The pressure has shown signs of easing in the past few months. In June, Ant received permission to restart its IPO plans, and earlier this week Didi Global was let off with a $1.2 billion fine, marking the end of a probe that forced it to delist from the New York Stock Exchange within a year of its debut.
Here are 10 numbers that convey the scale of the damage done to China’s tech sector in the past 20 months.
40
The percentage of large Chinese companies that are tech firms.
$1.5 trillion
The estimated value of the crackdown obliterated China’s tech industry at one point. That’s more than half of India’s entire GDP in 2020 ($2.62 trillion).
$2.8 billion
The record-breaking fine imposed on Alibaba for anti-competitive behaviour. One of the more heavy-handed punishments, it drew rebuke from senior party officials such as vice premier Liu He, China’s top economic policymaker, who called on regulators to be “standardised, transparent and predictable”.
95
The percentage of software companies among those penalised in the crackdown. Only 5% were primarily hardware firms.
14,000
The number of gaming-related companies that were forced to shut down after China abruptly stopped issuing video-game licences.
$100 billion
The estimated size of China’s edtech sector before it was all but wiped out in the crackdown.
25
The number of online education companies that shut down in 2021 in the wake of the crackdown on private education, according to Chinese research firm 100EC.
$54.8 billion
The amount investors outside of China put in Chinese tech firms across 955 deals in 2021 despite the crackdown, according to the PitchBook Greater China Venture Report.
$130 billion
The total amount Chinese tech companies raised in 2021, including domestic venture capital funding. This was 50% more than in 2020.
76.7
The percentage drop in investment and financing for China’s internet sector in the first quarter of 2022 from the same period in 2021, according to a report from the China Academy of Information and Communications Technology. It was also 42.6% lower than in the previous quarter, as investors finally began to flee.
Top Stories By Our Reporters
Tech policy
Indian tech firms meet lawmakers: Top executives, startup founders and CEOs of Indian internet firms including Flipkart, Paytm, Oyo Hotels & Homes, Ola, Zomato, Swiggy, Makemytrip and others met a high-powered parliamentary panel headed by former minister of state for finance Jayant Sinha of the BJP on Thursday to discuss ‘anti-competitive practices by Big-tech companies’.
Global electronics, hardware makers seek delayed PLI payments: Several global electronics and hardware manufacturers are petitioning the union government to release delayed payments due to them under the country’s ambitious production-linked incentive (PLI) schemes, sources told us.
Fintech developments
Number of prepaid cards issued by fintech firms crashes in July: Fintech firms such as Slice, Uni and LazyPay have issued fewer than 100,000 prepaid cards so far this month after the Reserve Bank of India barred them from loading credit lines onto wallets and other such prepaid payment instruments (PPIs) in June, several executives told us.
Slice changes business model after RBI circular: Card-based fintech startup Slice will now offer real-time term loans to customers for each transaction, based on the user’s profile, the nature of the transaction and the merchant.
Slice fundraising on hold as RBI note triggers uncertainty: Fintech firm Slice’s ongoing fundraising has come to a halt after the Reserve Bank of India’s circular last month barred prepaid payment instruments (PPIs) from loading credit lines, sources told us.
Startup news
Global investors of gaming firms ask FM for status quo on GST: Over a dozen global venture capital investors in Indian gaming startups haveurged the government to retain the current Goods and Services Tax (GST) levied on gross gaming revenue (GGR) instead of on total deposits. This comes amid widespread concerns that the GST Council – its apex decision making body – is considering tax on the latter.
Indian startup ecosystem created 7.68 lakh jobs in the past six years: India has registered about 72,983 startups in the last six years, and these companies have generated about 7.86 lakh jobs over this period, the government informed parliament on Wednesday.
Startups face barrage of probing questions from job seekers: How long is your money going to last? Why do you think your business model is going to work? Can you afford to go ahead with your buyback plans? These are some of the questions hiring managers at startups are facing from prospective employees.
Cryptoverse
Crypto firms plan new industry body as BACC shuts: Crypto exchanges and blockchain companies are trying to cobble together an independent industry body after the Internet and Mobile Association of India (IAMAI) dismantled the Blockchain and Crypto Assets Council (BACC) last week.
RBI wants crypto ban, govt needs global support for regulation, says FM: While the Reserve Bank of India has made it clear that it wants a complete ban on crypto assets, the Indian government needs global collaboration if such a ban or regulation is to be put into effect, Finance Minister Nirmala Sitharaman said on Monday.
ETtech Ecommerce Index
We’ve launched three indices – ET Ecommerce, ET Ecommerce Profitable, and ET Ecommerce Non-Profitable – to track the performance of recently listed tech firms. Here’s how they’ve fared so far.
IT corner
IT firms may rationalise real estate in big cities as small towns take centre stage: Some Indian and global IT companies are looking to rationalise their real estate in large cities even as others go slow on or entirely halt their expansion in metros. They are looking to expand aggressively into tier II and III cities to tap workers who moved back to their hometowns during the pandemic, company executives and analysts told us.
Wipro’s pipeline growing across sectors, says CEO: Buoyed by a record deal pipeline despite macroeconomic headwinds, Wipro has forecast 3-5% revenue growth – ahead of estimates – in the ongoing quarter. Thierry Delaporte, the chief executive of India’s fourth largest software exporter, told us in an interview that operating margins would climb to 17-17.5% over the next few quarters on investments in freshers and further operational efficiency.
IT sector is recession proof, says Wipro executive chairman Rishad Premji: IT sector is ‘recession proof’: The IT sector is “recession proof” as clients will either spend on business transformation or cost takeout deals, Wipro executive chairman Rishad Premji said, adding that clients have not stopped making decisions on deals and spending amid inflation and recession fears.
TCS building eight large campuses: Tata Consultancy Services is in the process of establishing eight new large office spaces with each having a capacity to house more than 10,000 employees. Some of these centres are coming up in non-metro cities, TCS chief financial officer Samir Seksaria told ET.
Ecommerce news
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Blinkit to integrate with Zomato Hyperpure in fresh pivot: Blinkit is shutting down warehouses again, this time to integrate its operations with food delivery major Zomato, which is in the process of acquiring the Gurgaon-based quick commerce startup.
SoftBank, Sequoia want portfolio firms to join ONDC: Card-based fintech startup Slice will now offer real-time term loans to customers for each transaction, based on the user’s profile, the nature of the transaction and the merchant.
ETtech Deals Digest
■ Temasek and Zomato-backed logistics aggregator Shiprocket said that it has acquired Arvind Retail’s omni-channel technology business Omuni in a Rs 200 crore cash-and-stock deal. This marks another attempt by Shiprocket to double down on its direct-to-consumer shipping business. Last month, it announced the acquisition of Pickrr in a $200 million deal.
■ Financial infrastructure provider M2P Fintech has made its third acquisition this year in identity verification service provider Syntizen, as it looks to bolster its offerings to fintechs and other financial institutions. The company bought out Bengaluru-based cloud lending platform Finflux earlier this month.
VC funds
LetsVenture CEO launches micro VC: Shanti Mohan, the cofounder and chief executive of early-stage investment firm LetsVenture, has launched a new micro venture capital (VC) firm Propell, with an investment corpus of Rs 50 crore. Propelll, founded last year, will focus on investments in early-stage startups in ecommerce, software services, D2C brands and technology enablement platforms.
B Capital raises $250 million for early-stage fund Ascent: Global tech-focussed investment firm B Capital said it has raised $250 million as part of its first dedicated early-stage vehicle Ascent Fund.
