The FT is buying another media startup: Deal Street Asia

Fresh from picking up a majority stake in Europe-based The Next Web, the Financial Times is buying another tech blog. The newspaper, which was founded in 1888, is adding Singapore-based Deal Street Asia to its roster with a deal expected to close in April, according to three sources with knowledge of discussions.

Founded in 2014 by Indian journalists Joji Thomas Philip and Sushobhan Mukherjee, Deal Street Asia mixes Asia startup news with updates from Asia’s financial markets and business verticals. It has around a dozen reporters across Southeast Asia and India, as well as a license to use content from wires. Its investors include Singapore Press Holdings, Vijay Shekhar Sharma, the founder of Alibaba-backed Paytm, the Singapore Angel Network and Hindustan Times, the Indian media firm that operates Mint, which is a Deal Street Asia content partner.

The company never disclosed its total fundraising, although TechCrunch wrote about an undisclosed round that closed in late 2015.

The deal is led by Nikkei, the Japanese parent of the FT, which has agreed to buy at least one-third of Deal Street Asia, one source told TechCrunch, but the total stake could reach 51 percent (as was the case with The Next Web) depending on which investors decide to sell. A separate source said the investment is worth at least $5 million. That would represent a positive return for all investors with early backers potentially banking 4-5X. That’s a pretty handsome result for an investment in a media business, which are often efforts to spark an ecosystem or at least include a lower expectation on a return.

“The FT is not involved in plans to acquire Deal Street Asia,” an FT spokesperson told TechCrunch.

Deal Street Asia declined to comment. At the time of writing, Nikkei’s press department had not responded to a request for comment that was sent yesterday at 20:31 Japanese time.

TechCrunch understands that the deal for Deal Street Asia will be similar to that of The Next Web. That’s to say that one of the primary interests is adding the company’s events business to its roster to help to break into the conference scene in Southeast Asia.

Deal Street Asia’s events are targeted at a business crowd. For example, its main summit in Singapore in September costs upwards of $1,000 and features senior executives from the likes of DBS, Grab, Sea, GGV, Allianz and IFC.

The startup uses a subscription business for its website, which is priced upwards of $89 for three months of complete access. Its paywall is a selective one that keeps some stories locked for subscribers, whilst others are left open for all readers.

Deal Street Asia’s upcoming Asia PE-VC Summit takes place in Singapore in September

This far from it for the FT in terms of deals. TechCrunch understands that the company is actively seeking acquisition and investment opportunities in media startups across the world. Beyond augmenting its existing events business, one source told TechCrunch that the FT is considering a new media subscription business which could bundle some of its acquisitions together. That’s very much an ongoing work in progress as seeks additional deals to plump up that potential subscription offering.

Aside from The Next Web and Deal Street Asia, the FT has acquired content startup AlphaGrid, intelligence service GIS Planning and research firm Longitude. The FT itself was bought by Nikkei from previous owner Pearson for $1.3 billion in 2015.

Disclaimer: The author is a former employee of The Next Web

500 Startups Japan becomes Coral Capital with a new $45M fund

The 500 Startups Japan crew is going independent. The VC firm announced a $30 million fund in 2015, and now the follow up is a new $45 million fund called Coral Capital.

Helmed by James Riney and Yohei Sawayama, just like 500 Startups Japan, Coral will essentially continue the work the U.S. firm made in Japan, where it made more than 40 investments including Kakehashi, satellite startup Infostellar, SmartHR and Pocket Concierge, which was acquired by American Express.

“Coral provides a foundational role within the marine ecosystem, it’s symbolic about how we want to be in the Japanese startup ecosystem,” Riney told TechCrunch in an interview.

LPs in the fund include 500 Startups backers Mizuho Bank, Mitsubishi Estate, and Taizo Son — the brother of SoftBank CEO Masayoshi Son and founder of Mistletoe — and Shinsei Bank as well as other undisclosed institutional investors, who Riney said account for nearly half of the LPs. Riney said the fund was closed within two and a half months of fundraising and Coral had to turn some prospective investors away due to the overall interest shown.

