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May 26, 2019
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Indonesia restricts WhatsApp, Facebook and Instagram usage following deadly riots

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Indonesia is the latest nation to hit the hammer on social media after the government restricted the use of WhatsApp and Instagram following deadly riots yesterday.

Numerous Indonesia-based users are today reporting difficulties sending multimedia messages via WhatsApp, which is one of the country’s most popular chat apps, and posting content to Facebook, while the hashtag #instagramdown is trending among the country’s Twitter users due to problems accessing the Facebook-owned photo app.

Wiranto, a coordinating minister for political, legal and security affairs, confirmed in a press conference that the government is limiting access to social media and “deactivating certain features” to maintain calm, according to a report from Coconuts.

Rudiantara, the communications minister of Indonesia and a critic of Facebook, explained that users “will experience lag on Whatsapp if you upload videos and photos.”

Facebook — which operates both WhatsApp and Instagram — didn’t explicitly confirm the blockages , but it did say it has been in communication with the Indonesian government.

“We are aware of the ongoing security situation in Jakarta and have been responsive to the Government of Indonesia. We are committed to maintaining all of our services for people who rely on them to communicate with their loved ones and access vital information,” a spokesperson told TechCrunch.

A number of Indonesia-based WhatsApp users confirmed to TechCrunch that they are unable to send photos, videos and voice messages through the service. Those restrictions are lifted when using Wi-Fi or mobile data services through a VPN, the people confirmed.

The restrictions come as Indonesia grapples with political tension following the release of the results of its presidential election on Tuesday. Defeated candidate Prabowo Subianto said he will challenge the result in the constitutional court.

Riots broke out in capital state Jakarta last night, killing at least six people and leaving more than 200 people injured. Following this, it is alleged that misleading information and hoaxes about the nature of riots and people who participated in them began to spread on social media services, according to local media reports.

Protesters hurl rocks during clash with police in Jakarta on May 22, 2019. – Indonesian police said on May 22 they were probing reports that at least one demonstrator was killed in clashes that broke out in the capital Jakarta overnight after a rally opposed to President Joko Widodo’s re-election. (Photo by ADEK BERRY / AFP)

For Facebook, seeing its services forcefully cut off in a region is no longer a rare incident. The company, which is grappling with the spread of false information in many markets, faced a similar restriction in Sri Lanka in April, when the service was completely banned for days amid terrorist strikes in the nation. India, which just this week concluded its general election, has expressed concerns over Facebook’s inability to contain the spread of false information on WhatsApp, which is its largest chat app with over 200 million monthly users.

Indonesia’s Rudiantara expressed a similar concern earlier this month.

“Facebook can tell you, ‘We are in compliance with the government’. I can tell you how much content we requested to be taken down and how much of it they took down. Facebook is the worst,” he told a House of Representatives Commission last week, according to the Jakarta Post.

Update 05/22 02:30 PDT: The original version of this post has been updated to reflect that usage of Facebook in Indonesia has also been impacted.

A young entrepreneur is building the Amazon of Bangladesh

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At just 26, Waiz Rahim is supposed to be involved in the family business, having returned home in 2016 with an engineering degree from the University of Southern California. Instead, the young entrepreneur is plotting to build the Amazon of Bangladesh.

Deligram, Rahim’s vision of what e-commerce looks like in Bangladesh, a country of nearly 180 million, is making progress, having taken inspiration from a range of established tech giants worldwide, including Amazon, Alibaba and Go-Jek in Indonesia.

It’s a far cry from the family business. That’s Rahimafrooz, a 55-year-old conglomerate that is one of the largest companies in Bangladesh. It started out focused on garment retail, but over the years its businesses have branched out to span power and energy and automotive products while it operates a retail superstore called Agora.

During his time at school in the U.S., Rahim worked for the company as a tech consultant whilst figuring out what he wanted to do after graduation. Little could he have imagined that, fast-forward to 2019, he’d be in charge of his own startup that has scaled to two cities and raised $3 million from investors, one of which is Rahimafrooz.

Deligram CEO Waiz Rahim [Image via Deligram]

“My options after college were to stay in U.S. and do product management or analyst roles,” Rahim told TechCrunch in a recent interview. “But I visited rural areas while back in Bangladesh and realized that when you live in a city, it’s easy to exist in a bubble.”

