Year: 2018

Cisco today announced its intent to buy Ann Arbor, MI-based security firm, Duo Security. Under the terms of agreement, Cisco is paying $2.35 billion in cash and assumed equity awards for Duo.

Duo Security was founded in 2010 by Dug Song and Jonathan Oberheide and went on to raise $121.M through several rounds of funding. The company has 700 employees with offices throughout the United States and in London though the company has remained headquartered in Ann Arbor, MI.

Co-founder and CEO Dug Song will continue leading Duo as its General Manager and will join Cisco’s Networking and Security business led by EVP and GM David Goeckeler.

The acquisition feels like a good fit for Cisco. Duo’s security apparatus lets employees use their own device for adaptive authentication. Instead of issuing key fobs with security codes, Duo’s solution works securely with any device. And within Cisco’s environment, the technology should feel like a natural fit for CTOs looking for secure two factor authentication.

“Our partnership is the product of the rapid evolution of the IT landscape alongside a modernizing workforce, which has completely changed how organizations must think about security,” said Dug Song, Duo Security’s co-founder and chief executive officer. “Cisco created the modern IT infrastructure, and together we will rapidly accelerate our mission of securing access for all users, with any device, connecting to any application, on any network. By joining forces with the world’s largest networking and enterprise security company, we have a unique opportunity to drive change at a massive scale, and reshape the industry.”

The deal is expected to close in the first quarter of Cisco’s fiscal year 2019.

Developing…

A national six-day taxi driver strike in Spain has ended after the government agreed to pass regulation that will allow the country’s autonomous communities to cap the number of private hire vehicle permits within their cities.

The VTC licenses are used by Uber and local ride-hailing rival Cabify to offer professional driver services in the country. So the government’s decision looks likely to limit the size of their businesses in regional markets which choose to uphold the cap.

Previous decisions by European courts have essentially closed down Uber’s p2p (non-professional driver) ride-hailing services in the region. So lobbying cities to deregulate and reform taxi laws in its favor is Uber’s game now.

But it’s a long game, and one that may not work in every market — underlining the drivers behind the company repositioning itself as a multimodal transport platform, after buying its way into e-bikes.

Spain’s Development Ministry issued the news the taxi industry had been pressing for yesterday, in a press release, following a meeting of the National Transport Conference that had been forward as a result of the strikes. It said measures to enable the country’s regional governments to regulate the VTC sector locally, allowing them to put in place their own urban mobility policies, will be implemented in September.

Taxi associations have parked their strike as a result — albeit, making it loud and clear on Twitter that they’ll be returning to keep up the pressure on legislators come September.

It was an attempt by the mayor of Barcelona to pass a law to locally enforce the 1:30 ratio — subsequently blocked by the courts — that triggered the latest strike.

A strike that — as Uber hyperbolically tells it — “paralyzed Spain”.

Of course the reality was rather closer to an inconvenience, and mostly for tourists, given the country has multiple, typically low cost urban public transport options. And locals love to scoot.

Spain’s taxi associations have been holding fierce strike protests for several years, ever since Uber re-entered the market with a licensed service offering — after some of same associations had successfully challenged its p2p service in the Barcelona courts and got UberPop banned.

Taxi drivers denounce Uber and another local ride-hailing player, Cabify, as exploitative and corrupt, and have been applying pressurize on local and national governments to protect their industry.

A judgement from the CJEU at the end of last year, deeming Uber a transport company — and therefore firmly subject to local transport laws — looked like the final nail in the coffin for ride-hailing platforms to circumvent taxi regulations in Europe.

Making lobbying for deregulation and (in the case of Uber) pushing into multi-modal transport options the regional long play for ride-hailing startups. Uber’s e-bikes are heading to Europe this summer.

In Spain the taxi industry’s anger has been focused on failure to uphold a 2015 reversion of a transport law which reinstated an earlier VTC license cap, dating back to 1990, that sets a ration of one VTC per 30 taxis.

However the provision has not been actively enforced, and has seemingly been easy (though not necessarily cheap) for ride-hailing firms to circumvent in practice — with the firms buying up VTC licenses from local operators and recruiting drivers via social media ads and job ad platforms like Jobandtalent.

