Asian Digital Tech Startups Join Tencent Portfolio

China’s Internet behemoth Tencent invests in Australian and Indian digital tech startups

Chinese Internet conglomerate Tencent Holdings, based out of China’s emerging financial capital Shenzhen, has picked up a 5% stake in Australian ‘shop now, pay later’ fintech startup Afterpay Limited for around US$300 million (AU$390 million), according to several reports.

Afterpay stock jumped by 36% after news of the investment broke, Reuters reported.

“To be able to tap into Tencent’s vast experience and network is valuable, as is the potential to collaborate in areas such as technology, geographic expansion and future payment options on the Afterpay platform,” Co-Founders of Afterpay Anthony Eisen and Nick Molnar said in a statement.

Afterpay applies the buy-now-pay-later model to the beauty segment. It allows online shoppers to purchase from premium global brands such as Fenty Beauty by Rihanna and MAC Cosmetics, as well as budget online stores such as SHEIN, and pay for their purchases at a later date.

The startup is aligned with global consumer trends “in terms of Afterpay’s customer centric, interest free approach as well as its integrated retail presence and ability to add significant value for its merchant base,” Chief Strategy Officer of Tencent James Mitchell said in the statement, highlighting Afterpay’s business model.

Catering to a largely young population, a significant slice of Afterpay’s customer base comes from the United States. Despite being Australia-based, only two of its top ten most shopped cities are from Asia Pacific. It is speculated that the Tencent investment will help Afterpay expand its footprint in the Asia Pacific region.

In another investment geared towards Asia-based startups, Tencent also injected $9.4 million into Indian startup Pratilipi’s Series C. Tencent led the round, with participation from impact investment firm Omidyar Network, Chinese venture capital (VC) firm Shunwei Capital, Indian media giant Bennett, Coleman & Co., and California-based VC firm Nexus Venture Partners.

All of the Series C investors have previously invested in Pratilipi either directly or through a subsidiary.

Pratilipi is a digital regional language self-publishing platform based out Bengaluru, India’s nerve center for tech innovation. The startup currently supports 12 languages, including English. While India officially recognizes 22 regional languages, nearly 20,000 unofficial regional languages exist in the country.

Tencent is the second Chinese investor to lead a financing round for the startup. Pratilipi’s Series B, a $15 million round that took place last year, was led by Chinese VC firm Qiming Venture Partners. The round saw participation from Shunwei Capital, Omidyar Network and Nexus Venture Partners, among others.

Omidyar Network also led Pratilipi’s Series $4.3 million Series A in 2018, and both Nexus Venture Partners and Bennett, Coleman & Co., (via its subsidiary Times Internet) were seed investors in the startup.

Header image courtesy of Tencent Holdings

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