Last week Germany blocked the sale of a satellite and radar firm to a Chinese state-backed buyer, the latest in a cooling of corporate relations between the two countries.

China Aerospace and Industry Group (CASIC) had tried to buy IMST, a Duisberg-based firm founded in 1992 and known for a series of radar module innovations helping enable 5G and 6G telecommunications rollouts.

The company is also a key partner to the German Aerospace Center (DLR) – a key reason Berlin vetoed the move on national security grounds, according to a document seen by Reuters.

The block marks a high point in tension between Berlin and Beijing, as the former takes steps to prevent Chinese takeovers of German firms with sensitive technology or information.

Under new rules the German government may intervene if a foreign investor attempts to buy a 10% stake in a German company, rather than the previous threshold of 25%.

Last week’s news follows the 2018 block of a sale of toolmaker Leifeld by Yantai Taihai, and China’s State Grid’s attempt to buy grid operator 50Hertz the same year.

States across the EU have grown fearful that China may use the COVID-19 pandemic to snap up weakened European firms at bargain prices. This contradicts the fact that Chinese investment in Europe has actually dropped significantly: the $13 billion China spent last year is a third that of 2016.

Nonetheless, Germany’s toughening stance is a striking moment given Berlin’s cosy ties with Beijing. Human-rights issues have brought its leading corporations’ operations in the Middle Kingdom into question: Volkswagen, Daimler, BMW and BASF all have large manufacturing plants in the Xinjiang region, where China is forcibly detaining hundreds of thousands of Muslim Uighurs.

The EU hopes incoming US President Joe Biden will dampen some of Donald Trump’s most fiery trade standoffs with China, and work with allies on economic progress with Beijing. Brussels’ Comprehensive Agreeement on Investment (CAI) with China is seen as a legacy issue for German Chancellor Angela Merkel, who leaves office next year after 16 in the role.

But negotiations have passed six years and 34 rounds. Some believe its chief goal—opening a level playing field for access to the Chinese market—is far too optimistic.

The post Germany Blocks China Satellite Buy, Steps Up Corporate Defenses appeared first on Red Herring.

Volkswagen, Germany’s largest company, knows where its future lies. The Wolfsburg-based giant, with quarterly revenues of $69 billion, has committed $91bn to electric vehicles (also shortened to NEVs, or new energy vehicles) by 2025 – double that of second-place compatriot Daimler.

And it knows where that NEV battle will be won: China. VW already sells around 40% of its 11m vehicles in the Middle Kingdom, alongside three joint ventures. By 2035 China will buy an estimated 50 million NEVs per year. That’s nearly as many as the global car market today. By then, Volkswagen wants its entire range to be offered as NEVs.

That is a huge undertaking. But it is a necessary one. China has been VW’s biggest market for over a decade. Volkswagen chief Herbert Diess admitted in 2019 that his company’s future would be decided in China. With Tesla and a glut of Chinese startups hot on his heels, Diess has put his foot on the electric pedal.

The biggest issue in securing an NEV future is batteries. China has a stranglehold on the global supply chain of minerals required to build electric motors. Getting ahead of this, last year VW invested $2.33 billion in a pair of Chinese NEV players: JAC, which was already a partner, and Guoxuan, a battery company.

Elon Musk’s Tesla may have built China’s first fully foreign-owned factory, the Gigafactory 3, outside Shanghai. And NEV startups such as NIO, Li Auto and Xpeng have impressed customers. But Volkswagen’s long history in China—it was the nation’s first foreign automaker in 1978—and its strong brand, put it in a commanding position with the right acquisitions.

“The key in China is to lower the cost of manufacturing the electronic cars,” says Bo Kuan Chen, an analyst at Shanghai-based Daxue Consulting. “But the peak technology is the battery: trying to develop batteries with much higher quality and lower costs.”

VW’s 2020 buys “give them a leg up,” adds Beijing auto consultant Tu Le, “but less about the nostalgia and more about its capabilities because they’ve been here the longest, so they have the largest footprint.”

With GM, Daimler and BMW sales flagging relatively, and Chinese startups set to emerge and fail in the early stages of China’s NEV revolution, it seems VW and Tesla will fight it out for market dominance.

In Wolfsburg, “Mission T” aims to streamline Volkswagen, take on software experts and become more like a Silicon Valley platform, than a German engineering behemoth. VW has already offloaded luxury supercar brand Bugatti to Croatian NEV firm Rimac. Other top-end marques will surely soon be sold too.

VW is “better off trying to leverage their current advantages to carve out their own place in the market,” says Le. “Diess is saying it. Elon is and has been already doing it.” While Tesla has SolarCity, SpaceX and even flamethrowers, Volkswagen has cars and little else. Brand strengthening, therefore, will be key heading into the next 12 months.

Can an 87-year-old company with over 650,000 staff become a software startup in the mould of Silicon Valley? 2021 will show. Should Volkwagen move in a typically lumbering German industry fashion, it may already have lost the race for China by 2022.

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The death of an e-commerce employee in western China has caused an outcry about lengthy working hours at the country’s tech giants – with state media joining the call.

