Singapore-based Syfe, a robo-advisor with a human touch, raises $18.6 million led by Valar Ventures

Dhruv Arora, the founder and CEO of Singapore-based investment platform Syfe

Dhruv Arora, the founder and CEO of Singapore-based investment platform Syfe
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Syfe, a Singapore-based startup that wants to make investing more accessible in Asia, announced today that it has closed a SGD $25.2 million (USD $18.6 million) Series A led by Valar Ventures, a fintech-focused investment firm.

The round also included participation from Presight Capital and returning investor Unbound, which led Syfe’s seed funding last yea.

Syfe serves customers based in 23 countries, but currently only actively markets it services in Singapore, where it is licensed under the Monetary Authority of Singapore. Part of its new funding will be used to expand into new Asian countries. The startup hasn’t disclosed its exact user numbers, but says the number of its customers and assets under management have increased tenfold since the beginning of the year, and almost half of its new clients were referred by existing users.

Other Valar Ventures portfolio companies include TransferWise, Xero and digital bank N26. In a statement about Syfe, founding partner Andrew McCormack said, “The potential of Asia as a region, with a fast-growing number of mass-affluent consumers aiming to grow their wealth, combined with the pedigree of the team and strong traction, makes Syfe a very compelling opportunity.”

Founded in 2017 by chief executive officer Dhruv Arora, Syfe launched in July 2019. Like “robo-advisors” Robinhood, Acorns and Stash, Syfe’s goal is to make investing more accessible. There is no minimum amount required to start investing and its all-inclusive pricing structure ranges from .4% to .65% per year.

Before starting Syfe, Arora was an investment banker at UBS Investment Bank in Hong Kong before serving as vice president of product and growth at Grofers, one of India’s largest online grocery delivery services. While at UBS, Arora worked with exchange-traded funds, or ETFs.

“I could see how a lot of institutions and some ultra-high-net worth individuals who are clients of the bank were using the product, and I thought it was a great tool for individuals, too,” Arora told TechCrunch. “But what I realized was that people are actually not very aware of how to use ETFs.”

In many Asian countries, people prefer to put their money away in bank accounts or invest in real estate. As interest rates and property prices stagnate, however, consumers are looking for other ways to invest. Syfe currently offers three investment products. The first is a global diversified portfolio with a mix of stocks, bonds and ETFs that is automatically managed according to each investor’s chosen risk level. The second is a REIT portfolio based on the Singapore Exchange’s iEdge S-REIT Leaders Index. Finally, Syfe’s Equity100 portfolio consists of ETFs that include stocks from more than 1,500 companies around the world.
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Other Asia-focused “robo-advisor” services include Stashaway and Kristal.ai, and Grab Financial also recently announced a “micro-investment” product. Arora acknowledges that in the future, there may be more entrants to the space. Right now, however, Syfe’s main competitor is the mindset that banks are still the best way to save money, he added. Part of Syfe’s work is consumer education, because “it was culturally ingrained in a lot of us, myself included, to keep your money in the bank.”

Syfe differentiates with a team of financial advisors, including former employees of Goldman Sachs, Citibank and Morgan Stanley, who are on hand for user consultations. Arora said most Syfe users talk to advisors when they first join the platform, and about 20% of them continue using the service. Questions have included if people should use a credit card to invest, which Arora said advisors dissuade them from doing because of high interest rates.

“We definitely want to be a tech-first platform, but we understand there is a value, especially as you deal with some of the older audiences who are in their 50s and 60s, who are still adapting to these technologies,” he said. “They need to know that you know there is somebody out there to look after their products.”

While Syfe’s average user is aged between 30 to 45, one growing bracket is people in their 50s who are motivated to save for retirement, or want to create a supplement to their pension plan. Users typically start with an initial investment of about SGD $10,000 (about USD $7,340), and about four out of five users regularly top up that amount.

Some users have tried other investment products, like investment-linked insurance plans, but for many, Arora says Syfe is their first introduction to investing in stocks, bonds and ETFs.

“We’ve realized that a fair number of them are quite well-to-do professionals in their field, in their mid- to late 30s, who amassed a significant amount of wealth but never really had a chance to invest, or the right advice on how to invest,” said Arora. “I think this has been one of the biggest revelations for us and it made us realize we should have a human touch in our platform.”

The platform manages its products with a mix of an investment team and algorithms that help avoid human bias, said Arora. Syfe’s algorithms take into account growth versus value, the market cap of a stock, volatility and sector momentum. To balance risk, it also analyzes how individual assets correlate with other assets in the same portfolio.

Arora said Syfe is currently in advanced talks with regulators in several countries and expects to be in at least two new markets by the end of next year. It also plans to double the size of its team and create more consumer financial products.

During COVID-19, Arora said Syfe’s portfolios experienced significantly lower corrections than indexes like the S&P, so only a few users withdrew their money. In fact, many invested more.

“I feel people have been rethinking their finances and the future,” he said. “As banks cut interest rates across the world, including in Singapore, many of them have started looking at other options.”

Caura, an app to take the hassle out of car ownership, launches from Echo co-founder Sai Lakshmi

Caura, a new U.K. startup that aims to take the hassle out of car ownership, is breaking cover today. Founded by Sai Lakshmi, who previously co-founded Echo, the medication management service acquired by LloydsPharmacy owner McKesson, Caura is an iOS app designed to manage all of the vehicle-related admin that car owners endure.

Drivers are on-boarded to Caura by entering their vehicle registration number. They’ll then be able to manage parking, tolls, MOT, road tax, car insurance and congestion charges — a “one-stop shop” app in a similar vain to Echo, perhaps. The idea is that Caura minimises car ownership admin and helps to mitigate associated penalty fines.

“After my girlfriend racked up hundreds of pounds of parking fines, I started doing market research,” explains Lakshmi. “It was clear there was an opportunity to build something in the space that made life easier for drivers — after all, I’d just spent the past seven years thinking about how to make the NHS run smoothly — this should be easy in comparison! I toyed with several different models, including hardware, and after a few pretty direct conversations with some Apple engineering folks, decided to focus on the software platform: it would be more accessible to more people and easier to integrate with private and public services we’d need to interface with if we wanted to be a one-stop shop for your car.”

