Aug
05
2020
--

Amazon inks cloud deal with Airtel in India

Amazon has found a new partner to expand the reach of its cloud services business — AWS — in India, the world’s second largest internet market.

On Wednesday, the e-commerce giant announced it has partnered with Bharti Airtel, the third-largest telecom operator in India with more than 300 million subscribers, to sell a wide-range of AWS offerings under Airtel Cloud brand to small, medium, and large-sized businesses in the country.

The deal could help AWS, which leads the cloud market in India, further expand its dominance in the country. The move follows a similar deal Reliance Jio — India’s largest telecom operator and which has raised more than $20 billion in recent months from Google, Facebook and a roster of other high-profile investors — struck with Microsoft last year to sell cloud services to small businesses. The two announced a 10-year partnership to “serve millions of customers.”

Airtel, which serves over 2,500 large enterprises and more than a million emerging businesses, itself signed a similar cloud deal with Google in January this year. That partnership is still in place, Airtel said.

“AWS brings over 175 services to the table. We pretty much support any workload on the cloud. We have the largest and the most vibrant community of customers,” said Puneet Chandok, President of AWS in India and South Asia, on a call with reporters Wednesday noon.

The two companies, which signed a similar agreement in 2015, will also collaborate on building new services and help existing customers migrate to Airtel Cloud, they said.

Today’s deal illustrates Airtel’s push to build businesses beyond its telecom venture, said Harmeen Mehta, Global CIO and Head of Cloud and Security Business at Airtel, on the call. Last month, Airtel partnered with Verizon — TechCrunch’s parent company — to sell BlueJeans video conferencing service to business customers in India.

Deals with carriers were very common a decade ago in India as tech giants rushed to amass users in the country. Replicating a similar strategy now illustrates the phase of the cloud adoption in the nation.

Nearly half a billion people in India came online last decade. And slowly, small businesses and merchants are also beginning to use digital tools, storage services, and accept online payments.

India has emerged as one of the emerging leading grounds for cloud services. The public cloud services market of the country is estimated to reach $7.1 billion by 2024, according to research firm IDC.

Jul
28
2020
--

Hevo draws in $8 million Series A for its no-code data pipeline service

Hevo founders Manish Jethani and Sourabh Agarwal.

According to data pipeline startup Hevo, many small to medium-sized companies juggle more than 40 different applications to manage sales, marketing, finance, customer support and other operations. All of these applications are important sources of data that can be analyzed to improve a company’s performance. That data often remains separate, however, making it difficult for different teams to collaborate.

Hevo enables its clients’ employees to integrate data from more than 150 different sources, including enterprise software from Salesforce and Oracle, even if they don’t have any technical experience. The company announced today that it has raised an $8 million Series A round led by Singapore-based venture capital firm Qualgro and Lachy Groom, a former executive at payments company Stripe.

The round, which brings Hevo’s total raised so far to $12 million, also included participation from returning investors Chiratae Ventures and Sequoia Capital India’s early-stage startup program Surge. The company was first covered by TechCrunch when it raised seed funding in 2017.

Hevo’s Series A will be used to increase the number of integrations available on its platform, and hire sales and marketing teams in more countries, including the United States and Singapore. The company currently has clients in 16 markets, including the U.S., India, France, Australia and Hong Kong, and counts payments company Marqeta among its customers.

In a statement, Puneet Bysani, tech lead manager at Marqeta, said, “Hevo saved us many engineering hours, and our data teams could focus on creating meaningful KPIs that add value to Marqeta’s business. With Hevo’s pre-built connectors, we were able to get data from many sources into Redshift and Snowflake very quickly.”

Based in Bangalore and San Francisco, Hevo was founded in 2017 by chief executive officer Manish Jethani and chief technology officer Sourabh Agarwal. The two previously launched SpoonJoy, a food delivery startup that was acquired by Grofers, one of India’s largest online grocery delivery services, in 2015. Jethani and Agarwal spent a year working at Grofers before leaving to start Hevo.

Hevo originated in the challenges Jethani and Agarwal faced while developing tech for SpoonJoy’s order and delivery system.

“All of our team members would come to us and say, ‘hey, we want to look at these metrics,’ or we would ask our teams questions if something wasn’t working. Oftentimes, they would not have the data available to answer those questions,” Jethani told TechCrunch.

