Vincross, the company behind the six-legged robot Hexa, said on Tuesday that it’s picked up $10 million in a Series A+ funding round led by Lenovo Capital, the startup fund managed by Lenovo Group. Returning investor GGV Capital and newcomer Seekdource Capital also participated. The company declined to disclose its latest valuation but said the proceeds will go towards research and development as well as new product lines.
Neuroscience and artificial intelligence researcher Tianqi Sun started Vincross in Beijing back in 2016 when he raised $220,000 for Hexa on Kickstarter. At the time the insectile, programmable robot had separated itself from the horde of humanoids on the market by billing itself as the first robot that can climb stairs, making it suitable for firefighting and other rescue tasks.
Meanwhile, Lenovo’s interest in the startup underscores the personal computer giant’s intent to catch the impending robotics wave, which has been evident since it shelled out $500 million in 2016 for a new investment vehicle to back artificial intelligence, robot and cloud computing startups as the PC market dwindled. Some notable AI companies from its 100-plus portfolio are face recognition company Face++, chipmaker Cambricon and electric automaker Nio.
Beta testers have used the Mind Kit to build a salt-passing robot. Photo: Vincross
“Lenovo lead this round as they had an aligned vision with us on how the future of consumer electronics products that will be in everyone’s home will be robotics, similar to how this has been the case for laptops and computers, which Lenovo is also known for,” founder and chief executive Sun told TechCrunch.
Vincross also announced Tuesday a new developer kit called Mind to serve customers at all levels of building capacities. The firm says early testers have used it to build devices from a voice-controlled gadget that passes you salt and pepper at the dining table, to an all-terrain, legged robot that looks just like Hexa. Amateurs and professional developers can order the suite for $99 on Kickstarter before it gets retailed at $150, a pricetag Sun believes is competitive for consumer-facing robotic development kits.
Vincross already runs an open platform for developers to toy with new hacks for Hexa, upon which they can sell those skills through the company’s online marketplace. The firm has sold about 2,000 devices till this day to researchers, educators, young developers and more in 20 countries, with most of its sales coming from China and the U.S., where Vincross has set up overseas operations.
Within the space of robots for kids, Vincross faces competition from Shenzhen-based Makeblock, which raised $30 million in 2017 to build its development kit targeted at young programmers.
“The types of consumers [Mind Kit is] targeting should be in the process of learning basic programming skills but interested in robotics development, and so we anticipate interest from high school students or older, all the way up to robotics makers,” suggested Sun.
You’d be forgiven for not knowing Amazon has operated in China for more than a decade, but perhaps not for much longer. The company is reportedly in talks to merge its China-based import business with local peer Kaola, the cross-border shopping platform run by Chinese internet behemoth NetEase, Caijing reported (link in Chinese) on Tuesday.
The deal, which NetEase initiated and will occur through a stock swap, had been signed at the end of 2018 but negotiations had been difficult, sources told Caijing.
The timing of the marriage is interesting since Amazon recently snagged a deal with Western Union to better serve unbaked shoppers across Asia (which did not include mainland China). Amazon also connects Chinese sellers to consumers worldwide, and just last week, WorldFirst, a London-based payments firm that relies heavily on working with Amazon small and medium-sized merchants, got bought by Alibaba, a direct rival to Amazon.
According to Caijing, the NetEase merger won’t affect Amazon’s export-led unit.
NetEase Kaola declined to comment on the matter. Amazon China cannot be immediately reached for comments.
Amazon entered China in 2004 after it bought out local book-selling business Joyo for $75 million. In 2014, it started offering an overseas shopping service to capture Chinese consumers’ growing appetite for imported goods. Since then the titan has devised various marketing gimmicks — including its annual Black Friday campaign — to lure shoppers, but the business was never able to establish a commanding position in China where big guns like Alibaba and JD.com dominate.
According to research firm iResearch, Amazon held less than 1 percent of the Chinese commerce market in 2016. Within the arena of imports, Amazon China claimed about 6 percent share by the second quarter of 2018, while Alibaba’s Tmall Global took the lead at 29 percent, per data from research company Analysys. NetEase Kaola and JD.com trailed behind at 22.6 percent and 13.7 percent, respectively.
