Chinese state investors are looking to take an ownership stake in ride-hailing giant
Didi Global Inc.,
months after regulators punished the company with restrictions and made it one of the highest-profile casualties of China’s toughening stance on tech.
The municipal government in Beijing is coordinating a proposed investment by a consortium of state-backed companies that includes a competing ride-hailing service, a person familiar with the matter said.
The state investors are seeking voting rights in Didi, a second person said, because that would give the government significant influence over matters like data and other major corporate decisions. The deal could be structured like last year’s investment by state entities to a Chinese unit of
the U.S.-listed electric vehicle company, this person added.
On Saturday, Didi said it is untrue that Beijing’s city government is coordinating with companies to take an equity stake.
Didi pushed through with a $4.4 billion U.S. initial public offering in late June, even though the country’s cybersecurity watchdog had suggested to the company that it postpone its share sale.
Didi has since been subject to punitive actions by Chinese regulators that have sent its newly listed shares plunging. The Chinese government has restricted Didi from accepting new users in the country, removed dozens of its apps from domestic app stores and put it under investigation by seven ministries.
Didi said Saturday that it is actively assisting in cybersecurity reviews.
The potential deal, which was at a preliminary stage, would be led by Beijing Shouqi (Group) Co., a smaller, state-owned rival to Didi that is backed by the city’s Beijing Tourism Group Co., a person familiar with the matter said Friday.
The proposed investment in Beijing-based Didi was earlier reported by Bloomberg. One potential scenario could see the consortium taking a so-called golden share with veto power and a board seat, Bloomberg said.
Shouqi Group counts Beijing Tourism Group, which is wholly owned by the Beijing government, as one of its biggest shareholders. A Shouqi Group subsidiary runs Shouqi Yueche, a ride-hailing service with more than 100 million users. Shouqi Group wants to share Didi’s resources and its Shouqi Yueche service could be co-run by the two companies, the person familiar with the matter added. One possibility would be for Shouqi Yueche to be folded into the Didi app, this person said.
The Beijing government, Beijing Tourism Group and Shouqi Group didn’t reply to requests for comment sent after business hours.
Chinese tech stocks popular among U.S. investors have tumbled amid the country’s regulatory crackdown on technology firms. WSJ explains some of the new risks investors face when buying shares of companies like Didi or Tencent. Photo Composite: Michelle Inez Simon
The Wall Street Journal Interactive Edition
The pressure on Didi forms part of a broader regulatory crackdown on Internet companies and other businesses in China that has forced many tech startups to reconsider overseas IPO plans and given global investors pause about investing in companies from China.
Days after Didi’s listing, China said it would tighten rules for companies seeking to sell shares abroad. A draft regulation requires tech companies with data from more than one million users to undergo cybersecurity reviews before pursuing foreign listings.
Didi has been in discussions with authorities in China about options that could address data-security concerns. In late July, The Wall Street Journal reported that Didi was considering going private to placate China, and was considering bringing in state-backed investors for financial support and guidance on data issues.
Didi’s American depositary shares closed Thursday at $8.81 each, down from an IPO price of $14. They were up around 2% in Friday afternoon trading.
The number of ride-hailing orders handled by Shouqi Yueche in July grew by 40.8% from a month earlier, one of the fastest growth rates for a major ride-hailing firm, according to data from the Ministry of Transport. Orders at Didi rose 13.1%. The ministry data don’t include market-share figures, but Didi is by far the country’s largest operator.
China is moving into internet-content companies by acquiring stakes, filling board seats and sending dedicated regulators to police content at firms more frequently.
In April, Beijing ByteDance Technology Co., the China-registered entity of ByteDance Ltd., sold 1% of its shares to a state-backed firm, according to publicly available government records. It also granted the state-backed firm the right to appoint a director to its board, The Wall Street Journal has previously reported.
After Chinese ride-hailing giant Didi made its Wall Street debut, Beijing said it plans to tighten rules for homegrown companies looking to raise money overseas. WSJ’s Yoko Kubota takes a Didi ride to explain what the crackdown means for China’s tech titans and investors. Photo illustration: Ang Li
The Wall Street Journal Interactive Edition
—Yoko Kubota contributed to this article.
International export offices worth the investment, according to Saskatchewan government – Global News
The Saskatchewan government is moving full steam ahead on its plan to open four new international export offices.
The offices will be opening in London, United Kingdom; Dubai, United Arab Emirates; Mexico City, Mexico; and Ho Chi Minh City, Vietnam.