Reuters reports there are currently 9,000 VTC permits granted to the online services vs 70,000 taxi permits. If the 1:30 ratio were to be upheld it would mean at least 6,600+ fewer permits — so likely thousands of Uber and Cabify contractors being put out of work.

 

VTC association, Unauto VTC, has sought to block attempts to enforce the cap — such as by challenging the Barcelona city authority’s attempt to enforce the ratio last month.

And ride-hailing companies appear to be seeking legal avenues to block the government’s latest move to devolve regulatory powers (for instance an Uber spokesperson pointed us to this report, in Mercado Financiero, which quotes a law professor questioning the constitutional validity of the government’s use of a decree to transfer the competency).

At the same time they are making public noises about wanting to work with the taxi industry.

In a blog post responding to yesterday’s government announcement that VTC regulatory powers would be devolved, Uber holds out an olive branch to taxis, calling for all players in the urban mobility space, private and public, to work together — and arguing that if people are going to leave their cars at home “we must offer them more and more alternatives, not less”.

“If we have learned something these days, we should work together. All together. Because although some insist on presenting this problem as a war, the truth is that it is not so different from the crossroads that all the great cities of the world live,” it writes.

“And at this crossroads, it is in our hands to decide which path we want to take. We can restrict the new mobility alternatives, or we can start working to achieve the objective that we share with the Government, the City Councils, the taxi sector, the VTC and Uber: that fewer private vehicles circulate on our streets every day.”

The company also makes a direct plea to taxi drivers to work with it by backing deregulation of the taxi industry, instead of a cap on the number of VTCs.

“We firmly believe that the solution is not to restrict the VTC, but to make the taxi more flexible so that it can compete better. So you can compete with Uber, not against Uber. Uber and the taxi? It may sound weird, but it is not. We already do it in several cities around the world, and we want to do it in Spain,” it writes.

“It is not about VTC or taxi. It is about that, little by little, we learn to work together to fulfill the objective of all: that you leave your car at home.”

An Uber spokesperson we reached for comment also told us: “The ways people move around cities is changing around the world — we want to partner with all local stakeholders, including taxis, to build better cities in Spain together.”

A spokeswoman for Cabify said the company did not have anything to add beyond its statement last week when it also made a similar plea for stakeholders to unite around a multi-modal urban transport mix — writing then: “We believe that unilateral solutions are not the right solutions to build the mobility of the future and that all players must work together with the administration in order to find the way to ensure the market’s evolution and the protection of all of those who operate in it.”

However the taxi industry’s attacks on the ride-hailing companies include claims that their platforms create precarious ‘jobs’ and underpay their workers.

Neither Uber nor Cabify’s public statements have engaged with that critique.

The most recent taxi strikes started last month in major cities including Spain’s capital Madrid and in the capital of Catalonia, Barcelona.

The strikes were initially scheduled to run for two days but the drivers changed up a gear — announcing a huelga indefinido and going to on spend almost a week blocking streets and making life especially miserable for suitcase-laden summer tourists trying to make trips to and from airports.

There were also violent scenes witnessed on the first day of the strike in Barcelona — which drew widespread condemnation after cars were damaged and there were reports of drivers being attacked and threatened.

The violence was not repeated after appeals for calm, including from one of the main taxi associations organizing the protest action.

This same organization, the Elite Taxi association, has since tweeted that Barcelona taxis have been offering free trips to hospitals to improve relations with citizens.

Shedul, an online booking platform for salons and spas, has raised $5 million in funding. The round is led by Berlin’s Target Global, with participation from New York based FJ Labs. A number of individuals also invested personally, including Tom Stafford (Managing Partner at DST Global), Niklas Östberg (founder and CEO of Delivery Hero), and Hakan Koç (co-founder and co-CEO of Auto1 Group).

Launched in 2015, Shedul’s first product is a free SaaS designed to help salons and spas manage their day-to-day sales and operations. The platform’s features span managing appointment bookings, point-of-sale, customer records, inventory, and financial reporting. A second, more recent offering is the Fresha.com marketplace, and it here where the London-headquartered company generates revenue by charging merchants a small percentage fee on top of bookings.