Then at Grofers, Jethani and Agarwal realized that even large companies face the same challenges. They decided to work on a solution to allow companies to quickly integrate data sources.

For example, a marketing team at an e-commerce company might have data about its advertising on social media platforms, and how much traffic campaigns bring to their website or app. But they might not have access to data about how many of those visitors actually make purchases, or if they become repeat customers. By building a data pipeline with Hevo, they can bring all that information together.

Hevo is designed to serve all sectors, including e-commerce, healthcare and finance. In order to use it, companies sign up for Hevo’s services on its website and employees enter their credentials for software supported by the platform. Then Hevo automatically extracts and organizes the data from those sources and prepares it for cloud-based data warehouses, such as Amazon Redshift and Snowflake. A user dashboard allows companies to customize integrations or hide sensitive data.

Hevo is among several “no code, low code” startups that have recently raised venture capital funding for building tools that enable non-developers to add features to their existing software. The founders say its most direct competitor is Fivetran, an Oakland, California-based company that also builds pipelines to move data to warehouses and prepare it for analysis.

Jethani said Hevo differentiates by “optimizing our product for non-technical users.”

“The number of companies who need to use data is very high and there is not enough talent available in the market. Even if it is available, it is very competitive and expensive to hire that engineering talent because big companies like Google and Amazon are also competing for the same talent,” he added. “So we felt that there has to be some democratization of who can use this technology.”

Hevo also focuses on integrating data in real time, which is especially important for companies that provide on-demand deliveries or services. During the COVID-19 pandemic, Jethani says e-commerce clients have used Hevo to manage an influx in orders as people under stay-at-home orders purchase more items online. Companies are also relying on Hevo to help organize and manage data as their employees continue to work remotely.

In a statement about the funding, Qualgro managing partner Heang Chhor said, “Hevo provides a truly innovative solution for extracting and transforming data across multiple data sources — in real time with full automation. This helps enterprises to fully capture the benefit of data flowing though the many databases and software they currently use. Hevo’s founders are the type of globally-minded entrepreneurs that we like to support.”

Jul
14
2020
--

Verizon partners with Airtel to launch BlueJeans in India

Bharti Airtel announced on Tuesday it has partnered with Verizon* to launch BlueJeans video-conferencing service in India to serve business customers in the world’s second largest internet market.

The video conferencing service, branded as Airtel BlueJeans in India, offers “enterprise-grade security” (which includes encrypted calls, ability to lock and password protect a meeting and generate randomized meeting IDs), a cloud point presence in India to enable low latency, HD video and Dolby Voice, and can accommodate up to 50,000 participants on a call.

Gopal Vittal, chief executive of Airtel, said in a call with reporters Tuesday that the Indian telecom operator is exploring ways to bring Airtel BlueJeans to home customers as well, though he cautioned that any such offering would take at least a few weeks to hammer out.

Airtel BlueJeans is being offered to businesses at no charge for the first three months, after which the video conferencing service will be offered at a “very competitive” price, said Vittal. Airtel will offer customized pricing plans for large businesses and small businesses, he added.

Airtel, the third largest telecom operator in India with 300 million subscribers, already maintains a partnership with G Suite and Cisco Webex, and Zoom. However, Vittal said that its collaboration with Verizon was “special” and enabled it to host data in India itself.

Verizon acquired BlueJeans in April this year. At the time, BlueJeans had over 15,000 business customers. Hans Vestberg, chief executive of Verizon, said on Tuesday that the American telecom giant was hopeful that Airtel BlueJeans would make major inroads in the Indian market, though he declined to share any figures.

Vestberg said Verizon is open to extending this partnership with Airtel to serve the Indian telecom operator’s business in African market, though both are currently focused on serving clients in India.

Tuesday’s announcement comes as video conferencing services have gained impressive momentum in India in recent months. Zoom app, which is also available to consumers, has already amassed over 35 million monthly active users in the country, according to mobile insights firm App Annie — data of which an industry executive shared with TechCrunch.

Reliance Jio Platforms, the top telecom operator in India with nearly 400 million subscribers, launched its video conferencing service JioMeet earlier this month. JioMeet is currently available to both consumers and business customers at no charge and a session on the service can last for up to 24 hours.

“We know we are not the first to launch a video conferencing in India, but we are confident that our differentiated offerings and brand value would stand out,” said Vittal.