So rather than stay in America or go to the family business, Rahim decided to pursue his vision to build “a technology company on the wave of rising economic growth, digitization and a vibrant young population.”

The youngster’s ambition was shaped by a stint working for Amazon at its Carlsbad warehouse in California as part of the final year of his degree. That proved to be eye-opening, but it was actually a Kickstarter project with a friend that truly opened his mind to the potential of building a new venture.

Rahim assisted fellow USC classmate Sam Mazumdar with Y Athletics, which raised more than $600,000 from the crowdsourcing site to develop “odor-resistant” sports attire that used silver within the fabric to repel the smell of sweat. The business has since expanded to cover underwear and socks, and it put Rahim’s mind to work on what he could do by himself.

“It blew my mind that you can build a brand from scratch,” he said. “If you are good at product design and branding, you could connect to a manufacturer, raise money from backers and get it to market.”

On his return to Bangladesh, he got Deligram off the ground in January 2017, although it didn’t open its doors to retailers and consumers until March 2018.

E-commerce through local stores

Deligram is an effort to emulate the achievements of Amazon in the U.S. and Alibaba in China. Both companies pioneered online commerce and turned the internet into a major channel for sales, but the young Bangladeshi startup’s early approach is very different from the way those now hundred-billion-dollar companies got started.

Offline retail is the norm in Bangladesh and, with that, it’s the long chain of mom and pop stores that account for the majority of spending.

That’s particularly true outside of urban areas, where such local stores almost become community gathering points, where neighbors, friends and families run into each other and socialize.

Instead of disruption, working with what is part of the social fabric is more logical. Thus, Deligram has taken a hybrid approach that marries its regular e-commerce website and app with offline retail through mom and pop stores, which are known as “mudir dokan” in Bangladesh’s Bengali language.

A customer can order their product through the Deligram app on their phone and have it delivered to their home or office, but a more popular — and oftentimes logical — option is to have it sent to the local mudir dokan store, where it can be collected at any time. But beyond simply taking deliveries, mudir dokans can also operate as Deligram retailers by selling through an agent model.

That’s to say that they enable their customers to order products through Deligram even if they don’t have the app, or even a smartphone — although the latter is increasingly unlikely with smartphone ownership booming. Deligram is proactively recruiting mudir dokan partners to act as agents. It provides them with a tablet and a physical catalog that their customers can use to order via the e-commerce service. Delivery is then taken at the store, making it easy to pick up, and maintaining the local network.

“We’ll tell them: ‘Right now, you offer a few hundred products, now you have access to 15,000,’ ” the Deligram CEO said.

Indeed, Rahim sees this new digital storefront as a key driver of revenue for mudir dokan owners. For Deligram, it is potentially also a major customer acquisition channel, particularly among those who are new to the internet and the world of smartphone apps.

This offline-online model — known by the often-buzzy industry term “omnichannel” — isn’t new, but in a world where apps and messaging is prevalent, reaching and retaining users is challenging, particularly in emerging markets.

“It’s not easy to direct people to a website today, and the app-first approach has made it hard,” Rahim said. “We looked at how companies in Indonesia and India overcame these challenges.”

In particular, he studied the work of Go-Jek in Indonesia, which uses an agent model to push its services to nascent internet users, and Amazon India, which leans heavily on India’s local “kirana” stores for orders and deliveries.

In Deligram’s case, the mudir dokan picks up sales commission as well as money for every delivery that is sent to their store. Home deliveries are possible, but the lack of local infrastructure — “turn right at the blue house, left at the white one, and my place is third from the left,” is a common type of direction — makes finding exact locations difficult and inefficient, so an additional cost is charged for such requests.

E-commerce startups often struggle with last-mile because they rely on a clutch of logistics companies to fulfill orders. In a rare move for an early-stage company, Deligram has opted to run its entire logistics process in-house. That obviously necessitates cost and likely provides significant growing pains and stress, but, in the long term, Rahim is betting that a focus on quality control will pay out through higher customer service and repeat buyers.