“We’ve built the world’s best platform for beauty and wellness industry and given it to all businesses globally 100 percent subscription free,” says founder and CEO William Zeqiri. “Good free software has spread virally with users in the industry enabling us to acquire new merchants very fast”.

This has seen Shedul acquire salon and spa operator customers in more than 120 countries, primarily in the U.S., U.K., Australia, and Canada. Around 6 million appointments are booked each month, growing at an average rate of 20 percent month-on-month, while the platform is on track to process $3.5 billion worth of appointment bookings by the end of 2018.

“Leveraging our existing pool of global merchants allowed us to bootstrap the consumer marketplace with a lot of liquidity,” explains Zeqiri. “This created additional value proposition for both merchants and marketplace customers. With our Free SaaS-enabled marketplace business model we are leveraging the critical mass of merchants and marketplace users to scale the platform exponentially”.

Currently in the initial rollout phase, Zeqiri says Fresha.com provides mobile apps for customers and real-time booking integrations through Instagram, Facebook and Google, along with in-app payment processing. It also incorporates intelligent features to help merchants grow revenues. This includes displaying price and availability options based on a customer’s purchase history and the merchant’s projected occupancy.

“With our two-sided Marketplace platform, we’re automating many processes of running a business in the beauty industry with powerful online booking features, marketing tools and access to our consumer marketplace to attract new clients,” adds the Shedul CEO. “This frees up merchants to do what they do best and spend more face time with customers.

“We have salons where 80 percent of their bookings are now made though our online marketplace Fresha.com. Our technology helps businesses optimize their schedule with real-time online availability; in some cases it has increased merchant revenues more than 30 percent”.

Shedul counts its main competitors in the U.S. as MindBody, Vagaro, and StyleSeat. In Europe, the startup competes most directly with marketplace TreatWell.

Meanwhile, Shedul says the new capital will be used for product development and to support the continued rollout of the new marketplace offering. It brings the total amount raised by the company to over $11 million to date and should see it through to an upcoming Series B round.

A mere sprinkling of autonomous vehicles exist in a few dozen cities today. A smattering in San Francisco and Silicon Valley. A dusting in the greater Phoenix area and Pittsburgh. A few drops in Boston, Detroit, Gothenburg, Shenzhen and Singapore.

And none of them—at least not yet—have been deployed as a true commercial enterprise.

While the bulk of this nascent industry fixates on the system of sensors, maps, and AI necessary for vehicles to drive without a human behind the wheel, the founders of startup RideOS are directing their efforts to the day when fleets of self-driving cars hit the streets.

It’s there, where human-driven and automated vehicles will be forced to mingle, that RideOS co-founders Chris Blumenberg and Justin Ho see opportunity. And so do investors.

The company, which has existed for all of 11 months, has raised $25 million in a Series B funding round led by Next47, the venture arm of Siemens. Sequoia, an existing investor, and Singapore-based ST Ventures, also participated in the round.

The Series B round brings the company’s total funding to $34 million. RideOS announced in June that it was partnering with Ford Motor subsidiary Autonomic and had raised $9 million in a Series A round led by Sequoia Capital.

In July, RideOS announced it had partnered with ST Engineering to accelerate the deployment of autonomous vehicles in Singapore.

What did they build anyway?

Blumenberg and Ho contend that unless there’s a coordinating layer that can communicate information between all automated vehicles—like say how air traffic control works in aviation—there will be traffic congestion and accidents.

The founders, who met at Uber Advanced Technologies Group, have developed a cloud-based fleet management platform that pulls mapping, traffic, and detection data to suggest to all self-driving vehicles operating in a given geography the safest, most efficient routes. The aim is to be an independent platform that can orchestrate communication between self-driving vehicle services that may be competitors.

RideOS is taking a similar approach to Waze, explained Blumenberg, the company’s CTO and a veteran of Apple. “Except we’re not relying on human input; we’re relying on things that can be detected automatically such as critical interventions or what is captured from computer vision or GPS data.”

Present-day platform

However, RideOS isn’t sitting around for a day when automated vehicles hit the road en masse. The company’s platform is designed to work for human-driven fleets too. RideOS has already signed partnerships with mobility companies, Ho said without naming them.

