Tech News

Mukesh Ambani, one of Asia’s richest men, has made a splash in many industries over the past three decades. It now appears he has set his eyes on a new sector: Gaming.

JioGames, part of Reliance Industries’ telecom platform Jio, said on Thursday it has inked a 10-year strategic partnership with French firm Gamestream. The French firm, which offers clients white-labeling cloud gaming solutions, will work with the Indian giant to make an “ambitious” play on bringing cloud gaming to “1.4 billion” Indians, Jio said.

Jio said the partnership will help it scale its cloud gaming platform JioGamesCloud, which is currently in beta and available to users across a range of devices. The firm quietly launched JioGamesCloud in beta late last year, offering dozens of games (though very few AAA titles). JioGamesCloud is currently free during its beta test period.

A Jio spokesperson told TechCrunch that Reliance is not making an investment in Gamestream as part of the partnership.

Gamestream, whose partners include Ubisoft, has deployed its tech in many markets in Europe, the Middle East and Asia in tie ups with Etisalat, Telkom, Sunrise and Telekom Slovenije.

“India will soon be the new hub of the video game industry, with the potential of over 1 billion gamers thanks to the rapid deployment in India of Jio True 5G network, with high speed and low latency. Video games could become one of the digital services that contribute significantly to economic growth,” said Kiran Thomas, chief executive of Jio Platforms, in a statement.

“This partnership between Gamestream and Jio will enable every Indian to access a high-quality Cloud Gaming experience.”

India, the world’s second largest internet market, is not necessarily a very attractive gaming market. (India is usually not among the first wave of nations that receives the new PlayStation and Xbox consoles. Google never bothered to launch its abandoned Stadia platform in the South Asian market. Nintendo has no presence in the country.)

But mobile gaming has taken off the in India in recent years, thanks to the proliferation of cutrate mobile data prices and affordable Android handsets. Krafton’s PUBG Mobile was the most popular game in the country with as many as 50 million monthly active users before New Delhi yanked it amid national security concerns.

Amazon last month rolled out Prime Gaming, its subscription service that offers access to a number of titles, to its members in India. The gaming service, complementary to Amazon Prime and Video subscribers, offers users access to a range of mobile, PC and Mac games as well as in-game loot at no additional cost.

India’s Jio partners with Gamestream in cloud gaming push by Manish Singh originally published on TechCrunch

The outlook of investing in China is suddenly brightening up as the country gradually phases out its draconian zero-COVID policy, which has caused disruptions in businesses of all kinds and kept the country’s borders shut for the last three years.

For venture capitalists, the pandemic has been a tumultuous ride. Tony Wu, a partner at Northern Light Venture Capital, a China-focused VC firm with $4.5 billion assets under management, calls 2022 the “toughest” in his 15 years of investing in Chinese startups.

“Now spring is finally bringing new life to dried trees. There’s a lot of optimism for 2023,” says Wu, who focuses on the consumer internet realm at the firm, in an interview with TechCrunch. NLVC’s wide-ranging portfolio includes China’s on-demand services titan Meituan; BGI, the country’s gene giant; and Black Sesame Technologies, one of the few home-grown makers of automotive chips.

What went wrong in 2022? And what makes Wu more hopeful about the coming year?

Herald of spring

In the past few years, China’s regulatory crackdown on its internet industry, coupled with COVID restrictions that caused great uncertainties in the economy, has drastically dampened investor confidence. Venture capital deals plunged 44% year-over-year to $62.1 billion in the first 10 months of 2022, according to research firm Preqin. Equity investments were down 33.9% in the first three quarters of the year, shows another report from the Chinese market researcher Zero2IPO.

The bearish mood of 2022 “was on par with 2008-2009,” Wu reckons. But unlike the 2008 financial crisis, he argued, this round of downturn “fundamentally hurt the vitality” of the country’s venture investment. “Money fled, talent left, and a lot of internet bosses moved to Singapore.”

Regulations is nothing new in China’s tech space as the authorities are always rushing out new legislations to rein in the reckless growth of emerging sectors. But the recent wave of clampdown, which roughly started in 2020 when the government suspended Ant Group’s colossal IPO, is widely seen as the toughest in decades, forcing tech companies left and right to rethink their strategies.

Companies operating in heavily-regulated areas, like social media, video games, and web3, saw a narrowing window of opportunity domestically, so many of them packed up and headed for the culturally familiar and geographically nearby Singapore. Their investors, especially those who raise money from international limited partners, followed suit and set up outposts in the city-state. An era of growing U.S.-China tensions further prompted Chinese companies with overseas ambitions to cut ties with home.

The abrupt end to the zero-COVID policy and early signs of regulatory loosening is giving investors hope that some aspects of the tech industry could finally be back on track. At the least, investors can meet founders in another city casually without worrying about being quarantined on their way back.

Clouds seem to be slowly scattering in the regulatory space, too. In December, China granted a batch of licenses to 44 foreign games, ending an 18-month hiatus that hit gaming giants like Tencent. Wu believes regulators will also begin to lift some of the curbs onAnt Group, which overhauled its fintech business at the behest of regulators to act more like a traditional finance group.