A prospective Deligram customer flips through a hard copy of the company’s product brochure in a local store [Image via Deligram]

Startups on the rise in Bangladesh

Rahim’s timing is impeccable. He returned to Bangladesh just as technology was beginning to show the potential to impact daily life. Bangladesh has posted a 7% rise in GDP annually every year since 2016, and with an estimated 80 million internet users, it has the fifth-largest online population on the planet.

“We are riding on a lot of macro trends; we’re among the top five based on GDP growth and have the world’s eighth-largest population,” Rahim told TechCrunch. “There are 11 million people in middle income — that’s growing — and our country has 90 million people aged under 30.”

“An index to track the growth of young people would be [capital city] Dhaka… you can just see the vibrancy with young people using smartphones,” he added.

That’s an ideal storm for startups, and the country has seen a mix of overseas entrants and local ventures pick up speed. Alibaba last year acquired Daraz, the Rocket Internet-founded e-commerce service that covers Pakistan, Bangladesh, Myanmar, Sri Lanka and Nepal, while the Chinese giant also snapped up 20% of bKash, a fintech venture started from Brac Bank as part of the regional expansion of its Ant Financial affiliate.

Uber, too, is present, but it is up against tough local opposition, as is the norm in Asian markets.

That’s because Bangladesh’s most prominent local startups are in ride-hailing. Pathao raised more than $10 million in a funding round that closed last year and was led by Go-Jek, the Indonesia-based ride-hailing firm valued at more than $9 billion that’s backed by the likes of Tencent and Google. Pathao is reportedly on track to raise a $50 million Series B this year, according to Deal Street Asia.

Pathao is one of two local companies that competes alongside Uber in Bangladesh [Image via Pathao]

Its chief rival is Shohoz, a startup that began in ticketing but expanded to rides and services on-demand. Shohoz raised $15 million in a round led by Singapore’s Golden Gate Ventures, which was announced last year.

Deligram has also pulled in impressive funding numbers, too.

The startup announced a $2.5 million Series A raise at the end of March, which Rahim wrote came from “a network of institutional and angel investors;” such is the challenge of finding a large check for a tech play in Bangladesh. The investors involved included Skycatcher, Everblue Management and Microsoft executive Sonia Bashir Kabir. A delighted Rahim also won a check from Rahimafrooz, the family business.

That’s not a given, he said, admitting that his family did initially want him to go to work with their business rather than pursuing his own startup. In that context, contributing to the round is a major endorsement, he said.

Rahimafrooz could be a crucial ally in future fundraising, too. Despite an improving climate for tech companies, Bangladesh’s top startups are still finding it tough to raise money, especially with overseas investors that can write the larger checks that are required to scale.

“I think the biggest challenge is branding. Every time I speak with new investors, I have to start by explaining where Bangladesh is, or the national metrics, not even our business,” Pathao CEO Hussain Elius told TechCrunch.

“There’s a legacy issue. Bangladesh seems like a country which floods all the time and the garment sector going down — that’s a part of the story but not the full story. It’s also an incredible country that’s growing despite those challenges,” he added.

Pathao is reportedly on track to raise a $50 million Series B this year, according to Deal Street Asia. Elius didn’t address that directly, but he did admit that raising growth funding is a bigger challenge than seed-based financing, where the Bangladesh government helps with its own fund and entrepreneurial programs.

“It’s hard for us as we’re the first ones out there, but it’ll be easier for the ones who’ll follow on,” he explained.

Still, there are some optimistic overseas watchers.

“We remain enthusiastic about the rapidly expanding set of opportunities in Bangladesh,” said Hian Goh, founding partner of Singapore-based VC firm Openspace — which invested in Pathao.

“The country continues to be one of the fastest-growing economies in the world, underpinned by additional growth in its garments manufacturing sector. This has blossomed into an expanding middle class with very active consumption behavior,” Goh added.

Growth plans

With the pain of fundraising put to the side for now, the new money is being put to work growing the Deligram business and its network into more parts of Bangladesh, and the more challenging urban areas.

Geographically, the service is expanding its agent reach into five more cities to give it a total of seven locations nationwide. That necessitates an increase in logistics and operations to keep up with, and prepare for, that new demand.