“We’re working on this grand future, but there are many, many use cases we can support prior to that,” Ho said.

RideOS plans to use the additional funds to expand its services to global transportation markets. It just so happens that a team within Next47 is dedicated to helping startups tap into Siemens’ global network. In other words, RideOS stands to benefit from Siemen’s global footprint and partnerships, in addition to its access to capital.

Next47 will also join the RideOS board and will be integral in guiding RideOS in European transportation markets, the company said.

“There’s a tremendous amount of innovation in AVs at the moment,” Mike Vernal, a new partner at Sequoia Capital who led the company’s Series A round, told TechCrunch. “There’s probably 50, 60,70 teams working on getting a single autonomous vehicle working. But no one is focused on what happens next.”

Musical.ly, the short video app that’s popular among teens and young people, is going away. Kinda.

The app and all user data and accounts is being merged with Toktok, a sister app that’s owned by ByteDance, the Chinese company that acquired Musical.ly for around $1 billion last year.

The switch-over happens today (Thursday) and it should be relatively seamless. Users of Musical.ly will see their app switch to TikTok once they update the app, and they should find their account, videos and personal settings inside the new app as per usual.

One notable new addition is a setting that alerts a user when they have been active in the app for two hours that day. Its addition comes just a day after Facebook added similar ‘well-being’ features to its core social network and Instagram.

ByteDance is making the move to consolidate its audiences on both apps. Four-year-old Musical.ly, which is particularly popular in the U.S., has around 100 million users while TikTok, which was created in 2016 and operates worldwide minus China, claims 500 million monthly active users. In China, the sister product is Douyin, while the company also offers news apps Toutiao in China and TopBuzz across the rest of the world.

“TikTok, the sound of a ticking clock, represents the short nature of the video platform. We want to capture the world’s creativity and knowledge under this new name and remind everyone to treasure every precious life moment. Combining musical.ly and TikTok is a natural fit given the shared mission of both experiences,” said Alex Zhu, co-founder of Musical.ly and Senior Vice President of TikTok, in a statement.

The app merger follows the closure of Musical.ly’s standalone live-streaming app Live.ly in June. That was part of the deal agreed to for the Musical.ly acquisition, and the company directed its users to Live.me, an app that counts ByteDance among its investors.

It makes sense that ByteDance is consolidating its sibling apps since Facebook is stalking out the short video space. The social network giant has tested a Musical.ly style app and just this week we found hints that it is planning to launch “Talent Show,” which would allow users to compete by singing popular songs then submitting their audition for review.

There’s also the revenue side. A global platform plays better for advertisers rather than forcing them to pick either Musical.ly or TikTok, or going through the added rigmarole of working on both.

Can Google’s week get any worse? Less than a day after the revelation that it is planning a censored search engine for China, so comes another: the U.S. firm is said to be developing a government-friendly news app for the country, where its search engine and other services remain blocked.

That’s according to The Information which reports that Google is essentially cloning Toutiao, the hugely popular app from new media startup ByteDance, in a bid to get back into the country and the minds of its 700 million mobile internet users. Like Toutiao, the app would apparently use AI and algorithms to serve stories to readers — as opposed to real-life human editors — while it too would be designed to work within the bounds of Chinese internet censorship.

That last part is interesting because ByteDance and other news apps have gotten into trouble from the government for failing to adequately police the content shared on their platforms. That’s resulted in some app store suspensions, but the saga itself is a rite of passage for any internet service that has gained mainstream option, so there’s a silver lining in there. But the point for Google is that policing this content is not as easy as it may seem.

The Information said the news app is slated for release before the search app, the existence of which was revealed yesterday, but sources told the publication that the ongoing U.S.-China trade war has made things complicated. Specifically, Google executives have “struggled to further engage” China’s internet censor, a key component for the release of an app in China from an overseas company.

There’s plenty of context to this, as I wrote yesterday:

The Intercept’s report comes less than a week after Facebook briefly received approval to operate a subsidiary on Chinese soil. Its license was, however, revoked as news of the approval broke. The company said it had planned to open an innovation center, but it isn’t clear whether that will be possible now.

Facebook previously built a censorship-friendly tool that could be deployed in China.