Despite a weak presence in China, Amazon’s massive global reach could be a coveted asset for its local rivals. “Netease needs to procure more inventory and it’s hard because they don’t do marketing as well as Alibaba overseas,” Ivy Shen, vice president with Shenzhen-based cross-border ecommerce startup Azoya, told TechCrunch.
“Kaola is also opening more offline stores so it might need more capital to expand, and Amazon can provide that capital. The cross-border market isn’t big enough for Amazon, but offline retail could be,” added Shen.
NetEase is best-known as China’s second-largest game publisher after Tencent, but its success dates back to the PC-era where it ran a popular news portal and email business. The Hangzhou-based company has over the years been re-inventing itself, leaping into a broad range of ventures including music streaming, a segment that rivals Tencent’s QQ Music; comics, which it sold to Bilibili, an anime streaming business backed by Tencent and Alibaba; and ecommerce, a unit that has driven much of its growth recently and contributed about 27 percent of its overall revenues during the latest quarter.
Rudina Seseri is founder and managing partner at Glasswing Ventures, an Entrepreneur-In-Residence at Harvard Business School and an Executive-In-Residence for Harvard University’s Innovation Lab.
At a high level, the American AI Initiative seems to be headed in the right direction. We absolutely need a holistic approach that considers all the various areas that are critical to building innovative AI solutions. This seems to be an underlying concept of the Initiative, as the executive order places priority on making data available across government agencies, allocating cloud computing resources to support AI R&D and training the workforce. Commitment to AI innovation is critical to maintaining our leadership position in technology with the increasing level of global AI competition.
We know that China, France and the U.K. have invested and committed billions already to their own AI initiatives. The American AI Initiative as it stands does little to blunt the fears that America will fall behind in its technological edge. In fact, its lack of particulars sends exactly the opposite message.
If the government wants to demonstrate its support for AI, it needs to commit significant funding and investment in education to retain, attract and grow the talent necessary to support such a critical industry that has the potential to define our future and truly increase American competitiveness.
We have started to see momentum from some institutions that have already announced funding initiatives for AI research and advanced computer science education, such as MIT’s $1 billion commitment to AI, but we need government agencies and other private institutions to follow suit in order to effectively change the landscape. Such investments and focus on advanced technology development must become the baseline expectation for competition in our country.
We also need continuous and robust investments from VCs for AI startups across industries and markets, as there exists ample opportunity for backing transformative AI startups. Now is the time for the government and private capital to come together and jointly put our monies where our mouths are.
Beyond funding, the government must take a hard look at the global AI talent pool and accelerate the incoming flow of talent to our country, whether through academia or industry. According to NVCA (National Venture Capital Association), an estimated 51 percent of domestic private companies valued at $1 billion or more had one or more founders who were born outside of the U.S.
Overall, 31 percent of venture-backed founders are immigrants. A large number of these are leading technology companies at the forefront of developing new American products and services, many of which will leverage some form of AI in the next few years if they aren’t already. Attracting and retaining fresh talent, educators and data scientists must be a part of our national agenda, as the talent pool necessary to take a leadership position in AI is currently cannibalizing itself.
With respect to the American AI Initiative, success comes down to the details and specific plans, which will be determined over the course of the next three to six months. Each of the milestones outlined in the executive order are important advancements, but the Initiative will only truly succeed if it is built holistically.
Access (and the necessary protections) to data, access to cloud computing and a commitment to computer science must be embraced by the government as an integral part of our technology-driven businesses and personal lifestyles. These cannot be viewed as separate components in disparate silos.
If the government can champion a frontier technology and data-centric approach, the American AI Initiative has the potential to both reduce barriers to entry for AI startups and elevate the entire tech, business and innovation landscape. But it starts with a commitment to academic education, training for the workforce and a deliberate and concerted focus on ensuring public trust in AI. While no small feat, this is what is required to guarantee the intelligent future of America, and its leadership role in global innovation.
The Australia government suffered a cyber attack that it suspects is the work of a “sophisticated state actor,” according to the country’s Prime Minister.
PM Scott Morrison said today the computer network of the country’s parliament, and those belonging to Liberal, Labor and Nationals parties, were targeted by an attack which took place a few weeks ago, The Sydney Morning Herald reports. Australia is months away federal elections which will take place in May.
Morrison said there is “no evidence of any electoral interference.”
