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April 22, 2019
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ShopBack, a cashback startup in Asia Pacific, raises $45M from Rakuten and others

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ShopBack, a Singapore-based startup that offers cashback and consumer rewards in Asia Pacific, has closed a $45 million round led by new investors Rakuten Capital and EV Growth.

Founded in 2014, the startup had been relatively under-the-radar until late 2017 when it announced a $25 million investment that funded expansion into Australia among other things. Now, it is doubling down with this deal which sees participation from another new backer, EDBI, the corporate investment arm of Singapore’s Economic Development Board. Shopback has now raised close to $85 million from investors, which also include Credit Saison Blue Sky, AppWorks, SoftBank Ventures Korea, Singtel Innov8 and Qualgro.

The investment will see Amit Patel, who leads Rakuten-owned cashback service Ebates, and EV Growth managing partner Willson Cuaca, join the board. Cuaca is a familiar face since his East Ventures firm, which launched EV Growth alongside Yahoo Japan Capital and SMDV last year, was an early investor in Shopback, while the addition of Patel is potentially very significant for the startup. Indeed, when I previously wrote about ShopBack, I compared the startup directly to Ebates, which was bought by Rakuten for $1 billion in 2014.

Ebates brings operating experience in the cashback space,” Henry Chan, ShopBack co-founder and CEO told TechCrunch in an interview.

“A lot has changed in the last year and a half, Ebates has a very strong focus on the U.S… given that we’re not competing, it makes sense to partner and to learn,” he added.

The obvious question to ask is whether this deal is a precursor to a potential acquisition.

So, is it?

“It is squarely for learning and for growth,” Chan said in response. “It makes sense for us to partner with someone with the know-how.”

ShopBack operates in seven markets in Asia Pacific — Singapore, Malaysia, the Philippines, Thailand, Taiwan, Australia and Indonesia — with a core rewards service that gives consumers rebates for spending on areas like e-commerce, ride-hailing, food delivery, online travel and more. It has moved offline, too, with a new service for discovering and paying for food which initially launched in Singapore.

ShopBack said it saw a 250 percent growth in sales and orders last year which translated to nearly $1 billion in sales for its merchant partners. The company previously said it handled $400 million in 2017. It added that it typically handles more than 2.5 million transactions for upwards of seven million users.

(Left to right) Henry Chan, co-founder and CEO of ShopBack, welcomes new board member Amit Patel, CEO of Rakuten -owned Ebates [Image via ShopBack]

Chan said that, since the previous funding round, ShopBack has seen its business in emerging markets like Indonesia, Thailand and the Philippines take off and eclipse its efforts in more developed countries like Singapore. Still, he said, the company benefits from the diversity of the region.

Markets like Singapore and Taiwan, where online spending is more established, allow ShopBack to “learn ahead of time how different industries will develop” as the internet economy matures in Southeast Asia, Chan — who started the company with fellow co-founder Joel Leong — explained.

Outside of Southeast Asia, Chan said that ShopBack’s Australia business — launched nearly one year ago — has been its “most phenomenal market in terms of growth.”

“We’re already superseding incumbents,” he said.

ShopBack claims some 300,000 registered users in Australia, where it said purchases through its platform have grown by 1,300 percent between May 2018 and March 2019. Of course, that’s growth from a tiny initial base and ShopBack didn’t provide raw figures on sales.

For its next expansion, ShopBack is looking closer to home with Vietnam its upcoming target. The country is already home to one of its three R&D centers — the other two are located in Singapore and Taiwan — and Chan said the startup is currently hiring for a general manager to head up the soon-to-launch Vietnam business.

Already, though, the company is beginning to think about reaching beyond Asia Pacific. Chan maintained that the company already has a proven playbook — particularly on the tech side — so it “can enter a Western market” if it chooses, but that isn’t likely to happen in the immediate future.

“We could [expand beyond Asia Pacific] but we have a fair bit on our plate, right now,” said Chan with a laugh.

News Source = techcrunch.com

Grab is talking to Ant Financial and PayPal about spinning out its financial services business

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Grab, the $16 billion-valued ride-hailing firm that acquired Uber’s Southeast Asia business last year, is in talks with Alibaba’s Ant Financial and PayPal as it considers spinning out of its financial services unit to double down on its non-transportation business, TechCrunch has learned.

The seven-year-old company’s coming-of-age moment was a deal to buy Uber’s regional business last year, but it hasn’t enjoyed the total monopoly many foresaw. Instead, it is faced with a growing challenge from rival Go-Jek, a $10 billion company backed by Google, Tencent and others, which is expanding across the region from Indonesia. In response, Grab is placing an increased focus on financial services as it seeks to become the ‘everyday app’ for consumers in Southeast Asia, where digital spending is expected to triple by 2025.