Deligram workers in one of the company’s warehouses [Image via Deligram]

Rahim said the company had handled 12,000 orders to date as of the end of March, but that has now grown past 20,000 indicating that order volumes are rising. He declined to provide financial figures, but said that the company is on track to increase its monthly GMV volume by six-fold by the end of this year. Electronics, phones and accessories are among its most popular items, but Deligram also sells apparel, daily items and more.

Interestingly, and perhaps counter to assumptions, Deligram started in rural areas, where Rahim saw there was less competition but also potentially more to learn through a more early-adopter customer base. That’s obviously one major challenge when it comes to growth, and now the company is looking at urban expansion points.

On the product side, Deligram is in the early stages of piloting consumer financing using its local store agents as the interface, while Rahim teased “exciting IOT R&D projects” that he said are in the planning stage.

Ultimately, however, he concedes that the road is likely to be a long one.

“Over the last 18-20 years, modern retail hasn’t made much progress here,” Rahim said. “It accounts for around 2.5% of total retail, e-commerce is below 1% and the long tail local stores are the rest.”

“People will eventually shift, but I think it’ll take five to eight years, which is why we provide the convenience via mom and pop shops,” he added.

Food delivery startup Dahmakan eats up $5M for expansion in Southeast Asia

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It’s harvest season for Southeast Asia’s full-stack food delivery startups. Following on from Singapore’s Grain raising $10 million, so Malaysia-based Dahmakan today announced a $5 million financing round of its own.

The money takes the startup to $10 million raised to date — its last round as $2.6 million last year — and it comes via new investors U.S-based Partech Partners and China’s UpHonest Capital and existing backers Y-Combinator, Atami Capital and the former CEO of Nestlé who was an angel investor. The round was closed earlier this year but is now being announced alongside this expansion play.

It’s been a busy couple of years for the company, which was founded in 2015 by former execs from Rocket Internet’s FoodPanda service. Dahmakan — which means “Have you eaten?” in Malay — graduated Y Combinator in 2017 and it expanded to Thailand last year through an acquisition, so what’s on the menu for 2019?

It is going all in on ‘cloud kitchen’ model of using unwanted retail space to cook up meals specifically for digital orders, which is entirely its business since it handles all processes in house rather than through a marketplace model.

Already, in its home town of Kuala Lumpur, Malaysia, Dahmakan has introduced ‘satellite’ hubs that will allow it to serve customers located in different parts of the city more efficiently. The service already fares better than rivals like FoodPanda, Grab Food and (in Thailand) GoJek’s GetFood service because customers order ahead of time from a fixed menu with scheduled delivery times, but there’s room to do better and more.

“The way that we are thinking about it is that we are 18 months ahead of the competition in terms of the cloud kitchen model. Most are only starting to build out clusters of mini kitchens (150sqft) or so without leveraging too much AI in terms of product development, procurement or automation in machinery,” Dahmakan COO and co-founder Jessica Li told TechCrunch.

“What we’ve figured out is how to scale food production for thousands of deliveries while maintaining quality and keeping costs at 30 percent below comparable restaurant prices,” she added, explaining that the company plans to add “new brands and new products” using the satellite hub approach.

A serving of Ayam Penyet, Indonesian smashed chicken

Dahmakan is looking to extend its reach in Southeast Asia, too.

Li said the immediate priority is domestic growth in Malaysia with the service set to expand in Penang and Johor Bharu during the third quarter of this year. Beyond that, she revealed that Dahmakan plans to move into Singapore and Indonesia before the end of 2019.

Food delivery is quickly becoming the new ride-hailing war in Southeast Asia as Grab and Go-Jek, which have raised the most money in the region, pour capital into space. Quite why they are doing so isn’t entirely clear. Food could be a channel for loyalty (if such a thing can exist in incentive-led verticals) and user engagement for ride-hailing or other parts of their so-called “super app” services, but, either way, it is certainly distorting the market by flooding users with promotions.

That’s not necessarily a bad thing for startups like Dahmakan and Grain which have grown in a more sustainable and responsible manner. They benefit from more people using food delivery in general, while they may also become attractive acquisition targets in the future.

