NoBroker raises $51M to help Indians buy and rent without real estate brokers

A startup that is attempting to significantly improve the way how Indians rent or buy an apartment just raised a substantially big amount to further pursue its mission. Bangalore-based real estate property operator NoBroker said today it has raised $51 million in a new round of funding.

The Series C financing round for the five-year-old startup was led by General Atlantic . It valued NoBroker at about $200 million, a person familiar with the matter told TechCrunch. Existing investors SAIF Partners and BEENEXT also participated in the round. NoBroker has raised about $71 million in capital to date, it said in a statement.

NoBroker, which operates in Bengaluru, Chennai, Gurgaon, Mumbai and Pune, has quickly emerged as one of the largest players in the real estate business. It operates over 2.5 million properties on its website and has already served more than 6 million users to date — up from 1.5 million customers two years ago. The startup helps Indians looking for an apartment avoid the brokers  — hence the name NoBroker — and connects them directly to property owners.

Real estate brokers in India, as is true in other markets, help people find properties. But they can charge up to 10 months worth of rent (leasing) — or a single-digit percent of the apartment’s worth if someone is buying the property — in urban cities as their commission.

Amit Kumar, CEO and cofounder of NoBroker, told TechCrunch in an interview that the startup will use the fresh capital to expand its operations in the nation. “This current funding round will support us in our plans to expand our operations. Our objective is to accelerate customer and deal-closure growth and continue to deliver value to customers across the country. We will also invest in our home store and financial services products,” he said.

Kumar said the startup, which generates revenue in two ways, is increasingly reaching profitability. First, it lets non-paying users get in touch with only nine property owners. Those who wish to contact more property owners are required to pay a fee. Second, property owners can opt to pay NoBroker to have its representatives deal with prospective buyers — in a move that ironically makes the startup serve as a broker.

As noble as NoBroker’s mission sounds, its path to expansion is filled with challenges. The startup is competing with a number of players including heavily backed NestAway, which counts Goldman Sachs and Tiger Global among its investors. NestAway operates in eight cities and has raised north of $100 million to date. Budget hotel startup Oyo, which now counts Airbnb as an investor, also entered this space with Oyo Living. India’s real estate industry is estimated to grow to $1 trillion in worth by 2030.

Besides, there are some other local challenges. Brokers are unsurprisingly not happy with startups such as NoBroker and have grown hostile in recent years. They continue to attack and harass NoBroker employees. So much so that the startup had to delist its address from Google Maps.

“We have been extremely impressed by the strength of the NoBroker team and their relentless focus on using technology to create an improved user experience in the large real estate market in India. We look forward to supporting them in their journey of making real estate transactions easier and convenient,” said Sharad Bhojnagarwala, VP of General Atlantic, in a prepared statement.

Huawei bars staff from having technical meetings with US contacts

Reeling from the ongoing U.S.-China trade war, Chinese technology giant Huawei has found itself in yet another dilemma: How to pursue internal communications with its own U.S. employees? For now, the company has ordered its Chinese employees to bar technical meetings with their U.S. contacts and sent home the American workers deployed in research and development functions in Shenzhen headquarters.

Dang Wenshuan, Huawei’s chief strategy architect, told the Financial Times that the company has also limited general communications between its Chinese and U.S. workers. The move comes as the Chinese technology giant scrambles to comply with the murky laws after its weeks-long tension with the U.S. government sees no signs of resolution in the immediate future.

The Chinese giant is also controlling the subjects of interactions workers in its campus have with overseas visitors. The conversations cannot touch topics related to technology, the FT report said. Dang said the company was just trying to ensure it was on the right side of the law.

It remains unclear exactly how export controls could mandate disruption of internal communications within an organization. Huawei could be using this tack as a bargaining chip, showing the U.S. that its own citizens are being hurt by its policies. A Huawei spokesperson declined to comment on queries sent by TechCrunch.

Earlier this month, Huawei and 68 affiliates were put on an “entity list” by the U.S. Commerce Department over national security concerns, forcing American companies to take approval from the government before conducting any business with the Chinese giant. In the aftermath, a range of companies, including chipmakers, Google and Microsoft, have made significant changes to their business agreements with Huawei.