Grab Financial Group — which covers the GrabPay service and ventures that include insurance and loans — would operate independently of the core Grab business if spun out, but could start its new life with some notable allies. Grab is in early discussions with Ant Financial, Alibaba’s financial services business, and global payments firm PayPal over potential strategic investments, two sources with knowledge of talks told TechCrunch.

Grab has been heavily linked with an investment from Alibaba — having held discussions in the past — but backing Grab Financial might make more sense for the Chinese firm since it aligns with Ant Financial’s push into Southeast Asia, which has seen investments in the Philippines, Thailand and Indonesia among other markets.

A spin-out could happen in the coming months, according to one of the sources.

Deal Street Asia previously reported that Ant, which operates Alibaba’s hugely successful Alipay service and other financial ventures, would invest in Grab’s financial services unit.

“We don’t comment on rumors or speculation,” a PayPal spokesperson told TechCrunch.

“We don’t comment on market rumors and speculation,” a Grab spokesperson told TechCrunch.

A spokesperson for Ant Financial declined to comment.

Update: “Ant Financial is not involved in talks with Grab,” a spokesperson from Ant told TechCrunch in an updated statement.

The move would cap a busy recent period for Grab, which earlier this month announced a $1.48 billion investment from SoftBank’s Vision Fund, a deal that TechCrunch first reported on in December. That financing took Grab’s ongoing Series H round to $4.5 billion. We previously reported that it could close out at around $5 billion and Grab has confirmed that it is still raising capital for the round. It’s important to note that the spin-out of Grab Financial Services would not be directly related to the round.

Headed by long-time Grab executive Reuben Lai, Grab Financial Services is — as the name suggests — focused on building out fintech and payment services for the ride-hailing firm as part of its ‘super app’ strategy. That’s designed to take Grab from merely being a transportation app, in the purest sense of what Uber and its rivals began as, and develop it into a daily app for Southeast Asia’s 600 million-plus consumers.

Beyond the obvious areas like transportation and food delivery, Grab has added its own payment service — in addition to rides, GrabPay covers online and offline merchants in selected markets in Southeast Asia — and teamed up with partners to add SME loans, insurance, cross-border transfers and more. Internally, Grab sees its financial platform as ‘glue’ that can keep its core app sticky for users whilst helping build new revenue streams and business lines beyond transportation — which, as we all know, is a highly capital intensive industry.

“This year is all about doubling down on financial services and really executing on that,” Lai told TechCrunch in an interview on the sidelines of the Money2020 event in Singapore this month, where Grab announced new insurance and loans products. Right now, many of those financial products are limited to Singapore, but Lai said Grab plans to offer its suite of financial services across the region over time.

Reuben Lai, senior managing director at Grab Financial Group, speaks during the Money20/20 Asia Conference in Singapore, on Tuesday, March 19, 2019. [Photographer: Nicky Loh/Bloomberg/Getty Images]

Lai spent three years as Grab’s chief of staff and head of business development before moving to lead Grab Financial Group a year ago. He claimed that Grab, which says it has e-money licenses in Southeast Asia’s six largest countries, is “the largest payments ecosystem” in the region. Grab doesn’t provide figures for the volume of its payment flows.

Beyond financial services, Grab is courting third parties in content, services and other verticals with the lure of adding their businesses to its app, which claims over 130 million downloads in Southeast Asia. Grab Platform — as the initiative is called — has added video service HOOQ, China’s Ping An Good Doctor, travel firm Booking.com, e-grocer HappyFresh, and others.

Southeast Asian consumers could be forgiven for a feeling of deja vu. Grab’s super app strategy is reminiscent of that of Go-Jek, its chief rival in the region post-Uber, which successfully built a dominant position in its native Indonesia using a ‘constellation’ of services that included GoPay and other on-demand services. Go-Jek’s financial services unit remains part of the overall business, but it’ll be interesting to see whether that changes as it scales up.

Unlike Grab, which expanded across the region before fanning out into new verticals beyond transport, Go-Jek built its reputation in Indonesia before launching in new markets for the first time last year. Go-Jek has moved into Vietnam, Singapore and Thailand using core transportation services. It remains to be seen whether, or indeed when, those new markets will get the financial services and other offerings that Go-Jek serves up in Indonesia.

News Source = techcrunch.com

Bike sharing pioneer Mobike is retreating to China

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In a telling sign of the state of bike sharing, Mobike, a once red-hot startup that attracted billions in investment capital, is closing down all international operations and putting its sole focus on China.

On Friday, Mobike laid off its operations teams in APAC, which entailed more than 15 full-time employees and many more contractors and third-party agency staff across Singapore, Malaysia, Thailand, India and Australia. Those affected were told the company will “ramp down” the regional business without being provided specific reasons for the rollback, five people familiar with the matter told TechCrunch.