Like Grain, Dahmakan puts a focus on healthy eating, which stands in contrast to the typical junk food orders that others in the space serve through their marketplace of restaurants. That certainly helps them stand out among certain audiences, and it’ll be interesting to see what new products and brands that Dahmakan is hatching to capitalize on the flood of attention food delivery is seeing..

This is certainly only the start. A Google-Temasek report on Southeast Asia published last year forecasts that the region’s food delivery market will grow from an estimated $2 million last year to $8 billion in 2025. That four-fold prediction is larger than the growth forecast for ride-hailing, although the latter is larger.

“That’s faster than any other region even China,” Li said.

A report from Google and Temasek predicts huge growth for ride-hailing and food delivery services in Southeast Asia

Biofourmis raises $35M to develop smarter treatments for chronic diseases

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Biofourmis, a Singapore-based startup pioneering a distinctly tech-based approach to the treatment of chronic conditions, has raised a $35 million Series B round for expansion.

The round was led by Sequoia India and MassMutual Ventures, the VC fund from Massachusetts Mutual Life Insurance Company. Other investors who put in include EDBI, the corporate investment arm of Singapore’s Economic Development Board, China-based healthcare platform Jianke and existing investors Openspace Ventures, Aviva Ventures and SGInnovate, a Singapore government initiative for deep tech startups. The round takes Biofourmis to $41.6 million raised to date, according to Crunchbase.

This isn’t your typical TechCrunch funding story.

Biofourmis CEO Kuldeep Singh Rajput moved to Singapore to start a PhD, but he dropped out to start the business with co-founder Wendou Niu in 2015 because he saw the potential to “predict disease before it happens,” he told TechCrunch in an interview.

AI-powered specialist post-discharge care

There are a number of layers to Biofourmis’ work, but essentially it uses a combination of data collected from patients and an AI-based system to customize treatments for post-discharge patients. The company is focused on a range of therapeutics, but its most advanced is cardiac, so patients who have been discharged after heart failure or other heart-related conditions.

With that segment of patients, the Biofourmis platform uses a combination of data from sensors — medical sensors rather than consumer wearables, which are worn 24/7 — and its tech to monitor patient health, detect problems ahead of time and prescribe an optimum treatment course. That information is disseminated through companion mobile apps for patients and caregivers.

Bioformis uses a mobile app as a touch point to give patients tailored care and drug prescriptions after they are discharged from hospital

That’s to say that medicine works differently on different people, so by collecting and monitoring data and crunching numbers, Biofourmis can provide the best drug to help optimize a patient’s health through what it calls a ‘digital pill.’ That’s not Matrix-style futurology, it’s more like a digital prescription that evolves based on the needs of a patient in real-time. It plans to use a network of medical delivery platforms, including Amazon-owned PillPack, to get the drugs to patients within hours.

Yes, that’s future tense because Biofourmis is waiting on FDA approval to commercialize its service. That’s expected to come by the end of this year, Singh Rajput told TechCrunch. But he’s optimistic given clinical trials, which have covered some 5,000 patients across 20 different sites.

On the tech side, Singh Rajput said Biofourmis has seen impressive results with its predictions. He cited tests in the U.S. which enabled the company to “predict heart failure 14 days in advance” with around 90 percent sensitivity. That was achieved using standard medical wearables at the cost of hundreds of dollars, rather than thousands with advanced kit such as Heartlogic from Boston Scientific — although the latter has a longer window for predictions.

The type of disruption that Biofourmis might appear to upset the applecart for pharma companies, but Singh Rajput maintains that the industry is moving towards a more qualitative approach to healthcare because it has been hard to evaluate the performance of drugs and price them accordingly.

“Today, insurance companies are blinded not having transparency on how to price drugs,” he said. “But there are already 50 drugs in the market paying based on outcomes so the market is moving in that direction.”

Outcome-based payments mean insurance firms reimburse all outcomes based on the performance of the drugs, in other words how well patients recover. The rates vary, but a lack of reduction in remission rates can see insurers lower their payouts because drugs aren’t working as well as expected.

Singh Rajput believes Biofourmis can level the playing field and added more granular transparency in terms of drug performance. He believes pharma companies are keen to show their products perform better than others, so over the long-term that’s the model Biofourmis wants to encourage.