Lakshmi says that after purchasing his first car that shipped with Apple CarPlay, he was “blown away” by how slick the interface is for entertainment, communication and maps, but also became convinced there was more to be done in this space. “I then thought it would be brilliant to have one single app to add all your vehicle-related payments to streamline the experience, improve vehicle compliance and make paying for parking and the ever-changing digital road landscape simple,” he says.

Image Credits: Caura

Once you’ve downloaded the app and entered your vehicle registration number, you can view the status of your car’s tax, MOT and insurance renewal dates. From the home screen, you can also pay for selected parking, toll roads and congestion charges.

The FCA-approved app integrates with Apple Pay or will safely store payment details, which can be used to pay car charges “in just two clicks.” In-app notifications also remind you when it’s time to pay, with Caura promising to reduce the millions of automated fines or penalty charge notices that are issued to Brits each year.

“There are dozens of platforms that drivers need to manage just one car,” notes Lakshmi. “On a more regular basis, you need a dozen parking apps and other websites to manage your drive. These all have their own log-ins, forms and payment details and the whole experience is a dog’s dinner. There are apps that insist on CVC codes being entered every time you use them and others that insist on SMS messages for reminders, which is so 2000, not 2020. Also, if you get any of this wrong, you get lumped with automated fines.”

Caura can be used for a single vehicle, but can also support multiple registered vehicles, meaning it can potentially scale for fleet managers. An Android version is also promised by the end of the year.

Lakshmi says he and his co-founders — Shaun Foce (director of engineering) and Bhavin Kotecha (chief of staff and finance director) — have already raised £1.4 million for Caura. Backing comes from various unnamed angels, although he says 50% of Caura’s investors have connections to his previous company.

Asked how the startup generates revenue, “Right now, we don’t,” replies the Caura founder. “We’re just passing through these payments to the final provider like congestion charge and parking. Given the seismic shift in investor mindset from crazy growth to building profitable businesses, our long-term business model is most certainly something with sustainable unit economics. It’s currently in the oven and we’re really excited to share more in Q4 2020 later this year.”

Amazon adds support for Kannada, Malayalam, Tamil and Telugu in local Indian languages push ahead of Diwali

More than seven years after Amazon began its e-commerce operations in India, and two years after its shopping service added support for Hindi, the most popular language in the country, the American giant is embracing more local languages to court hundreds of millions of new users.

Amazon announced on Tuesday its website and apps now support Kannada, Malayalam, Tamil, and Telugu in a move that it said would help it reach an additional 200-300 million users in the country.

Localization is one of the most crucial — and popular — steps for companies to expand their potential reach in India. Netflix added support for Hindi last month, and Amazon’s Alexa started conversing in the Indian language last year. (Amazon’s on-demand video streaming service, Prime Video, also supports Hindi, in addition to Tamil and Telugu.)

The company said the usage of Hindi, which it rolled out on its website and apps in India in 2018, has grown by three times in the past five months, and “hundreds of thousands” of Amazon customers have switched to Hindi shopping experience.

Amazon’s further language push comes months after its chief rival in India, Walmart -owned Flipkart, added support for Tamil, Telugu and Kannada, three languages that are spoken by roughly 200 million people in India.

Like Flipkart, Amazon worked with expert linguists to develop an accurate and comprehensible experience in each of the languages, the American e-commerce firm said.

But simple translation is not enough to make inroads with users in India. YouTube and YouTube Music, for instance, understand when Bollywood fans in India search for music by the name of the movie character or actor who played the part instead of the actual musician or song title — a phenomenon unique among Indian users.

Amazon appears to have incorporated similar learnings into its shopping experience. The company said for translations it preferred using commonly used terms from daily life over perfectly translated words.

Kishore Thota, Director of Customer Experience and Marketing at Amazon India, termed the availability of Amazon India shopping experience in four new languages a “major milestone.”

The move comes weeks ahead of Diwali, the biggest festival in India that sees hundreds of millions of Indians spend lavishly. “We are super excited to do this ahead of the upcoming festive season,” said Thota.

Event discovery network IRL raises $16M Series B after refocusing on virtual events

The COVID-19 pandemic impacted the way a number of companies have had to do business. For the event discovery startup, IRL, it meant pivoting into the virtual events space. This April, the startup quickly reacted to government lockdowns and restrictions on in-person gatherings to focus on helping people find their online counterparts and other virtual events, like live-streamed concerts, Zoom parties, esports tournaments, and more. Today, those efforts are paying off as IRL announces $16 million in Series B funding and the expansion of its social calendaring app to colleges.

The new round was led by Goodwater Capital with participation from Founders Fund, Floodgate, and Raine, and comes on top of the $11 million IRL had previously raised, including its $8 million Series A last year.

The coronavirus pandemic, surprisingly, may have made IRL relevant to a wider audience. Before, IRL was mostly useful to those who lived in areas where there were a lot of events to attend, or who could afford to travel. But with the refocusing on “remote life” instead of “real life,” more people could launch the app to find something interesting to do — even if it was only online.

In fitting with its new focus, IRL redesigned its app earlier this year to create a new homescreen experience where users could discover events they could attend remotely. This design continues to be tweaked, and now features a colorful “discover” tab in the app where you can tap into various event categories, like gaming, music, tv, wellness, sports, podcasts, lifestyle, and more, including those sourced from partners like TikTok, Meetup, Twitch, Spotify, SoundCloud, HBO, Ticketmaster, Eventbrite, and others.

There are also dedicated sections for events you’re following and a curated Top Picks. The IRL in-app calendar, meanwhile, lets you easily see what’s happening today and in the weeks and months ahead.

Since its refocusing on virtual events, IRL has brought people together for online happenings like Burning Man’s Multiverse and TikTok Live’s The Weekend Experience, for example.

According to TikTok, IRL had helped it gauge early interest in its The Weekend Experience event, with some 52,000 IRL RSVPs and 1.1 million followers on its IRL profile.

Image Credits: IRL screenshot via TechCrunch

“IRL has been an amazing platform for us to engage with more of our audience and meet new potential users,” said Jenny Zhu, Head of Integrated Marketing U.S. at TikTok. She also added that TikTok sees “major traffic coming from IRL” and is “excited to continue our partnership.”

In terms of growth, IRL claims its users are now tracking over 1 million hours per spent daily in “Time Together” — a metric that tabulates the number of hours users are spending together at the events they RSVP’d to, virtual or otherwise. In addition, IRL says it has seen 10x growth in daily active users and a total of 300 million “Time Together” hours since last June. It also claims 5.5 million MAUs.