Airtel BlueJeans, which includes BlueJeans’ Meetings, Events, Rooms, and Gateway for Microsoft Teams functionalities, will go live in India Tuesday evening.

*Verizon is TechCrunch’s parent company.

Jul
09
2020
--

WhatsApp Business, now with 50M MAUs, adds QR codes and catalog sharing

The global COVID-19 health pandemic has raised the stakes for businesses when it comes to using digital channels to connect with customers, and today WhatsApp unveiled its latest tools to help businesses use its platform to do just that.

The Facebook-owned messaging behemoth is expanding the reach and use of QR codes to let customers easily connect with businesses on the platform, providing them also with a series of stickers (pictured below) to kick off “we’re open for business” campaigns; and it’s made it possible for businesses to start sharing WhatsApp-based catalogs — dynamic lists of items that can in turn be ordered by users — as links outside of the WhatsApp platform itself.

The new launches come as WhatsApp’s business efforts pass some significant milestones.

WhatsApps’ profile as a formal platform for doing business is growing, albeit slowly. The WhatsApp Business app — used by merchants to interface with customers over WhatsApp and use the platform to market themselves — now has 50 million monthly active users, according to Facebook. Its two biggest markets for the service are India at over 15 million MAUs and Brazil at over 5 million MAUs, while catalogs specifically have had 40 million viewers.

On the other hand, WhatsApp has hit some stumbling blocks with features it’s tried to put into place to grow those numbers faster and boost usage among businesses.

Specifically, last month WhatsApp launched payments in Brazil, its first market, aimed not just at users sending each other money but merchants selling goods and services over the platform. But just nine days later, Brazilian regulators blocked the service over competition concerns, and it has yet to be restored pending further review. (India, which many had thought would be the first market for payments, is now part of a bigger global roadmap for rolling out payments.)

To put WhatsApp Business app’s usage numbers into some context, WhatsApp itself passed 2 billion users in February of this year. In that regard, hitting 50 million MAUs of the WhatsApp business app in the two years since it’s launched doesn’t sound like a whole lot (and in particular considering that it has competitors like Google offering payment services to merchants). Still, there has always been a lot of informal usage of the app, especially by smaller merchants, and that speaks to monetising potential if they can be lured into more of WhatsApps’ — and Facebook’s — products.

All the more reason that Facebook is expanding other features to make WhatsApp more useful for businesses, and especially smaller businesses — capitalising on a moment when many of them are turning to numerous digital channels (some for the first time ever) like social media, messaging services, websites and third-party delivery platforms to get their products and services out to the masses, in a period when visiting physical storefronts has been severely curtailed because of the health pandemic.

QR codes got a little boost last week from WhatsApp on the consumer side, with the company introducing a way for contacts to swap details for the first time by sharing codes rather than manually entering phone numbers — not unlike Snap Codes and shortcuts for adding contacts created on other social apps. That is now getting the business treatment.

Now, if you need to reach a business for customer support, to ask a question or order something, instead of manually entering a business phone number, you can scan a QR code from a receipt, a business display at the storefront, a product or even posted on the web, in order to connect with the company. Businesses that are using these can also set up welcome messages to start conversations once they’ve been added by a user. (They will have to use the WhatsApp Business app or the WhatsApp Business API to do this, of course.)

The catalog sharing feature, meanwhile, is an expansion on a feature that the company first launched in November 2019, which will now allow businesses to create and share links to their catalogs to post elsewhere. To be frank, the lack of ability to share catalogs at launch felt like a feature omission, considering that businesses often use multiple channels to market themselves, although it might have been an intentional move: there has long been questions about how tight links are between Facebook and WhatsApp, so slowly introducing features that share and cross-market from the start might be the preferred route for the company.

The idea now will be that those links can now be shared on Facebook, Instagram and other places.

Although all of these services, and WhatsApp Business, remain free to use, they continue to lay the groundwork for how Facebook might monetise the features in the future, not least through payments but also through stronger pushes to advertise on Facebook, now with more ways of linking a company’s WhatsApp profile to those ads.

Jun
15
2020
--

VESoft raises $8M to meet China’s growing need for graph databases

Sherman Ye founded VESoft in 2018 when he saw a growing demand for graph databases in China. Its predecessors, like Neo4j and TigerGraph, had already been growing aggressively in the West for a few years, while China was just getting to know the technology that leverages graph structures to store data sets and depict their relationships, such as those used for social media analysis, e-commerce recommendations and financial risk management.