While its U.S. peer has struggled to get a read on China, Google has been noticeably increasing its presence in the country over the past year or so.

The company has opened an AI lab in Beijing, been part of investment rounds for Chinese companies, including a $550 million deal with JD.com, and inked a partnership with Tencent. It has also launched products, with a file management service for Android distributed via third-party app stores and, most recently, its first mini program for Tencent’s popular WeChat messaging app.

As for Google, the company pointed us to the same statement it issued yesterday:

We provide a number of mobile apps in China, such as Google Translate and Files Go, help Chinese developers, and have made significant investments in Chinese companies like JD.com. But we don’t comment on speculation about future plans.

Despite two-for-one value on that PR message, this is a disaster. Plotting to collude with governments to censor the internet never goes down well, especially in double helpings.

Starbucks is palling up with Alibaba as it seeks to rediscover growth for its business in China.

China has been a bright spot for some time for the U.S. coffee giant, but lately it has struggled to maintain growth — its China business dragged on its Q3 financials — and it is up against some ambitious new rivals, including billion-dollar startup Luckin Coffee.

One-year-old Luckin recently raised $200 million from investors and it has already built quite a presence. It claims over 500 outlets across China and it taps into the country’s mobile trends, with mobile payments and orders and delivery, too. Then there are some deep discounts aimed at getting new users, as is common with food, cars and other on-demand services.

In response, Starbucks is injecting some of that ‘New Retail’ strategy into its own China presence — and it is doing so with none other than Alibaba, the company that coined the phrase, which signifies a marriage between online and offline commerce.

The partnership between Alibaba and Starbucks is wide-ranging and it will cover delivery, a virtual store and collaboration on Alibaba’s “new retail” Hema stores.

The delivery piece is perhaps most obvious, and it’ll see Starbucks work with Ele.me, the $9.5 billion food delivery platform owned by Alibaba, to allow customers to order and receive coffee without visiting a store. The service will start in September in Beijing and Shanghai, with plans to expand to 30 cities and over 2,000 stores by the end of this year.

Starbucks is also building its app into Alibaba’s array of e-commerce sites, including its Tmall brand e-mall and Taobao marketplace. That’s a move that Starbucks President and CEO Kevin Johnson told CNBC would operate “similar to the mobile app embedded right into that experience” and open Starbucks up to Alibaba’s 500 million-plus users.

Finally, Starbucks is bringing its own “Starbucks Delivery Kitchens” to Alibaba’s Hema stores, which feature robots and mobile-based orders, that will combine Starbucks stores to boost its delivery capacity and speed.

Starbucks, as mentioned, needed a boost in China but the deal is also a major coup for Alibaba, which is battling JD.com on the new retail front as well as ambitious on-demand service Meituan. The latter is reported to have recently filed for an IPO in Hong Kong that could raise it $4 billion.

Editor’s note: This post originally appeared on TechNode, an editorial partner of TechCrunch based in China.

When Emily Zhang was interning with a peer-to-peer (P2P) lending firm in the Summer of 2016, her main task was to carry out research on other P2P lending firms. She found the rates of return tempting and some underlying assets reliable, so she decided to invest in the market herself. Until now, none of her investments have matured, but she worries about whether she can actually withdraw her profits, much less get back the principal.

Even so, Zhang considers herself lucky that the companies that sold her the assets are still in business while many other P2P companies have collapsed, leaving their investors in despair.

Stories have been circulating across Chinese social networks about desperate investors who have lost their life savings. Zhang Xue, for instance, a 47-year old single mother with a 13-year-old son, was reported to have lost the 3.8 million RMB her husband left her with when he died of a heart attack. “I am totally desperate. 3.8 million RMB. It’s finished, all finished,” she told local media.

Some of those affected protested in front of police stations and chanted the Chinese national anthem, March of the Volunteers, in an effort to pressure authorities. Others organized online investor rights groups, making a collective effort to get the money back. Together, the protesters made headlines in domestic media and sparked intense online debates on who is responsible for the losses and where the industry is heading.

P2P lending, or online lending, is generally considered as a method of debt financing that directly connects borrowers, whether they are individuals or companies, with lenders. The world’s first online lending platform, Zopa, was founded in the UK in 2005. China’s online lending industry has seen rapid growth since 2007 without significant regulation.