While IRL doesn’t share its download figures, app store intelligence firm Sensor Tower estimates the app has seen a total of 7.7 million installs across iOS and Android.

With the additional capital, IRL is expanding with the launch of a college network.

Its goal is to improve upon the Facebook experience for the younger, student demographic by helping college users find, share, and attend academic and social events, both physical and virtual. However, just this month Facebook launched its own college network, Facebook Campus, which allows students to privately network and track student events on the Facebook platform, outside of their main Facebook profile.

IRL says it’s starting its college network with 100 colleges and universities across the North America, including Harvard, Columbia and NYU. Facebook Campus, meanwhile, launched with 30 schools.

“IRL is the only social platform that helps users find the best ways to spend their time and actually encourages them to get off the platform,” said IRL founder and CEO Abraham Shafi, Founder, about the launch of the new network. “Colleges and universities, in particular, need a way to build and foster a sense of community, whether their students are away from campus remote learning or on campus practicing hybrid learning,” he explained.

For IRL’s investor, Chi-Hua Chien, a Managing Partner at Goodwater Capital, the potential in IRL is its focus on real connections and community-building.

“We believe IRL will grow to become one of the major social networks powering communities on the Internet and in the real world,” Chien said. “IRL delivers on the promise to make social media less isolating, by helping drive authentic connection between friends and family around events they care about,” he added.

 

TikTok, WeChat and the growing digital divide between the U.S. and China

Over the past decade, the dynamic between Chinese and United States tech companies has undergone dramatic shifts. Once seen as a promising market for American companies, that narrative flipped as China’s tech innovation and investment power became increasingly evident, and the expanding reach of the Chinese Communist Party’s cybersecurity regulations fueled concerns about data privacy. For years, however, there still seemed to be room for a flow of ideas between the two countries. But that promise has eroded, against the backdrop of the tariff wars and, most recently, the Trump administration’s executive orders against TikTok and WeChat.

The U.S. Commerce Department was set to enforce the shutdown of TikTok and WeChat in the United States last weekend, but both apps got reprieves. In WeChat’s case, a U.S. district court judge issued a temporary stay against the ban, while TikTok owner ByteDance is in the process of finalizing a complicated deal with Oracle.

The TikTok and WeChat imbroglios underline how much America’s perception of Chinese tech has evolved. Not only is TikTok the first consumer app by a Chinese company to gain a major foothold in the United States, but it’s also had a significant impact on popular culture there. This would have been almost unimaginable just ten, or even five, years ago.

China as a target for expansion

For a long time, China, with its population of 1.4 billion people, was seen as a lucrative market by many foreign tech companies, even as government censorship began to expand. In 2003, China’s Ministry of Public Security launched the Golden Shield Project, commonly referred to as the Great Firewall of China, the apparatus that controls what overseas sites and apps Chinese internet users have access to. At first the Great Firewall mainly targeted access to Chinese-language sites with anti-Chinese Communist Party content. Then it began blocking more services.

A laptop computer screen in Beijing shows the homepage of Google.cn, 26 January 2006, a day after its debut in mainland China where the US online search engine launched a new service after agreeing to censor websites and content banned by the Beijing authorities (AFP PHOTO/Frederic J. BROWN)

A laptop computer screen in Beijing shows the homepage of Google.cn, 26 January 2006, a day after its debut in mainland China where the US online search engine launched a new service after agreeing to censor websites and content banned by the Beijing authorities (AFP PHOTO/Frederic J. BROWN)

Even as the Communist Party’s online censorship became more stringent, many American internet companies were still keen to expand into China. Perhaps the most prominent example from that era is Google, which added Chinese support to Google.com in 2000.

Though access to the search engine was spotty (according to a 2010 timeline from the Financial Times, this may have been because of “extensive filtering” by China’s licensed internet service providers) and it was briefly blocked in 2002, Google continued launching new services targeted to users in China, including a simplified Chinese language version of Google News.

Then in 2005, the company announced plans to set up a research and development center in China. The next year, it officially launched Google.cn. In order to do so, Google agreed to exclude search results on sensitive political topics, causing controversy.

Despite its concessions to the Chinese government, Google’s relationship with China began deteriorating, foreshadowing what other foreign tech companies, particularly those offering online services, would deal with when they tried to enter China. After being blocked on and off, access to YouTube was completely cut off in 2009 after footage was uploaded that appeared to show the brutal beatings of Tibetan protestors in Lhasa. That year, China also blocked access to Facebook and Twitter.

In January 2010, Google announced it was no longer willing to censor searches in China and would withdraw from the country if necessary. It also began redirecting all search queries on Google.cn to Google.com.hk.

But the company continued its R&D operations there and maintained a sales team. (In 2018, an investigation by The Intercept found that Google had started to work on a censored search engine for China again, code-named “Project Dragonfly”). Other big U.S. tech companies also continued courting China, even though their services were blocked there.

For example, Facebook chief executive Mark Zuckerberg made several trips to China in the mid-2010s, including a 2015 visit to Tsinghua University, a leading research university. Zuckerberg had joined the university’s board the previous year, and delivered several public talks in Mandarin. Speculation mostly focused on Facebook’s efforts to get a version of its service into China, but China-based companies were, and continue to be, one of Facebook’s most important sources of advertising revenue.

Chinese government policies designed to help domestic companies become more competitive also began to have an impact and by 2015, many American tech firms needed to find a local partner to enter China. The narrative that China needed American tech innovation began to turn on its head.

A shifting dynamic

Since Google Play was also blocked in China, that led the way for the rise of third-party Android app stores, including Chinese internet giant Tencent’s My App.

But Tencent’s most influential product is WeChat, the messenger that launched in 2011. Two years later, Tencent added mobile payments by integrating it with TenPay. In less than five years, WeChat became a vital part of daily life for hundreds of millions of users in China. WeChat Pay and Alibaba’s Alipay, its main competitor, have revolutionized payments in China, where about one-third of consumer payments are now cashless, according to research by think tank CGAP.