VESoft is ready for further growth after closing an $8 million funding round led by Redpoint China Ventures, an investment firm launched by Silicon Valley-based Redpoint Ventures in 2005. Existing investor Matrix Partners China also participated in the Series pre-A round. The new capital will allow the startup to develop products and expand to markets in North America, Europe and other parts of Asia.

The 30-people team is comprised of former employees from Alibaba, Facebook, Huawei and IBM. It’s based in Hangzhou, a scenic city known for its rich history and housing Alibaba and its financial affiliate Ant Financial, where Ye previously worked as a senior engineer after his four-year stint with Facebook in California. From 2017 to 2018, the entrepreneur noticed that Ant Financial’s customers were increasingly interested in adopting graph databases as an alternative to relational databases, a model that had been popular since the 80s and normally organizes data into tables.

“While relational databases are capable of achieving many functions carried out by graph databases… they deteriorate in performance as the quantity of data grows,” Ye told TechCrunch during an interview. “We didn’t use to have so much data.”

Information explosion is one reason why Chinese companies are turning to graph databases, which can handle millions of transactions to discover patterns within scattered data. The technology’s rise is also a response to new forms of online businesses that depend more on relationships.

“Take recommendations for example. The old model recommends content based purely on user profiles, but the problem of relying on personal browsing history is it fails to recommend new things. That was fine for a long time as the Chinese [internet] market was big enough to accommodate many players. But as the industry becomes saturated and crowded… companies need to ponder how to retain existing users, lengthen their time spent, and win users from rivals.”

The key lies in serving people content and products they find appealing. Graph databases come in handy, suggested Ye, when services try to predict users’ interest or behavior as the model uncovers what their friends or people within their social circles like. “That’s a lot more effective than feeding them what’s trending.”

Neo4j compares relational and graph databases (Link)

The company has made its software open source, which the founder believed can help cultivate a community of graph database users and educate the market in China. It will also allow VESoft to reach more engineers in the English-speaking world who are well-acquainted with the open-source culture.

“There is no such thing as being ‘international’ or ‘domestic’ for a technology-driven company. There are no boundaries between countries in the open-source world,” reckoned Ye.

When it comes to generating income, the startup plans to launch a paid version for enterprises, which will come with customized plug-ins and host services.

The Nebula Graph, the brand of VESoft’s database product, is now serving 20 enterprise clients from areas across social media, e-commerce and finance, including big names like food delivery giant Meituan, popular social commerce app Xiaohongshu and e-commerce leader JD.com. A number of overseas companies are also trialing Nebula.

The time is ripe for enterprise-facing startups with a technological moat in China as the market for consumers has been divided by incumbents like Tencent and Alibaba. This makes fundraising relatively easy for VESoft. The founder is confident that Chinese companies are rapidly catching up with their Western counterparts in the space, for the gargantuan amount of data and the myriad of ways data is used in the country “will propel the technology forward.”

Jun
04
2020
--

Nanox, maker of a low-cost scanning service to replace X-rays, expands Series B to $51M

A lot of the attention in medical technology today has been focused on tools and innovations that might help the world better fight the COVID-19 global health pandemic. Today comes news of another startup that is taking on some funding for a disruptive innovation that has the potential to make both COVID-19 as well as other kinds of clinical assessments more accessible.

Nanox, a startup out of Israel that has developed a small, low-cost scanning system and “medical screening as a service” to replace the costly and large machines and corresponding software typically used for X-rays, CAT scans, PET scans and other body imaging services, is today announcing that it has raised $20 million from a strategic investor, South Korean carrier SK Telecom.

SK Telecom in turn plans to help distribute physical scanners equipped with Nanox technology as well as resell the pay-per-scan imaging service, branded Nanox.Cloud, and corresponding 5G wireless network capacity to operate them. Nanox currently licenses its tech to big names in the imaging space, like FujiFilm, and Foxconn is also manufacturing its donut-shaped Nanox.Arc scanners.

The funding is technically an extension of Nanox’s previous round, which was announced earlier this year at $26 million with backing from Foxconn, FujiFilm and more. Nanox says that the full round is now closed off at $51 million, with the company having raised $80 million since launching almost a decade ago, in 2011.