“We have put in place a number of measures to ensure the integrity of our electoral system,” he said, adding that security services “acted decisively to confront it.”
There is apparently no indication that data was accessed following the attack.
Where exactly it originated from remains unclear.
Sources told SMH that the sophistication of the attack was “unprecedented,” but nobody in the government is naming suspects. Reportedly, the incident sports “the digital fingerprints of China” but there remains the possibility that the attack was framed to look like it originated from China.
China’s education authorities are about to take some burden off parents with school-aged children. A proposal posted last week by the Department of Education in China’s eastern province of Zhejiang said teachers should be banned from using WeChat, QQ or other mobile apps to assign homework or ask parents to grade students’ assignments.
As mobile internet booms in China, phones have become an extension of daily activities, including school practices. Instead of announcing homework in class or handing out notices to students in person, teachers are now dumping assignments into WeChat groups designed to interact with parents. Many teachers are keen to exercise their power through these digital channels, asking parents to help students with problem sets and even grade their homework.
The regional call to action follows a set of national guidelines released by the Ministry of Education in October directing teachers and schools to take more responsibilities rather than shift the load onto parents. “Teachers should be accountable for their job, treat teaching seriously, correct homework with prudence and help students with care.”
Not all schools abuse digital platforms to such an extent. A Shenzhen-based parent told TechCrunch that her second-grader who attends a local public school still does much of her homework in written form and parents’ involvement is moderate.
“Different schools treat technology differently and I’m not opposed to the use of it. It’s helpful, for example, to use a digital device to learn English because much of the process involves audios and videos,” the parent said. “I think sometimes media are painting teachers and schools in such a negative light just to get attention.”
Other recommendations in the national notice include limiting the amount of online homework to reduce nearsightedness, which has become a source of concerns for parents and society at large.
The new directives also come as Beijing tries to rein in what and how private technology services are infiltrating students’ lives. In one far-reaching move, the government ordered video-game publishers to cap children’s playing time, sending shares of industry leaders Tencent and NetEase tumbling. More recently, the Ministry of Education asked schools and universities to audit apps used by teachers and students on campus in accordance with guidelines set by the regulator.
Despite the government’s intent to ease stress and unplug devices for students, education apps have flourished in China. Those that help students outperform their peers have done particularly well. Yuanfudao, a startup that offers live courses, exam prep and homework help, gained a $3 billion valuation in its latest $300 million funding round in December. Its rivals Zuoyebang and Yiqi Zuoye have similarly attracted big-name investors and sizable funds to help their young users get ahead.
China’s largest ride-hailing firm Didi plans to let go 15 percent of its employees or about 2,000 people this year, sources told TechCrunch. The cut comes as the beleagured transportation giant copes with a stricter regulatory environment that puts a squeeze on driver supply and backlash from two high-profile passenger murders last year.
Chief executive Cheng Wei made the announcement during an internal meeting Friday morning as he told management that Didi will scale back its non-core businesses and step up investments in key areas, including safety technology, product engineering, offline driver management and international operations.
The sources did not specify which of Didi’s business units are affected by the layoff but said Didi will add 2,500 new hires by the end of the year to work on company priorities, which will give the company a total headcount of about 13,000 staff around the world.
In addition, Didi will work to ramp up operational efficiency, an issue that Didi also addressed during a major re-organization in December. A Didi spokesperson declined to comment.
Earlier this week, Chinese tech news portal 36Kr reported that Didi lost $1.6 billion in 2018 and spent $1.67 billion on subsidies for drivers. According to an internal memo Cheng made in September, Didi lost 4 billion yuan ($590 million) in the first half of 2018 and the company had not been profitable for six years.
Ecommerce giant Alibaba is continuing its push into the world of youth culture after it scooped up an 8 percent stake in anime streaming and game publishing company Bilibili.
According to a securities filing on Thursday, Alibaba’s Taobao marketplace has acquired about 24 million shares in Bilibili, the Shanghai-based firm that has captured 93 million monthly users from hosting licensed anime titles, video games and user-generated content.
The financial gesture is hot on the heels of a partnership announced in December that saw the pair working to monetize Bilibili’s content assets. For one, Alibaba can help Bilibili creators sell merchandise like cosplay costumes and anime toys through Taobao’s online bazaar. Bilibili itself owns an e-store, but Taobao’s command of 700 million monthly users dwarfs its reach.
