China overtakes U.S. in smart speaker market share

The U.S. no longer leads the smart speaker market, according to new data from Canalys out this morning, which found China’s smart speaker shipments grew by 500 percent in Q1 2019 to overtake the U.S. and achieve a 51 percent market share.

The firm said shipments in China reached 10.6 million units which was driven by “festive promotions.”

More specifically, Baidu had a huge quarter thanks to an exclusive sponsorship deal with China’s national TV channel, CCTV, on its New Year’s Gala on Chinese New Year’s Eve — one of the biggest entertainment shows in terms of viewer numbers. This promotion prompted users to download the Baidu app, which distributed over 100 million coupons to an audience of 1.2 billion during the show, and drove awareness around the brand’s smart speakers, Canalys says.

In Q1, Baidu shipped 3.3 million speakers — putting it in third place behind Amazon’s 4.6 million and Google’s 3.5 million. Alibaba and Xiaomi followed, each with 3.2 million shipments, also driven by Chinese New Year promotions.

“The lightning fast development in China is largely driven by vendors pouring in large amount of capital to achieve dominant share quickly,” noted Nicole Peng, VP of Mobility at Canalys, in a statement. “This strategy is favoured by internet service providers like Baidu, Alibaba and Tencent who are used to spending billions on traffic acquisition and know how to reach critical installed base fast.”

Other brands, combined, accounted for a further 2.9 million shipments. That includes Apple’s HomePod, whose market share was so small it got wrapped into this “Other” section instead of being broken out on its own.

With 10.6 million units, China topped the U.S. 5 million units shipped and brought its market share up to 51 percent, while the U.S. dropped from 44 percent in Q4 2018 to 24 percent in Q1 2019.

Overall, the global smart speaker market returned to triple digit annual growth of 131 percent in the quarter, reaching 20.7 million total Q1 shipments — up from just 9 million in the first quarter of 2018.

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Smart TVs add fuel to Xiaomi’s Q1 earnings

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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Thunes raises $10M to make financial services more accessible in emerging markets

Cross-border fintech continues to be an area of interest for venture capitalists. The latest deal sees GGV Capital — the U.S-China firm that’s backed Xiaomi, Airbnb, Square and others — lead a $10 million investment in Singapore-based startup Thunes.

Other investors in the Series A round are not being disclosed at this point.

Thunes — which is slang for money in French and is pronounced ‘tunes’ — is not your typical startup. Its service is a b2b play that provides payment solutions for companies and services that deal with consumers and need new features, increased interoperability and flexibility for users. It makes money on a fee basis per transaction and, in the case of cross border, a small markup on exchange rates using mid-market rates for reference.

The company was founded in February of this year when TransferTo, a company that provided services like mobile top-up cross-border split itself in two. Thunes is the b2b play that uses TransferTo’s underlying technology, while DT One was spun out to cover the consumer business of top-up and mobile rewards.

The investment, then, is a first outside raise for Thunes, which had previously been financed by TransferTo, which is a profitable business, according to Thunes executive chairman Peter De Caluwe, who led payments startup Ogone to a €360 million acquisition in 2013.

De Caluwe, who is also CEO of DT One, told TechCrunch that Thunes reached $3 billion in payment volumes over the last 12 months. His goal for this year is double that to $6 billion and already, he said, it is “on track to get there.” (Steve Vickers, who previously managed Xiaomi in Southeast Asia and has worked with Grab, is Thunes CEO.)

Thunes works with customers across the world in North America, Central America, Latin America, Africa, Europe and Asia, but it is looking particularly at Southeast Asia and the wider Asia continent for growth with this new capital. It is not a consumer-facing brand, but its biggest customers include Western Union, PayPal and Mpesa — where it has worked to connect the two payment interfaces in Africa — and India’s Paytm and ride-hailing company Grab, which it helps to pay drivers.

In the case of Grab — the $14 billion company backed by SoftBank’s Vision Fund — De Caluwe said Thunes helps it to pay “millions” of drivers per day. Grab uses Thunes’ real-time payment system to help drivers, many of whom need a daily paycheck, to convert their earnings to money in Grab’s wallet, their bank account or cash pick-up locations.