In recent weeks, several Huawei executives have spoken out about the significance of the U.S. government order. In the meantime, the company has also explored ways to fight back the order. Earlier this week, Huawei filed a legal motion to challenge the U.S. ban on its equipment, calling it “unconstitutional.”

At stake is the future of one of the largest suppliers of smartphones and networking equipment. A significant portion of the company’s business comes from outside of China. For smartphones, one of its core businesses, the company says it is already working on an operating system that does not rely on technologies sourced from U.S. companies. But it is yet to provide any evidence on how — and if — that operating system would function.

The U.S. government earlier this month offered some relief to Huawei by granting a temporary general export license for 90 days, which allows companies such as Google to continue to provide critical support to the Chinese company for three months.

Whoops: SoftBank CEO reveals Walmart has acquired Flipkart

Here’s one way to make sure Amazon doesn’t get control of Flipkart in India by outbidding you for a majority stake: buy it outright. Today during SoftBank’s earnings presentation, it looks like CEO Masayoshi Son slipped in a little scoop: he announced that Walmart, the world’s largest retailer, on Tuesday night reached a deal to buy Flipkart, the leading e-commerce retailer in India, putting an end to months (and actually years) of speculation. SoftBank is currently one of Flipkart’s biggest investors.

Walmart is purchasing Flipkart,” Son said in the presentation (he spoke in Japanese with a real-time translation provided by a SoftBank representative). “Last night there was the official announcement.”

Very soon after, there was a quick and slightly messy recovery: a second gentleman approached Son during the Q&A section of his presentation and slipped him a note, after which point the CEO read it, and then said an announcement had not yet been confirmed.

“With regards to Flipkart, it’s not officially announced yet,” he said with a weak smile. “Maybe I should not have mentioned that … Well, I can’t take it out!”

“Not yet announced” is also the line that SoftBank spokespeople are also taking, and we have yet to hear back from Flipkart and Walmart with their comments. Yet it could come very soon, though: we’ve been told by a source that the official news will be released at 5pm India time.

If Masa’s first statement was accurate, Walmart’s acquisition would end a long-running saga.  For months now, there have been rumors that the world’s largest retailer was gearing up to acquire a sizeable stake in the Indian company to get its foot into India — with reports putting the size of the stake at anywhere between 51 percent and around 70 percent, and at a value of between $15 billion and $20 billion, with additional investors potentially including Google.

But in the last week, alternative reports started to emerge that Amazon would try to gazump Walmart and take a pole position as a shareholder.

Walmart and Amazon have been hotly competing against each other in other markets, specifically the US — where Amazon dominates in online sales but Walmart continues to lead the charge in brick-and-mortar, despite many aggressive moves from Amazon, such as its acquisition of Whole Foods.

Meanwhile, India — Asia’s second-largest economy after China and one of the world’s fastest-growing markets — has become a key country for Amazon over the last several years, with billions already ploughed into its operations there and billions more earmarked for future investment. So when it appeared that Walmart was also going to try to muscle in by taking a stake in the country’s largest homegrown online retailer, Flipkart became the latest battleground between the two U.S. giants.

Walmart clearly was not ready to give up, though. As we pointed out last week, Walmart divesting its stake in Asda in the UK to Sainsbury’s would pave the way for the company to make a bigger move in India, and that seems to be what has happened here.

It’s still not clear if Walmart will buy out all investors with this deal, or whether it will take just a controlling share, and continue to involve other third parties.

Flipkart has raised around $7.3 billion in funding since being founded in 2007, with other investors including Microsoft, eBay, Naspers, Tencent, Tiger Global, Accel and many more, and it has been a consolidator of sorts itself, buying eBay India last year.

But although it is the country’s biggest online retailer, it has had a rocky time in terms of its valuation, which at one point was over $15 billion but dipped to $11.6 billion in its last round in 2017, in part because of fierce competition from Amazon, Snapdeal and more.

Interestingly, we should point out that this is not the first time that Son has “announced” an India-based tech deal ahead of time.

