which has built its business around encouraging business growth and management — uses the information it has access to help its partners.

Tanjo said the company takes an undisclosed cut of the loan in cases where it has successfully connected the two parties. He said that he doesn’t expect that to initially become a major revenue stream, but over time he anticipates it will help its customer base grow and become a more important source of income for the startup.

Sequoia India has some experience in POS startups having backed Pine Labs in India, which recently landed a big $125 million round from PayPal and Singapore sovereign fund Temasek. Still, there are plenty of local players across various markets in Southeast Asia, including StoreHub, which is backed by Temasek subsidiary Vertex Ventures, and Malaysia’s SoftSpace.

While those two competitors have established a presence in multiple markets in Southeast Asia, Tanjo — the Moka CEO — said there are no plans to venture overseas for at least the next 12 months.

“We’re still scratching the service,” he said. “So [it] doesn’t make sense to expand too soon.”

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Musical.ly investor bets on internet radio with $17M deal for Korea’s Spoon Radio

Posted by | Altruist, Apps, Asia, bubble motion, bytedance, djs, Facebook, Fundings & Exits, goodwater capital, instagram, Internet Radio, Japan, korea, Media, Mobile, musical.ly, Singapore, Software, Southeast Asia, Twitter, vietnam | No Comments

One of the early backers of Musical.ly, the short video app that was acquired for $1 billion, is making a major bet that internet radio is one of the next big trends in media.

Goodwater Capital, one of a number of backers that won big when ByteDance acquired Musical.ly last year, has joined forces with Korean duo Softbank Ventures and KB Investment to invest $17 million into Korea’s Spoon Radio. The deal is a Series B for parent company Mykoon, which operates Spoon Radio and previously developed an unsuccessful smartphone battery sharing service.

That’s much like Musical.ly, which famously pivoted to a karaoke app after failing to build an education service.

“We decided to create a service, now known as Spoon Radio, that was inspired by what gave us hope when [previous venture] ‘Plugger’ failed to take off. We wanted to create a service that allowed people to truly connect and share their thoughts with others on everyday, real-life issues like the ups and downs of personal relationships, money, and work.

“Unlike Facebook and Instagram where people pretend to have perfect lives, we wanted to create an accessible space for people to find and interact with influencers that they could relate with on a real and personal level through an audio and pseudo-anonymous format,” Mykoon CEO Neil Choi told TechCrunch via email.

Choi started the company in 2013 with fellow co-founders Choi Hyuk jun and Hee-jae Lee, and today Spoon Radio operates much like an internet radio station.

Users can tune in to talk show or music DJs, and leave comments and make requests in real-time. The service also allows users to broadcast themselves and, like live-streaming, broadcasters — or DJs, as they are called — can monetize by receiving stickers and other virtual gifts from their audience.

Spoon Radio claims 2.5 million downloads and “tens of millions” of audio broadcasts uploaded each day. Most of that userbase is in Korea, but the company said it is seeing growth in markets like Japan, Indonesia and Vietnam. In response to that growth — which Choi said is over 1,000 percent year-on-year — this funding will be used to invest in expanding the service in Southeast Asia, the rest of Asia and beyond.

Audio social media isn’t a new concept.

Singapore’s Bubble Motion raised close to $40 million from investors but it was sold in an underwhelming and undisclosed deal in 2014. Reportedly that was after the firm had failed to find a buyer and been ready to liquidate its assets. Altruist, the India-based mobile services company that bought Bubble Motion has done little to the service. Most changes have been bug fixes and the iOS app, for example, has not been updated for nearly a year.

Things have changed in the last four years, with smartphone growth surging across Asia and worldwide. That could mean different fortunes but there are also differences between the two in terms of strategy.

Bubbly was run like a social network — a ‘Twitter for voice’ — whereas Spoon Radio is focused on a consumption-based model that, as the name suggests, mirrors traditional radio.

“This is mobile consumer internet at its best,” Eric Kim, one of Goodwater Capital’s two founding partners, told TechCrunch in an interview. “Spoon Radio is taking an offline experience that exists in classic radio and making it even better.”

Kim admitted that when he first used the service he didn’t see the appeal — he claimed the same was true for Musical.ly — but he said he changed his tune after talking to listeners and using Spoon Radio. He said it reminded him of being a kid growing up in the U.S. and listening to radio shows avidly.