BEIJING, CHINA - SEPTEMBER 19: A Chinese customer uses his mobile to pay via a QR code with the WeChat app at a local market on September 19, 2020 in Beijing, China. (Photo by Kevin Frayer/Getty Images)

BEIJING, CHINA – SEPTEMBER 19: A Chinese customer uses his mobile to pay via a QR code with the WeChat app at a local market on September 19, 2020 in Beijing, China. (Photo by Kevin Frayer/Getty Images)

In 2017, Wechat launched “mini-programs,” that allows developers to create “apps within an app” that run on WeChat. The program took off quickly, and within less than two years, Tencent said it had reached one million mini-programs and 200 million daily users. Even Google quietly launched its own mini-program in 2018.

Despite its ubiquity in China, WeChat’s international presence is relatively small, especially when compared to other messengers like WhatsApp. WeChat claims more than one billion monthly active users in total, but only an estimated 100 million to 200 million are international users. Many are members of the Chinese diaspora who use it to keep in touch with family and associates in mainland China since many other popular messengers, including WhatsApp, Facebook Messenger and Line, are blocked there.

In the meantime, another company was gaining ascendancy, and would eventually succeed where Tencent hadn’t.

Founded in 2012 by Microsoft veteran Zhang Yiming, ByteDance had its own early run-ins with the Chinese government. The first app it launched, a social media platform called Neihan Duanzi that reached 200 million users by 2017, was shut down the next year after the National Radio and Television Administration accused it of hosting inappropriate content. Despite that early setback, ByteDance continued to grow, releasing apps like Toutiao, one of China’s top news aggregators.

But the product it is best known for launched in 2016. Called Douyin in China, ByteDance always planned to expand the short video-sharing app overseas. In an interview with Chinese tech news site 36Kr, Zhang said, “China is home to only one-fifth of the world’s internet users. If we don’t expand globally, we are bound to lose to our peers eyeing the rest of the world” — both echoing and contravening the viewpoint of U.S. internet companies that had seen China as a crucial market.

TikTok, the international version of Douyin, was launched in 2017. That year, ByteDance also bought Musical.ly, a lip-syncing app popular with teens, in a deal worth between $800 million to $1 billion. ByteDance merged Musical.ly with TikTok, consolidating their audiences.

By early 2019, TikTok had become popular among teens and people in their early 20s, though many older people still struggled to understand its appeal. But as TikTok was turning into a mainstay of Gen Z culture, it also began to face scrutiny by the U.S. government. In February 2019, the Federal Trade Commission fined TikTok $5.7 million for violating children’s privacy laws.

Then a few months later, the U.S. government reportedly began a national security review of TikTok, marking the first in a chain of events that led to Trump’s August executive order against the company, and ByteDance’s new, but confusing, agreement with “trusted technology partner” Oracle.

The impact of China’s 2017 cybersecurity law

The United States is not the only country where TikTok has been deemed a national security threat. In June, it was among 59 apps developed by Chinese companies banned in India for threatening the country’s “national security and defence.” It’s also under investigation by French data security watchdog CNIL over how it handles user data.

While some cybersecurity experts believe that TikTok’s data collection practices are similar to other social media apps that depend on targeted ads for revenue, the heart of the issue is a Chinese law, implemented in June 2017, that requires companies to comply with government requests for data stored in China. ByteDance has insisted repeatedly it would resist attempts by the Chinese government to access U.S. users’ data, which it says is stored in the United States and Singapore.

“Our data centers are located entirely outside of China, and none of our data is subject to Chinese law,” TikTok wrote in a October 2019 statement. “Further, we have a dedicated technical team focused on adhering to robust cybersecurity policies, and data privacy and security practices.”

In the same post, TikTok also addressed concerns that it censors content, including videos about the Hong Kong protests and China’s treatment of Uighurs and other Muslim groups. “We have never been asked by the Chinese government to remove any content and we would not do so if asked. Period,” the company said.

WeChat and TikTok’s uncertain future in the U.S.

But as a Chinese company, ByteDance is ultimately still beholden to Chinese laws. Earlier this week, ByteDance said it will retain an 80% stake in TikTok, after selling a total of 20% to Oracle and Walmart. Then Oracle executive vice president Ken Glueck said that Oracle and Walmart would make their investment upon the creation of a new entity called TikTok Global. He added that ByteDance will have no ownership in TikTok Global.

This creates more questions, but doesn’t answer the most pressing one: how close will the U.S. version of TikTok remain to ByteDance, and will it still be subject to the Chinese cybersecurity regulations that cause so much concern?

Around the same time that ByteDance’s proposed deal with Oracle and Walmart was announced, a U.S. district court judge temporarily stayed the nationwide ban on WeChat, as part of a case brought against the U.S. government by the U.S. WeChat Users Alliance, a nonprofit organization initiated by attorneys who want to preserve access to WeChat for users in America. In her opinion, Judge Laurel Beeler wrote, “while the government has established that China’s activities raise significant national-security concerns—it has put in scant little evidence that its effective ban of WeChat for all U.S. users addresses those concerns.”

On its site, the U.S. WeChat Users Alliance said it believes Trump’s August 6 executive order against WeChat “violates many provisions of the U.S. Constitution and the Administrative Procedure Act.” Furthermore, the group argued that a WeChat ban would “severely affect the lives and the work of millions of people in the U.S.” who use WeChat to talk to family, friends and business associates in China.

While WeChat is heavily censored, users have often found ingenious ways to bypass bans on topics deemed sensitive by the Chinese government. For example, people used emojis, PDFs and fictional languages like Klingon to share an interview with Ai Fen, the director of Wuhan Central Hospital’s emergency department and one of the first whistleblowers to sound the alarm about COVID-19 even as the government attempted to stifle information about the disease.

The growing divide

The U.S. government’s actions against TikTok and WeChat are taking place against an increasingly fraught political landscape. Huawei and ZTE were first identified as potential threats to U.S. national security in a 2012 bipartisan House committee report, but legal actions against Huawei, one of the world’s biggest telecom equipment suppliers, escalated under the Trump administration. These include criminal charges brought against Huawei by the Department of Justice, and the arrest and indictment of chief financial officer Meng Wanzhou.

The U.S. government’s actions in the name of national security doesn’t just affect the Chinese government or China’s biggest companies. It also impacts individuals, as in the case of increasingly stringent visa restrictions for Chinese students.

At the same time, the Great Firewall has become more restrictive under President Xi Jinping’s regime and China’s cybersecurity laws are becoming increasingly invasive, granting the government even more access to citizens’ data. Increasingly sophisticated surveillance technology has been used to monitor Uighurs and other ethnic minorities, and a crackdown on VPN services that began escalating in 2017 is making it harder for people in China to circumvent the Great Firewall.

