China’s tech chiefs in retreat

ByteDance founder Zhang Yiming has become the latest Chinese tech chief to step out of the limelight as geopolitics and greater regulation bear down on leading companies.

Zhang, 38, founded ByteDance almost a decade ago and steered the Beijing-based group that has developed hit apps including TikTok and its sister Chinese platform Douyin through a period of US-China tensions, report our Beijing team. Last August, former Disney executive Kevin Mayer quit as TikTok chief executive just months into his tenure, citing changes in the political environment.

Zhang will step down as chief executive at the end of the year and be replaced by co-founder and head of human resources Liang Rubo. Lex says the new boss faces the daunting task of simultaneously appeasing Washington and Beijing, where a crackdown on tech giants is under way. 

Colin Huang, founder of Pinduoduo, left the ecommerce group in March, while food delivery group Meituan is facing an antitrust probe. Its shares tumbled last week after its founder, Wang Xing, posted an ancient poem that some interpreted as a critique of Chinese president Xi Jinping.

Ant’s chief executive Simon Hu resigned in March as the fintech prepared to undertake a restructuring ordered by regulators. Ant’s ecommerce affiliate Alibaba was fined a record $2.8bn last month after regulators found it had abused its market dominance. Jack Ma, the founder of both companies, has hardly been seen in public since criticising China’s regulators and state-owned banks in a speech in Shanghai late last year.

“Founders of China’s tech unicorns have built enormous personal charisma. Beijing is worried that they may grow political ambition, or at the very least influence the political agenda-setting with their popularity,” says Feng Chucheng, founding partner at consultancy Plenum.ai.

Meanwhile, US companies are lobbying for a Korean tech leader to be brought back into the limelight. They are urging President Moon Jae-in of South Korea to release Samsung chair Lee Jae-yong from prison, arguing that the billionaire executive could boost Joe Biden’s efforts to shake off American dependence on computer chips produced in foreign countries, with Samsung considering semiconductor facilities in the US.

The Internet of (Five) Things

1. Chip shortage hits Cisco, boosts used car prices
Cisco Systems has been hit by the shortage of semiconductors that is driving prices higher and pushing up costs throughout the supply chain. The US networking equipment maker warned higher costs would hit profit margins in its current quarter. Alphaville reports on the knock-on effect on the used car market from chip scarcity in the auto industry.

2. Bitcoin is a “dirty currency”
The Chinese province of Inner Mongolia, a centre of coal-fired power plant growth, has asked residents to blow the whistle on neighbours they suspect of being cryptocurrency miners, in a new sign of how authorities in the country are cracking down on the booming industry and its energy consumption. Today’s Big Read looks at the environmental cost of bitcoin mining, particularly as rising prices draw in miners with less efficient machines. After Wednesday’s big swings in bitcoin’s price, Rob Armstrong writes in our new Unhedged newsletter that the cryptocurrency is best thought of as equity in a company whose only asset is a promising but unproven technology. David Stevenson has just invested in an NFT fund.

3. Tencent revenues up 25 per cent
Under the watchful eye of regulators, social and gaming giant Tencent beat expectations with 25 per cent revenue growth to Rmb135bn ($21bn) in its latest quarter, led by its fintech and business services unit, which includes mobile payments platform WeChat Pay. Chinese financial regulators warned Tencent and other companies to “rectify prominent problems” on their payments platforms at the end of April.

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4. Hackers threaten to publish Irish data
Patient and other confidential data stolen from Ireland’s healthcare system will be published online and sold unless a $20m ransom is paid by Monday, an account claiming to be the hackers warned on Wednesday night. The ContiLocker Team account has already shared a sample of 27 files including information related to 12 named individuals.

5. Media deals are ‘tip of streaming iceberg’
Anders Jensen, head of Stockholm-based Nent, which has styled itself as Europe’s answer to Netflix, has called the recent burst of media deals “the tip of a consolidation iceberg” driven by traditional television players rushing to catch up with consumer behaviour. He announced the launch of his Viaplay service in the Netherlands early next year, the tenth country in Nent’s international expansion. The FT View is that advertisers must work out new ways of reaching streaming services’ audiences.

Forwarded from Sifted — the European start-up week

Interest from US venture capital firms in European tech companies has accelerated dramatically over the past two years, according to new data, reaching an all-time high last month. Less than halfway through the year, American investors have already put €10.1bn into Europe’s start-ups, according to Dealroom, easily surpassing the €9.3bn invested in all of 2020.
One of the US firms leading the way in Europe is Sequoia, which this week hired its third European partner and led a $750m funding round for German trading app Trade Republic. Another is Tiger Global, which has been on a shopping spree in Europe (and around the world), this week leading the $100m funding round into Paris-based Ankorstore along with Bain Capital Ventures.

In other European start-up news this week, Sifted mapped out all the female partners at European venture capital firms; former Monzo CEO Tom Blomfield talked about turning to angel investing; and a debate raged about whether the European university tech transfer system needs an overhaul. 

Tech tools — Cineworld’s cinematic gaming

Cinema chains are having to be more resourceful in these pandemic times, with Cineworld announcing availability today across 100 UK cinemas of a video gamer offering. Players can “experience state of the art projection and high-quality immersive sound in a Covid-safe environment” while enjoying the latest releases or cult classics on the big screen. Console and game hire is part of the service. Prices start from £119 for a party of 20, including screen hire for 2 hours, with the obligatory popcorn and drinks available for an extra £4.95 per person.