“Source:- Economic Times”
Two well-entrenched Chinese investors — Xiaomi and Shunwei Capital, which also share deep linkages — have struck their first deals in the new calendar year in the Indian startup ecosystem, as they look to add to their portfolios in Asia’s third-largest economy.
Shunwei Capital, which manages assets of about $3 billion and founded by Xiaomi founders Lei Jun and Koh Tuck Lye, has co-led a $5.5 million (about Rs 40 crore) investment round in regional language podcast app Kuku FM.
This is latest deal struck by the Chinese investment firm, which has emerged as one of the most active dealmakers in India’s startup ecosystem.
The deal will also see the entry of Vertex Ventures, the venture capital arm of Temasek, the investment company backed by the government of Singapore, into Kuku FM’s cap table.
The Mumbai-based company will use the proceeds from the Series A investment to expand its content repository, and to increase the number of languages available on its platform.
The deal will be the 18th funding round that Shunwei Capital has participated in over the course of the last 12 months, according to data collated by industry tracker Tracxn.
In the last two years, the Beijing-based firm — which is investing out of its $1.2 billion sixth fund — has backed the likes of online food delivery platform Zomato, regional language social media company ShareChat, mobile bike taxi service Rapido and social commerce startup Meesho.
“For most of Shunwei’s peers, India and Southeast Asia are natural expansion destinations after the rise and stabilisation of the Chinese ecosystem. While it is not immediately clear that a one-to-one mapping of market models and product strategies will work in the entire region, funds like Shunwei have seen scale like few VCs manage to outside of the US,” said Pranav Pai, managing partner of 3one4 Capital.
3one4 Capital and Shunwei Capital have both invested in consumer lending platform LoanTap and Kuku FM.
Separately, Xiaomi, one of the largest smartphone manufacturers in India, has invested Rs 42 crore in WorkIndia, an online and mobile-based platform that connects companies with blue collar employees, based on their location.
The deal, which is believed to have closed last month according to sources, is the latest by the company which has a market capitalisation of about $30 billion. Xiaomi has also backed the likes of Sharechat, Zest Money and TouchTalent over the last 24 months.
Both, Xiaomi and WorkIndia founder Kunal Patil did not respond to emails seeking comment.
This also comes at a time when Chinese investors scouting for deals in India have begun accelerating their deal making activity, leading to a near-doubling of investments in Indian startups to $3.9 billion in 2019, up from $2 billion in the previous year.
Additionally, they are also looking for overseas geographies to park capital in, even as venture investments in the world’s second-largest economy slows.
In the fourth quarter of 2019, venture investments in tech startups in China dropped 51.5% over the previous year, according to the China Academy of Information and Communications Technology, a government-backed research institute.