On December 29 a 22-year-old woman surnamed Zhang, working at the Xinjiang branch of fresh-produce e-commerce platform Pinduoduo, collapsed while walking home from the office with colleagues. She died later in hospital.

Citizens flooded social media with messages of sympathy for the woman, and slammed China’s “996” culture, which encourages employees to work from 9am to 9pm, six days a week.

“The death of such a young employee hurts me,” wrote Lijia Zhang in the South China Morning Post yesterday. “Throughout the 1980s, I was also an employee. Luckily, I worked in a state-owned factory where the workload was never intense and overtime was always paid for. In those days, workers were hailed as the “masters of the nation”. Why have these “masters” become slaves to work?”

In a reflection of top-level concerns within the Chinese Communist Party’s politburo, state news agency Xinhua joined the chorus of dissent, calling long overtime hours at workers’ expense “illegal.”

“When I was working at Pinduoduo, I started working at 11am and usually finished at 11p. or 12pm, six days a week,” an employee who gave his surname as Wang told Xinhua.

It is not just Shanghai-based Pinduoduo that has come under the spotlight. A video has recently circulated of a driver for e-commerce brand Ele.me, part of the Alibaba Group, setting himself on fire to protest unpaid wages.

China’s state authorities have declared their intent to crack down on issues of antitrust and employee health at the nation’s leading tech companies, whose operations have accelerated to underpin China’s consumer economy during the ongoing COVID-19 pandemic.

Despite the crisis, Chinese consumers spent 16% more on e-commerce in 2020 than they did the previous year.

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Human resources tech startup DarwinBox has raised a $15 million Series C funding round, as it aims to scale its platform deeper into the southeast Asian market.

The round, led by Salesforce Ventures with participation from existing investors Sequoia India and Lightspeed, brings DarwinBox’s total cash injection above $30m. The 2015-founded firm claims to have grown more than 300% since its 2019 Series B round, as the COVID-19 pandemic has forced work-from-home hierarchies to turn to tech for their hiring solutions.

“Cloud adoption in Asia is growing at a monumental pace and the pandemic has only further amplified the importance of going digital,” said Alex Kayyal, partner and head of international at Salesforce Ventures.

Hyderabad-headquartered DarwinBox has already grabbed some of southeast Asia’s leading companies including Tokopedia and Alodokter. As the region’s workforce continues to get younger—its median age is just 30 years today—DarwinBox believes its SaaS model will see ever-higher adoption.

“More enterprises are abandoning legacy solutions in favour of our modern, agile platform that helps them stay ahead of change,” said Jayant Paleti, one of DarwinBox’s three founders.

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Uisee, a Chinese autonomous mobility startup, has announced a $155 million funding round, as China continues to dominate emerging markets for self-driving and new-energy vehicles (NEVs).

In a signal that China’s Communist Party (CCP) plans to expand its own coffers with the spoils of the global car industry, Uisee’s latest backing was led by the simply-named China Development Bank Manufacturing Transformation and Upgrading Fund, an arm of the country’s Ministry of Finance.

The money will help 2016-founded Uisee, headquartered in Beijing with over 300 scientists and engineers across China, roll out its Level-4 autonomous technology—which allows cars to be driven almost entirely human-free—domestically. The company already has a partnership with SAIC-GM-Wuling Automobile, one of China’s largest vehicle manufacturers. It also provides self-driving trailers to Hong Kong’s international airport.

Uisee is one of many mobility tech firms to emerge as key players in the burgeoning market in recent years. Guangzhou’s WeRide, which develops robo-taxis, has announced a $310m Series B round.

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Saudi Arabian firm Foodics, which has created an all-in-one restaurant management system, has raised a $20 million Series B funding round, as it bids to expand into the micro-lending industry.

The 2014-founded company, headquartered in Saudi capital Riyadh, has “revolutionized the food tech scene in Saudi Arabia and the UAE,” its website writes, “and is steadily growing in the rest of the GCC region.”

Foodics’ latest funding, which brings its total backing to $28m, was led by the Saudi government’s Public Investment Fund subsidiary Sanabil, and Saudi Technology Ventures (STV). It claims to have served 10,000 F&B clients with its cloud-based POS platform, which includes a variety of features including table management and employee timesheets.

“2020 was a tough year during which we have proactively captured opportunities,” said Foodics co-founder and CEO Ahmad al-Zaini. “We are very thankful to all our clients, investors and partners who have joined us on this journey so far, and look forward to more success together in the future.”

The firm has also won a $100m injection from compatriot fund Maleem Investments to found Foodics Capital, a Shariah-compliant micro-lending solution for F&B ventures in the region.

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Singapore-based edtech startup Cialfo, which uses data to streamline college and career workflows, has extended its Series A funding round to the tune of $15 million.

The new round, spearheaded by Vulcan Capital and trader SIG with fellow new entrants January Capital and Bisk Ventures, was joined by existing investors Imobillari, Multi-Family Office, DLF Venture and Alto Partners. It will help Cialfo scale into Southeast Asia, China and India.