These layoffs are a key step towards the eventual goal of closing Mobike’s international footprint since the Asia Pacific region accounts for the majority of its non-China business. More staff cuts are impending outside Asia that can include Europe and the Americans, according to two sources. Eventually, Mobike will only be operational in its native China, which accounts for the majority of its overall global business.

The change of strategy encapsulates the struggle that Chinese bike sharing companies have experienced over the past year. Mobike was arguably the most successful from the camp. Before it was ultimately bought by Chinese delivery giant Meituan for $2.7 billion 11 months ago, it had raised over $900 million from investors such as Tencent, Foxconn, Hillhouse Capital and Warburg Pincus as bike-sharing became the hot topic in 2017. Ultimately, though, Mobike wasn’t able to find a sustainable business model amid tough competition and tight financials.

Photo source: Mobike

Employees were taken aback by Friday’s announcement as they had been under the impression that Mobike’s prospects were bright and there had not been issues with salaries or other financial concerns. In Singapore, specifically, the bike app claims to be the top player and is working closely with the government to make the city-state greener.

“I was shocked. The business is doing well from my perspective,” one source told TechCrunch. “But just because one country does well doesn’t mean the whole region will survive. Mobike ran a lot of analysis on profits and losses in the [overseas] region and came to the conclusion that there is no way it would turn profitable.”

Things were rosier just a year ago. When Meituan, the one-stop app for neighborhood services in China, acquired Mobike, the buyout was widely seen as a triumph for the young startup as its Chinese peer Ofo suffered mounting financial pressures standing as an independent company. Ofo started to phase out its international operations last year and was reportedly preparing for bankruptcy recently.

Before long, Meituan also started to show its restraint over the mobility segment. In an effort to cut costs, the Hong Kong-listed firm focusing on food delivery and hotel booking announced it would pause expansions on dockless bikes and car-hailing. Its bike unit is also facing growing competition from Hellobike, which is Alibaba’s latest attempt to crack China’s two-wheel transport industry.

Despite the hurdles, Mobike’s APAC employees told TechCrunch that they had believed the overseas business would stick it out as they had generated “a lot of cost-saving and progresses” in recent months after being assigned to boost the company’s operational efficiency.

mobike 3

Photo source: Mobike

Those affected won’t have much time to ponder but feel “unbalanced” and “upset” about the company’s “one-sided” decision. TechCrunch understands that staff weren’t given a chance to negotiate and most will leave by mid-April with a limited number of “key” employees asked to stay until the “ramping down” is completed. Severance packages vary on people’s termination dates, while some employees received no compensation altogether as the notice had arrived before the 30-day period required by the contract.

Meituan’s decision to close down the regional business has also come as a risky move for the company. In Singapore, Mobike’s largest market outside China, bike-sharing companies are required to file an exit plan with the government before they pull the trigger. Mobike has not informed the Singapore Land Transport Authority of its layoff as of Friday, according to two sources, although it has been in talks with the transportation regulator regarding a potential shutdown. Mobike told employees to keep news of the job cuts private before it announces them officially to the LTA.

Meituan declined to comment for this story. The company is scheduled to report earnings on Monday which may shed more light on the situation.

News Source = techcrunch.com

Go-Jek’s Get app officially launches in Thailand as Southeast Asia expansion continues

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Go-Jek is extending its reach in Southeast Asia after its Thailand-based unit made its official launch, which included the addition of a new food delivery service.

Get, which is the name for Go-Jek business in Thailand, started out last year offering motorbike taxi on-demand services to a limited part of Thai capital city Bangkok, now the company said it has expanded the bikes across the city and added food and delivery options. Get’s management team is composed of former Uber staffers while CEO Pinya Nittayakasetwat was recruited from chat app Line’s food delivery business.

Over the last two months, Get claims to have completed two million trips in the past two months. There’s no word on when Get will add four-wheeled transport options, however. On the food side, Get is claiming to have 20,000 merchants on its platform but there are some issues. Rumming through the app, I found a number of listed restaurants that didn’t include menus. In those instances, customers have to input their dish and price which makes it pretty hard to use.

Go-Jek’s Get app in Thailand doesn’t include menus for a number of restaurants, making it nearly impossible to order

Grab is the dominant player in Thailand, where it offers taxis, private cars, motorbikes, delivery and food across eight markets in Southeast Asia. Go-Jek rose to success in its native Indonesia, where it began offering motorbikes on demand but has expanded to cover taxi, cars, food, general services on-demand and fintech. Its investors include Google, Tencent, Meituan and Sequoia India.

That’s the same playbook Grab is using, but Go-Jek is taking its time with its market expansions. Thailand represents its third new market beyond Indonesia, following launches in Vietnam and Singapore. The Philippines is another market where Go-Jek has voiced a desire to be present — it has even made an acquisition there — but regulatory issues are holding up a launch.