Two years ago during another quarterly presentation, the SoftBank boss let slip that OYO — the hotel aggregator service that counts SoftBank as an investor — had acquired rival Zo Rooms, a deal that had been much-speculated in India at the time.

Despite his reveal, the OYO-Zo deal actually never happened. In fact, the two were at loggerheads and even went to court as the relationship soured following the breakdown of the proposed deal.

The scale of the Flipkart-Walmart tie-up is many orders of magnitude higher, with Flipkart’s India’s highest-valued startup and a poster child for the tech industry. Let’s hope Mr. Son got it right this time.

After buying Flipkart, Walmart seeks allies to join its fight against Amazon in India

The rumors are true: Walmart has bought a controlling stake in India’s Flipkart. This isn’t a straight-up acquisition, however, because, rather than going it alone, the U.S. retailer is enlisting strategic allies as it takes its fight to Amazon in a new region.

Walmart has an existing offline retail business in India, but enter the online space puts it up against Amazon, which has made massive strides since entering India in 2012.

That perhaps calls for something special, which is one reason why Walmart is buying just 77 percent of Flipkart and leaving space for others with expertise to come join.

Walmart confirmed that “some” existing investors will retain their stakes, including Tencent the $500 billion Chinese giant — and Tiger Global, both of which have board sets, and Microsoft, which was part of a $1.4 billion investment last year. Added to that, Flipkart co-founder Binny Bansal has committed to stay retain his shares, although there’s no word on fellow co-founder Sachin Bansal who had been tipped to move on.

Beyond those three strategic Flipkart backers, Walmart said it is in ongoing discussions with “with additional potential investors who may join the round.”

Google is one who has been linked with a deal but you can imagine that Walmart — very much a physical retail specialist — will be looking to tap the world of tech and Asian partners to help gain an advantage over Amazon, which is broadly thought to have closed the gap on Flipkart in recent years.

Walmart is indicating that the new backers will buy a part of its equity if they invest, but it said it will “retain clear majority ownership” regardless of who joins.

“One of the things that was important to us here was having partners alongside us as well. So having Tencent, Microsoft and Tiger Global who are already investors in this business is really powerful in terms of the model that we’re creating,” Judith McKenna, Walmart COO, said on a call with investors following today’s announcement.

“[Flipkart] will be run through an independent board who will have some Walmart representation. We think that structure will best keep the entrepreneurial side of this business and guide it strategically, too,” McKenna added.

Walmart declined to give a timeline on when it might have news about the prospective investors.

Despite that, a number of investors have exited entirely with impressive returns, including SoftBank — which sunk a then-Indian record investment into Flipkart via its Vision Fund last year — Naspers and eBay.

In the more immediate future, Walmart is putting $2 billion of fresh capital into the business which Flipkart will be able to spend on growth and existing strategies.

Interestingly, too, Walmart is open to allowing Flipkart to IPO as a listed subsidiary in the future. That would help maintain incentives for employees and fulfill the ambition of management, McKenna said.

China closing in on massive new chip fund in bid to dominate US semiconductor industry

China’s government has made technological independence from the United States one of its highest priorities. And now, it appears to be putting its money where its messaging has been.

According to the Wall Street Journal, China is close to finalizing a $47 billion investment fund that would finance semiconductor research and chip startup development. The fund, formally the China Integrated Circuit Industry Investment Fund Co., appears to be underwritten predominantly by government capital sources.

Such a fund has been rumored for months, with the size of the fund ranging widely. Just two weeks ago, Reuters had reported that the fund would be $19 billion, while Bloomberg reported $31.5 billion two months ago. The exact number appears to be under intense negotiation among the Chinese leadership, and is also responsive to the increasingly tense trade negotiations with the United States.

If the $47 billion number pans out, it would be identical in size to a $47 billion fund that was financed by Tsinghua University, China’s leading engineering university, to spur the development of an indigenous semiconductor industry back in 2015.

China is highly dependent on foreign tech in its semiconductor industry, importing 90% of its chips in order to power its fast-growing economy. The Chinese government has always been wary of that dependency, but its fears were heightened in recent weeks after the United States banned American companies from selling components to ZTE, a prominent Chinese telecom equipment manufacturer.