When compared to these social issues, the future of a video-sharing app might seem relatively minor. But it underscores one of the most unsettling developments in the relationship between U.S. and China over the past ten years.

In a prescient 2016 Washington Post article titled “America wants to believe China can’t innovate. Tech tells a different story,” Emily Rauhala wrote “China’s tech scene is flourishing in a parallel universe.” TikTok’s deep cultural impact gave a glimpse of what is possible when two parallel universes connect. Along with geopolitical tensions, the furore over TikTok and WeChat uncovers something else: that the exchange of ideas and information between people in two of the world’s most powerful countries is becoming increasingly restricted due to circumstances beyond their control.

TikTok, WeChat and the growing digital divide between the U.S. and China

Over the past decade, the dynamic between Chinese and United States tech companies has undergone dramatic shifts. Once seen as a promising market for American companies, that narrative flipped as China’s tech innovation and investment power became increasingly evident, and the expanding reach of the Chinese Communist Party’s cybersecurity regulations fueled concerns about data privacy. For years, however, there still seemed to be room for a flow of ideas between the two countries. But that promise has eroded, against the backdrop of the tariff wars and, most recently, the Trump administration’s executive orders against TikTok and WeChat.

The U.S. Commerce Department was set to enforce the shutdown of TikTok and WeChat in the United States last weekend, but both apps got reprieves. In WeChat’s case, a U.S. district court judge issued a temporary stay against the ban, while TikTok owner ByteDance is in the process of finalizing a complicated deal with Oracle.

The TikTok and WeChat imbroglios underline how much America’s perception of Chinese tech has evolved. Not only is TikTok the first consumer app by a Chinese company to gain a major foothold in the United States, but it’s also had a significant impact on popular culture there. This would have been almost unimaginable just ten, or even five, years ago.

China as a target for expansion

For a long time, China, with its population of 1.4 billion people, was seen as a lucrative market by many foreign tech companies, even as government censorship began to expand. In 2003, China’s Ministry of Public Security launched the Golden Shield Project, commonly referred to as the Great Firewall of China, the apparatus that controls what overseas sites and apps Chinese internet users have access to. At first the Great Firewall mainly targeted access to Chinese-language sites with anti-Chinese Communist Party content. Then it began blocking more services.

A laptop computer screen in Beijing shows the homepage of Google.cn, 26 January 2006, a day after its debut in mainland China where the US online search engine launched a new service after agreeing to censor websites and content banned by the Beijing authorities (AFP PHOTO/Frederic J. BROWN)

A laptop computer screen in Beijing shows the homepage of Google.cn, 26 January 2006, a day after its debut in mainland China where the US online search engine launched a new service after agreeing to censor websites and content banned by the Beijing authorities (AFP PHOTO/Frederic J. BROWN)

Even as the Communist Party’s online censorship became more stringent, many American internet companies were still keen to expand into China. Perhaps the most prominent example from that era is Google, which added Chinese support to Google.com in 2000.

Though access to the search engine was spotty (according to a 2010 timeline from the Financial Times, this may have been because of “extensive filtering” by China’s licensed internet service providers) and it was briefly blocked in 2002, Google continued launching new services targeted to users in China, including a simplified Chinese language version of Google News.

Then in 2005, the company announced plans to set up a research and development center in China. The next year, it officially launched Google.cn. In order to do so, Google agreed to exclude search results on sensitive political topics, causing controversy.

Despite its concessions to the Chinese government, Google’s relationship with China began deteriorating, foreshadowing what other foreign tech companies, particularly those offering online services, would deal with when they tried to enter China. After being blocked on and off, access to YouTube was completely cut off in 2009 after footage was uploaded that appeared to show the brutal beatings of Tibetan protestors in Lhasa. That year, China also blocked access to Facebook and Twitter.

In January 2010, Google announced it was no longer willing to censor searches in China and would withdraw from the country if necessary. It also began redirecting all search queries on Google.cn to Google.com.hk.

But the company continued its R&D operations there and maintained a sales team. (In 2018, an investigation by The Intercept found that Google had started to work on a censored search engine for China again, code-named “Project Dragonfly”). Other big U.S. tech companies also continued courting China, even though their services were blocked there.

For example, Facebook chief executive Mark Zuckerberg made several trips to China in the mid-2010s, including a 2015 visit to Tsinghua University, a leading research university. Zuckerberg had joined the university’s board the previous year, and delivered several public talks in Mandarin. Speculation mostly focused on Facebook’s efforts to get a version of its service into China, but China-based companies were, and continue to be, one of Facebook’s most important sources of advertising revenue.

Chinese government policies designed to help domestic companies become more competitive also began to have an impact and by 2015, many American tech firms needed to find a local partner to enter China. The narrative that China needed American tech innovation began to turn on its head.

A shifting dynamic

Since Google Play was also blocked in China, that led the way for the rise of third-party Android app stores, including Chinese internet giant Tencent’s My App.

But Tencent’s most influential product is WeChat, the messenger that launched in 2011. Two years later, Tencent added mobile payments by integrating it with TenPay. In less than five years, WeChat became a vital part of daily life for hundreds of millions of users in China. WeChat Pay and Alibaba’s Alipay, its main competitor, have revolutionized payments in China, where about one-third of consumer payments are now cashless, according to research by think tank CGAP.

BEIJING, CHINA - SEPTEMBER 19: A Chinese customer uses his mobile to pay via a QR code with the WeChat app at a local market on September 19, 2020 in Beijing, China. (Photo by Kevin Frayer/Getty Images)

BEIJING, CHINA – SEPTEMBER 19: A Chinese customer uses his mobile to pay via a QR code with the WeChat app at a local market on September 19, 2020 in Beijing, China. (Photo by Kevin Frayer/Getty Images)

In 2017, Wechat launched “mini-programs,” that allows developers to create “apps within an app” that run on WeChat. The program took off quickly, and within less than two years, Tencent said it had reached one million mini-programs and 200 million daily users. Even Google quietly launched its own mini-program in 2018.