It’s hard to define exactly what Thunes’ role is, but De Caluwe roughly calls it “the swift of the emerging markets.” That’s to mean that it enables interoperability between different wallets, banks in different countries and newer payment systems, too. It also provides feature — like the instant payout option used by Grab — to enable this mesh of financial endpoints to work efficiently — because right now the proliferation of mobile wallets can feel siloed to the ‘regular’ banking infrastructure.

De Caluwe said that Thunes will work to add more destinations, support for more countries, more partners and more features. So growth across the board with this money. It is also looking to increase its team from the current headcount of 60 to around 110 by the end of this year.

Singapore is HQ but Thunes also has staff located in London and Nairobi offices, with some employees in the U.S. — they share a Miami office with DT One — and others remote in India and Indonesia. A Dubai office, covering the important and lucrative Middle East region, is in the process of being opened.

The company is also looking to raise additional capital to support continued growth. De Caluwe, who has spent time working at Telenor and Naspers-owned PayU, said a Series A+ and Series B is tentatively timed for the end of this year or early next year. The Thunes executive chairman sees massive potential since he believes the company “doesn’t have much competition.”

That’s echoed by GGV managing partner Jenny Lee .

“In China and the U.S, currency is homogenous and payment systems are established,” Lee told TechCrunch in an interview. “But in Southeast Asia right now, a huge number of the population is just getting on the internet and there are not a lot of established players.”

GGV has just opened its first office in Singapore — Lee herself is Singaporean — and the company intends to make fintech a major focus of its deals in the region. To date, Thunes is just its second investment in Southeast Asia, so there is certainly more to come.

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India’s ZestMoney raises $20M to grow its digital lending service

Fintech is very much still hot in Asia. ZestMoney, a startup that helps consumers with no credit history get loans to buy online, announced today it has raised a $20 million Series B.

The round is led by Quona Capital, a stealthy Washington-based fund that invests in emerging market fintech and has an office in India. Others participating included new backer Reinventure, an Australian fund which includes Coinbase among its fintech portfolio, as well as returning investors Ribbit Capital, Omidyar Network and Naspers -owned PayU. The round takes ZestMoney to $42 million to date, it previously raised a $13.4 million ‘Series A2’ led by Chinese phone giant Xiaomi last August.

ZestMoney was founded in 2015 by Lizzie Chapman (its CEO), Priya Sharma (CFO/COO) and Ashish Anantharaman (CTO). The trio — pictured at the top — met working at Wonga after Chapman moved to India from the UK to head up the controversial pay-day loan company’s local business. That venture ended up falling through and the rest is history, as they say.

Unlike Wonga and its ilk, ZestMoney is very much a consumer-centric loans company. That’s to say that it works with consumers who have no credit card, limited credit history and often very little assessable data, to help them build a profile and become ‘credit-worthy.’ That typically begins with small loans, which grow as a customer repays successfully.

The startup has partnered with over 800 merchants, including Flipkart and Amazon, to offer financing options at point-of-sale. That helps retailers close out transactions whilst enabling consumers to buy medium-to-large ticket items, which typically include electronics, education and learning costs or vacations. Most of its transactions happen online, but Xiaomi is a major partner helping ZestMoney’s offline push.

Small loans don’t generate a return that makes the hassle worthwhile for banks, but that’s where startups like ZestMoney come in. It aggregates the smaller customers and manages the details, making it an attractive partner at scale for banks — and that’s another stakeholder that the startup works with.

All in all, the approach runs in stark contrast to the ratchety terms that Wonga and others force on consumers who use their credit services.

As Chapman told us last year: “New age fintech is much more optimistic… the thesis is ‘Behave well and do good things and you’ll get cheaper pricing.’”

Speaking to TechCrunch this week, the ZestMoney CEO said the new capital will towards further increasing the focus on technology. That includes AI for credit assessment and other analytics, as well as developing voice-based communication and facial recognition technologies that will help engage consumers who are less comfortable with English as a language and lack experience using the internet and digital services.

