A road map for SEA firms after EU tech clampdown

Opening Bell 🔔 is Tech in Asia’s free newsletter that brings you the biggest news and latest trends around Asia’s publicly listed tech companies. [Read from your browser]( Opening Bell 🔔 Welcome to the Opening Bell! Delivered every Monday via email and through the Tech in Asia website, this free newsletter breaks down the biggest stories and latest trends on Asia’s publicly listed tech companies. If you’re not a subscriber, get access by [registering here](. Hello {NAME} I’ve developed a new respect for ostriches. I no longer fault the bird for the head-buried-in-the-sand metaphors associated with it (though the [metaphor itself is misleading](. Having learned more about the all-encompassing term of [market risks]( I’ve also decided to bury my head in the sand, so to speak. To use the old tree falling in the forest analogy, if I don’t see my portfolio plunge, has it really plunged? Jokes aside, the Financial Times [says that Chinese equities]( are on course for the biggest monthly gain in almost two years: The CSI 300 Index of Shanghai- and Shenzhen-listed stocks has climbed more than 8% in June. Besides other factors, Beijing cutting down on quarantine requirements for international travelers has also driven the optimism. While it’s too soon to buy the dip for US and European stocks, US investment firm Invesco says China’s tech stocks are [the most attractive in the world.]( On the other end of this spectrum lies all the other China-related problems we’ve seen play out, including tightened regulations and Didi’s delisting, which we'll get into a little bit later. As my colleague Jenina notes in this week’s Big Story, Southeast Asia’s tech companies could also be mulling what they can and can’t do after the European Union tightened regulations for the region’s firms earlier this year. This week, we also look at some of the entrepreneurs who’ve made their companies tick - and trip. But the road to recovery for some is shorter than others. -- Nikita  --------------------------------------------------------------- THE BIG STORY [EU tech crackdown a warning shot for SEA’s big tech companies]( Southeast Asia’s big tech companies are safe from the EU’s new regulations for now, but they should start preparing for future challenges.  --------------------------------------------------------------- 3 TRENDS TO KEEP AN EYE ON Hot stocks, earnings reports, restructuring, pressure from activist investors, and more. 1️⃣ Costly troubles: Naspers’ Prosus [has sold close to US$4 billion]( of stock in JD.com (JD, NDAQ), which it received from Tencent (0700, HKG). As a result of the move, Tencent lost [US$7.4 billion of market value](. However, the Shenzhen-headquartered tech giant could consider more investments overseas as it [navigates a sea of troubles](. 2️⃣ Food fuel: F&B apps are booming in Southeast Asia, and Grab is (GRAB, NDAQ) [leading the pack]( according to Data.ai (formerly App Annie). While Uber’s (UBER, NYSE) Uber Eats came in at second and Foodpanda at third, Zomato (ZOMT, NSE) came in at fourth place. Home deliveries was added as a new segment for the 2021 edition of [Asia’s Top 1,000 brands]( a survey done by Campaign Asia-Pacific and NielsenIQ. GrabFood and rival GoFood both made it to Indonesia’s top 100 brands in this list, but more interestingly, both have placed higher than their parent companies Grab and Gojek. While GrabFood and GoFood placed 21st and 26th, their parent companies came in at the 29th and 42nd spot, respectively. In a drive to become profitable, Grab has also launched a B2B map service in a bid to capture what the Singapore-based firm says is a US$1 billion market opportunity in Southeast Asia.  See more: [How GrabMaps plans to beat Google Maps in $1b sweepstake for SEA dominance]( 3️⃣ Electric issues: Last week, electric vehicle stocks were down overall, and EV firm Polestar (PSNY, NYSE) had [a lukewarm debut](. China’s Nio (NIO, NYSE) is also under the microscope after Grizzly Research’s report claims that the EV company is adjusting its financial results. [Nio says]( the report is “without merit” and contains “numerous errors.”  ---------------------------------------------------------------  2 EYE-POPPING FACTS Tech in Asia scours the internet to bring you head-turning numbers from the world of business. - [US$100 million]( - That’s how much Chinese podcast group Ximalaya was hoping to raise for its Hong Kong IPO. The firm has now canceled its listing plans due to a weak response from potential investors, according to the Financial Times. Often compared to Spotify, Ximalaya is backed by Tencent, Xiaomi, Baidu, and Sony Music Entertainment. - [US$570 million]( - That’s how much Zomato plans to spend to acquire quick commerce firm Blinkit in an all-stock deal. Zomato’s path to profitability seems longer now, and the deal announcement sent [the company’s shares tumbling]( late last week. --------------------------------------------------------------- THE 1 YOU DIDN'T SEE COMING We spotlight the unusual, not-your-everyday kind of story that has got everyone talking and social media buzzing over the past week. A tale of Adams and Ashneers In a recent article, Bloomberg dove into Didi’s US$60 billion crash, an event that saw [the single biggest destruction of shareholder value]( in over 12 months of an Asian firm that raised over US$1 billion. Reportedly days before filing the company’s IPO, Didi’s bankers and investors had caught wind of regulatory pushback. But the firm’s management asked them to proceed, albeit with a low profile. Didi started trading on June 30, 2021. Days later on July 2, an investigation was announced into possible violations of security at the firm. Didi’s main app disappeared from stores, and China announced a moratorium on foreign IPOs soon after. Bloomberg reports that Didi CEO Cheng Wei and co-founder Jean Liu had grown impatient and decided to push forward despite knowing that the agency investigating the firm had asked Didi to postpone the IPO. The events that followed will now forever be cited in the history of China’s tech companies. I’ve been thinking a lot about those at the helm of news-making companies lately, perhaps because of the [BharatPe saga]( the Indian fintech major that is aiming for an IPO in the next 18 to 24 months. Or maybe it’s because of the cautionary tale depicted in the TV series The Dropout, which focuses on Theranos and its disgraced founder Elizabeth Holmes. WeCrashed is only the latest TV show to focus on the unraveling of a company that pushed forward at all costs. In this case, the series was about Adam Neumann and WeWork. Neumann walked away with a little over a billion dollars while his company’s valuation plunged from US$47 billion to US$9 billion following a botched IPO attempt. Neumann, a gifted salesperson and often shoeless entrepreneur, and his wife Rebekah are now back with another startup, Flowcarbon. See more: [Adam Neumann’s Flowcarbon: Another WeWork in the making?](  After the [disgrace]( at BharatPe, co-founder Ashneer Grover is also back with another startup, and he’s [raising US$200 million]( for it. And the latest example comes from Singapore-based fashion ecommerce platform Zilingo. The firm’s co-founder and ousted CEO just [resigned from the company’s directorships]( while reiterating her “commitment to save the company.” While Zilingo’s is still a developing story, the Adams and Ashneers of the world know how to keep investors hooked despite their dirty laundry being out in the public eye.  --------------------------------------------------------------- That’s it for this edition - we hope you liked it! Not your cup of tea? You can unsubscribe from this newsletter by going to our preference center at the bottom of this email. Happy investing and see you next week! Disclaimer: This content is for informational purposes only. Kindly do not construe any such information as legal, tax, investment, financial, or other advice. [ADVERTISE]( | [SUBSCRIBE]( | [HIRE]( | [FIND JOBS]( P.S. Don't miss out on the biggest tech news and analysis. Add newsletter@techinasia.com to your address book, contacts, or safe sender list. Or simply move us into your inbox. 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