Despite its ubiquity in China, WeChat’s international presence is relatively small, especially when compared to other messengers like WhatsApp. WeChat claims more than one billion monthly active users in total, but only an estimated 100 million to 200 million are international users. Many are members of the Chinese diaspora who use it to keep in touch with family and associates in mainland China since many other popular messengers, including WhatsApp, Facebook Messenger and Line, are blocked there.

In the meantime, another company was gaining ascendancy, and would eventually succeed where Tencent hadn’t.

Founded in 2012 by Microsoft veteran Zhang Yiming, ByteDance had its own early run-ins with the Chinese government. The first app it launched, a social media platform called Neihan Duanzi that reached 200 million users by 2017, was shut down the next year after the National Radio and Television Administration accused it of hosting inappropriate content. Despite that early setback, ByteDance continued to grow, releasing apps like Toutiao, one of China’s top news aggregators.

But the product it is best known for launched in 2016. Called Douyin in China, ByteDance always planned to expand the short video-sharing app overseas. In an interview with Chinese tech news site 36Kr, Zhang said, “China is home to only one-fifth of the world’s internet users. If we don’t expand globally, we are bound to lose to our peers eyeing the rest of the world” — both echoing and contravening the viewpoint of U.S. internet companies that had seen China as a crucial market.

TikTok, the international version of Douyin, was launched in 2017. That year, ByteDance also bought Musical.ly, a lip-syncing app popular with teens, in a deal worth between $800 million to $1 billion. ByteDance merged Musical.ly with TikTok, consolidating their audiences.

By early 2019, TikTok had become popular among teens and people in their early 20s, though many older people still struggled to understand its appeal. But as TikTok was turning into a mainstay of Gen Z culture, it also began to face scrutiny by the U.S. government. In February 2019, the Federal Trade Commission fined TikTok $5.7 million for violating children’s privacy laws.

Then a few months later, the U.S. government reportedly began a national security review of TikTok, marking the first in a chain of events that led to Trump’s August executive order against the company, and ByteDance’s new, but confusing, agreement with “trusted technology partner” Oracle.

The impact of China’s 2017 cybersecurity law

The United States is not the only country where TikTok has been deemed a national security threat. In June, it was among 59 apps developed by Chinese companies banned in India for threatening the country’s “national security and defence.” It’s also under investigation by French data security watchdog CNIL over how it handles user data.

While some cybersecurity experts believe that TikTok’s data collection practices are similar to other social media apps that depend on targeted ads for revenue, the heart of the issue is a Chinese law, implemented in June 2017, that requires companies to comply with government requests for data stored in China. ByteDance has insisted repeatedly it would resist attempts by the Chinese government to access U.S. users’ data, which it says is stored in the United States and Singapore.

“Our data centers are located entirely outside of China, and none of our data is subject to Chinese law,” TikTok wrote in a October 2019 statement. “Further, we have a dedicated technical team focused on adhering to robust cybersecurity policies, and data privacy and security practices.”

In the same post, TikTok also addressed concerns that it censors content, including videos about the Hong Kong protests and China’s treatment of Uighurs and other Muslim groups. “We have never been asked by the Chinese government to remove any content and we would not do so if asked. Period,” the company said.

WeChat and TikTok’s uncertain future in the U.S.

But as a Chinese company, ByteDance is ultimately still beholden to Chinese laws. Earlier this week, ByteDance said it will retain an 80% stake in TikTok, after selling a total of 20% to Oracle and Walmart. Then Oracle executive vice president Ken Glueck said that Oracle and Walmart would make their investment upon the creation of a new entity called TikTok Global. He added that ByteDance will have no ownership in TikTok Global.

This creates more questions, but doesn’t answer the most pressing one: how close will the U.S. version of TikTok remain to ByteDance, and will it still be subject to the Chinese cybersecurity regulations that cause so much concern?

Around the same time that ByteDance’s proposed deal with Oracle and Walmart was announced, a U.S. district court judge temporarily stayed the nationwide ban on WeChat, as part of a case brought against the U.S. government by the U.S. WeChat Users Alliance, a nonprofit organization initiated by attorneys who want to preserve access to WeChat for users in America. In her opinion, Judge Laurel Beeler wrote, “while the government has established that China’s activities raise significant national-security concerns—it has put in scant little evidence that its effective ban of WeChat for all U.S. users addresses those concerns.”

On its site, the U.S. WeChat Users Alliance said it believes Trump’s August 6 executive order against WeChat “violates many provisions of the U.S. Constitution and the Administrative Procedure Act.” Furthermore, the group argued that a WeChat ban would “severely affect the lives and the work of millions of people in the U.S.” who use WeChat to talk to family, friends and business associates in China.

While WeChat is heavily censored, users have often found ingenious ways to bypass bans on topics deemed sensitive by the Chinese government. For example, people used emojis, PDFs and fictional languages like Klingon to share an interview with Ai Fen, the director of Wuhan Central Hospital’s emergency department and one of the first whistleblowers to sound the alarm about COVID-19 even as the government attempted to stifle information about the disease.

The growing divide

The U.S. government’s actions against TikTok and WeChat are taking place against an increasingly fraught political landscape. Huawei and ZTE were first identified as potential threats to U.S. national security in a 2012 bipartisan House committee report, but legal actions against Huawei, one of the world’s biggest telecom equipment suppliers, escalated under the Trump administration. These include criminal charges brought against Huawei by the Department of Justice, and the arrest and indictment of chief financial officer Meng Wanzhou.

The U.S. government’s actions in the name of national security doesn’t just affect the Chinese government or China’s biggest companies. It also impacts individuals, as in the case of increasingly stringent visa restrictions for Chinese students.

At the same time, the Great Firewall has become more restrictive under President Xi Jinping’s regime and China’s cybersecurity laws are becoming increasingly invasive, granting the government even more access to citizens’ data. Increasingly sophisticated surveillance technology has been used to monitor Uighurs and other ethnic minorities, and a crackdown on VPN services that began escalating in 2017 is making it harder for people in China to circumvent the Great Firewall.

When compared to these social issues, the future of a video-sharing app might seem relatively minor. But it underscores one of the most unsettling developments in the relationship between U.S. and China over the past ten years.

In a prescient 2016 Washington Post article titled “America wants to believe China can’t innovate. Tech tells a different story,” Emily Rauhala wrote “China’s tech scene is flourishing in a parallel universe.” TikTok’s deep cultural impact gave a glimpse of what is possible when two parallel universes connect. Along with geopolitical tensions, the furore over TikTok and WeChat uncovers something else: that the exchange of ideas and information between people in two of the world’s most powerful countries is becoming increasingly restricted due to circumstances beyond their control.