Nanox’s valuation is not being publicly disclosed, but a news report in the Israeli press from December said that one option the startup was considering was an IPO at a $500 million valuation. We understand from sources that the valuation is about $100 million higher now.

The Nanox system is based around proprietary technology related to digital X-rays. Digital radiography is a relatively new area in the world of imaging that relies on digital scans rather than X-ray plates to capture and process images.

Nanox says the ARC comes in at 70 kg versus 2,000 kg for the average CT scanner, and production costs are around $10,000 compared to $1-3 million for the CT scanner.

But in addition to being smaller (and thus cheaper) machines with much of the processing of images done in the cloud, the Nanox system, according to CEO and founder Ran Poliakine, can make its images in a tiny fraction of a second, making them significantly safer in terms of radiation exposure compared to existing methods.

Imaging has been in the news a lot of late because it has so far been one of the most accurate methods for detecting the progress of COVID-19 in patients or would-be patients in terms of how it is affecting patients’ lungs and other organs. While the dissemination of equipment like Nanox’s definitely could play a role in handling those cases better, the ultimate goal of the startup is much wider than that.

Ultimately, the company hopes to make its devices and cloud-based scanning service ubiquitous enough that it would be possible to run early detection, preventative scans for a much wider proportion of the population.

“What is the best way to fight cancer today? Early detection. But with two-thirds of the world without access to imaging, you may need to wait weeks and months for those scans today,” said Poliakine.

The startup’s mission is to distribute some 15,000 of its machines over the next several years to bridge that gap, and it’s getting there through partnerships. In addition to the SK Telecom deal it’s announcing today, last March, Nanox inked a $174 million deal to distribute 1,000 machines across Australia, New Zealand and Norway in partnership with a company called the Gateway Group.

The SK Telecom investment is an interesting development that underscores how carriers see 5G as an opportunity to revisit what kinds of services they resell and offer to businesses and individuals, and SK Telecom specifically has singled out healthcare as one obvious and big opportunity.

“Telecoms carriers are looking for opportunities around how to sell 5G,” said Ilung Kim, SK Telecom’s president, in an interview. “Now you can imagine a scanner of this size being used in an ambulance, using 5G data. It’s a game changer for the industry.”

Looking ahead, Nanox will continue to ink partnerships for distributing its hardware and reselling its cloud-based services for processing the scans, but Poliakine said it does not plan to develop its own technology beyond that to gain insights from the raw data. For that, it’s working with third parties — currently three AI companies — that plug into its APIs, and it plans to add more to the ecosystem over time.

Jun
01
2020
--

India’s richest man built a telecom operator everyone wants a piece of

As investors’ appetites sour in the midst of a pandemic, a three-and-a-half-year-old Indian firm has secured $10.3 billion in a month from Facebook and four U.S.-headquartered private equity firms.

The major deals for Reliance Jio Platforms have sparked a sudden interest among analysts, executives and readers at a time when many are skeptical of similar big check sizes that some investors wrote to several young startups, many of which are today struggling to make sense of their finances.

Prominent investors across the globe, including in India, have in recent weeks cautioned startups that they should be prepared for the “worst time” as new checks become elusive.

Elsewhere in India, the world’s second-largest internet market and where all startups together raised a record $14.5 billion last year, firms are witnessing down rounds (where their valuations are slashed). Miten Sampat, an angel investor, said last week that startups should expect a 40%-50% haircut in their valuations if they do get an investment offer.

Facebook’s $5.7 billion investment valued the company at $57 billion. But U.S. private equity firms Silver Lake, Vista, General Atlantic, and KKR — all the other deals announced in the past five weeks — are paying a 12.5% premium for their stake in Jio Platforms, valuing it at $65 billion.

How did an Indian firm become so valuable? What exactly does it do? Is it just as unprofitable as Uber? What does its future look like? Why is it raising so much money? And why is it making so many announcements instead of one.

It’s a long story.

Run up to the launch of Jio

Billionaire Mukesh Ambani gave a rundown of his gigantic Indian empire at a gathering in December 2015 packed with 35,000 people including hundreds of Bollywood celebrities and industry titans.

