This comes at a time when India is emerging as the next frontier of growth given that fewer Chinese startups are going public due to the uncertainty caused by the country’s ongoing trade war with the US and overall sobering of valuations.
Technology behemoth Tencent has emerged as the biggest Chinese strategic investor in the Indian startup ecosystem, aggressively closing about 10 funding deals across stages over the last six-eight months. Its increased activity coincides with Alibaba stepping back from the domestic market after years of being among the most prolific Chinese strategics in India.
Tencent’s most recent bet is on edtech startup Doubtnut, where it has led a $15 million round, its second bet in the space, having earlier invested in Byju’s. The Doubtnut app allows students to take a snapshot of a particular problem, for which it claims a video solution will be provided in 10 seconds.
The operator of popular messaging app WeChat, Tencent has also taken recent wagers on insurance marketplace PolicyBazaar, business-to-business ecommerce portal Udaan, video streaming platform MX Player, apart from writing smaller cheques in MyGate, Khatabook and Niyo Solutions.MX Player is owned by Times Internet, a part of The Times Group, which also publishes this paper.
Aside of Doubtnut, it is also in talks to invest $12-15 million in PocketFM, according to sources. Pocket FM is a social audio platform for Indian languages where users can find great quality audio shows ranging from audiobooks, stories, podcasts and self-help content.
“Tencent believes the market is correcting and valuations are getting more stable than what they were six to eight months back, making it the right time to take several bets across stages,” said an investor who has dealt with the firm.
Founders also highlighted that the firm is being increasingly flexible in the rights it demands as a strategic investor, in a bid to get into the best companies. “They (Tencent) have over the last few discussions been more open to lead follow-on rounds and keeping strategic rights under check, making these deals more company friendly,” said a founder who raised capital from the firm.
Another startup founder said the fund is also looking at India as a financial investment market, more than a strategic play.
It also comes at a time when India is emerging as the next frontier of growth given that fewer Chinese startups are going public due to the uncertainty caused by the country’s ongoing trade war with the US and overall sobering of valuations. Earlier this week, ET reported that more than a dozen new China-domiciled large corporates, venture funds, and family offices are aggressively stepping up investment conversations with early- to growth-stage domestic firms.
Overall, Tencent has made at least 15 investments in India, including Swiggy, Dream11, Flipkart, Hike, and Practo. Globally, Tencent has invested in over 800 firms, 70 of which are listed and 160 are now unicorns.
Founders said the strategic value derived from Tencent’s learnings in China will be critical in their scale-up journey as they build similar models for India. “Their experience of working with Yuanfudao in China will help our team get fresh and valuable perspective on distribution of first edtech models,” said Aditya Shankar, cofounder of Doubtnut.
Source: The Economic Times