The move will give Saskatchewan a stronger presence in those regions, by expanding the province’s international network, according to the government.
The province says the establishment of these spaces is being implemented in an effort to facilitate investment trade efforts to grow and diversify Saskatchewan’s exports, assisting in COVID-19 economic recovery.
“Now we’re going through the process of hiring managing directors for those offices and we hope to have two of them open in November and two more in the first quarter of the calendar year,” said Jeremy Harrison, Saskatchewan Minister of Trade and Export Development.
The number of international offices will be doubling as the province already has a permanent presence in Japan, India, Singapore and China.
The offices in Japan, India and Singapore were open for businesses earlier this year, whereas the one in Shanghai, China has been operational since 2010.
Staff at the offices work full-time for the provincial government to promote trade and economic interests.
Harrison says despite the pandemic, Saskatchewan companies are able to export approximately 65 per cent of what they produce.
Some popular export items include potash, oil, wheat, canola seeds, lentils, canola oil, peas, canola meal, soya beans, and barley.
Just like the cost to export these products, operating those international offices isn’t cheap.
“It’s about a million dollars per year, per office, our entire international engagement will be about $9 million this year with the eight offices and the administration associated with that, but I mean with the return on investment being over $30 billion of international trade last year…” Harrison explained.
“Of course the offices aren’t responsible for every dollar of that trade, but that being said, having that long-term, on-the-ground presence really has paid significant dividends to the province, we would view it as being a tremendous return on investment,” he added.
Harrison also says with Saskatchewan negotiating its own deals, rather than the Canadian government, the province has been able to secure lower tariffs.
Tension with China grows with blow to Canadian canola farmers
The trade and export development minister goes on to say the Saskatchewan government decided to take trade matters into its own hands, opposed to relying on the federal government because it believes it can secure better deals overall.
In 2019, the minister, with the help of former Conservative Canadian Prime Minister Stephen Harper and his company called Harper and Associates, lobbied senior officials with the government of India to lower tariffs on Saskatchewan peas and lentils.
Harper and Associates is being paid for its role in assisting with the establishment of the international offices. The contract is yearly, and is renewed annually.
Harrison said the meeting resulted in the province temporarily reducing the tariff from 30 per cent to 10 per cent from June to August in 2020 and onwards.
Jason Childs, associate professor of economics with the University of Regina explains why the provincial government may have felt enticed not to leave trade matters to federal government officials.
“I think the perception that Saskatchewan feels underrepresented abroad and our interests aren’t being served, I think that says a lot about what’s going on,” Childs said.
He adds international offices are not uncommon among provinces in Canada, and they are supported across party lines.
International trade essential to Alberta’s food trade: Minister of Agriculture
By Saskatchewan being at the helm of its own trading decisions, Childs says the province can head trade missions that are dedicated to vouching for the specific agricultural products the province has to offer the rest of the world.
“So, the products we produce here in Saskatchewan, are going to be radically different than say the products produced in Quebec or southern Ontario, which are much more manufacturing-driven,” Childs said.
He says if the Canadian government was making these deals, then time government officials spend on having to represent the other jurisdictions across the country would be split.
Childs continues to say there are some notable benefits to Saskatchewan having its own international trading partners to advocate its own interests to, rather than other Canadian provinces or somewhere else in North America.
“Sheer population, sheer market size, the Canadian market is only 38 million people, whereas some of the countries we’re talking about Vietnam, China, India and the U.K., there’s hundreds of millions, billions of people involved, right so it’s a much larger market,” Childs said.
Harrison says these exports will bring numerous job opportunities to residents.
—With files from Mickey Djuric
© 2021 Global News, a division of Corus Entertainment Inc.
Israeli developer of popular apps for creators nabs $130m investment – The Times of Israel
Lightricks, a Jerusalem-based software startup that makes photo and video editing apps, raised $130 million in a Series D investment round at a valuation of $1.8 billion, the company announced on Sunday.
The round was co-led by New York-based global private equity and venture capital firm Insight Partners and Hanaco Venture Capital, with participation from existing investors Goldman Sachs Asset Management, Clal Tech, Harel Insurance and Finance and Greycroft. New investors Migdal Insurance, Altshuler Shaham and Shavit Capital also participated in the round.
Founded in 2013, Lightricks developed a number of photo and video editing tools that are widely popular with content creators on social media networks, especially Instagram, the highly visual content platform owned by Facebook. The company’s suite of 11 apps including Facetune, Facetune Video, and Videoleap has over 500 million downloads worldwide across Android and Apple users, Lightricks has said.
