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Africa’s top mobile phone seller Transsion to list in Chinese IPO

Chinese mobile-phone and device maker Transsion will list in an IPO on Shanghai’s STAR Market, Transsion confirmed to TechCrunch.
The company—which has a robust Africa sales network—could raise up to 3 billion yuan (or $426 million).
“The company’s listing-related work is running smoothly. The registration application and issuance process is still underway, with the specific timetable yet to be confirmed by the CSRC and Shanghai Stock Exchange,” a spokesperson for Transsion’s Office of the Secretary to the Chairman told TechCrunch via email.
Transsion’s IPO prospectus was downloadable (in Chinese) and its STAR Market listing application available on the Shanghai Stock Exchange’s website.
STAR is the Shanghai Stock Exchange’s new Nasdaq-style board for tech stocks that also went live in July with some 25 companies going public. 
Headquartered in Shenzhen—where African e-commerce unicorn Jumia also has a logistics supply-chain facility—Transsion is a top-seller of smartphones in Africa under its Tecno brand.
The company has a manufacturing facility in Ethiopia and recently expanded its presence in India.
Transsion plans to spend the bulk of its STAR Market raise (1.6 billion yuan or $227 million) on building more phone assembly hubs and around 430 million yuan ($62 million) on research and development,  including a mobile phone R&D center in Shanghai—a company spokesperson said. 
Transsion recently announced a larger commitment to capturing market share in India, including building an industrial park in the country for manufacture of phones to Africa.
The IPO comes after Transsion announced its intent to go public and filed its first docs with the Shanghai Stock Exchange in April. 
Listing on the STAR Market will put Transsion on the freshly minted exchange seen as an extension of Beijing’s ambition to become a hub for high-potential tech startups to raise public capital. Chinese regulators lowered profitability requirements, for the exchange, which means pre-profit ventures can list.
Transsion’s IPO process comes when the company is actually in the black. The firm generated 22.6 billion yuan ($3.29 billion) in revenue in 2018, up from 20 billion yuan from a year earlier. Net profit for the year slid to 654 million yuan, down from 677 million yuan in 2017, according to the firm’s prospectus.
Transsion sold 124 million phones globally in 2018, per company data. In Africa, Transsion holds 54% of the feature phone market—through its brands Tecno, Infinix, and Itel—and in smartphone sales is second to Samsung and before Huawei, according to International Data Corporation stats.
Transsion has R&D centers in Nigeria and Kenya and its sales network in Africa includes retail shops in Nigeria, Kenya, Tanzania, Ethiopia and Egypt. The company also attracted attention for being one of the first known device makers to optimize its camera phones for African complexions.
On a recent research trip to Addis Ababa, TechCrunch learned the top entry-level Tecno smartphone was the W3, which lists for 3600 Ethiopian Birr, or roughly $125.
In Africa, Transsion’s ability to build market share and find a sweet spot with consumers on price and features gives it prominence in the continent’s booming tech scene.

Diving deep into Africa’s blossoming tech scene

Africa already has strong mobile-phone penetration, but continues to undergo a conversion from basic USSD phones, to feature phones, to smartphones.
Smartphone adoption on the continent is low, at 34 percent, but expected to grow to 67 percent by 2025, according to GSMA.
This, added to an improving internet profile, is key to Africa’s tech scene. In top markets for VC and startup origination—such as Nigeria, Kenya, and South Africa—thousands of ventures are building business models around mobile-based products and digital applications.
If Transsion’s IPO enables higher smartphone conversion on the continent that could enable more startups and startup opportunities—from fintech to VOD apps.
Another interesting facet to Transsion’s IPO is its potential to create greater influence from China in African tech, in particular if the Shenzhen company moves strongly toward venture investing.
Comparatively, China’s engagement with African startups has been light compared to China’s deal-making on infrastructure and commodities—further boosted in recent years as Beijing pushes its Belt and Road plan.
Transsion’s IPO move is the second recent event—after Chinese owned Opera’s big venture spending in Nigeria—to reflect greater Chinese influence and investment in the continent’s digital scene.
So in coming years, China could be less known for building roads, bridges, and buildings in Africa and more for selling smartphones and providing VC for African startups.