Default rates have been soaring since June. In May, only 10 platforms were considered in trouble. But by June, that number had increased to 63. By the end of July, 163 platforms were on the concern list. The Home of Online Lending (网贷之家), a platform that compiles the data, defines “troubled” as companies that have difficulty paying off investors, have been investigated by national economic crime investigation department, or whose owners have run away with investors’ money.

One of the key factors contributing to the sudden surge is the national P2P rectification campaign that was supposed to have been finished by June. “The due date of rectification has passed, but many P2P platforms have not met the requirements. Strict regulations have propelled a break-out of the compliance issues,” Shen Wei, Dean and Professor of Law at Shangdong University Law School, told TechNode.

In late 2017, the platforms were asked to register with local authorities by June 2018, according to China Banking Regulatory Commission, which has now merged with China’s insurance regulator to become China Banking and Insurance Regulatory Commission.

Shen said the main purpose of the regulations is to restrict P2P lending platforms to be information intermediaries only, matching borrowers and investors. Under such regulations, the platforms are not allowed to pool funds from investors or grant loans to any client or provide any credit services, which most of the platforms were doing when they first started.

The rise of P2P lending in China

China’s first online lending platform, PPDAI Group (拍拍货), launched in 2007 and went public on the New York Stock Exchange in late 2017. The industry has gone through rapid growth since then. In January 2016, there were 3,383 platforms in business with combined monthly transactions reaching 130 billion RMB, according to Home of Online Lending.

In a recent research paper, Robin Hui Huang, professor of law at the Chinese University of Hong Kong, attributed the increase of P2P in China to three factors: a high 56 percent rate of internet penetration by 2018, a large supply of available funds from investors, and financial demands of small-to-medium-sized companies that cannot be satisfied by the existing banking system.

P2P lending is a tempting and easy investment option because the loans usually promise 8-12 percent interest rates, according to Home of Online Lending, of which many mature within a year, much higher than the 2.75 percent rate for three-year fixed deposits found at most banks.

P2P lending is also friendlier to smaller businesses since major banks in China generally prefer state-owned enterprises or large companies. Huang cited a joint 2016 report by the Development Bank of Singapore and Ernst & Young, that only 20-25 percent of bank loans went to small to medium-size enterprises, even though they accounted for 60 percent of China’s gross domestic product.

China’s financial system is still dominated by banks, especially the established “Big Four”— the Bank of China, China Construction Bank, the Agricultural Bank of China, and the Industrial and Commercial Bank of China. Ryan Roberts, a research analyst at MCM Partners, told TechNode that about 70 percent of the banks’ loans are commercial loans, with just 30 percent for individuals.

Unresolved regulations

Before the government first signaled regulations in 2016, the P2P lending industry aggressively expanded. Compared with the current defaulting scandals, the situation back then wasn’t any better.

By the end of 2015, there were 1,031 total troubled platforms out of 3,448 platforms still in operation. So, on average, one out of four was problematic. Chinese media reported on a number of Ponzi scheme stories concerning dubious platforms that tempted would-be investors with fat bonuses for referring family and friends, too.

Despite the fact that there was no established regulatory framework, the government was watching. Since mid-2015, a series of announcements set the stage for China’s first regulatory instrument for online lending in August 2016. Called Interim Measures on Administration of Business Activities of Online Lending Information Intermediaries, violations of its articles can lead to administrative or even criminal penalties.

The interim measures set the business scope of the platforms to be mere information intermediaries. It also asked all platforms to set up custody accounts with commercial banks for investor and borrower funds held by the platforms in order to reduce the risks that platform owners abscond with funds. The measures require online lending platforms to register with their local financial regulatory authority.

Later, a specific timeline was set for the implementation. Provincial government agencies were told to complete general investigations into local P2P platforms by July 2016 and formulate regulatory policies based on regional conditions. Overall rectification and registration should have been completed by June 2018, the latest.

It’s August now and, obviously, the work still isn’t finished

Huang said the measures, in general, have covered all the factors of the industry that should be regulated, but when it came to implementation, all we really saw was a delay.