Chinese President Xi Jinping has gone on something of an indigenous innovation tour in recent weeks, visiting factories across the country and encouraging further investment in the country’s technology industry. From the Communist Party of China’s official newspaper the People’s Daily two weeks ago, “National rejuvenation relies on the ‘hard work’ of the Chinese people, and the country’s innovation capacity must be raised through independent efforts, President Xi Jinping said on Tuesday.”

While the numbers discussed are eye-popping, so are the costs of developing leading-edge semiconductor technology. As semiconductors have grown more complex, costs have skyrocketed to maintain Moore’s Law. Intel spent more than $13 billion on R&D expenses alone in 2017, according to IC Insights, with Qualcomm, Broadcom, and Samsung each spending more than $3 billion.

While China may try to play catchup in the broad category of semiconductors, it is strategically placing its money on new areas like 5G wireless and artificial intelligence-focused chips where it might become a leading provider of technology. Concerns over 5G in particular have galvanized American attention on Qualcomm and its ability to compete in what is rare virgin territory in the telecom equipment space.

For American companies like Intel and Qualcomm, who are used to holding de facto monopolies on entire swaths of the semiconductor market, the renewed competition from China is going to pressure them to push their tech forward faster.

Nintendo’s new president aims to build a billion-dollar mobile gaming business

It’s a time of optimism and transition at Nintendo, where brisk sales of the Switch have bolstered its bottom line and new leadership signals a fresh approach to the market. Shuntaro Furukawa, the new president, told the Nikkei that one of his plans is to pursue mobile gaming with more vigor, aiming to build it into a billion-dollar business.

Furukawa is taking over from Tatsumi Kimishima, who took the helm temporarily after the tragic and sudden death of the beloved Satoru Iwata in 2015. He’s only 46, and clearly as a member of the younger generation has a different outlook on mobile, which the company completely avoided until very recently.

“The idea that something will emerge that transforms into something big, in the same manner as game consoles, is the defining motive of the Nintendo business,” he told the Nikkei. “From what I can see, smartphone games are the ones I want to expand the most.”

He said he envisions the smartphone side of the game company to become a 100 billion yen business — short of a billion at the present exchange rate, but why not round up? The company did a trillion yen in sales last year, so it’s not like we’re going to run out of zeroes.

The company’s tentative forays into the field have been a mixed success. Pokémon GO was, of course, a worldwide phenomenon, but widely criticized for half-baked gameplay and other issues. Mario Run was a perfectly fun game, but many mobile players balked at its high up-front price. Then Fire Emblem: Heroes has proven popular and a financial success — but its reliance on “loot box” mechanics and in-game microtransactions soured the experience for many.

A new game and franchise, Dragalia Lost, is coming this summer.

Clearly Nintendo is still finding its feet in this relatively unfamiliar territory, though long practice with the DS (in many ways very like a smartphone) means that mobile gaming, if not a core competency, is at least core-adjacent. And popular franchises like Advance Wars and Professor Layton are great matches for mobile.

No one should expect a smartphone equivalent to sprawling, beautiful games like Breath of the Wild, but Nintendo has handheld fun in its blood, and there’s no reason to think they won’t nail it after a few tries.

Chinese government admits collection of deleted WeChat messages

Chinese authorities revealed over the weekend that they have the capability of retrieving deleted messages from the almost universally used WeChat app. The admission doesn’t come as a surprise to many, but it’s rare for this type of questionable data collection tactic to be acknowledged publicly.

As noted by the South China Morning Post, an anti-corruption commission in Hefei province posted Saturday to social media that it has “retrieved a series of deleted WeChat conversations from a subject” as part of an investigation.

The post was deleted Sunday, but not before many had seen it and understood the ramifications. Tencent, which operates the WeChat service used by nearly a billion people (including myself), explained in a statement that “WeChat does not store any chat histories — they are only stored on users’ phones and computers.”

The technical details of this storage were not disclosed, but it seems clear from the commission’s post that they are accessible in some way to interested authorities, as many have suspected for years. The app does, of course, comply with other government requirements, such as censoring certain topics.

