Canada Pension Plan Investment Board (CPPIB) said on Monday that it has made an investment worth US$115 million in SoftBank and Carlyle-backed Indian logistics unicorn Delhivery Pvt. Ltd.
This is the second investment made by CPPIB through its Fundamental Equities Asia Group which focuses on emerging markets in the Indian startup ecosystem. Its first investment was made in Byju’s last year in December.
Alain Carrier, the senior managing director and head of International CPPIB commented on the deal, saying that they have found in Delhivery a highly reputable partner who fits well with their focus on supporting high-growth businesses.
With this investment, Delhivery’s valuation is placed at US$1.5 billion and following the deal, CPPIB will also have a seat on the Delhivery board.
Delhivery’s Founder and CEO Sahil Barua said, “We are delighted to welcome CPPIB as a new partner for our next phase of growth alongside our existing partners. The last year has been particularly exciting for us at Delhivery — we have crossed 17 500 pin codes across India, launched 3 new businesses, and created over 10 000 new jobs”
Founded in 2011 by Sahil Baru, Bhavesh Manglani, Suraj Saharan, Kapil Bharti, and Mohit Tandon, Delhivery initially operated as SSN Logistics Pvt. Ltd to provide local on-demand service before it aims to become the operating system for commerce in the country.
Since its inception, Delhivery has become a full-fledged logistics player providing transportation, warehousing, freight services, and overall fulfillment services to various customers in more than 2,000 cities across India.
The startup has also received the coveted ET Startup of the Year award 2019, earning high praise for touching remote corners of the country and creating impact by being a full-stack logistic platform.
Its investment portfolio includes several PE investors such as Multiples Private Equity, Tiger Global Management, and Nexus Ventures. Earlier in March this year, the startup has raised US$413 million (Rs 2890 crore) in a funding round led by SoftBank Vision Fund, alongside Carlyle and China’s Fosun International.
With this newly raised funding capital, the startup plans to further broaden its exposure in the country’s logistics sector and this will be a challenge as it faces fierce competition.
Aside from Delhivery, there are many other logistics startups in India such as E-com Express, Blue Dart, Xpressbees, Blackbuck, Rivigo, and Shadowfax among others.
As a matter of fact, Inc42’s State of the Indian Startup Ecosystem 2018 Report has noted over 900 logistics startups as of November 2018.
According to data released by Tracxn Labs in December last year, the startups playing in the digitally-driven logistics and supply chain space in India attracted investments worth US$1.89 billion till then in 2018.
This year is expected to continue the momentum. In May, BlackBuck announced that it had raised US$150 million in a Series D equity funding round led by Goldman Sachs Investment Partners and Silicon Valley-based Accel.
Meanwhile, another major player operating in the space, Rivigo, raised a funding of $65 million in its ongoing Series E round, led by existing investors Warburg Pincus and SAIF Partners.
Indeed, India’s tech-based logistics startups will see heated competition as the startups ramp up to offer their solutions to the existing challenges in the supply chain network. Delhivery will need to play its cards right in order to continue to be in the lead.
When you think of the startup scene in Southeast Asia, you might think of regional leaders like Singapore and Indonesia which are home to six of eight unicorns.
However, a country in Southeast Asia, Vietnam is quickly following suit. Home to over 95 million people, the country is one of the region’s fastest-growing economies with an average GDP of US$68.78 billion from 1985 until 2017.
In fact, the Nikkei Asian Review has reported that Vietnam’s startup sector is growing at a rapid pace despite a global economic slump, and quickly closing its gap with the regional leaders.
The vibrant startup landscape can be attributed to the support fuelled by the government and accelerators as they aggressively promote entrepreneurship through legal and financial support. In the first quarter of 2017 alone, the country sees 39,580 startups entering the ecosystem.
And according to the joint research by Singapore’s Cento Ventures and Ho Chi Minh city-based venture capital ESP Capital, the first six months of 2019 has recorded the country’s startup investment to reach US$246 million this year through 56 deals.
Investment is also forecasted to exceed US$800 million by the end of the year, which would represent a rise of at least 80% over last year’s US$444 million.
When tracking the investments based on the destination country, Vietnam accounted for 17% of startup investments in the region, increasing 5% for all of 2018, behind Indonesia at 48% and Singapore at 25%.
As a matter of fact, the startup investment in Vietnam began to increase last year, with the online retail, payments and education sectors attracting huge capital injections.