Regional expansion doesn’t come cheap and Go-Jek is in the midst of raising $2 billion to finance these moves. It recently closed $1 billion from existing investors, and Deal Street Asia reports that it could raise as much as $3 billion for the entire Series F round. That’s likely in response to Grab’s own fundraising plans. The Singapore-based company closed $2 billion last year, but it is looking to increase that total to $5 billion with a major injection from SoftBank’s Vision Fund a key piece of that puzzle.

News Source = techcrunch.com

On-demand logistics startup Lalamove raises $300M for Asia growth and becomes a unicorn

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Lalamove, a Hong Kong-based on-demand logistics startup, has closed a $300 million Series D round as it seeks expansion across Asia. In doing so, the company has officially entered the unicorn club.

Founded in 2013 by Stanford graduate Shing Chow, Lalamove provides logistics and delivery services in a similar style to ride-hailing apps like Uber but it is primarily focused on business and corporate customers. That gives it more favorable economics and a more loyal customer base than its consumer-focused peers, who face discount wars to woo fickle consumers.

This new round is split into two, Lalamove said, with Hillhouse Capital leading the ‘D1’ tranche and Sequoia China heading up the ‘D2’ portion. The company didn’t reveal the size of the two pieces of the round. Other investors that took part included new backers Eastern Bell Venture Capital and PV Capital and returning investors ShunWei Capital — the firm founded by Xiaomi CEO Lei Jun — Xiang He Capital and MindWorks Ventures .

The deal takes Lalamove to over $460 million raised to date, and it follows a $100 million Series C that closed in late 2017. Lalamove isn’t disclosing a valuation but Blake Larson, the company’s head of international, told TechCrunch that it has been “past unicorn mark for quite some time [but] we just don’t talk about it.” That figures given the size of the round and the fact that Lalamove was just shy of the $1 billion mark for that Series C.

The Lalamove business is anchored in China where it covers over 130 cities with a network of over two million drivers covering vans, cars and motorbikes.

Beyond China, Lalamove is present in its native Hong Kong — where Uber once briefly tried a similar service — Taiwan, Vietnam, Indonesia, Malaysia, the Philippines and Thailand, where it works with popular chat app Line. All told, it covers 11 cities outside of China and this new capital will go towards expanding that figure with additional city launches in Southeast Asia and entry to India.

“If we do this well, then we are in countries that are more than half the world’s population,” Larsen said in an interview, although he didn’t rule out the potential for Lalamove to expand beyond Asia in the future.

There are also plans to grow the business in mainland China in terms of both geography and new services. Already, Lalamove has begun to offer driver services, starting with financing packages to help drivers with vehicle purchasing, and it is developing dedicated corporate offerings, too.

Lalamove CEO Shing Chow started Lalamove in late 2013, his past roles have included time with Bain & Company, a number of startup ventures — including a Hong Kong-based skin center — and a stint as a professional poker player

Overall, the business claims to have registered 3 million drivers to date and served more than 28 million users across all cities. With its headquarters in Hong Kong, it employs some 4,000 people across its business.

Rival GoGoVan exited through a merger with China-based 58 Suyun in 2017, at a claimed valuation of $1 billion, but Lalamove has remained independent and stuck to its guns. Larson said that already it is profitable in “a significant amount” of cities and typically, he said, the blueprint is to reach profitability within two years of opening a new location.

“The focus has always been on sustainable growth and we’re very strong on the cash flow front,” the former Rocket Internet executive added.

Larson and Lalamove have been very forthcoming in their desire to go public in Hong Kong, noting so publicly as early as 2017 at a TechCrunch China event in Shenzhen. That desire is still evident — “we’re very proud to be from Hong Kong and Hong Kong would be a good place for an IPO,” Larson said this week — but still the company said that it has no particular plan on the cards, despite its consumer-focused peers Uber and Lyft lining up IPOs in the U.S. this year.

“We don’t spend maybe even five minutes a year talking about it,” Larsen told TechCrunch. “The discussion is really ‘Let’s make sure we’re IPO ready’ because sometimes there are macroeconomic conditions you can’t control.”

Clearly, investors are bullish and it is notable that Lalamove’s new round comes at a time when many Chinese companies are downsizing their staff, with the likes of Didi, Meituan and JD.com announcing cuts and refocusing strategies in recent weeks.

“[Lalamove CEO and founder] Shing is a role model for Hong Kong’s new generation of innovative entrepreneurs,” said Sequoia China founder and managing partner Neil Shen. “Raised in Hong Kong and educated at Stanford University, Shing returned and plunged himself in the entrepreneurial wave of ‘Internet Plus,’ becoming a figure of entrepreneurial success.”

News Source = techcrunch.com

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