Indeed, the confidence is such that Biofourmis intends to initially go to market via pharma companies, who will sell the package into clinics bundled with their drugs, before moving to work with insurance firms once traction is gained. While the Biofourmis is likely to be bundled with initial medication, the company will take a commission of 5-10 percent on the recommended drugs sold through its digital pill.

Biofourmis CEO and co-founder Kuldeep Singh Rajput dropped out of his PhD course to start the company in 2015

Doubling down on the US

With its new money, Biofourmis is doubling down on that imminent commercialization by relocating its headquarters to Boston. It will retain its presence in Singapore, where it has 45 people who handle software and product development, but the new U.S. office is slated to grow from 14 staff right now to up to 120 by the end of the year.

“The U.S. has been a major market focus since day one,” Singh Rajput said. “Being closer to customers and attracting the clinical data science pool is critical.”

While he praised Singapore and said the company remains committed to the country — adding EDBI to its investors is certainly a sign — he admitted that Boston, where he once studied, is a key market for finding “data scientists with core clinical capabilities.”

That expansion is not only to bring the cardio product to market, but also to prepare products to cover other therapeutics. Right now, it has six trials in place that cover pain, orthopedics and oncology. There are also plans to expand in other markets outside of the U.S, and in particular Singapore and China, where Biofourmis plans to lead on Jianke.

Not lacking in confidence, Singh Rajput told TechCrunch that the company is on course to reach a $1 billion valuation when it next raises funding, that’s estimated as 18 months away and the company isn’t saying how much it is worth today.

Singh Rajput did confirm, however, that the round was heavily oversubscribed, and that the startup rebuffed investment offers from pharma companies in order to “avoid a conflict of interest and stay neutral.”

He is also eying a future IPO, which is tentatively set for 2023 — although by then, Singh Rajput said, Biofourmis would need at least two products in the market.

There’s a long way to go before then, but this round has certainly put Biofourmis and its digital pill approach on the map within the tech industry.

Smart TVs add fuel to Xiaomi’s Q1 earnings

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Chinese smartphone company Xiaomi just released its first quarterly results since announcing its $1.48 billion pledge to focus on smartphones and ‘AIoT’, an acronym for Internet of Things powered by artificial intelligence.

Xiaomi’s adjusted net profit for the first quarter increased 22.4 percent year-over-year to 2.1 billion yuan ($300 million), while total revenue climbed 27.2 percent to 43.8 billion yuan ($6.33 billion).

Sales in India, where Xiaomi handsets dominate, as well as other countries outside China, continued to be a bright spot for the company. International markets brought in 38 percent of its total revenue over the first quarter, representing a 35 percent increase. Xiaomi’s overseas momentum came amid a global slowdown in the smartphone sector and at a time its rival Huawei copes with a technology ban that threatens to hobble international sales.

Smartphones remained as Xiaomi’s biggest revenue driver, though the segment had shrunk from 67.5 percent of total revenue in Q1 of 2018 to 61.7 percent a year later. According to Canalys, Xiaomi was the world’s fourth-largest smartphone maker by units shipped in the first quarter. A brand traditionally popular among male consumers, Xiaomi has made efforts to court female users by taking over Meitu’s smartphone business that would allow it to sell selfie-optimizing devices.

Xiaomi’s ‘IoT and lifestyle’ unit, which churns out a wide range of home appliances from air purifiers to suitcases, saw its share of revenue jump from 22.4 percent to 27.5 percent year-over-year.

Xiaomi said growth of this segment was primarily driven by smart TV sales, a new area of focus at the smartphone company. In January, Xiaomi announced taking a 0.48 percent stake in TV manufacturer TCL, deepening an existing alliance that saw the two work together to integrate Xiaomi’s operating system into TCL products.

Xiaomi has long tried to differentiate itself from other hardware firms by making money not just from gadgets but also from software and internet services sold through those devices. But the latter portion is still relatively paltry, accounting for just 9.7 percent of Xiaomi’s total revenue, compared to 9.1 percent a year before.

As of March, Xiaomi owned 261 million monthly active users through its MIUI operating system installed across all devices, a 37.3 percent growth YoY. The number of IoT devices, excluding smartphones and laptops, jumped 70 percent to reach approximately 171.0 million units.

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