Opera founded startup OPay raises $50M for mobile finance in Nigeria

Africa’s top mobile phone seller Transsion to list in Chinese IPO

App revenue tops $39 billion in first half of 2019, up 15% from first half of last year

App store spending is continuing to grow, although not as quickly as in years past. According to a new report from Sensor Tower, the iOS App Store and Google Play combined brought in $39.7 billion in worldwide app revenue in the first half of 2019 — that’s up 15.4% over the $34.4 billion seen during the first half of last year. However, at that time, the $34.4 billion was a 27.8% increase from 2017’s numbers, then a combined $26.9 billion across both stores.
Apple’s App Store continues to massively outpace Google Play on consumer spending, the report also found.
In the first half of 2019, global consumers spent $25.5 billion on the iOS App Store, up 13.2% year-over-year from the $22.6 billion spent in the first half of 2018. Last year, the growth in consumer spending was 26.8%, for comparison’s sake.
Still, Apple’s estimated $25.5 billion in the first half of 2019 is 80% higher than Google Play’s estimated gross revenue of $14.2 billion — the latter a 19.6% increase from the first half of 2018.
The major factor in the slowing growth is iOS in China, which contributed to the slowdown in total growth. However, Sensor Tower expects to see China returning to positive growth over the next 12 months, we’re told.
To a smaller extent, the downturn could be attributed to changes with one of the top-earning apps across both app stores: Netflix.
Last year, Netflix dropped in-app subscription sign-ups for Android users. Then, at the end of December 2018, it did so for iOS users, too. That doesn’t immediately drop its revenue to zero, of course — it will continue to generate revenue from existing subscribers. But the number will decline, especially as Netflix expands globally without an in-app purchase option, and as lapsed subscribers return to renew online with Netflix directly.
In the first half of 2019, Netflix was the second highest earning non-game app with consumer spending of $339 million, Sensor Tower estimates, down from $459 million in the first half of 2018. (We should point out the firm bases its estimates on a 70/30 split between Netflix and Apple’s App Store that drops to 85/15 after the first year. To account for the mix of old and new subscribers, Sensor Tower factors in a 25% cut. But Daring Fireball’s John Gruber claims Netflix had a special relationship with Apple where it had an 85/15 cut from year one.)
In any event, Netflix’s contribution to the app stores’ revenue is on the decline.
In the first half of last year, Netflix had been the No. 1 non-game app for revenue. This year, that spot went to Tinder, which pulled in an estimated $497 million across the iOS App Store and Google Play, combined. That’s up 32% over the first half of 2018.

But Tinder’s dominance could be a trend that doesn’t last.
According to recent data from eMarketer, dating app audiences have been growing slower than expected, causing the analyst firm to revise its user estimates downward. It now expects that 25.1 million U.S. adults will use a dating app monthly this year, down from its previous forecast of 25.4 million. It also expects that only 21% of U.S. single adults will use a dating app at all in 2019, and that will only grow to 23% by 2023.
That means Tinder’s time at the top could be overrun by newcomers in later months, especially as new streaming services get off the ground (assuming they offer in-app subscriptions); if TikTok starts taking monetization seriously; or if any other large apps from China find global audiences outside of China’s third-party app stores.
For example, Tencent Video grossed $278 million globally in the first half of 2019, outside of the third-party Chinese Android app stores. That made it the third-largest non-game app by revenue. And Chinese video platform iQIYI and YouTube were the No. 4 and No. 5 top-grossing apps, respectively.
Meanwhile, iOS app installs actually declined in the first half of the year, following the first quarter that saw a decline in downloads, Q1 2019, attributed to the downturn in China.
The App Store in the first half of 2019 accounted for 14.8 billion of the total 56.7 billion app installs.
Google Play installs in the first half of the year grew 16.4% to 41.9 billion, or about 2.8 times greater than the iOS volume.

The most downloaded apps in the first half of 2019 were the same as before: WhatsApp, Messenger and Facebook led the top charts. But TikTok inched ahead of Instagram for the No. 4 spot, and it saw its installs grow around 28% to nearly 344 million worldwide.
In terms of mobile gaming specifically, spending was up 11.3% year-over-year in the first half of 2019, reaching $29.6 billion across the iOS App Store and Google Play. Thanks to the fallout of the game licensing freeze in China, App Store revenue growth for games was at $17.6 billion, or 7.8% year-over-year growth. Google Play game spending grew by 16.8% to $12 billion.
The top-grossing games, in order, were Tencent’s Honor of Kings, Fate/Grand Order, Monster Strike, Candy Crush Saga and PUBG Mobile.