Chasing web3

Even if the darkest days of regulations might be behind us, the revival has limitations. The reckless, high-growth era of social networks, ride-hailing and other consumer-focused businesses has come to an end. In web3, one of the few remaining areas in tech that were still delivering astonishing returns for VCs until the recent market crash, “there’s no perceivable future for China, for now,” Wu suggests.

That’s a conclusion shared by many founders and investors. Over the years, China has moved to ban much of the underlying infrastructure of web3, most crucially, cryptocurrency trading. Many serious web3 projects have relocated offshore as a result.

Despite the exodus of talent, Wu continues to back web3 entrepreneurs originating from China. In 2023, he plans to allocate at least 60% of his “energy” to web3, which he believes is just as disruptive to venture capital as it is to the internet.

“Web3 has fundamentally changed how investment is done,” the investor observes. “In the past, you are investing Chinese founders with operations in China. Now, a web3 startup could have its R&D in China, but its product is global, and the rest of its team could be in Singapore or the U.S. It’s taking equity as well as token investment. And instead of 10%, we are only taking 1% of its stake.”

Like others who remain bullish on web3 despite the crash, Wu believes the bear market is a good time to “build” when people finally aren’t viewing crypto as a speculative asset class. “We should be looking at how many users and new developers are piling into web3 instead,” he notes.

China also remains pivotal to the global development of web3 even though a domestic market doesn’t exist for the decentralized technology. Two decades of frantic growth at tech giants like Tencent, Alibaba, and ByteDance have given rise to a pool of skilled software engineers who are known for delivering results under pressure and strict deadlines, and who, on average, cost just one-fifth of their American counterparts.

China’s internet talent is also experienced in dealing with fast-expanding, large-scale internet services, Wu argues. “Solana is known for being fast and cheap, right? But it’s also had a few outages. The blockchain is just managing over a thousand nodes. But name any major Chinese internet firm — it easily operates hundreds of thousands of servers.”

He continues. “The question is how to unleash the supply of China’s developers for the global web3 industry.”

Electric car race

While Wu is following China’s web3 founders abroad, he’s also placing bets on domestic players in another heady area: electric vehicles. Even in the relatively new EV industry, he reckons the race has already entered “the second half” and competition is becoming “cutthroat”.

China shipped around 20 million vehicles in 2022, 6.5 million or 32.5% of which were run on “new energy” like electricity or hybrid, according to China Passenger Car Association. “Give or take the EV penetration rate reaches 60-70% — because there will still be some petrol cars — [a 30% penetration means] the industry is moving into the second half,” Wu says.

So far, none of China’s EV companies is remotely close to the level of brand recognition enjoyed by the German luxury carmakers. But they each offer their unique selling point. Upstart Nio puts much effort into customer service and its rival Xpeng prides itself on advanced technologies like autonomous driving.

Wu singles out BYD, the 28-year-old battery and EV giant, as the trailblazer in globalizing Chinese EV firms because of its incredible affordability. In December, BYD’s overseas sales surpassed 10,000 units — which doesn’t sound like a lot. But the carmaker is already well-established in China, often wrestling with Tesla for the top spot in the world’s biggest EV market.

“The globalization of Chinese EVs is inevitable. We have a complete supply chain, and our price advantage is already pretty obvious,” Wu argues, pointing out that BYD is the only Chinese EV maker in control of the entire supply chain like Tesla, which gives it wiggle room to lower prices. “You got to remember, these Chinese automakers are coming out of an extremely competitive environment.”

Clouds might be scattering in China’s venture capital world by Rita Liao originally published on TechCrunch

The African tech scene was met with fanfare in 2021: Venture capital investments in the region totaled between $4 billion and $5 billion and produced five unicorns. In my piece detailing this progress, I predicted there would be more unicorns in 2022. Those predictions proved to be way off the mark by year’s end.

Data from market insights trackers Briter Bridges and The Big Deal reveal that funding raised by African startups exceeded $5 billion (including undisclosed deals) in 2022 — a slight percentage increase from the figures reported in 2021 despite a global pullback in VC funding. And yet, no unicorns popped up throughout the year, compared to five in 2021.

That fact may appear insignificant because, at the end of the day, private valuations don’t pass an actual test till startups go public. However, producing no unicorns despite raising more venture capital suggests it’s perhaps too early to assume African markets are mature enough to consistently pop out private billion-dollar companies like their Global South counterparts: India, Southeast Asia and Latin America.

That said, 2022 was peculiar. The global economic downturn and venture capital crunch ensured that every region produced fewer billion-dollar companies than the previous year. Globally, 216 unicorns were minted in 2022, per Tracxn, compared to 541 in the previous year. In India, 22 companies became unicorns last year, compared to 46 in 2021. While 18 companies in Latin America got their horns in 2021, that figure fell to just eight last year.