Daily Crunch: This TikTok deal is pretty confusing

Companies send out conflicting messages about the TikTok deal, Microsoft acquires a gaming giant and the WeChat ban is temporarily blocked. This is your Daily Crunch for September 21, 2020.

The big story: This TikTok deal is pretty confusing

This keeps getting more confusing. Apparently TikTok’s parent company ByteDance has reached a deal with Walmart and Oracle that will allow the Chinese social media app to continue operating in the United States, and the deal has been approved by Donald Trump. But it’s hard to tell exactly what this agreement entails.

ByteDance said it would retain 80% control of TikTok, while selling 20% of the company to Walmart and Oracle as “commercial partner” and “trusted technology partner,” respectively. However, Oracle released a seemingly conflicting statement, claiming that Americans will have majority ownership and “ByteDance will have no ownership in TikTok Global.”

So what’s going on here? We’re trying to figure it out.

The tech giants

Microsoft set to acquire Bethesda parent ZeniMax for $7.5B — ZeniMax owns some of the biggest publishers in gaming, including Bethesda Game Studios, id Software, ZeniMax Online Studios, Arkane, MachineGames, Tango Gameworks, Alpha Dog and Roundhouse Studios.

Trump administration’s WeChat ban is blocked by US district court — More news about the Trump administration’s efforts to ban some high-profile Chinese apps: A district court judge in San Francisco has temporarily stayed the nationwide ban on WeChat.

Nikola’s chairman steps down, stock crashes following allegations of fraud — This comes in the wake of a report from a noted short-seller accusing the electric truck company of fraud.

Startups, funding and venture capital

With $100M in funding, Playco is already a mobile gaming unicorn — Playco is a new mobile gaming startup created by Game Closure co-founder Michael Carter and Zynga co-founder Justin Waldron.

Indian mobile gaming platform Mobile Premier League raises $90 million — Mobile Premier League operates a pure-play gaming platform that hosts a range of tournaments.

A meeting room of one’s own: Three VCs discuss breaking out of big firms to start their own gigs — We talked to Construct Capital’s Dayna Grayson, Renegade Partners’ Renata Quintini and Plexo Capital’s Lo Toney.

Advice and analysis from Extra Crunch

Edtech investors are panning for gold — At Disrupt, investors told us how they separate the gold from the dust.

Despite slowdowns, pandemic accelerates shifts in hardware manufacturing — China continues to be the dominant global force, but the price of labor and political uncertainty has led many companies to begin looking elsewhere.

The Peloton effect — Alex Wilhelm examines the latest VC activity in connected fitness.

(Reminder: Extra Crunch is our subscription membership program, which aims to democratize information about startups. You can sign up here.)

Everything else

Ireland’s data watchdog slammed for letting adtech carry on ‘biggest breach of all time’ — The Irish Council for Civil Liberties is putting more pressure on the country’s data watchdog to take enforcement action.

Pandemic accelerated cord cutting, making 2020 the worst-ever year for pay TV — According to new research from eMarketer, the cable, satellite and telecom TV industry is on track to lose the most subscribers ever.

Original Content podcast: ‘Wireless’ shows off Quibi’s Turnstyle technology — I interviewed the director of the new Quibi series.

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.

Daily Crunch: This TikTok deal is pretty confusing

Companies send out conflicting messages about the TikTok deal, Microsoft acquires a gaming giant and the WeChat ban is temporarily blocked. This is your Daily Crunch for September 21, 2020.

The big story: This TikTok deal is pretty confusing

This keeps getting more confusing. Apparently TikTok’s parent company ByteDance has reached a deal with Walmart and Oracle that will allow the Chinese social media app to continue operating in the United States, and the deal has been approved by Donald Trump. But it’s hard to tell exactly what this agreement entails.

ByteDance said it would retain 80% control of TikTok, while selling 20% of the company to Walmart and Oracle as “commercial partner” and “trusted technology partner,” respectively. However, Oracle released a seemingly conflicting statement, claiming that Americans will have majority ownership and “ByteDance will have no ownership in TikTok Global.”

So what’s going on here? We’re trying to figure it out.

The tech giants

Microsoft set to acquire Bethesda parent ZeniMax for $7.5B — ZeniMax owns some of the biggest publishers in gaming, including Bethesda Game Studios, id Software, ZeniMax Online Studios, Arkane, MachineGames, Tango Gameworks, Alpha Dog and Roundhouse Studios.

Trump administration’s WeChat ban is blocked by US district court — More news about the Trump administration’s efforts to ban some high-profile Chinese apps: A district court judge in San Francisco has temporarily stayed the nationwide ban on WeChat.

Nikola’s chairman steps down, stock crashes following allegations of fraud — This comes in the wake of a report from a noted short-seller accusing the electric truck company of fraud.

Startups, funding and venture capital

With $100M in funding, Playco is already a mobile gaming unicorn — Playco is a new mobile gaming startup created by Game Closure co-founder Michael Carter and Zynga co-founder Justin Waldron.

Indian mobile gaming platform Mobile Premier League raises $90 million — Mobile Premier League operates a pure-play gaming platform that hosts a range of tournaments.

A meeting room of one’s own: Three VCs discuss breaking out of big firms to start their own gigs — We talked to Construct Capital’s Dayna Grayson, Renegade Partners’ Renata Quintini and Plexo Capital’s Lo Toney.

Advice and analysis from Extra Crunch

Edtech investors are panning for gold — At Disrupt, investors told us how they separate the gold from the dust.

Despite slowdowns, pandemic accelerates shifts in hardware manufacturing — China continues to be the dominant global force, but the price of labor and political uncertainty has led many companies to begin looking elsewhere.

The Peloton effect — Alex Wilhelm examines the latest VC activity in connected fitness.

(Reminder: Extra Crunch is our subscription membership program, which aims to democratize information about startups. You can sign up here.)

Everything else

Ireland’s data watchdog slammed for letting adtech carry on ‘biggest breach of all time’ — The Irish Council for Civil Liberties is putting more pressure on the country’s data watchdog to take enforcement action.

Pandemic accelerated cord cutting, making 2020 the worst-ever year for pay TV — According to new research from eMarketer, the cable, satellite and telecom TV industry is on track to lose the most subscribers ever.