Meanwhile, the most downloaded games were Color Bump 3D, Garena Free Fire and PUBG Mobile.
Image credits: Sensor Tower

App revenue tops $39 billion in first half of 2019, up 15% from first half of last year

Daily Crunch: Telegram faces new attack in China

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 9am Pacific, you can subscribe here.
1. Telegram faces DDoS attack in China… again
The popular encrypted messaging service Telegram is once again being hit with a distributed denial of service (DDoS) attack in Asia as protestors in Hong Kong take to the streets.
As they look to evade surveillance measures by government officials, Telegram is one of the tools that organizers have turned to. Four years ago, a similar attack struck the company’s service, just as China was initiating a crackdown on human rights lawyers in the country.
2. Bird confirms acquisition of Scoot
This acquisition means Bird may finally get to operate shared electric scooters in San Francisco.
3. LaLiga fined $280K for soccer app’s privacy-violating spy mode
Users of the LaLiga app were outraged to discover the smartphone software does rather more than show minute-by-minute commentary of football matches: It can use the microphone and GPS of fans’ phones to record their surroundings in a bid to identify bars that are unofficially streaming games.

4. Google leaks its own phone
Details of the Pixel 4 have been swirling around this week, so Google decided to just leak the design of its next phone via its official Twitter account, revealing the backplate and new camera module on the smartphone.
5. NFC gets a lot more powerful in iOS 13
This opens up a range of new application possibilities, Apple said, including the ability to create apps that read passports and contactless smart cards and interact with NFC-enabled hardware.
6. Facebook collected device data on 187,000 users using banned snooping app
The social media giant said in a letter to Sen. Richard Blumenthal’s office — which TechCrunch obtained — that it collected data on 31,000 users in the U.S., including 4,300 teenagers. The rest of the collected data came from users in India.
7. Uber’s annual flying taxi summit reveals Uber Air has a ways to go
We talked to Uber Director of Engineering for Energy Storage Systems Celina Mikolajczak at the company’s third annual Elevate Summit in Washington, D.C. this week. (Extra Crunch membership required.)

Daily Crunch: Telegram faces new attack in China

Mid-range flagships like the Honor 20 Pro are giving premium phones a run for their money

Phone sales have been trending downward for some time now. There are a number of reasons for this — many of which you can read about in this piece I published last week. The creeping cost of premium handsets is pretty high on that list, with flagships now routinely topping $1,000 from many of the big names.
The big smartphone makers have begun to react to this, with budget flagship alternatives like the iPhone XR, Galaxy S10e and Pixel 3a. A new crop of mid-range flagships, however, are giving them a run for their money and serving as an important reminder that a quality handset doesn’t need to be priced in the four digits.
The Honor 20 Pro fits nicely in the latter camp, joining the likes of the recently announced OnePlus 7 Pro and Asus ZenFone 6 in demonstrating that premium specs can still be had for what was once considered a reasonable flagship price.
Of course, before we get into specifics of pricing with the newly announced handset, it bears mentioning whether Honor, a brand owned by Huawei, will actually ever make it to the States. That’s all pretty complicated — like Donald Trump in a trade war with with China complicated. The pricing on the London-launched Pro version is €599, putting it at around $670.
The phone’s got Huawei’s latest and greatest Kirin 980 processor, coupled with a 6.26-inch display with hole-punch cutout and a quartet of rear-facing cameras. Those include a wide angle with 117-degree shots, 48-megapixel main, telephoto and a macro, which is an interesting addition to the standard array. The Pro’s out at some point in the June or July time frame.
Huawei bans aside, it will be interesting to see how this new crop of more affordable premium devices impacts the rest of the big names up top.

Mid-range flagships like the Honor 20 Pro are giving premium phones a run for their money