“The partnership is great news for ACG content creators,” a Shanghai-based merchant that sells Lolita costumes on Taobao told TechCrunch, referring to the acrynom for “anime, comic and games.” The owner sells through both Taobao and Bilibili, though most sales have come from Taobao.
“We can now leverage Taobao’s gigantic platform and seasoned ecommerce operating capabilities to further help our content creators realize and improve their commercial values, thereby building a more virtuous content community and commercialization-focused ecosystem,” says Bilibili chief executive and chairman Chen Rui in a statement.
Screenshot: Taobao has a dedicated channel for anime, comic and gaming (ACG) items.
What Alibaba gets in return is access to China’s Generation Z. Bilibili claims that 82 percent of its users were born between 1990 and 2009. In a savvy move, Alibaba hooked up its food delivery unit Ele.me with Bilibili in December to tap a demographic of anime-watching and game-playing young people reliant on delivered meals.
“Over 1.6 million content creators, including anime, comic and games (ACG) experts, were actively supporting the Taobao app and helping brands on our platform engage with consumers,” said Fan Jiang, vice president of Alibaba and president of Taobao, back in December. “Through deep cooperation with intellectual property holders and content creators, Taobao has experienced the great potential of ACG.”
Investors’ darling
Tencent and Baidu’s iQiyi have also spent big bucks to beef up their respective anime offering, but Bilibili’s flourishing youth community gives it an edge over these deep-pocketed video-streaming heavyweights and to an extent makes it an investors’ darling. The eight-year-old company is notable for being one of the rare companies that count both Alibaba and Tencent — which compete on multiple fronts spanning ecommerce to cloud computing — as their investors. Other companies that won backings from the duo include China’s largest ride-hailing service Didi Chuxing.
Last October, social media and gaming juggernaut Tencent poured nearly $320 million into Bilibili in exchange for a 12.3 percent stake. While Alibaba helps drive revenues to Bilibili’s community of creators and potentially boost their loyalty to the site, Tencent could help it save on licensing fees for games and animes.
“Tencent and Bilibili are two of the major players in the animation industry. By working with Tencent, this will intensively expand our content offering and effectively decrease our content investment in the animation copyright procurement,” Chen of Bilibili said during the company’s Q3 earnings call.
“The agreement will enable us to leverage Tencent’s primary content, particularly in licensing, co-producing and investment in anime as well as publish Tencent’s large portfolio of high-quality mobile games,” Bilibili’s chief financial officer Sam Fan added.
China’s largest car-hailing company is facing relentless pressure from all fronts. Beijing-based Didi Chuxing reportedly lost a staggering 10.9 billion yuan ($1.6 billion) in 2018, according to financial data that Chinese news site 36Kr obtained.
For some context, Uber posted a net loss of $939 million on a pro forma basis and an EBITA loss at $527 million during Q3 2018.
Didi has not responded to TechCrunch’s inquiry about its losses, but an internal letter leaked in September offers a glimpse at the depth of Didi’s troubles. According to the memo from founder and chief executive Cheng Wei, Didi had been operating in the red for six consecutive years and lost 4 billion yuan in the first half of 2018. At this moment, the transportation giant’s predicament appears to be multipronged.
Public backlash
The ride-booking app capped off 2018 with a bleak outlook after two female passengers were killed by their Didi drivers in separate instances, drawing ire of the government and triggered a nationwide backlash underpinned by a #DeleteDidi campaign that’s reminiscent of the #DeleteUber movement.
Didi responded with a fold of security measures, including stricter identity checks on drivers and a major reorganization to place customer safety ahead of growth. Hitch, the carpooling service that was complicit in both accidents and was popular among riders for its relatively cheap fares, is suspended indefinitely, a move that could exclude the more price-sensitive consumers.
Cash-burning model
Didi’s struggles had preceded the passenger murders. Cheng admitted in his memo that the company’s expansion was getting out of hand. “The expansion frenzy planted seeds of trouble and our internal system couldn’t keep up with our expansion.”
During the first six months of 2018, Didi shelled out about $1.7 billion in subsidies for drivers and steep discounts for passengers as competition intensified, Bloomberg reported citing sources. In the entire year, Didi burnt through a total of 11.3 billion yuan ($1.67 billion) on driver subsidies according to the 36Kr report.