Facetune, the company’s flagship app used to enhance and retouch photos (think tooth whitening and blemish removal) has previously earned accolades such as Apple’s App of the Year and Google Play’s Best of the Year. The app VideoLeap, which offers powerful editing tools for video content, is one of the most widely used tools to create Tik Tok content, the company indicated.
The apps are geared for individual consumers, beginners and professionals, as well as businesses and brands. Lightricks uses a freemium model for the tools, which offers some functions for free while other features require payment to unlock.
Dr. Zeev Farbman, co-founder and CEO of Lightricks, told The Times of Israel on Sunday that business and brand customers present a huge opportunity for the company as it establishes itself “not just as a toolmaker but also a service provider for content creation.”
“We are looking to help people and businesses draw in their audience and engage with them,” he said.
The company said in a statement that it will use the fresh funding to expand and create new platforms and tools for content creators in an effort to “become a one-stop-shop for resources including creative tools, services, and monetization opportunities.”
Farbman said the funding is a sort of “war chest” with which to acquire similar or related companies and startups to leverage their user base for Lightricks’s growth.
He estimated that the company might be “ready for IPO [initial public offering] in about a year.”
“Our mission has always been to continuously strive to bring creators the most advanced technology and help them find new ways to express themselves,” Farbman said in the company statement. “The rise of the creator economy has only exacerbated the need of mobile users to streamline the content creation and monetization processes. With this latest funding, we’re able to help elevate our users’ creativity and capabilities with continued advancements to our technology and offering.”
The creator economy — an industry of bloggers, influencers, brands, photographers and videographers monetizing their online presence — has an estimated total market size of $100 billion and has seen $1.3 billion in funding for US creators in 2021 alone, according to New York-based research firm CB Insights.
Lightricks reported “tremendous growth” over the past year with the COVID-19 health crisis driving people to tap their creativity “to express themselves and earn income during the pandemic.” The company says it saw a 90 percent increase in app usage across its creativity tools in the US alone.
Worldwide, it says, its users develop over a billion creations per year on the company’s apps.
Farbman confirmed that Instagram is the biggest platform for users of Lightricks’ tools “with Tik Tok playing a bigger part overall and Snap seeing a resurgence.”
“The creator economy has changed the way we, as a society, experience social networks,” said Pasha Romanovski, co-founding partner of Hanaco Ventures. “Audiences constantly consume information through the different content channels daily. Lightricks’ platform enables creators to have a broader, more professional and higher-quality set of tools to optimize content.”
Lightricks was founded by Farbman, Nir Pochter, Yaron Inger, Amit Goldstein, Itai Tsiddon, almost all with a computer science or artificial intelligence background. The company is headquartered in Jerusalem with offices in the UK. Most recently, Lightricks opened an office in China to focus on tapping into the country’s huge potential user base. The company employs approximately 500 people.
Applications now open for 2022 Halton Region Community Investment funding – Oakville News
Community organizations can now submit applications to the Halton Region Community Investment Fund (HRCIF) for non-profit human service programs and initiatives that enhance the health, safety and well-being of Halton residents. Applicants must describe how they will incorporate the latest COVID-19 public health guidance and how their program or initiative aligns with Halton’s overall approach to community safety and well-being.
“We are pleased to support the important work of local non-profits through the Halton Region Community Investment Fund,” said Regional Chair Gary Carr. “I would like to thank these organizations for delivering vital services to some of our most vulnerable residents and working alongside us to keep Halton a safe and healthy community.”
Funding is available in single year and multi-year grants through two categories:
- Category One: Provides up to one year of funding, to a maximum of $30,000. Non-profit, charitable or unincorporated community organizations can apply to fund short-term, small capital and/or innovative projects.
- Category Two: Provides up to three years of funding to registered charities for programs and initiatives.
Organizations that meet eligibility criteria may submit one application in each funding category. The initial application deadline for both categories is Monday, November 1, 2021 at 2 p.m. Additional opportunities to apply for HRCIF funding will be available in 2022 for programs and initiatives that help respond to emerging community needs.
The Region will host three virtual information sessions to help community organizations learn about the HRCIF and the application process:
- Friday, September 24 from 10 a.m. to noon
- Wednesday, September 29 from 2 to 4 p.m.
- Tuesday, October 5 from 6 to 8 p.m.
For more information about HRCIF guidelines, upcoming virtual information sessions and the application process, please visit the HRCIF webpage on halton.ca or call 311.
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