Company / division: Tencent
Flipkart raises $1.4Bn from Tencent, eBay & Microsoft at $11.6Bn valuation, acquires eBay India – Economic Times (Apr 10, 2017)
There were recent rumors that Japan’s SoftBank might want to combine its investment in Snapdeal with an acquisition of Flipkart, but this funding news suggests that’s going to come later if it comes at all. The trio of companies investing here is intriguing. Tencent is perhaps the least surprising, as a company that invests heavily overseas including the US in minority stakes. eBay is apparently using this investment as a vehicle to buy into a bigger e-commerce business in India, as it’s transferring its own Indian operations to Flipkart as part of the process. Microsoft is the most interesting of all – though Flipkart recently switched to Azure for cloud services, Microsoft has no significant direct stake in an e-commerce anywhere else, so this is something of a departure for them, though of course major competitor Amazon already combines cloud and retail. Flipkart had in the past seemed to be the leader in the Indian e-commerce market, but has fallen from that role in the last couple of years as two overseas companies – Amazon and Alibaba – have made inroads there. This is a down round over the company’s previous valuation, but it and its new investors will be hoping the infusion of cash helps it get back into contention.
via Economic Times
China’s Tencent Buys 5% Stake in Tesla – WSJ (Mar 28, 2017)
Tencent has been one of the most active Chinese investors in the US tech industry, and here’s another investment. It already has stakes in both Uber and Lyft, and although Baidu has been making bigger direct investments in autonomous driving in the US, Tencent’s indirect investments in transportation in the US are growing. This is a nice vote of confidence in Tesla at a time when it’s trying to raise money to fund the Model 3 manufacturing ramp, and it also gives Tencent decent exposure to what has been a nice growth stock so far this year.
Chinese investors buy stake in mapping firm HERE | Reuters (Dec 27, 2016)
HERE is Nokia’s former mapping division, which was sold to a consortium of carmakers in 2015. China is one of the most important markets for carmakers and an important new market for HERE’s map data too, so this seems a great strategic fit. And it also allows the Chinese backers access to global mapping and navigation data, which will be useful in their expansion outside China.
This is a great overview of some of the significant investments the four major Chinese Internet companies have made in the US over the past few years. A few things stand out: Tencent has invested significantly more than the others, both in dollar terms and in the number of individual investments; California has received 79% of the total investments made, with most other states only capturing a small number of deals or none at all; investments appear to have peaked in 2016 and dropped in 2015 (though this analysis doesn’t capture the whole of 2016). A lot of the investments are in tiny companies you’ve never heard of, but there are some exceptions: Alibaba and Tencent in Lyft and Snap; Alibaba in ShopRunner, MagicLeap, and Jet.com; Baidu in Uber; and Tencent in Cyanogen. Most of these are small minority investments, but the overall number is significant – the big Chinese companies have been far more able and willing to invest in US properties than vice versa.
via CB Insights