“Reliance Industries has the second-largest polyester business in the world. We produce one and a half million tons of polyester for fabrics a year, which is enough to give every Indian 5 meters of fabric every year, year-on-year,” said Ambani, who is Asia’s richest man.

Mar
18
2020
--

Chinese cloud infrastructure market generated $3.3B in Q42019

Research firm Canalys reports that the Chinese cloud infrastructure market grew 66.9% to $3.3 billion in the last quarter of 2019, right before the COVID-19 virus hit the country. China is the second largest cloud infrastructure market in the world, with 10.8% share.

The quarter puts the Chinese market on a $13.2 billion run rate. Canalys pegged the U.S. market at $14 billion for the same time period, with a 47% worldwide market share.

Alibaba led the way in China, with more than 46% market share. Like its American e-commerce giant counterpart, Amazon, Alibaba has a cloud arm, and it dominates in its country much the same way AWS does in the U.S.

Tencent was in second, with 18%, roughly the equivalent of Microsoft Azure’s share in the U.S., and Baidu AI Cloud came in third, with 8.8%, roughly the equivalent of Google’s U.S. market share.

Slide: Canalys

Matthew Ball, an analyst at Canalys, says the fourth quarter numbers predate the medical crisis due to the COVID-19 outbreak in China. “In terms of growth drivers for Q4, we have seen the ongoing demand for on-demand compute and storage accelerate throughout 2019, as private and public organizations embark on digital transformation projects and start building platforms and applications to develop new services.”

Ball says gaming was a big cloud customer, as was healthcare, finance, transport and industry. He also pointed to growth in facial recognition technology as part of the smart city sector.

As for next year, Ball says the firm still sees big growth in the market despite the virus impact in Q12020. “In addition to the continuation of digital projects once business returns to normality, we anticipate many businesses new to using cloud services during the crisis will continue use and become paying customers,” he said. The cloud companies have been offering a number of free options to businesses during the crisis.

“The overall outcome of current events around the world will be that companies will assess their business continuity measures and make sure they can continue to operate if events are ever repeated,” he said.

Mar
17
2020
--

Salesforce hires former banker Arundhati Bhattacharya as chairperson and CEO of India business

Salesforce, the global giant in CRM, said on Wednesday that former banker Arundhati Bhattacharya will be joining the company on April 20 as chairperson and chief executive of its India division.

The San Francisco-headquartered firm said Bhattacharya, who served as the chairperson of the state-run State Bank of India for nearly four decades and oversees financial services group SWIFT India, will be tasked with helping the global giant scale rapidly in India, one of its fastest growing overseas markets.

Arundhati will report to Ulrik Nehammer, General Manager of Salesforce in the APAC region. “Arundhati is an incredible business leader, and we are delighted to welcome her to Salesforce as chairperson and CEO India,” said Gavin Patterson, President and CEO of Salesforce International, in a statement.

“India is an important growth market for Salesforce and a world-class innovation and talent hub and Arundhati’s leadership will guide our next phase of growth, customer success and investment in the region,” he said.

Salesforce offers a range of cloud services to customers in India, where it has over 1 million developers and more Trailhead users than in any other market outside of the U.S. The company, which competes with local players Zoho and Freshworks, counts Indian firms redBus, Franklin Templeton and CEAT as some of its clients.

The company said it expects to add 3,000 jobs in India in the next three years and turn the nation into a “leading global talent and innovation hub” for the company. Sunil Jose, who joined the firm in 2017, oversaw some of the company’s India operations previously.

“I could not be more excited to join the Salesforce team to ensure we capture this tremendous opportunity and contribute to India’s development and growth story in a meaningful way,” said Bhattacharya in a statement.

According to research firm IDC, Salesforce and its ecosystem of customers and partners in India are expected to create over $67 billion in business revenues and create more than 540,000 jobs by 2024.

Mar
08
2020
--

China Roundup: Enterprise tech gets a lasting boost from coronavirus outbreak

Hello and welcome back to TechCrunch’s China Roundup, a digest of recent events shaping the Chinese tech landscape and what they mean to people in the rest of the world. This week, a post from Sequoia Capital sounding the alarm of the coronavirus’s impact on businesses is reaching far corners of tech communities around the world, including China.

Many echo Sequoia’s observation that the companies that are the “most adaptable” are the likeliest to survive. Others cling to the hope of “[turning] a challenging situation into an opportunity to set yourself up for enduring success.”

