Investors discouraged by the start of education in China

Hello from a dark Hong Kong, where the news follows the weather. After a bit of excitement last week, the reality of 5G telecoms is our biggest theme, with Huawei and SoftBank looking heavy. Our main benefit comes from the online education sector in China, where the stress is crying. Do not miss Tik Tok, the popular Chinese video sharing app that was launched in India. Meanwhile, Match Group is targeting Cupid's arrow in Asia. Enjoy!

The great story – Exclusive

Cindy Mi, a drop-dead woman who says her math teacher thought she was "the most stupid student on the planet," now runs one of the world's largest online education companies, VIPKID. But his start-up – who teaches English to Chinese students by connecting them online to tutors in the United States – is struggling to raise $ 500 million in additional investors in order to take the company to a target valuation of $ 5 to $ 6 billion.

Main implications: How VIPKID rates will be heavily monitored for wider implications. Eight of the world's largest publicly traded educational institutions are Chinese, but the price of many of their shares has fallen significantly from mid-2018 due to tighter regulation and signs of market fatigue. What is worrisome for VIPKID, which has some 70,000 teachers in the United States and more than 600,000 students in China, is that its profit margins are under pressure because they offer costly incentives to win unstable customers, explained the investors.

Result: VIPKID, the largest online education company in China, has raised more funds ($ 825 million) than any other Chinese start-up in the education sector. If it fails to mobilize the capital it needs, the repercussions will not only affect its own future, but also a rebadessment of the expectations of private equity investors and portfolio investors for several giants of education. Chinese.

The top 10 of Mercedes

Summary of the best technical stories of the week by Mercedes Ruehl, an FT reporter in Asia

1. There was a lot of movement in the landscape of 5G this week, but the biggest news was the merger between Apple and Qualcomm. It seems that both countries agree on the importance of technology for the United States as China tries to dominate the global market.

2. Which brings us to Huawei, the Chinese telecommunications company leading the race to build 5G networks. The FT has discovered that none of Huawei's 40 commercial 5G contracts were signed with the mainland – a revelation that comes as China slows down the deployment of 5G.

3. Similarly, SoftBank has committed much less money for the deployment of 5G in Japan, which is another sign of caution with the new technology.

4. In case you missed it, a scoop from Nikkei Asian Review highlighted the growing tensions between Tesla and Panasonic, the car manufacturer's traditional supplier of automotive batteries. Does Tesla look elsewhere for batteries, like China?

5. Remaining on electric cars, Xpeng Motors, one of the fastest-growing start-ups in China, backed by Alibaba, claims to have rethought its recruitment policy. This decision comes after two of its major employees were accused by the United States and Tesla of stealing business secrets.

6. The founder of the Beijing-based JD.com e-commerce group, Richard Liu, is being sued by a student at the University of Minnesota for alleged rape, nearly four months after US prosecutors refused to file a complaint.

7. I attended the launch of the 996 week debate in China's tech sector – from 9 am to 9 pm 6 days a week – especially after Alibaba's founder, Jack Ma, defended it (and then quickly backward).

8. Terry Gou, president of Foxconn, said his decision to run for the Taiwanese presidency kept him awake at night for weeks. The company will begin to entrust the management of the iPhone badembler to a new generation.

9. The international outcry provoked by the surveillance and mbad detention of Uyghurs in China is beginning to have effects. SenseTime, one of the country's leading artificial intelligence start-ups, has been sold to a joint venture in Xinjiang's security sector.

10. Finally, I'll leave you with this article by John Gapper of the FT, which uses the example of the election of India to illustrate the dark side of WhatsApp – and the problems related to the privatization of social platforms.

When wise men speak

• Guess who really owns Huawei, the telecom equipment giant, has long been a board game for Chinese observers. This – from Christopher Balding and Donald Clarke – do not give all the answers but advance this kind of niche.

• An example we only discovered recently (our bad). Gregory Allen The Center for a New American Security is a tour de force illuminating China's AI strategy.

• And look for a new report – written by Danielle Cave and others, published in a few hours by the Australian Institute of Strategic Policy (ASPI) on the theme "Mapping of the Giants of Technology in China". It will show the global expansion of 12 Chinese telecom, internet and biotechnology companies. The exit is scheduled at 15h (London time) and 10h (Eastern time) (Washington).

Heard by Henny

China has by far the largest private sector lending sector (P2P) in the world. But government repression, coupled with adverse market conditions, has sent over a thousand P2P lenders to the wall in recent years. Some, like Dianrong – an industry leader who has attracted the most talented investors – has survived in part by cutting costs and staffing.

Now the company is appealing for an additional $ 100 million – and co-founder Kevin Guo has invested $ 10 million of his own money to show his commitment. The expected capital should allow Dianrong to acclimatize until Beijing accredit a group of P2P lenders, which should be done by the end of the year.

But are investors going to fend for themselves? Previous donors include the family offices of Jack Ma, Tiger Global, Sung Hung Kai, GIC, Orix and Standard Chartered. Much of the outlook may depend on Beijing. Will Dianrong get a license and to what extent will the new regime be restrictive?

Read the story here by Henny Sender, FT Senior Correspondent, International Finance.

In the honor

Match Group, an American Internet company that owns Tinder and Hinge dating apps, is courting Asia. Cultural changes in the region, such as the withdrawal of arranged marriage from India, mean that dating applications are becoming more commonplace.

The market has grown rapidly, stimulated by Tinder clones such as Paktor, based in Singapore. There have even been negotiations. Last year, Tantan, China's most popular online dating service, was purchased by the Nasdaq-listed Momo social media application. But there are still virgin opportunities: mostly in the form of some 400 million singles outside of North America and Europe, two-thirds of whom have never used dating apps.

That's why the managing director of Match Mandy Ginsberg, In the photo, it is expected to increase the workforce in the region by 40% this year. "The stigma is really eroding," she said. The company already has offices in South Korea, Japan, India and Indonesia and plans to open an office in Singapore in the coming months. But it does not work in China, where Tinder is banned.

Smart data

The video sharing app in China, TIC Tac, was removed from the Google Play Store and iOS application in India after the ban in New Delhi. Tik Tok, owned by Bytedance, has more than 230 million downloads in India, making it an explosive success.

The decision – officially attributed to concerns about badgraphy on the Tik Tok website – is in line with growing concerns in India about the popularity of some Chinese technology products and services.

Job market

• SoftBank recruits in China and Singapore. The Deal Vision Asia, led by Masayoshi Son, is said to be in talks to open an office in China and expand its team in Singapore.

• Advanced Technology Venture Capital Corporation in Southeast Asia Monk's Hill Ventures appointed two new partners as it expanded into the region. Michele Daoud and Justin Nguyen are based in Singapore and Vietnam, respectively.