India’s most popular services are becoming super apps

Truecaller, an app that helps users screen strangers and robocallers, will soon allow users in India, its largest market, to borrow up to a few hundred dollars in the nation.
The crediting option will be the fourth feature the nine-year-old app adds to its service in the last two years. So far it has added to the service the ability to text, record phone calls and mobile payment features, some of which are only available to users in India. Of the 140 million daily active users of Truecaller, 100 million live in India.
The story of the ever-growing ambition of Truecaller illustrates an interesting phase in India’s internet market that is seeing a number of companies mold their single-functioning app into multi-functioning so-called super apps.
Inspired by China
This may sound familiar. Truecaller and others are trying to replicate Tencent’s playbook. The Chinese tech giant’s WeChat, an app that began life as a messaging service, has become a one-stop solution for a range of features — gaming, payments, social commerce and publishing platform — in recent years.
WeChat has become such a dominant player in the Chinese internet ecosystem that it is effectively serving as an operating system and getting away with it. The service maintains its own app store that hosts mini apps and lets users tip authors. This has put it at odds with Apple, though the iPhone-maker has little choice but to make peace with it.
For all its dominance in China, WeChat has struggled to gain traction in India and elsewhere. But its model today is prominently on display in other markets. Grab and Go-Jek in Southeast Asian markets are best known for their ride-hailing services, but have begun to offer a range of other features, including food delivery, entertainment, digital payments, financial services and healthcare.
The proliferation of low-cost smartphones and mobile data in India, thanks in part to Google and Facebook, has helped tens of millions of Indians come online in recent years, with mobile the dominant platform. The number of internet users has already exceeded 500 million in India, up from some 350 million in mid-2015. According to some estimates, India may have north of 625 million users by year-end.
This has fueled the global image of India, which is both the fastest growing internet and smartphone market. Naturally, local apps in India, and those from international firms that operate here, are beginning to replicate WeChat’s model.
Founder and chief executive officer (CEO) of Paytm Vijay Shekhar Sharma speaks during the launch of Paytm payments Bank at a function in New Delhi on November 28, 2017 (AFP PHOTO / SAJJAD HUSSAIN)
Leading that pack is Paytm, the popular homegrown mobile wallet service that’s valued at $18 billion and has been heavily backed by Alibaba, the e-commerce giant that rivals Tencent and crucially missed the mobile messaging wave in China.
Commanding attention
In recent years, the Paytm app has taken a leaf from China with additions that include the ability to text merchants; book movie, flight and train tickets; and buy shoes, books and just about anything from its e-commerce arm Paytm Mall . It also has added a number of mini games to the app. The company said earlier this month that more than 30 million users are engaging with its games.
Why bother with diversifying your app’s offering? Well, for Vijay Shekhar Sharma, founder and CEO of Paytm, the question is why shouldn’t you? If your app serves a certain number of transactions (or engagements) in a day, you have a good shot at disrupting many businesses that generate fewer transactions, he told TechCrunch in an interview.
At the end of the day, companies want to garner as much attention of a user as they can, said Jayanth Kolla, founder and partner of research and advisory firm Convergence Catalyst.
“This is similar to how cable networks such as Fox and Star have built various channels with a wide range of programming to create enough hooks for users to stick around,” Kolla said.
“The agenda for these apps is to hold people’s attention and monopolize a user’s activities on their mobile devices,” he added, explaining that higher engagement in an app translates to higher revenue from advertising.
Paytm’s Sharma agrees. “Payment is the mote. You can offer a range of things including content, entertainment, lifestyle, commerce and financial services around it,” he told TechCrunch. “Now that’s a business model… payment itself can’t make you money.”
Big companies follow suit
Other businesses have taken note. Flipkart -owned payment app PhonePe, which claims to have 150 million active users, today hosts a number of mini apps. Some of those include services for ride-hailing service Ola, hotel booking service Oyo and travel booking service MakeMyTrip.
Paytm (the first two images from left) and PhonePe offer a range of services that are integrated into their payments apps
What works for PhonePe is that its core business — payments — has amassed enough users, Himanshu Gupta, former associate director of marketing and growth for WeChat in India, told TechCrunch. He added that unlike e-commerce giant Snapdeal, which attempted to offer similar offerings back in the day, PhonePe has tighter integration with other services, and is built using modern architecture that gives users almost native app experiences inside mini apps.
When you talk about strategy for Flipkart, the homegrown e-commerce giant acquired by Walmart last year for a cool $16 billion, chances are arch rival Amazon is also hatching similar plans, and that’s indeed the case for super apps.
In India, Amazon offers its customers a range of payment features such as the ability to pay phone bills and cable subscription through its Amazon Pay service. The company last year acquired Indian startup Tapzo, an app that offers integration with popular services such as Uber, Ola, Swiggy and Zomato, to boost Pay’s business in the nation.
Another U.S. giant, Microsoft, is also aboard the super train. The Redmond-based company has added a slew of new features to SMS Organizer, an app born out of its Microsoft Garage initiative in India. What began as a texting app that can screen spam messages and help users keep track of important SMSs recently partnered with education board CBSE in India to deliver exam results of 10th and 12th grade students.
This year, the SMS Organizer app added an option to track live train schedules through a partnership with Indian Railways, and there’s support for speech-to-text. It also offers personalized discount coupons from a range of companies, giving users an incentive to check the app more often.
Like in other markets, Google and Facebook hold a dominant position in India. More than 95% of smartphones sold in India run the Android operating system. There is no viable local — or otherwise — alternative to Search, Gmail and YouTube, which counts India as its fastest growing market. But Google hasn’t necessarily made any push to significantly expand the scope of any of its offerings in India.
India is the biggest market for WhatsApp, and Facebook’s marquee app too has more than 250 million users in the nation. WhatsApp launched a pilot payments program in India in early 2018, but is yet to get clearance from the government for a nationwide rollout. (It isn’t happening for at least another two months, a person familiar with the matter said.) In the meanwhile, Facebook appears to be hatching a WeChatization of Messenger, albeit that app is not so big in India.
Ride-hailing service Ola too, like Grab and Go-Jek, plans to add financial services such as credit to the platform this year, a source familiar with the company’s plans told TechCrunch.
“We have an abundance of data about our users. We know how much money they spend on rides, how often they frequent the city and how often they order from restaurants. It makes perfect sense to give them these valued-added features,” the person said. Ola has already branched out of transport after it acquired food delivery startup Foodpanda in late 2017, but it hasn’t yet made major waves in financial services despite giving its Ola Money service its own dedicated app.
The company positioned Ola Money as a super app, expanded its features through acquisition and tie ups with other players and offered discounts and cashbacks. But it remains behind Paytm, PhonePe and Google Pay, all of which are also offering discounts to customers.