Subsidies have played a key role in the rise of Didi and many other aspiring consumer-facing services in China. Investors dole out big bucks for early movers to gain market share rather than strive for profitability. That tactic has helped catapult tiny startups into billion-dollar businesses such as bike-rental service Mobike, but it has also led to the dramatic fall of some, Mobike’s peer Ofo being one alarming example.
Regulatory hurdles
Following Didi’s safety incidents, Chinese authorities hastened their pace to reinforce rules they had long laid out for the fledgeling industry, and some of the policies prove costly to uphold. For one, ride-booking drivers now need to obtain two licenses — one for the drivers themselves and the other for their vehicles to operate commercially.
The new requirement discourages part-time drivers as the costs of owning a commercial vehicle outpace the returns of taking up the gig work. Didi has tried to neutralize the constraint by offering test preps to drivers and teaming up with car rental businesses to equip drivers with the licensed vehicles. But these moves are set to incur new costs for Didi’s already money-burning business. The mobility startup was mulling a multi-billion-dollar initial public offering in 2018 that could value it upwards of $70 billion, Wall Street Journal reported last April.
New rivals
Another stumbling block for the firm is the swarm of new contenders eyeing a market long dominated by Didi after it swallowed up competitor Uber China. Neighborhood services marketplace Meituan, for instance, began to offer shared rides last year though it later put a hold on the capital-intensive new business to stay focused on its dining and hotel-booking units. On the other hand, traditional automakers, including a few that are state-owned such as BAIC, are charging full speed ahead by luring drivers with more favorable commission rates.
These newcomers have a long way to go before they could threaten Didi’s share, but Alibaba has a tool that can potentially help them grow. The ecommerce titan is not competing directly against Didi. Instead, its AutoNavi map service doubles as a ride-hailing platform that lets users book cars from a list of third-party operators. The model in effects levels the playing field for smaller players to challenge Didi, as they all compete on equal terms to court AutoNavi’s 1 billion daily active users.
Two older iPhone models are back on sale in Apple stores in Germany — but only with Qualcomm chips inside.
The iPhone maker was forced to pull the iPhone 7 and iPhone 8 models from shelves in its online shop and physical stores in the country last month, after chipmaker Qualcomm posted security bonds to enforce a December court injunction it secured via patent litigation.
Apple told Reuters it had “no choice” but to stop using some Intel chips for handsets to be sold in Germany. “Qualcomm is attempting to use injunctions against our products to try to get Apple to succumb to their extortionist demands,” it said in a statement provided to the news agency.
Apple and Qualcomm have been embroiled in an increasingly bitter global legal battle around patents and licensing terms for several years.
The litigation follows Cupertino’s move away from using only Qualcomm’s chips in iPhones after, in 2016, Apple began sourcing modem chips from rival Intel — dropping Qualcomm chips entirely for last year’s iPhone models. Though still using some Qualcomm chips for older iPhone models, as it will now for iPhone 7 and iPhone 8 units headed to Germany.
For these handsets Apple is swapping out Intel modems that contain chips from Qorvo which are subject to the local patent litigation injunction. (The litigation relates to a patented smartphone power management technology.)
Hence Apple’s Germany webstore is once again listing the two older iPhone models for sale…
Newer iPhones containing Intel chips remain on sale in Germany because they do not containing the same components subject to the patent injunction.
“Intel’s modem products are not involved in this lawsuit and are not subject to this or any other injunction,” Intel’s general counsel, Steven Rodgers, said in a statement to Reuters.
While Apple’s decision to restock its shelves with Qualcomm-only iPhone 7s and 8s represents a momentary victory for Qualcomm, a separate German court tossed another of its patent suits against Apple last month — dismissing it as groundless. (Qualcomm said it would appeal.)
The chipmaker has also been pursing patent litigation against Apple in China, and in December Apple appealed a preliminary injunction banning the import and sales of old iPhone models in the country.
At the same time, Qualcomm and Apple are both waiting the result of an antitrust trial brought against Qualcomm’s licensing terms in the U.S.
Two years ago the FTC filed charges against Qualcomm, accusing the chipmaker of operating a monopoly and forcing exclusivity from Apple while charging “excessive” licensing fees for standards-essential patents.