There are still plenty of questions, the answers to which would help explain user vulnerability: Are messages effectively encrypted at rest? Does retrieval require the user’s password and login, or can it be forced with a “master key” or backdoor? Can users permanently and totally delete messages on the WeChat platform at all?

Fears over Chinese government access to data held or handled by Chinese companies has led to a global backlash against those companies, including some countries (including the U.S.) banning Chinese-made devices and services from sensitive applications or official use altogether.

Report: Chinese smartphone shipments drop 21% to reach lowest level since 2013

Analysts have long-warned of a growth crunch in China’s smartphone space, and it’s looking like that’s very much the case right now.

China’s smartphone growth has been the feel-good story for domestic OEMs who have clocked impressive figures as the billion-plus population has rushed online via mobile devices. However, the market reached saturation point in 2017 — when sales stopped growing for the first time — and the first quarter of this year is already showing savage results.

In a report released today, Canalys claimed that shipments across the industry fell by 21 percent year-on-year in Q1.

The total number of mobile devices shipped in China dropped below the 100 million market in a quarter for the first time since late 2013, the firm added.

“Eight of the top 10 smartphone vendors were hit by annual declines, with Gionee, Meizu and Samsung shrinking to less than half of their respective Q1 2017 numbers,” the report read.

Ouch.

Of the field, only Xiaomi the firm tipped for an IPO at a $100 billion valuation — was able to post positive momentum as its numbers grew by 37 percent to reach 12 million. That was enough to see it overtake Apple into fourth place, but Xiaomi numbers are still heavily reliant on its $150 Redmi range, which isn’t as lucrative as its higher-end products.

Huawei, Oppo and Vivo led the market. Somewhat incredibly, those three firms plus Xiaomi now account for a very dominant 73 percent of all shipments, which Canalys believes is bad for consumers and smartphone aficionados in China.

“The level of competition has forced every vendor to imitate the others’ product portfolios and go-to-market strategies,” analyst Mo Jia said in a statement. “While Huawei, Oppo, Vivo and Xiaomi must contend with a shrinking Chinese market, they can take comfort from the fact that it will continue to consolidate, and that their size will help them last longer than other smaller players.”

There might be a bright spark coming soon. Canalys anticipates growth in the second quarter as Oppo, Vivo and Huawei trot out new flagship devices. But China’s once-booming industry is now having to contend with the same issue as the U.S.: consumers don’t upgrade their phone as frequently as carriers would like.

Xiaomi promises to give money back to customers if its profits get too high

Xiaomi, the Chinese smartphone maker tipped for a public listing this year, has made a unique pledge: if it makes too much money, it’ll give a chunk of its profits back to its customers.

Yes, that’s right.

The company said today it will forever limit the net profit margins after tax for smartphones, smart home devices and other hardware to just five percent. If it makes more money than planned over a calendar year, it plans to “distribute the excess amount by reasonable means to its users.”

Today our CEO Lei Jun announced a promise to all our fans…#Xiaomi will forever limit the net profit margin after tax for our entire hardware sales (including smartphones, IoT and lifestyle products) to a maximum of 5%.

Do you like the sound of that? pic.twitter.com/ZbEjaVeBLf

— Mi (@xiaomi) April 25, 2018

It’s hard to know exactly what reasonable means Xiaomi is referring to, but here are some though.

Spoiler number one alert !! — most companies in mobile make a scant profit, if any at all, on hardware.

Firms like LG and Samsung rely on component divisions and other consumer brands to record the bulk of the revenue which makes them profitable. More broadly, the competitive market means there’s not much money to claim in selling phones. Apple is estimated to account for a whopping 87 percent of all smartphone profits despite just 18 percent market share.

Xiaomi Mi Mix 2 was widely-lauded when it launched last year

Spoiler number two alert !! — selling hardware with a low net profit has always been a component of Xiaomi’s strategy.

Indeed, former head of international Hugo Barra previously said it didn’t make money on hardware sales. That approach may have changed, but Xiaomi had never put a figure on its take-home margin before.

This pledge aligns itself neatly with the company’s core focus on providing cutting-edge tech, or as close to, at affordable prices. Much has been said over the years of the bang-for-buck of its $150 Redmi range, while countless comparisons of its higher-end Mi phones — which typically sell for $150-$300 — and flagship products from Apple and Samsung have graced the internet.