“It’s good that the measures are carried out locally, which means that local government can develop policies in line with local conditions,” Huang explained to us. However, in order to attract more capital locally, local authorities have engaged in a race to the bottom, competing with one and another to have the loosest regulations, and therefore, have been hesitant to finalize them.

Moreover, the general public has a different understanding of the registration process. “Registering with local authorities doesn’t mean that local governments have recognized or will guarantee the legitimacy and quality of platforms. However, in reality, the public seems to perceive registration as official assurance,” Huang said. This has lead to very cautious approaches from government agencies towards the whole registration project since they don’t intend to be held responsible for the fallout or future wrongdoings of the P2P firms.

The concern is quite reasonable. Huoq.com—a P2P lending platform launched in December 2016 and backed by state-owned enterprises—announced on July 11, 2018, that it went into liquidation. The platform is owned by Dingxi Zhuoyue Online Lending Information Intermediary. One-third of Dingxi is owned by Xinjiang Tianfu Lanyu Optoelectronics Technology while Tianfu Lanyu itself is partly owned by a state-owned company in Xinjiang. On July 10, however, owners of the platform disappeared. Neither the company nor investors were able to locate them.

Their still-functioning official site doesn’t show the slightest sign of liquidation, displaying various certificates and recognition from government agencies and industry associations. A banner at the bottom of their mobile app icon still says “Central enterprises are our majority shareholders.”

The unresolved regulations are also affecting P2P lending companies listed overseas. Shares of PPDAI plummeted to $4.77 as of July 30 from $13.08 when it was first traded in late 2017. The stock price of Yirendai (宜人贷), the first Chinese online lending company to go public overseas, dropped to $19.33 compared with $38.26 the same period last year.

That the shares of these companies don’t trade well indicates that investors are skeptical towards the business, said Roberts. With the ongoing regulations, it’s still possible that regulators can outlaw and ban their businesses, he explained. Some borrowers even take advantage of the unsettled regulation and stop paying back their loans, in the hopes that the platform they have borrowed from would fail, Roberts added.

Buyer beware

In June 2018, 17.8 billion RMB worth of transactions took place on China’s P2P lending platforms and outstanding loan balance reached 1.3 trillion RMB. The number looks insignificant if compared with 1.8 trillion RMB in net new bank loans in June alone.

However, they have made quite a splash. Victims of the troubled online lending platforms gathered in Hangzhou in early July, filling two of the largest local sports stadiums, which the local government had set up as temporary complaint centers.

“One of the reasons why the current wave of defaults has drawn so much attention is that many troubled platforms were pretty big,” Huang said. Some of the platforms violated the rules, pooling funds illegally, and some were suffering from China’s slowing economic growth and the ongoing deleveraging campaigns.

P2P lending has helped fund small-to-medium-sized enterprises in some way, but in general, the role it plays in the financial system is limited, said Shen. Most of the P2P investors are speculative and they themselves should be responsible for their losses, he added.

“If the rate of return exceeds 6 percent, investors should be alert; if it is more than 8 percent, the investment is very risky, and if it’s more than 10 percent, investors should prepare themselves for losing all their capital,” said Guo Shuqing, chairmen of China Banking and Insurance Regulatory Commission at a finance forum in June in Shanghai, referring to financial scams that lure investors in with high returns.

Although P2P lending is only a relatively small piece in China’s financial industry, there are still concerns that the collapse of these platforms should trigger systematic risks, Shen said. This also implied that Chinese investors have very limited investment options.

According to research by China International Capital Corporation, experts predicted only 10 percent of the current P2P lending companies, less than 200, could still be in business after three years.

Zhang said P2P lending needs regulations because many platforms are not innocent. “P2P platforms have high moral hazards and it’s really easy to fake borrowers’ information. However, I believe the government is supportive towards the industry and some platforms will survive till the end,” said Zhang. “I just wish I can be lucky enough to pick the right one.”

Grab, the ride-hailing service that struck a deal to take Uber out of Southeast Asia, has announced that it has pulled in $2 billion in new capital as it seeks to go beyond ride-hailing to offer more on-demand services.