Integrated entertainment
Super apps indeed come in all shapes and sizes, beyond core services like payment and transportation — the strategy is showing up in apps and services that entertain India’s internet population.
MX Player, a video playback app with more than 175 million users in India that was acquired by Times Internet for some $140 million last year, has big ambitions. Last year, it introduced a video streaming service to bolster its app to grow beyond merely being a repository. It has already commissioned the production of several original shows.
In recent months, it has also integrated Gaana, the largest local music streaming app that is also owned by Times Internet. Now its parent company, which rivals Google and Facebook on some fronts, is planning to add mini games to MX Player, a person familiar with the matter said, to give it additional reach and appeal.
Some of these apps, especially those that have amassed tens of millions of users, have a real shot at diversifying their offerings, analyst Kolla said. There is a bar of entry, though. A huge user base that engages with a product on a daily basis is a must for any company if it is to explore chasing the super app status, he added.
Indeed, there are examples of companies that had the vision to see the benefits of super apps but simply couldn’t muster the requisite user base. As mentioned, Snapdeal tried and failed at expanding its app’s offerings. Messaging service Hike, which was valued at more than $1 billion two years ago and includes WeChat parent Tencent among its investors, added games and other features to its app, but ultimately saw poor engagement. Its new strategy is the reverse: to break its app into multiple pieces.
“In 2019, we continue to double down on both social and content but we’re going to do it with an evolved approach. We’re going to do it across multiple apps. That means, in 2019 we’re going to go from building a super app that encompasses everything, to Multiple Apps solving one thing really well. Yes, we’re unbundling Hike,” Kavin Mittal, founder and CEO of Hike, wrote in an update published earlier this year.
And Reliance Jio, of course
For the rest, the race is still on, but there are big horses waiting to enter to add further competition.
Reliance Jio, a subsidiary of conglomerate Reliance Industry that is owned by India’s richest man, Mukesh Ambani, is planning to introduce a super app that will host more than 100 features, according to a person familiar with the matter. Local media first reported the development.
It will be fascinating to see how that works out. Reliance Jio, which almost single-handedly disrupted the telecom industry in India with its low-cost data plans and free voice calls, has amassed tens of millions of users on the bouquet of apps that it offers at no additional cost to Jio subscribers.
Beyond that diverse selection of homespun apps, Reliance has also taken an M&A-based approach to assemble the pieces of its super app strategy.
It bought music streaming service Saavn last year and quickly integrated it with its own music app JioMusic. Last month, it acquired Haptik, a startup that develops “conversational” platforms and virtual assistants, in a deal worth more than $100 million. It already has the user bases required. JioTV, an app that offers access to over 500 TV channels; and JioNews, an app that additionally offers hundreds of magazines and newspapers, routinely appear among the top apps in Google Play Store.
India’s super app revolution is in its early days, but the trend is surely one to keep an eye on as the country moves into its next chapter of internet usage.

India’s most popular services are becoming super apps