Unlike Africa, these regions raised way less venture capital in 2022 than in 2021, so it makes sense that their unicorn numbers dropped. For example, in India, the number of unicorns dropped by more than half as VC activity dropped by 33%. Latin America and Southeast Asia also witnessed a double-digit decline in VC funding last year compared to 2021, though the drop in unicorns indicates more damage.

So what happened in Africa in 2022 that made it so … weird?

Why Africa had no unicorns last year despite record fundraising haul by Tage Kene-Okafor originally published on TechCrunch

After years of denials and loathing, Apple may finally be getting around to bringing touchscreens to MacBooks. According to Bloomberg, Apple is actively working on this project and may break away from its long-standing approach of designing a traditional desktop system without a touchscreen.

Apple could launch MacBooks with touchscreens by 2025 as a part of a new MacBook Pro lineup, the Bloomberg report adds. This lineup revamp could also see the company switching from LCD to OLED displays for the 14-inch and 16-inch Pro models.

Earlier this week, another Bloomberg report indicated that Apple was aiming to make its own screens for Apple Watch and iPhone. However, there was no mention of the company building displays for its Mac lineup.

Apple executives have long maintained the stance that MacBooks don’t need to have a touchscreen. Instead, for years they have invited people to try an iPad if they want a large computing device with a touchscreen. The closest Apple ever got around to bringing a touchscreen on a Mac was adding the TouchBar on the keyboard— which is slowly being phased out — on MacBook Pros.

Apple has long maintained that iPad is the best touchscreen “computer” out there. The company might have to slowly move away from that narrative if they are planning to launch MacBooks with a touchscreen. Meanwhile, Apple’s competitors, including Microsoft, have built a long line of touchscreen laptops with different form factors.

Steve Jobs famously called touchscreens on laptops “ergonomically terrible” back in 2010.

“We’ve done tons of user testing on this, and it turns out it doesn’t work. Touch surfaces don’t want to be vertical. It gives a great demo, but after a short period, you start to fatigue, and after an extended period, your arm wants to fall off. It doesn’t work; it’s ergonomically terrible,” he had said. But technology has evolved since then and Apple has also introduced things like the Apple Pencil, another product idea that Jobs hated.

More recently, Apple senior VP Craig Federighi also referred to touchscreen PCs as “experiments” and said he is “not into touchscreens.”

On the positive side, iOS apps on MacBooks could work better if Apple decided to go ahead with this plan. The company first introduced Project Catalyst in 2020 to bring iOS apps to desktop systems.

The iPhone-maker is treading on a convoluted line. On one hand, it has made its iPads more powerful in recent years, giving them desktop-class processors, decent add-on keyboards, and added a number of desktop features to the iPadOS. So to sell both iPad and MacBooks with touchscreen, Apple will have to keep enough differentiation between the two lineups.

Apple is reportedly working on MacBooks with touchscreens by Ivan Mehta originally published on TechCrunch

Stripe, a richly-valued payments startup, has cut its internal valuation yet again, according to sources familiar with the manner. It is now valued, internally, at $63 billion.

The cut, first reported by The Information, puts Stripe’s internal per-share price at $24.71, down 40% since peaking. The 11% cut comes after a prior internal valuation cut that occurred six months ago, which valued the company at $74 billion.

The valuation change was not triggered by a new funding round, but instead a new 409A price change. 409A valuations are set by third-parties, which means that they are not tied to what a venture backer or other investor thinks. It’s an IRS-regulated process that measures the value of common stock against public market comps to help set a fair market value.

Companies are supposed to do a 409A at least every 12 months or when a material event might lower its valuation. In Stripe’s case, alongside other late stage companies, the 409A valuation reviews are now getting conducted on what looks like a quarterly basis. Material events in the background range from the evergreen, and ever-tense macroeconomic climate; and let’s not forget that Stripe’s public market comps are certainly showing signs of trouble, with Shopify, Block and Paypal all down from their 52-week highs.

Internal valuation cuts offer a different signal than an investor-led markdown. In fact, many founders and industry experts see a company receiving a 409A valuation that’s lower than its private, investor-led valuation, as a good thing. Per analysts, that’s because a low 409A valuation allows companies to grant their employees stock options at a lower price. Companies can also use the new, lower 409A valuation as a recruiting tool, luring prospective employees with cheap options and the promise of cashing out at a higher price when the company eventually exits.

Still, in Stripe’s case, a second internal valuation cut may not necessarily be being used to attract new talent. In November 2022, the fintech laid off 14% of its workforce, impacting around 1,120 of the fintech giant’s 8,000 workforce. Back in August, TechCrunch learned that Stripe laid off employees behind TaxJar, a tax compliance startup it acquired last year.

In a memo addressing Stripe’s layoffs, CEO Patrick Collison shared some of his reasoning for the personnel pullback: “We were much too optimistic about the internet economy’s near-term growth in 2022 and 2023 and underestimated both the likelihood and impact of a broader slowdown.” Instead, the valuation cut could help with retention of existing employees, or even adjust expectations ahead of a wishful IPO.

Stripe’s internal valuation gets cut to $63 billion by Natasha Mascarenhas originally published on TechCrunch