The $2 billion figure includes a $1 billion investment from Toyota which was announced in June, and it sees a whole host of institutional investors join the Grab party. Some of those names include OppenheimerFunds, Ping An Capital, Mirae Asset — Naver Asia Growth Fund, Cinda Sino-Rock Investment Management Company, All-Stars Investment, Vulcan Capital, Lightspeed Venture Partners and Macquarie Capital.

Grab confirmed that the round is still open, so we can expect that it’ll add more investors and figures to this deal.

The deal values Grab at $11 billion post-money, which is the same as the $10 billion valuation it earned following the Toyota deal. The caliber of investors certainly suggests an IPO is on the cards soon — not that it ever hasn’t been — although the company didn’t comment directly on that when we asked.

This new financing takes Grab to $6 billion from investors. Some of its other notable backers include SoftBank and China’s Didi Chuxing, which both led a $2 billion round last year which gave Grab the gas to negotiate a deal with Uber that saw the U.S. ride-hailing giant exit Southeast Asia in exchange for a 27.5 percent stake in Grab. From that perspective, the deal was a win-win for both sides.

In this post-Uber world, Grab is transitioning to offer more services beyond just rides. It has long done so, with its own payment service and food deliveries, but it is rolling out a revamped “super app” design that no longer opens to a ride request page and that reflects the changing strategy of the Singapore-based company.

Grab said in a statement today that this new money will go towards that “O2O” [offline-to-online] strategy that turns Grab’s app into a platform that allows traditional, offline services to tap the internet to reach new customers. The trend started out in China, with Alibaba and Tencent among those pushing O2O services, and Grab is determined to be that solution for Southeast Asia’s 650 million consumers.

Indonesia, Southeast Asia’s largest economy with a population of over 260 million, is a key focus for Grab, the company said. The company has been pushed out new financial services in the country, fueled by an acquisition last year, and it claims it is winning “significant market share” with GMV quadrupled in the first half of this year.

With Uber out of the picture, the company’s main rival for the ‘Southeast Asia Super App Crown’ is Go-Jek, the Indonesian on-demand service valued at $5 billion.

Go-Jek has long focused on its home market but this year it unveiled an ambitious plan to expand to three new markets. That kicked off yesterday with a launch in Vietnam, and the company has plans to arrive in Thailand and the Philippines before the end of the year.

Go-Jek has raised over $2 billion and it counts KKR, Warburg Pincus, Google and Chinese duo Tencent and Meituan among its backers.

“We’ve been in semi-stealth mode on this basically for the last 2-3 years,” said Elon Musk on an earnings call today. “I think it’s probably time to let the cat out of the bag…”

The cat in question: the Tesla computer. Otherwise known as “Hardware 3”, it’s a Tesla-built piece of hardware meant to be swapped into the Model S, X, and 3 to do all the number crunching required to advance those cars’ self-driving capabilities.

Tesla has thus far relied on Nvidia’s Drive platform. So why switch now?

By building things in-house, Tesla say it’s able to focus on its own needs for the sake of efficiency.

“We had the benefit […] of knowing what our neural networks look like, and what they’ll look like in the future,” said Pete Bannon, director of the Hardware 3 project. Bannon also noted that the hardware upgrade should start rolling out next year.

“The key,” adds Elon “is to be able to run the neural network at a fundamental, bare metal level. You have to do these calculations in the circuit itself, not in some sort of emulation mode, which is how a GPU or CPU would operate. You want to do a massive amount of [calculations] with the memory right there.”

The final outcome, according to Elon, is pretty dramatic: he says that whereas Tesla’s computer vision software running on Nvidia’s hardware was handling about 200 frames per second, its specialized chip is able to do crunch out 2000 frames per second “with full redundancy and failover”.

Plus, as AI analyst James Wang points out, it gives Tesla more control over its own future:

By having its own silicone, Tesla can build for its own needs at its own pace. If they suddenly recognize something the hardware is lacking, they’re not waiting on someone else to build it. It’s by no means a trivial task — but if they can pull it off without breaking the bank (and Elon says it costs them “the same as the current hardware”), it could end up being a significant strength.

As for how they’ll get the chips into existing Teslas, Elon says: “We made it easy to switch out the computer, and that’s all that needs to be done. You take out one computer, and plug in the next. All the connectors are compatible.”