Among startups that raised the lion’s share of funding last year was e-payment app Momo, which raised about US$100 million from American private equity company Warburg Pincus, making it one of the largest single rounds ever raised by a Vietnamese startup.
Other up-and-coming startups in Vietnam like ecommerce platform Tiki has also secured a large injection of funding. Based on ESP-Cento, the round raised US$75 million in March and was led by Singapore private equity firm Northstar Group.
Then, of course, there’s its home-grown unicorn VNG Corporation, which specializes in digital content, online entertainment, social networking, and ecommerce. The startup behind Zal, a communication application with more than 100 million, also recorded a US$29 million investment from Temasek.
Looking at these statistics and moving trends, it seems like Vietnam is in the bare minimum cash-ready and the bet of various investors as the region’s next leading startup ecosystem.
Since China released its national guidelines to allow automated vehicles testing on designated streets with a driver present in the vehicle back in 2018, it seems like every other day there’s news regarding the latest advancements in self-driving technologies.
Here’s the latest: Pony.ai is entering into a partnership with Toyota to explore safe mobility services involving driverless technologies.
More specifically, the two companies will work together on a pilot program to accelerate the development and deployment of these autonomous vehicles.
Looking at this alliance that involves the Chinese autonomous unicorn with the Japanese auto giant that makes over 10 million in annual vehicle sales worldwide, unquestionably it will boost their position in the race to bring driverless cars to the masses.
“Autonomous driving technology is the key to creating a better transportation system that will deliver value to the lives of many,” the companies stated in a press release. “Through such collaborations, Toyota and Pony.ai are accelerating the arrival of a safer, more efficient and more enjoyable mobility future for all.”
This announcement came after the self-driving startup revealed its latest test project PonyPilot, that will be testing its “product-ready” self-driving cars within a geofenced area in Guangzhou, which covers roughly 50 square kilometers of central Nansha.
This testing area will be a defined space, covering various destinations including commercial plazas, office buildings, landmark hotels, libraries, and residential complexes. But for now, the PonyPilot will only be accessible to employees and selected affiliates by invitation only.
Founded in 2016 by two former Baidu executives James Peng and Tiancheng Lou, Pony.ai is the first company in the country to launch a robotaxi operation and offer autonomous rides to the general public. But it doesn’t stop there.
The two founders are ambitious and aim to build level 4 autonomous cars which can operate without human oversight for predictable environments, such as industrial parks, college campuses, and small towns, with a tentative development window of 2 to 3 years from now.
Pony.ai’s current full-stack hardware platform, PonyAlpha leverages lidars, radars, and cameras to keep tabs on obstacles within up to 200 meters of its self-driving cars.
On the other hand, it might be unlikely to some but Toyota also has an ongoing player in the driverless car foray.
In March 2018, the firm said that its R&D division at the Toyota Research Institution would be building a closed-course test facility in Ottawa Lake, Michigan that will replicate edge-case driving scenarios too dangerous to conduct on public roads.
Also last year, Toyota has revealed e-Pallete, a fully-automated battery-powered electric car that is designed for a range of mobility-as-a-service businesses. While more recently, Toyota has also invested US$500 million in Uber to jointly develop self-driving cars.
Then again, these two are facing competition from many other startups.
The autonomous driving sector has drawn billions of dollars of investment over the past few years and is becoming one of the key sectors in AI. The sector even sees participation by China’s BAT (Baidu, Alibaba, and Tencent), as well as Huawei and many more.
And that is amid the heated competition with the United States for global leadership.
Last summer, German automotive multinational corporation Daimler obtained a permit from the Chinese government allowing it to test self-driving cars powered by Baidu’s Apollo platform on public roads in Beijing.
Separately, Waymo has racked up more than 10 million real-world miles in over 25 cities across the U.S. and roughly 7 billion simulated miles, in November 2018 became the first company to obtain a driverless car testing permit from the California Department of Motor Vehicles (DMV).
Not to mention, other rivals also include Tesla, Zoox, Aptiv, May Mobility, Pronto.ai, Aurora, Nuro, among some.
Now you must be wondering – who’s ahead in the race?
According to the California self-driving statistics, Chinese companies are still lagging behind US companies in the field, with Waymo drivers disengaging the auto-drive function roughly every 11,000 miles and Cruise drivers once every 5,200 miles on average over a 12-month period through November last year.
