Hello and welcome to TechCrunch’s China roundup, a digest of recent events shaping the Chinese tech landscape and what they mean to people around the world.
This week, China takes seriously the destruction of the walled gardens that its internet giants have shaped for decades. Two major funding rounds have been announced, from new standalone unicorn Deeproute.ai and fast-growing cross-border financial service provider XTransfer.
Knock down the walls
The Chinese Internet is infamous, with a handful of “super apps” each occupying protective, cozy territory that try to lock up users and keep their rivals out. On Tencent’s WeChat messaging, for example, links to Alibaba’s Taobao Marketplace and ByteDance’s Douyin short video service cannot be viewed or even redirected. It’s different from WhatsApp, Telegram, or Signal which offer user-friendly URL previews in chats.
Ecommerce platforms repel competition in different ways. Taobao uses Alipay, a subsidiary of Alibaba, as the default payment option, omitting its big rival WeChat Pay. JD.com, an Alibaba rival, backed by Tencent, encourages its users to pay through its own payment system or WeChat Pay.
But changes are underway. “Ensuring normal access to legal URLs is the basic condition for developing the Internet,” a senior official from China’s Ministry of Industry and Information Technology said at a press conference this week. He added that unwarranted blocking of web links “affects user experience, infringes user rights and disrupts market orders.”
There is some merit in filtering out third party links when it comes to preventing pornography, misinformation, and violent content. Content distributors in China also strictly adhere to censorship rules, silencing politically sensitive discussions. These principles will remain in place, and MIIT’s new order is really to break down anti-competitive practices and diminish the power of the bloated internet giants.
The call to end digital walled gardens is part of MIIT’s campaign, launched in July, to restore “orders” on the Chinese internet. While crackdowns on internet companies are common, the slew of new policies announced in recent months – from new data security rules to increased gambling restrictions – signify Beijing’s resolution to limit the influence of Chinese internet companies. all sorts.
The deadline for online platforms to unblock URLs is September 17, MIIT said earlier. Virtually all of the major Internet companies promptly issued statements claiming that they would firmly adhere to the requirements of MIIT and help promote the healthy development of the Chinese Internet.
Internet users will inevitably benefit from the dismantling of the walled gardens. They will be able to browse third-party content smoothly on WeChat without having to switch between apps. They can share Taobao product links directly in the messenger instead of asking their friends to copy and paste a string of cryptic codes that Taobao automatically generates for WeChat sharing.
Self-driving startup Deeproute.ai said this week it has closed a $ 300 million Series B funding round from investors such as Alibaba, Jeneration Capital and Chinese automaker Geely. The rating for this tour was not disclosed.
We’ve seen a lot of advertising from Pony.ai, WeRide, Momenta, and AutoX but not so much Deeproute.ai. Part of the reason is that the company is relatively young, founded only in 2019 by Zhou Guang after being “fired” by his co-founders from the once promising Roadstar.ai amid internal feuds.
Roadstar.ai investors reportedly viewed Zhou’s dismissal as damaging to the startup, which had raised at least $ 140 million so far, and subsequently sought to dissolve the company. It appears that Zhou, former chief scientist of Roadstar, still enjoys the trust of some investors to support his resurgent autonomous driving business.
Like Pony.ai and WeRide, Deeproute tries to exploit its own robotaxi fleets. While the business model gives it control over tons of driving data, it takes a lot of research and money. As such, the major Chinese robotaxi startups are all considering faster commercial deployments, like self-driving buses and trucks, to ease their financial stress.
Cross-border trade boom
The other big funding news this week comes from Shanghai-based XTransfer, which helps small and medium Chinese exporters collect payments from overseas. The Series C cycle, led by D1 Partners, grossed $ 138 million and catapulted Xtransfer’s valuation to over $ 1 billion. Profits will go towards product development, hiring and global expansion.
Founded by former Ant Group executives, XTransfer attempts to solve a problem faced by small and medium exporters: opening and maintaining bank accounts in different countries can be difficult and costly. As such, XTransfer functions as a payment gateway between its SME client, the paying party, and their respective banks.
By July, the number of XTransfer customers had exceeded 150,000, most of whom are in mainland China. The company with more than 1,000 employees is also expanding in Southeast Asia.
As business-to-business exports are booming in China, more and more products are also sold directly by Chinese brands to consumers around the world. Some of the more successful examples, like Shein and Anker, use a different set of payment processors for their direct-to-consumer sales, which tend to be bulkier but smaller in average value.