Riney said that the scandals around 500 Startups — founding partner Dave McClure resigned in 2017 after admitting he’d been a “creep” around women — “wasn’t really a strong consideration” for starting Coral.

“It’s something we’d been wanting to do for a while,” he explained.

Coral Capital founding partners James Riney and Yohei Sawayama previously led 500 Startups Japan

Riney explained that Coral won’t mix in with 500 Startups Japan investments, and the team will continue to manage that portfolio whilst also running the fund.

Thesis-wise, the plan is to continue on from 500 Startups Japan, that means going after early stage deals across the board. Riney said that over the last four years, he’s seen more founders leave stable jobs and start companies which bodes well for Japan’s startup ecosystem.

“Now you’re seeing people more into their careers who see entrepreneurism as a way to fundamentally change their industry,” he said in an interview. “That bucks the trend of risk aversion in Japan which is commonly the perception.”

He sees the arrival of Coral as an opportunity to continue to push startup culture in Japan, a country well known for massive corporations and company jobs with an absence of early stage capital options for founders.

“There’s a lot of work we can do and the impact we can make in Japan is much higher than in somewhere like Silicon Valley,” Riney said.

“Pretty much every corporate has a startup program, but few of them are strong leads within seed or early stage deals, they tend to feel more comfortable in later stage investments. There have been investors investing on behalf of corporations who got the courage to spin out and go alone… but it is still much much fewer than other countries,” he added.

Tencent is launching its own version of Snap Spectacles

Some were surprised to see Snap release a second version of its “face-camera” Spectacles gadget, since the original version failed to convert hype into sales.

But those lackluster sales — which dropped to as low as 42,000 per quarter — didn’t only fail to dissuade the U.S. social firm from making more specs, because now Tencent, the Chinese internet giant and Snap investor, has launched its own take on the genre.

Tencent this week unveiled its answer to the video-recording sunglasses, which, you’ll notice, bear a striking resemblance to Snap’s Spectacles.

Called the Weishi smartglasses, Tencent’s wearable camera sports a lens in the front corner that allows users to film from a first-person perspective. Thankfully, the Chinese gaming and social giant has not made the mistake of Snap’s first-generation Spectacles, which highlighted the camera with a conspicuous yellow ring.

Tencent, which is best known for operating China’s massively popular WeChat messenger, has been an investor in Snap for some time after backing it long before it went public. But, when others have criticized the company and its share price struggled, Tencent doubled down. It snapped up an additional 12 percent stake one year ago and it is said to have offered counsel to Snap CEO Evan Spiegel on product strategy. We don’t know, however, if the two sides’ discussions have ever covered Spectacles and thus inspired this new Tencent take on then.

The purpose behind Tencent’s new gadget is implicit in its name. Weishi, which means “micro videos” in Chinese, is also the name of the short-video sharing app that Tencent has been aggressively promoting in recent months to catch up with market dominators TikTok and Kuaishou .

TikTok, known as Douyin in China, is part of the entertainment ecosystem that Beijing-based ByteDance is building. ByteDance also runs the popular Chinese news aggregator Toutiao and is poised to overtake Uber as the world’s most-valued tech startup when it closes its mega $3 billion funding round.

Weishi’s other potential rival Kuaishou is, interestingly, backed by Tencent. Kuaishou launched its own video-taking sunglasses in July.

Alongside the smart sunglasses, Tencent has also rolled out a GoPro-like action camera that links to the Weishi app. Time will tell whether the gadgets will catch on and get more people to post on Weishi.

Snap Spectacles V1 (top) and V2

The spectacles will go on sale November 11, a date that coincides with Singles Day, the annual shopping spree run by Tencent’s close rival Alibaba. Tencent does not make the gadget itself and instead has teamed up with Shenzhen-based Tonot, a manufacturer that claims to make “trendy” video-taking glasses. Tonot has also worked with Japan’s Line chat app on camera glasses.