By contrast, Pony.ai, the front runner among Chinese autonomous driving companies has reported human intervention once ever 1,022 miles. However, there’s still some catching up Pony.ai has to do and this deal with Toyota comes in time.
“I think in the huge scheme of things, the biggest challenge is still the uncertainty in the open driving environment,” explained Peng on the obstacles the startup had to encounter to create a sustainable autonomous driving system.
Malaysia’s youth and sports minister Syed Saddiq Syed Abdul Rahman is planning to bring Go-Jek into Malaysia.
On August 19, Syed Saddiq said he had managed to bring Go-Jek’s founder, Nadiem Makarim, whom he had previously met in July, to meet with Prime Minister Dr. Mahathir Mohamad and Transport Minister Anthony Loke.
“The presentation was accepted kindly, and we will finalize the discussion in the upcoming Cabinet meeting this Wednesday,” Syed Saddiq recounted.
The youth and sports minister mentioned that these efforts are aimed at providing more job opportunities to motorcyclists.
“Motorcyclists want jobs, not just one-off programs or race tracks,” Saddiq said his Twitter post which features a one-minute video.
Golongan mat motor mahukan pekerjaan & pembelaan,
Bukan sahaja program one-off/Litar.
Mereka wajib dibela. Jangan perlekehkan sumbangan mereka kepada negara.
— Syed Saddiq (@SyedSaddiq) August 19, 2019
In an interview, Syed Saddiq also mentions that Go-Jek has been successful in Indonesia, with an employment of over two million motorcyclists in Indonesia, and hundreds of thousands more in Thailand, Singapore, and Vietnam.
Through this proposal, Syed Saddiq believes that Go-Jek entry into Malaysia will create hundreds of thousands of job opportunities for motorcyclists, in addition to boosting the businesses of small entrepreneurs.
In a separate Twitter post on August 18, Syed Saddiq has also started a poll asking netizens to vote if they support or oppose Go-Jek e-hailing services.
Overall, the poll saw 56,000 responses with 88% agreeing to the statement.
If you are unfamiliar with the startup, Go-Jek is an Indonesian e-hailing company backed by Tencent, JD.com, Google, and Temasek Holdings.
Founded in 2011, the startup has since then moved beyond ride-hailing services, developing into a one-stop app where users can order on-demand services such as grocery delivery and beauty treatments.
In Indonesia, Gojek has expanded to offer more than 20 services, including e-payment, house cleaning, and laundry services. It is known for its very affordable pricing, which analysts say is possible because the company pays for part of the costs out of its coffers.
Go-Jek also claims to be the largest food delivery service in Southeast Asia, beating even regional competitors in India, which has a population which is more than four times that of Indonesia’s 260 million.
The startup said it currently has more than two million partner drivers and 400,000 partner merchants in Southeast Asia.
Nadiem Makarim, Go-Jek’s Founder and Group Chief Executive said: “When we first launched Go-Food in Indonesia, we became the biggest player in the food delivery service in the country within six hours.”
Anyhow, if cabinet discussions held this week are to go well and Go-Jek entry to Malaysia is successful, the ride-hailing consumers are most likely the first to benefit.
Because after Uber ended its services in Southeast Asia, Singapore-based Grab has basically become the sole player in the Malaysian ride-hailing market.
At least with Go-Jek, the two will extend the competition, giving way to a free market and bringing choice back to the ride-hailing market in Malaysia.
Then again, this matter also reminded many of the homegrown Go-Jek known as Dego Ride which similarly offers motorcycle ride-hailing services in Johor.
Dego Ride and its thousands of riders were dissolved and brought to a halt by the Barisan Nasional government last year, after saying that its service is not needed as Malaysia already provides a comprehensive public transportation system.
The service was also previously criticized by transport minister Anthony Loke Siew Fook saying that, “we will never legalize Dego Ride in Malaysia because we disagree with any types of ride-sharing services that involve motorcycles.”
“In Malaysia, there are too many accidents involving bikes that we just can’t take the risk,” he told reporters.
Then again, with narratives changing now, we just might see a revival of Doge Rides? But first and foremost, this will all rely on the cabinet discussions for Go-Jek.
ByteDance, TikTok’s parent has recently revealed its plans to launch a search product that will challenge Baidu which currently holds more than 80 percent market share on mobile.