The case was heard last month and is pending a verdict or settlement.
Ant Financial, the financial services behemoth affiliated with Chinese e-commerce giant Alibaba, has made its first big move into Europe. It’s acquired London-headquartered payments company WorldFirst in a deal that sources tell us is valued at around $700 million.
(That price would also line up with multiple reports from December claiming the two were in talks for an acquisition of around £550 million, or $717 million at current exchange rates.)
This isn’t your average multi-hundred million dollar acquisition. The deal was confirmed by WorldFirst in a note to customers while Alibaba, which curiously didn’t put out an official press release, acknowledged the acquisition to us through a spokesperson.
Yet despite a relatively under-the-radar outing, the deal has potentially significant consequences. It not only underscores the strong market connections between China and Europe, but also the margin (and thus strategic) pressures that many smaller remittance companies are under in the wake of larger companies like Amazon building its own money-moving services, as well as competition from local players in Asia.
One of a number of globally active money remittance services, 15-year-old WorldFirst lets businesses and consumers move money between countries at prices that are lower than regular banks.
The company claims to have transferred over £70 billion ($90 billion) for customers since 2004, with more than one million transfers made each year. WorldFirst is a player in the competitive remittance market, in which migrant workers send money home to family, who can make transfers online or in person at WorldFirst outlets.
Ant Financial is best known for its Alipay service, which is China’s dominant mobile payment app with over 550 million registered users. Alibaba owns one-third of Ant, which is valued at as much as $150 billion, and it has been pushing to expand its empire outside of China and beyond Asia Pacific, too.
“Alipay and WorldFirst’s capabilities and international footprints are highly complementary,” WorldFirst co-founder and chief executive Jonathan Quin wrote in an internal memo obtained by TechCrunch.
According to Quin, WorldFirst will retain its brand and become a wholly-owned subsidiary of Ant Financial. Many merchants in the UK already accept Alipay, which has expanded to cater for Chinese tourists spending money overseas.
“The tie-up will add WorldFirst’s international online payments and virtual account products to Alipay’s range of technology solutions,” an Ant Financial spokesperson told TechCrunch without disclosing the size of the buyout.
WorldFirst has been financed by private equity investors and, as a private company, it keeps its financial details closely held, but in August 2018 it noted that it had transferred more than $95 billion for some 160,000 customers — businesses and individuals included. A source told us its GMV was around $10 billion a year.
But sources noted that it was under pressure of its own that would have made securing a deal with Ant even more of a priority.
“That whole sector of payments from the West to China sellers for e-commerce is under massive margin pressure from Amazon going direct with its own service, plus new China based entrants PingPong, LianLian and Airwallex,” one executive very close to the remittance space told us. “WorldFirst had recently seen low to declining growth because of this.” Another source said that it had been shopping itself around.
(The Amazon reference is related to Amazon PayCode, a new service it has built with Western Union to let people in markets where Amazon has not launched a local site to pay for goods in local currencies on its platform. The deal was first announced in October last year, and has seen the two companies offering payment alternatives in places like Thailand and Kenya to remove the need to transfer payments in other ways, via Alipay or whatever transfer service a seller or buyer might use.)
The acquisition gives Ant Financial a massive international boost, and for the first time a presence in Europe, but it comes amid some stumbles for the company in its other attempts to expand internationally.
While WorldFirst is based out of the UK, the company last year made a key move to expand its US operations when it was announced in August that it would acquire the retail money transfer business of San Francisco-based startup Wyre, which had built the network on blockchain technology but was selling it to focus on the other side of its business, providing currency exchange APIs to larger B2B customers.
It looked like all systems go for WorldFirst to move deeper in the US after that. But then, the company abruptly announced on February 20 that it planned to close the U.S-based business. The move may have been made to prevent a repeat of that scuppered MoneyGram acquisition.
WorldFirst is closing its business in the U.S. in a move widely seen as a precursor to its acquisition by Ant Financial
Outside of the U.S. and China, Ant Financial has aggressively expanded its presence in Asia through a series of investment deals that have seen it put $200 million into Kakao Pay in Korea, and find similar deals in Southeast Asia. The overall strategy appears to be to replicate the success of Alipay in China, where it offers mobile payments and digital financial services that cover loans, banking and wealth management.