“There isn’t really a demand for video-recording glasses,” says Mi Zou, a Beijing-based entrepreneur working on an AI selfie app. That’s because smartglasses are “not offering that much more to consumers than smartphones do,” she argues. Plus, a lot of people on apps like Douyin and Kuaishou love to take selfies, a need that smartglasses fail to fulfill.

“Tencent will have to work on its marketing. It could perhaps learn a few things from the Apple Watch, which successfully touts a geeky product as a fashionable accessory,” suggests Mi, who points out Snap Spectacles’ so-far dim reception.

Weishi had not responded to TechCrunch’s request for comment at the time of writing, but we’ll update this story with any additional information should the company provide it.

China’s Didi pumps $1B into its rebranded driver services business

Didi Chuxing is going pedal to the metal for its automobile services business after it announced it will invest $1 billion into the division, which is also getting a rebrand.

The Chinese ride-hailing firm had been tipped to spin out the business and raise $1.5 billion from investors ahead of an IPO, according to a recent Reuters report. The business itself hasn’t spun out, however, but it has been renamed to Xiaoju Automobile Solutions and given more autonomy with the introduction of its own general manager.

The division handles services for registered Didi drivers, such as leasing and purchase financing, insurance, repairs, refueling, car-sharing and more. Essentially, with its huge army of drivers, Didi can get preferential rates from service providers, which means better deals for its drivers. That, in turn, is helpful for recruiting new drivers and growing the business. (Didi claims to support 30 million drivers, but that covers food delivery as well as more basic point-to-point transportation.)

Rather than outsiders — SoftBank had been linked with an investment at a valuation of up to $3 billion — Xiaoju is getting its capital boost direct from Didi. The company said it injected $1 billion to “support its business in providing Didi drivers and the broader car-owner community with convenient, flexible, economical, and reliable one-stop auto services.”

Of course, these factors don’t preclude Didi from spinning the business out in the future and listing it separately to the parent Didi firm. That’s the reasoning Reuters made in its previous story, and it still stands to reason that if Didi is (as widely expected) planning a public listing of its own then it might be keen to break out this asset-heavy part of its business.

Didi didn’t respond to our request for comment on those future plans.

Didi Chuxing’s rebranded Xiaoju driver services division includes a refueling program for its drivers.

The company is saying more about the Xiaoju business itself. It said the services support drivers in over 257 cities through a network of 7,500 partners and distributors. There are some caveats, though: the auto care service is currently limited to seven cities in China.

Didi also went on the record with some financial data. The company claimed that annualized GMV for Xiaoju has jumped from 37 billion RMB ($5.4 billion) in April 2018 to 60 billion RMB ($8.76 billion) as of today. That’s impressive growth of 62 percent, and the forecast is that it will easily pass its previous goal of 90 billion RMB ($13.15 billion) for 2018 before this year is finished.

GMV, in this case, refers to the total value of goods and services crossing the Xiaoju platform. That help gives an idea of how active it is, but it doesn’t translate to revenue or profit/loss for Didi. The company didn’t provide information for either revenue or profitability for Xiaoju.

This year has been a notable one as the company has expanded its horizons for the first time by venturing outside of China.

Last year, Didi raised $4 billion to double down on technology, AI and move into new markets, and it has come good on that promise by entering Mexico, Australia and Taiwan. It also landed Brazil through the acquisition of local player and Uber rival 99 and it is preparing to go live in Japan, where it will operate a taxi-booking service through a joint venture with SoftBank.

Beyond that massive $4 billion raise, Didi recently landed a $500 million investment from Booking Holdings that’s aimed at providing strategic alliances between the Didi and the travel giant’s range of services. The company has raised over $17 billion from investors to date and it was last valued at $56 billion.