Cialfo will also use the money to develop AI and science-based products, and pair with leading universities to provide online and other mixed courses – the demand for which has skyrocketed in the year since the COVID-19 pandemic broke out.

“The adoption of technology-driven education solutions is rising at an unprecedented rate,” said Rohan Pasari, CEO of Cialfo. “A standstill on global travel has upended education entirely – forcing high schools and universities to engage current and potential students virtually.”

The post Singapore’s Cialfo Closes $15m Series A Funding Extension appeared first on Red Herring.

Meesho, India’s largest reselling website, has negotiated a $250 million funding round led by SoftBank’s Vision Fund, the Economic Times has reported.

The round, if completed, will value Meesho at between $1.5bn and $1.8bn, making it India’s 40th tech “unicorn” company – that is, a privately-backed venture worth a billion dollars or more. Its previous round, a Series D completed in August 2019, raised $125m from South African Internet retailers Naspers and social media giant Facebook.

Meesho currently claims 70m customers and 10m resellers on its site, which was founded in 2015 in Bengaluru, widely acknowledged as India’s tech capital. Last year its revenue leapt almost fourfold to $42m.

Despite heavy competition from the likes of Dealshare and Glowroad, Meesho has maintained its number one spot in India’s social commerce sector. The industry is expected to reach a value of up to $70bn by 2030 according to Bain & Company, a consultant.

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Startups backed by influential Israel-based equity crowdfunding group OurCrowd are looking to hire in greater numbers, despite the lingering COVID-19 pandemic.

The number of jobs listed by OurCrowd’s global portfolio companies more than doubled from 350 in June 2020 to 912 in December 2020. The number of job openings in Israel rose by 400% during the same period to more than 200. The positions were advertised by 100 of OurCrowd’s portfolio of companies and funds.

OurCrowd partner and head of business development Laly David says: “We are thrilled to see the growth and job creation taking place within our portfolio companies. Despite the lingering pandemic and fears that the economy would take a long time to recover, many of the startups backed by OurCrowd are already emerging strongly from the downturn.”

Looking forward, companies surveyed for the OurCrowd Jobs Index forecast that the job growth would continue through 2021. Most also said they expect to maintain a mix of in-person and remote working.

“We will be expanding our global team further in 2021,” says Howard Edelstein, CEO of BioCatch, a behavioral biometrics company providing fraud prevention solutions to financial services. “With almost 200 employees on board we are hiring across all departments and hope to grow to 250 employees by the end of this year.”

Demand for software engineers has grown the fastest. But demand has also increased to a lesser extent in most other areas as well. About a third of the surveyed companies said they have hired more aggressively during the pandemic than before the novel coronavirus shut down much of the global economy and sharply reduced travel. 

About 23% of surveyed companies said they had hired at a slower pace since the start of the pandemic.Each day during the fourth quarter of 2020, OurCrowd companies posted an average of 14 job openings, up from 13 per day during the third quarter and 10 per day during the second quarter, when uncertainty over the pandemic and the economy was at a peak. 

“Memic will continue the process of expanding its commercial team in the US, adding new employees in all segments including sales, customer support, professional education, marketing, product management, and clinical affairs,” says Dvir Cohen, CEO of Memic Innovative Surgery Ltd. “Memic will enhance its research and operational capabilities to expand targeted applications and surgical disciplines, adding software developers, artificial intelligence experts, project managers, mechanical and systems engineers.”

Even as COVID-19 vaccines are being rolled out in Israel and elsewhere, only 14.3%, of surveyed portfolio companies expect all their employees will be back in the workplace by July 1, 2021. 85.7%, expect a mix of in-person and remote work.

Though hiring has picked up, some companies indicated they were still somewhat cautious, with 52.5% of surveyed startups saying they expect ‘cautious hiring’ through 2021. Meanwhile 47.6% said they plan ‘aggressive hiring’ through 2021.

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Israeli venture capital fund YL Ventures has sold its stake in compatriot cybersecurity firm Axonius – just days after the latter was valued at over a billion dollars.

The stake, worth around $270 million, was purchased by ICONIQ Growth, DTCP, Harmony Partners and Alkeon Capital Management. It is YL’s first major return since it began its $75m fund in 2017.

Axonius, which markets itself on allowing clients a comprehensive asset inventory, was founded the same year, and picked up by YL as one of its early-stage investments. YL still has stakes in six other startups, and closed a fourth, $120m fund most recently in 2019.

It seems like a win-win for Axonius and YL. ICONIQ Growth is a renowned late-stage investor that has backed headline tech companies including Crowdstrike, Adyen and Zoom, among others.

“The transition from early-stage to late-stage investors just makes sense as we drive toward IPO, and it allows each investor to focus on what they do best,” Dean Sysman, co-founder and CEO of Axonius, told TechCrunch.

“We appreciate the guidance and support the YL Ventures team has provided during the early stages of our company and we congratulate them on this successful journey.”

The post Israel’s YL Ventures Sells Axonius Stake for $270m, Just a Week After Unicorn Valuation appeared first on Red Herring.