The startup revealed the news through a WeChat post last week stating that it was hiring people to build a new search engine with better user experience. And so far, it had been successful with hires from Google, Baidu, and Bing.
Charlie Chai from 86Research said, “the erosion of Baidu’s market share is expected to be slow but steady. However, search ad revenue is already stagnating in China, so a new entrant is definitely going to be trouble for Baidu investors.”
For a very long time, Baidu has been the dominant search engine in China.
This is especially true since 2010 when the US search engine giant Google retreated from the Chinese market after it has refused to comply with the government request to filter its search results.
Since then, Baidu had been dubbed the Google of China.
According to StatCounter, the Chinese search engine accounted for 66 percent of desktop searches and 71 percent of mobile searches in China last year.
Then again, recently Baidu has also been facing extensive criticism for various moves such as the slow transition to mobile, extensive ad placements, and hosting false hospital information.
Well, it is to the extent that Baidu’s CEO Robin Li has become the victim of water attack during his speech on stage in July.
But when asked about Bytendance’s search engine, Ping Xiaoli, the general manager of Baidu App doesn’t describe it as a threat.
“There has always been competition in China’s search market. We have estimated that there are about two new players emerging in the search engine market each year, which goes to show the prospects and potential of the search market,” said Ping.
“However the truth is: we have been dominating the market over the past two decades. Search and feed are two different products. The technological barrier into search is very high and Baidu has accumulated massive technologies and experience in the past 20 years,” she added.
So far, Baidu had kept its users hooked through launching its standalone app with a feed of videos, news, search, and other features to keep users hooked within its products.
The Baidu app sees 174 million daily active users as of March and said its total mobile reach expanded to 1.1 billion monthly active devices, which is likely larger than ByteDance’s total audience.
Then again, most analysts are not so confident with Baidu’s stance, saying that ByteDance could do significant damage out of the Chinese search engine’s market share.
Especially given the popularity of Douyin and Toutiao that has placed ByteDance as the most highly valued startup in the world.
ByteDance was valued at US$75 billion during pre-IPO financing in 2018, making it even more valuable than Uber which is currently at US$72 billion.
Toutiao is being installed on more than 250 million monthly unique devices, according to data from the Chinese market research firm iResearch.
Meanwhile, Douyin, otherwise better known as TikTok outside China has 500 million monthly active users as of January 2019.
That’s a big install base and one of the reasons analysts think ByteDance can disrupt Baidu’s more than 80 percent market share.
Not to mention, the track records whereby ByteDance acquired Musical.ly in 2017, turning it into TikTok, and making it the most downloaded social media app worldwide within a year, beating even Instagram.
Considering all this, it will be interesting to see where this company will end up in the search engine space moving forward.
But for now, it is said that the search engine will not likely launch a standalone search engine, but will instead integrate that function within ByteDance’s existing products, for example in its news aggregation app Toutiao.
ByteDance first step into the search was through launching a new search portal as part of an additional feature for its TouTiao website, a news aggregator owned by ByteDance.
The domain for the new search engine, Toutiao Search, sits within the company’s flagship product – Chinese news aggregator Jinri Toutiao.
Though it is part of Toutiao’s website, the portal is separate from Toutiao’s own search function which lets users look for news articles and topics within the app.
The new Toutiao Search offers content from ByteDance-owed apps including Jinri Toutiao and Douyin, the Chinese version of TikTok in addition to results from the wider web.
“In building from the ground up for mobile, Bytedance can also keep the user within the walled garden of its own apps, and deliver information from both the world wide web and its own database and apps,” said Neil Campling, the head of technology, media and telecoms research at Mirabaud Securities.
“This helps increase relevancy for a user search, and in turn, it will also help improve organic reach for advertisers and sponsored information. Baidu doesn’t have this walled garden advantage.”
However, like other search engines in Chinese, its results are censored. Searches for “Hong Kong”, where large pro-democracy demonstrations are currently taking place shows only results from state-approved media outlets or ByteDance’s own services like Xigua Video, Douyin, or Toutiao.
Still, ByteDance may face some challenges as it seeks to gain popularity in search, including changing user behavior to shift away from Baidu. The company will also need to make a product that is superior in its user experience and search results.
However, if this search were to be successful, ByteDance will be able to drive traffic to all of its platforms. Question is, can ByteDance become the favorite search engine of China?