The company is also beginning to cast its eye overseas, and it has opened an office in Singapore as it begins to assess expansion opportunities in the Southeast Asian region. Singapore is the regional hub, especially for fintech, but Chapman said the country itself isn’t likely to be a market for ZestMoney. She also cautioned that expansion isn’t likely to come in the immediate future.

“We’re looking at doing things around the Southeast Asia region,” she explained in an interview. “We won’t dive in and start operating in 10 other markets overnight, but a lot of countries [there] have synergies with India. There could be opportunities to work with local e-commerce companies or perhaps license our technology.”

The main focus for ZestMoney will remain its home market in India, however.

“There is still a huge, huge ocean of demand in India,” added Chapman — who spoke at our Disrupt Berlin event last year. “We still see sub-five percent financing online and it is just 30 percent offline.”

With that in mind, Chapman said ZestMoney is making a more concerted push around its in-store financing option that works directly with physical retail partners.

Quona Capital co-founder and managing partner Ganesh Rengaswamy echoed Chapman’s belief that there is still plenty of growth opportunity in India.

“ZestMoney and Quona’s partnership is very symbiotic given the shared values of addressing big challenges in emerging markets fintech, market leadership through responsible high growth, and delivering financial accessibility to vastly underserved consumers,” he said in a statement

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Tencent’s latest investment is an app that teaches grannies in China to dance

Besides churning out video games for China’s young generations, Tencent has also been attuned to the need of silver-haired users: its latest bet is an app that teaches middle-age and elderly users, most of whom are female, how to dance.

Called Tangdou, or “sugar beans” in Chinese, the app announced on Monday that it’s raised a Series C funding round led by Tencent with participation from existing investors GGV Capital and Xiaomi founder Lei Jun’s Shunwei Capital, as well as IDG Capital.

The financial infusion makes for an interesting move for Tencent, whose WeChat messenger counts users over the age of 55 as its fastest-growing group. In fact, Tangdou has piggybacked off WeChat to acquire users by creating lite-apps that are designed for ease of use and run within the ubiquitous chatting tool, which is many senior users’ first taste of the internet.

While Tangdou did not disclose the size of the round, the new proceeds brought its total funds raised to date to nearly $100 million. It last inked $15 million (in Chinese) from a Series B funding round in 2016 and another $5 million from a B-plus round in 2017.

“As [China’s] mobile internet enters the ‘second half’ of its development phase, the markets for maternal and child care, middle-age and elderly users have become the new red-hot verticals,” said GGV’s managing partner Jenny Lee in a statement.

Of China’s 829 million online users, 12.5 percent were above 50 years old in 2018, up from 10.4 percent in the year-earlier period, according to data collected by the government-run China Internet Network Information Center.

tangdou

Screenshots of the Tangdou app / Source: Tangdou

Clad in color-coordinated costumes, the so-called demographic of “square-dancing aunties,” a term that sometimes carries derogatory color for the dancers are lashed for blasting deafening music, shimmy in parks, squares and when public space is in short supply, on sidewalks. Dancing in the public is now a daily routine for hundreds of millions of female retirees in China, a phenomenon that’s fueling an emerging market, and Tangdou is one of the players who got in early.

Founded four years ago, Tangdou began by offering video tutorials that teach grannies and aunties how to dance but has over time morphed into a one-stop app fulfilling news reading, networking and other needs for its senior users. The app’s content now touches on a wide variety of topics, from fashion, food, health to skin care, and it’s dabbled offline to host meetups for those craving a sense of camaraderie.

All told, the company claims it serves 200 million users across its range of products. More than 4,000 offline events take place each month attracting over 500 thousand attendees. 400 thousand users consume videos and articles on the Tangdou app each month and spend an average of 33 minutes on it every day. That level of user loyalty makes Tangdou an ideal destination for advertising, which is indeed one of the company’s major revenue sources. Tangdou is also mulling an ecommerce business and other forms of offline services, including dance classes and tours for its dance enthusiasts.

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