Facebook stalks multibillion-dollar deal in India
Hi all — James here. You might expect this newsletter to be completely dominated by the coronavirus this week. And much of it is, but not all. The FT’s scoop that Facebook is close to a big deal in India stands as evidence that big investments are still in play. Elsewhere, though, the virus is starting to take a heavy toll. Huawei’s smartphone business is being hit hard. Toyota, SoftBank and Samsung have been affected in different ways. Hopes for an effective drug, Avigan, pushed Fujifilm’s share price into gyrations. Wherever you are, take very good care.
And a reminder that Tech Scroll Asia is free to read for a month when you sign up here — pass it on to your colleagues and friends.
The Big Story — Exclusive
Facebook is seeking to boost its presence in India with a multibillion-dollar deal. The US social media company — which already counts 400m WhatsApp users in India — is close to signing a deal to take a 10 per cent stake in Reliance Jio, a mobile internet service with some 370m customers, according to this exclusive in the Financial Times.
The move, if it goes ahead, will mark one of the biggest investments by a US tech group in India to date. Analysts at Bernstein valued Jio at more than $60bn.
Key implications: India is becoming a battleground between large Chinese and US tech companies seeking to compete in a market that PwC, the consultancy, estimated will have 850m internet users in 2022, up from 450m in 2017.
The deal, if it materialises, would further Reliance Jio’s plan to reduce net debt to zero by March 2021. Google had also been in talks with Reliance Jio, one person briefed on the discussions said. Microsoft last year announced plans to partner with Jio to offer cloud computing services.
© FT montage; Getty Images
Upshot: Facebook’s popularity in India makes this potential deal of crucial strategic importance. And for Facebook, too, a tie-up with Jio could be vital; the company has more users in India than in any other single country.
Mercedes’ top 10
China’s Huawei is a casualty of the coronavirus. The world’s leading telecoms equipment maker has slashed its sales target for smartphones this year by 60m units, says this exclusive.
SoftBank’s $41bn fire sale: chief executive Masayoshi Son is scaling back the aggressive investment strategy that made SoftBank one of the biggest forces in Asian tech. Also don’t miss this piece on the Japanese conglomerate’s “audacious attempt” to go private this week.
More fallout from the pandemic: Toyota plans to suspend production lines at five plants in Japan next month.
Tesla hits headwinds in Japan. Sharp, the Japanese electronics company, has filed a lawsuit against Tesla in Japan, claiming that the US car company infringed patents for onboard communications equipment.
Australia has been a hub for the booming “buy now, pay later” business model. Now the risk of a coronavirus-induced credit crunch is threatening the survival of stock market darlings such as Afterpay, writes FT Australia correspondent Jamie Smyth.
Richard Waters, the FT’s west coast editor, has some comforting words in these dark times. The US’s Big Tech companies are flush with enough cash to fuel expansion after the crisis.
Lex’s Louise Lucas reviews Samsung Rising, a book on how the Korean electronics group became a global tech giant. It “highlights the sheer breadth of ‘the Republic of Samsung’ — an omnipresence that stretches beyond South Korea”, she writes.
Samsung’s decision to shift part of its domestic phone production to Vietnam because of the coronavirus outbreak in South Korea has had a setback. Vietnam’s travel restrictions are raising concerns that production of the new Galaxy Note phones will fall behind schedule.
Singapore has been lauded internationally for its early aggressive measures to stop the spread of coronavirus, including contact tracing. It has now made its tracing app available to other countries but critics say the technology raises questions over personal privacy.
We have heard of the myriad uses for blockchain but this has to be a new one. Japan’s sake makers are using the technology to fight counterfeits of the alcoholic beverage.
When sages speak
At a time of overwhelmed health systems around the world, this episode of Tech Buzz China takes an unflinching look at China’s system. Doctors are overworked, poorly paid, often abused, sometimes assaulted — and bribery is endemic. This dystopia opens the door for telemedicine companies such as Good Doctor.
Pratnashree Basu suggests that India learn from Taiwan in digitising its healthcare infrastructure in this piece for ORF, the Indian think-tank. Taiwan’s performance in preventing the spread of coronavirus has won many admirers around the world.
In the spotlight
South-east Asian technology group Grab and its partner Singtel, as well as New York-listed Sea Group, are among the frontrunners for Singapore’s new full digital bank licences, due to be announced mid-year.
Both bidders have progressed to the next round in the process, several people with knowledge of the process told Tech Scroll Asia. A consortium led by Singapore financial-technology company MatchMove has also progressed, the people said. Seven bids were received in January for the full licences, according to the Monetary Authority of Singapore, but only two can be granted a licence.
While there are doubts about the impact these neobanks will have in a city that is already heavily banked, the process has big implications for south-east Asia. The winners will have a springboard to expand into a region of 650m people. The market for lending via digital channels in south-east Asia is expected to more than quadruple to $110bn by 2025, according to a report by Bain & Co, Google and Temasek Holdings.
Ravi Menon (pictured), who has led the city’s financial regulator since 2011, said in an interview last year that he wants the city to be an Asian hub for digital banks. “Singapore wants to be a base for these players as they grow in the region,” he said.
Art of the deal
Australia’s digital banking start-up, Xinja Bank, has received a massive capital injection from Dubai-based Emirates World Investments. The Middle Eastern group is pumping A$433m ($255m) into the online bank over the next two years to support its growth.
The injection comes despite the havoc coronavirus is wreaking on markets. Xinja, which only received a banking licence six months ago, stopped taking new deposits this month when demand for its high-interest savings accounts exceeded expectations.
Singapore-headquartered waste management company Blue Planet Environmental Solutions has raised $25m from Japan’s Nomura. One of Blue Planet’s important offerings includes the conversion of organic waste into energy and high-value compost using an anaerobic digestion technology.
Lilium, a German flying taxi start-up, has raised $240m from existing investors led by Chinese technology group Tencent to fund the next stage of its growth.
Hong Kong-based Ping An Global Voyager Fund, a part of Chinese insurance company Ping An, has led a $146m funding in iCapital Network, a US-based fintech company that focuses on alternative investing.
Silicon Valley venture capital firm Sequoia has decided to take the third edition of its south-east Asian and Indian accelerator programme Surge completely online. A sign of things to come for fundraising at the time of coronavirus?
Whichever company develops a drug that is effective against Covid-19 can expect popularity among its investors. So the whipsaw motion of Fujifilm’s share price in March reflects a cycle of hope — and disappointment — surrounding its drug Avigan.
Avigan had its beginnings in 1990 as a project to develop a completely new kind of antiviral drug by Toyama Chemical, a company that is now owned by Fujifilm. After decades in the cold, Avigan attracted fevered speculation after Chinese medical authorities suggested this month that it was effective against Covid-19. Indonesia promptly announced it was ordering millions of doses. But since then some disappointment has taken hold. The Nikkei Asian Review reports on the drug’s 30-year journey out of the lab.
There are a few more details about India’s latest efforts to curb the power of ecommerce companies: the government could force companies such as Amazon to turn over swiftly information sought by authorities. That is one of the new policies being considered, as well as setting up a specific ecommerce regulator. More from Reuters here.
First China now Japan? A prefecture in southwestern Japan will seek to limit kids to an hour of video games a day under a new ordinance set to take effect on April 1, amid growing alarm about the risk of addiction.