Friday Tech Briefing: June 1

DEALS AND FUNDRAISING

1. China’s SenseTime Raises $620 Million, Its Second Funding Round in Two Months

WHAT:

·        Chinese facial recognition technology developer SenseTime Group Ltd. said it has raised $620 million in a second round of funding in just two months

·        The financing, which values the company at more than $4.5 billion, was led by Fidelity International, Hopu Capital, Silver Lake and Tiger Global, and follows a $600 million funding round in April led by Alibaba

WHY IT’S IMPORTANT:

·        SenseTime continued to be the world’s most valuable unicorn in artificial intelligence

·        Megvii Inc, a Beijing-based rival, in October raised $460 million from a Chinese state fund, Ant Financial and Foxconn Technology

BIG PICTURE:

·        SenseTime’s valuation has more than doubled in the past half year, at a time when Beijing is keen for China to become an international leader in AI by 2025

Source: Reuters

PRODUCTS

2. Google Launches Second App in China

WHAT:

·        Google has launched a second China-specific app, a file managing tool named “Files Go”, in several Chinese app stores

·        The move marks Google’s first launch on third-party Chinese app stores including those hosted by Baidu, Xiaomi and Huawei

WHY IT’S IMPORTANT:

·        By joining hands with China’s Internet giants and collaborating with third-party Chinese app stores, Google is looking for fresh inroads into the world’s biggest smartphone market, after most of its services were banned in China in 2010

BIG PICTURE:

·        Google is trying to expand its operations in China, but its return to providing consumer products has been slow amid tightening self-policing regulations

·        The world’s biggest internet company’s about-face in China comes as it chases the huge opportunity offered by the country’s internet and smartphone markets

Source: Reuters

BIG TECH COMPANIES

3. ZTE to Replace Top Exec as China Seeks to Lift U.S. Ban

WHAT:

·        Tian Dongfang, a ZTE non-executive director, has assumed the role of party secretary. He replaces Fan Qingfeng in a position that’s considered the one with ultimate responsibility in most major Chinese companies

WHY IT’S IMPORTANT:

·        Last week, the U.S. indicated that it would allow ZTE to resume business -- provided it pay a $1.3 billion fine and change its management and board

BIG PICTURE:

·        China is trying to convince the U.S. to lift a seven-year ban on ZTE’s purchases of vital American technology, imposed in April for breaching terms of a settlement over sanction-breaking sales to Iran

·        The dispute has become part of a larger trade dispute between the world’s two largest economies, and has exposed how China’s high-tech champions are still dependent on foreign technology

Source：Bloomberg

4. New GLP Mega-Fund to Invest in Smart Logistics

WHAT:

·        Logistics giant GLP recently launched a 10 billion yuan ($1.6 billion) fund to improve efficiency in China’s booming logistics industry

·        The fund will invest in three areas: multimodal solutions that combine water, rail, road and air transport; cold chain logistics for the food sector; and smart trucking.

WHY IT’S IMPORTANT:

·        China’s 230 trillion yuan ($35.76 trillion) logistics industry is fraught with waste and challenged by changing consumption patterns. The proportion of logistics costs to China’s GDP is larger than the 8-9% in developed markets

BIG PICTURE:

·        With about three-quarters of the mainland’s 29.2 trillion yuan in e-commerce transactions last year involving goods and services, operators are in a race to find ways to deliver goods as quickly as possible

Source: South China Morning Post

5. Suning Nets $900 Million in Further Alibaba Stake Sell-Down

WHAT:

·        Suning sold Alibaba shares for $1.5 billion, netting a profit of about 5.6 billion yuan ($890 million) on the transaction

·        Following the sale, Suning will continue to hold about 13.2 million Alibaba shares, equivalent to about 0.51% of Alibaba’s total share count

WHY IT’S IMPORTANT:

·        The sale follows a similar one announced in December, when Suning netted 3.25 billion yuan in profit from its sale of about 5.5 million Alibaba shares

·        Between the two sales, Suning has now reaped a profit of nearly9 billion yuan from its Alibaba investment in 2015, thanks to a tripling in Alibaba stock since the tie-up

BIG PICTURE:

·        Suning and Alibaba formed a strategic tie-up in 2015, pooling their complementary assets in traditional brick-and-mortar and online retailing

·        China’s online and traditional brick-and-mortar retailers are scrambling to form similar tie-ups in search of an online-offline retailing model of the future

Source: Caixin

Compiled by Hou Qijiang, Qian Tong and Zhang Erchi