Original Content podcast: ‘Wireless’ shows off Quibi’s Turnstyle technology — I interviewed the director of the new Quibi series.

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.

How to make the most of iOS 14 widgets and iPhone home screen customization

You’ve probably seen the screenshots going around that show iOS home screens that differ considerably from the stock options that Apple provides. Yes, if you’re an Android user you’re probably laughing at iPhone owners for finally (nearly) catching up to the customization features they’ve had for years, but if you’re an iOS fan, you probably just want to know how to join in. It’s actually relatively easy – provided you’ve got some time to spare, and you don’t mind a few slightly hacky workaround (don’t worry, no jailbreaking required).

Widgets

The big new addition that’s prompting all the shared screens across social media are home screen widgets, which are supported under iOS 14 for the first time. These can be either first- or third-party, and are included with apps you download from the App Store. There are a number of developers who pushed to ensure they were ready at or near the launch of iOS, and Sarah has created a growing list of some of the best for you to check out if you’re not sure where to start.

One of my personal favorite widget apps is Widgetsmith, an app that, as its name suggest, was created pretty much entirely for the purpose of making them. It allows you a range of customization options, has a number of handy, useful functions including calendar, weather and clock, and comes with different font choices to best suit your style. I’ve always aimed to create a clean, single tone look with iOS as much as possible, and Widgetsmith is the best I’ve found so far for creating homescreen displays that look like they’re borderless (provided your iOS wallpaper is a solid color that matches one of those the app supports).

Widgets are great at providing at-a-glance information that you don’t typically want to dive into an app to retrieve, right on your homescreen where you need them. Some can shortcut to useful features, like the search widget built into Google’s iOS app, but most are made primarily to reduce the amount of time you spend actually inside the apps themselves.

Custom app icons

While Widgets are new, another big component of this customization push is not – that’s the ability to create custom homescreen icons for iOS apps. That’s been around ever since Apple introduced its Shortcuts app on iOS a couple of years ago, but many people are discovering the feature for the first time as a result of the increased attention around homescreen customization with the introduction of Widgets in iOS 14.

[gallery ids="2049681,2049682"]

Creating custom icons on iOS isn’t actually doing that, strictly speaking – what you’re in fact doing is creating new Shortcuts that trigger the launch of an app, and using a custom image for that bookmark that then lives on your homescreen instead. This is not an ideal solution, because it means that A) you won’t have any notification badges on your ‘apps,’ and B) the system first directs you to Apple’s Shortcuts app, which opens for a split-second before bumping you into the actual app you selected for the shortcut.

Apple clearly didn’t design this Shortcuts feature for this use (opening a target app is meant to be the start of a string of automated actions), but Apple also hasn’t really ever seemed interested in letting users choose their own custom icons, so it’s the best we can do for now. Luckily, the process is relatively simple. Unluckily, there are a lot of steps involved, so it’s pretty time-consuming to customize your entire homescreen.

Here’s a video of how to do this as simply as possible:

Image Credits: Darrell Etherington

There are some fantastic examples out there of what creative individuals have been able to do with this, given a little time and some elbow grease. With more widget options coming online all the time, we’ve probably only begun to see the limits of testing the boundaries of what’s possible under Apple’s rules, too.

How to make the most of iOS 14 widgets and iPhone home screen customization

You’ve probably seen the screenshots going around that show iOS home screens that differ considerably from the stock options that Apple provides. Yes, if you’re an Android user you’re probably laughing at iPhone owners for finally (nearly) catching up to the customization features they’ve had for years, but if you’re an iOS fan, you probably just want to know how to join in. It’s actually relatively easy – provided you’ve got some time to spare, and you don’t mind a few slightly hacky workaround (don’t worry, no jailbreaking required).

Widgets

The big new addition that’s prompting all the shared screens across social media are home screen widgets, which are supported under iOS 14 for the first time. These can be either first- or third-party, and are included with apps you download from the App Store. There are a number of developers who pushed to ensure they were ready at or near the launch of iOS, and Sarah has created a growing list of some of the best for you to check out if you’re not sure where to start.

One of my personal favorite widget apps is Widgetsmith, an app that, as its name suggest, was created pretty much entirely for the purpose of making them. It allows you a range of customization options, has a number of handy, useful functions including calendar, weather and clock, and comes with different font choices to best suit your style. I’ve always aimed to create a clean, single tone look with iOS as much as possible, and Widgetsmith is the best I’ve found so far for creating homescreen displays that look like they’re borderless (provided your iOS wallpaper is a solid color that matches one of those the app supports).

Widgets are great at providing at-a-glance information that you don’t typically want to dive into an app to retrieve, right on your homescreen where you need them. Some can shortcut to useful features, like the search widget built into Google’s iOS app, but most are made primarily to reduce the amount of time you spend actually inside the apps themselves.

Custom app icons

While Widgets are new, another big component of this customization push is not – that’s the ability to create custom homescreen icons for iOS apps. That’s been around ever since Apple introduced its Shortcuts app on iOS a couple of years ago, but many people are discovering the feature for the first time as a result of the increased attention around homescreen customization with the introduction of Widgets in iOS 14.

[gallery ids="2049681,2049682"]

Creating custom icons on iOS isn’t actually doing that, strictly speaking – what you’re in fact doing is creating new Shortcuts that trigger the launch of an app, and using a custom image for that bookmark that then lives on your homescreen instead. This is not an ideal solution, because it means that A) you won’t have any notification badges on your ‘apps,’ and B) the system first directs you to Apple’s Shortcuts app, which opens for a split-second before bumping you into the actual app you selected for the shortcut.

Apple clearly didn’t design this Shortcuts feature for this use (opening a target app is meant to be the start of a string of automated actions), but Apple also hasn’t really ever seemed interested in letting users choose their own custom icons, so it’s the best we can do for now. Luckily, the process is relatively simple. Unluckily, there are a lot of steps involved, so it’s pretty time-consuming to customize your entire homescreen.

Here’s a video of how to do this as simply as possible:

Image Credits: Darrell Etherington

There are some fantastic examples out there of what creative individuals have been able to do with this, given a little time and some elbow grease. With more widget options coming online all the time, we’ve probably only begun to see the limits of testing the boundaries of what’s possible under Apple’s rules, too.