Xiaomi has said from the get-go that smartphones are just one part of its wider ecosystem — which includes Xiaomi-branded smart home and “lifestyle” devices from third-parties, and, crucially, services that link all the hardware together. Those include services such as online video, e-commerce, financial products and other digital services.

“From the beginning, we embarked on a relentless pursuit of innovation, quality, design, user experience and efficiency advances, to provide the best technology products and services at accessible prices. We hope that our products and services will help our users to achieve a better life,” CEO and co-founder Lei Jun said in the money statement that accompanies today’s announcement.

Xiaomi is widely tipped to go public this year in an IPO that could value its business as high as $100 billion, according to Bloomberg. Chinese media recently claimed that the company is planning a dual-IPO that would see it list both in Hong Kong and on Mainland China, as our sister site Technode explained.

Such a double-headed IPO would be unique but, as Xiaomi showed today, it has no intention of sticking to so-called convention.

The future of e-commerce in India increasingly looks like an all-American affair

India’s technology industry is bracing itself for the next era of e-commerce warfare, which looks set to be waged and bankrolled by two gigantic corporations located halfway across the world: Amazon and Walmart.

Amazon is already deeply committed to the country, where it has pledged to deploy more than $5 billion to grow its business, and now U.S. rival Walmart is said to be inching closer to a deal to buy Flipkart.

Bloomberg reports that Walmart is poised to acquire 60-80 percent of the company for $12 billion. The deal could potentially value Flipkart as high a $20 billion, which would be a major jump on the $12 billion valuation it secured last year when it landed a $1.4 billion investment from Microsoft, Tencent and eBay.

Amazon was said to have made a last-minute move to conduct talks with Flipkart, but it seems now that there is intent for Walmart to take the deal, with Flipkart’s founders said to be in favor. Bloomberg cautioned, however, that there are still unresolved issues — including which shareholders will sell, how much they will sell, and whether the Flipkart leadership remains — while there’s also no guarantee that the talks don’t break down.

That said, it is reported that Tiger Global plans to sell nearly all of its 20 percent share and SoftBank will offload “a substantial part” of its 20-percent-plus holding.

At stake is a growing online sales market as more of India’s 1.4 billion population comes online for the first time.

India is tipped to reach 500 million internet users by June 2018, according to a report from the Internet and Mobile Association of India (IAMAI) and Kantar IMRB. That’s up from 481 million six months prior, but internet penetration in rural areas is at just 20 percent compared with 65 percent in urban India. That rush online has led some analysts to predict big gains for online retail, with Morgan Stanley forecasting that 30 percent annual growth in GMV will take India’s e-commerce market to $200 billion by 2026.

Walmart’s increased focus on India comes after the retailer exited the Chinese market in 2016, selling its Yihaodian service — which it first backed in 2011 — to Alibaba rival JD.com. That deal also saw Walmart work closely with JD.com, essentially using the company as a storefront to reach Chinese consumers.

With the China exit complete, it was then linked with an investment in Flipkart last year. Fast-forward to today and it is poised to take a very major role in India via Flipkart, which most reports indicate remains India’s top e-commerce firm despite Amazon pushing it hard.

Amazon itself is keen to diversify. The company recently announced it has more than 100 million Prime members worldwide, having added “more members in India in its first year than any previous geography in Amazon’s history” thanks to an array of promotional offers run with local companies, including telecom operators.

Now the firm is aiming outside of its core e-commerce focus, with Amit Agarwal — the head of Amazon India — telling Reuters that he expects groceries and household products to account for half of its revenue in the country within the next five years.

Outside of Flipkart and Amazon, Alibaba has invested considerably in Paytm, which specializes in mobile payments but also includes e-commerce, digital banking and has plans for gaming. Long-time Alibaba ally SoftBank is also backing the company’s Paytm Mall effort — having led a recent $450 million investment — but the main battle looks like between Amazon and Walmart-Flipkart if things go as they are reported to be headed.

Walmart declined to comment. Flipkart did not respond to a request for comment for this story.