Two weeks ago I wrote about how the private sector and the government in China are working together to contain the epidemic, bringing a temporary boost to the technology industry. This week I asked a number of investors and founders which of these changes will stand to last, and why.

B2B on the rise

The business-to-business (B2B) space was rarely a hot topic in China until online consumer businesses became relatively saturated in recent times. And now, the COVID-19 epidemic has unexpectedly breathed life into the once-boring field, which stretches from virtual meetings, online education, digital healthcare, cybersecurity, telecommunications, logistics to smart cities, analysis from investment firm Yunqi Partners shows.

For one, there is an obvious opportunity for remote collaboration tools as people work from home. Downloads of indigenous work apps like Dingtalk, WeChat Work, TikTok’s sister Lark as well as America’s Zoom jumped exponentially amid the health crisis. While some argue that the boom is overblown and will dissipate as soon as businesses are back to normal, others suggest that the shift in behavior will endure.

Like other work collaboration services, Zoom soared in China amid the coronavirus outbreak, jumping from No. 180 in late January to No. 28 as of late February in overall app installs. Data: App Annie 

“People are reluctant to change once they form a new habit,” suggests Joe Chan, partner at Hong Kong-based Mindworks Ventures. The virus outbreak, he believes, has educated the Chinese masses to work remotely.

“Meeting in person and through Zoom both have their own merits, depending on the social norm. Some people are used to thinking that relationships need to be established through face-to-face encounters, but those who don’t hold that view will have fewer meetings. [The epidemic] presents a chance for a paradigm shift.”

But changes are slow

Growth in enterprise businesses might be less visible than what China witnessed over the SARS epidemic that fueled internet consumer verticals such as ecommerce. That’s because software-as-a-services (SaaS), cloud computing, health tech, logistics and other enterprise-facing services are intangible for most consumers.

“Compared to changes in consumer behavior, the adoption of new technologies by enterprises happen at a slower pace, so the impact of coronavirus on new-generation innovations [B2B] won’t come as rapidly and thoroughly as what happened during SARS,” contended Jake Xie, vice president of investment at China Growth Capital.

Xie further suggested that the opportunities presented by the outbreak are reserved for companies that have been steadily investing in the field, in part because enterprise services have a longer life cycle and require more capital-intensive infrastructure. “Opportunists don’t stand a chance,” he concluded.

As for changing consumer behavior, such as the uptick in grocery delivery usage by seniors trapped indoors, the impact might be short-lived. “The only benefit that the epidemic brings to these apps is getting more people to try their services. But how many of them will stay? The argument that people will keep using these apps over concerns of getting sick in offline markets is unsubstantiated. The strength of a business lies in its ability to solve user problems in the long term, for example, providing affordability and convenience,” suggested Derek Shen, chairman of Danke Apartment, the Chinese co-living startup slated to list on NYSE.

Summoned by Beijing

The adjacent sector of enterprise services — at-scale technologies tailored to energizing government functions — has also seen traction over the course of the epidemic. Private firms in China have teamed up with regional authorities to better track people’s movements, ramp up facial recognition capacities aimed at a mask-wearing public, develop contact-free consumer experience, among other measures.

Tech firms touting services to the government are no stranger to criticisms concerning the lack of transparency in how user data is used. But the appeal to private firms is huge, not only because state contracts tend to provide a steady stream of long-term revenue, but also that certain public-facing projects can be billed as a fulfillment of corporate social responsibilities. Following the virus outbreak, Chinese tech companies of all sizes hastened to offer contributions, with efforts ranging from making monetary donations to building tools that keep the public informed.

On the flip side, the government also needs private help in emergency management. As prominent Chinese historian Luo Xin poignantly pointed out in podcast SurplusValue’s recent episode [1:00:00], some of the most efficient and effective responses to the public health crisis came not from the government but the private sector, whether it is online retailer JD.com or logistics firm SF Express delivering relief supplies to the epicenter of the outbreak.

That said, Luo argued there are signs that some local authorities’ tendency to centralize control is getting in the way of private efforts. For example, some government offices have stumbled in their attempts to develop crisis management systems from scratch, overlooking a pool of readily available and proven infrastructure powered by the country’s tech giants.

Powered by WordPress | Theme: Aeros 2.0 by TheBuckmaker.com