“It’s a really interesting phenomenon taking off in Asia because of smartphone growth and people being keen for content, but not always able to get video content. It was a net new behavior that we’d never seen before… Musical.ly was in the same bracket as net new content for the new generation, we’ve been paying attention to this category broadly,” Kim — whose firm’s other Korean investments include chat app giant Kakao and fintech startup Toss — explained.

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India’s Cashify raises $12M for its second-hand smartphone business

Posted by | Asia, bessemer, eCommerce, funding, Fundings & Exits, india, Mobile, Samsung, smartphone, smartphones, Southeast Asia, technology | No Comments

Cashify, a company that buys and sells used smartphones, is the latest India startup to raise capital from Chinese investors after it announced a $12 million Series C round.

Chinese funds CDH Investments and Morningside led the round which included participation from Aihuishou, a China-based startup that sells used electronics in a similar way to Cashify and has raised over $120 million. Existing investors including Bessemer Ventures and Shunwei also took part in the round.

This new capital takes Cashify to $19 million raised to date.

The business was started in 2013 by co-founders Mandeep Manocha (CEO), Nakul Kumar (COO) and Amit Sethi (CFO) initially as ‘ReGlobe.’ The business gives consumers a fast way to sell their existing electronics, it deals mainly in smartphones but also takes laptops, consoles, TVs and tablets.

“When we began we saw a lot of transaction for phone sales moving from offline to online,” Manocha told TechCrunch in an interview. “But consumer-to-consumer [for used devices] is highly opaque on price discovery and you never know if you’re making the right decision on price and whether the transaction will take place in the timeframe.”

These days, the company estimates that the average upgrade cycle has shifted from 20 months to 12 months, and now it is doubling down.

With Cashify, sellers simply fill out some details online about their device, then Cashify dispatches a representative who comes to their house to perform diagnostic checks and gives them cash for the device that day. The startup also offers an app which automatically carries out the checks — for example ensuring the camera, Bluetooth module, etc all work — and offers a higher cash payment for the user since Cashify uses fewer resources.

 

A sample of the Cashify Q&A for selling a device.

Beyond its website and app, Cashify gets devices from trade-in programs for Samsung, Xiaomi and Apple in India, as well as e-commerce companies like Flipkart, Amazon and Paytm Mall.

Used device acquired, what happens next is interesting.

The startup has built out a network of offline merchants who specialize in selling used phones. Each phone it acquires is then sold (perhaps after minor refurbishments) to that network, so it might pop up for sale anywhere in India.

With this new money, Cashify CEO Manocha said the company will develop an online resale site that will allow anyone to buy a used phone from the company’s network. Devices sold by Cashify online will be refurbished with new parts where needed, and they’ll include a box and six-month warranty to give a better consumer experience, Manocha added.

Today, Cashify claims to handle 100,000 smartphones a month, but it is planning to grow that to 200,000 by the end of this year. Cashify said its devices are typically low-end, those that retail for sub-$300 when new. A large part of that push comes from the online site, but the startup is also enlarging its offline merchant network and working to reach more consumers who are actually selling their device. That’s where Manocha said he sees particular value in working with Aihuishou.

Cashify is also developing other services. It recently started offering at-home repairs for customers and Manocha said that adding Chinese investors — and Aihuishou in particular — will help it with its sourcing of components for the repairs service and general refurbishments.

Cashify estimates that the used smartphone market in India will see 90 million phones sold this year, with as many as 120 million trading by 2020. That’s close to the 124 million shipments that analysts estimate India saw in 2017, but with surprisingly higher margins.

A reseller can make 10 percent profit on a device, Manocha explained, and Cashify’s own price elasticity — the difference between what it buys from consumers at and what it sells to resellers for — is typically 30-35 percent, he added. That’s more than most OEMs, but that doesn’t take into account costs on the Cashify side which bring that number down.

“When I sell to a reseller, the margins aren’t that exciting which is why we want to sell direct to consumers,” the Cashify CEO said.

The startup has plenty going on at home in India, but already it is considering overseas possibilities.

“We will focus on India for at least next 12 months but we have had discussions on markets that would make sense to enter,” Manocha, explaining that the Middle East and Southeast Asia are early frontrunners.

“We are working very closely with one of the Chinese players and figuring out if we can do some business in Hong Kong because that’s the hub for second-hand phones in this part of the world,” he added.

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