ByteDance sold its entire stake to new investors Canada Pension Plan Investment Board (CPPIB) and Ontario Teachers’ Pension Plan Board (OTPPB)
Starting June 2020, the Indian government has so far banned 277 China-originated apps operating in the country
Some companies that have seen the exit or reduction in the stake of Chinese investors include Paytm Mall, KreditBee, Zomato, among others
As VerSe Innovation planned to expand its leadership in the homegrown social media market, it had raised $805 Mn at a valuation of $5 Bn in April 2022. In the same round, TikTok-backer ByteDance had reportedly exited the company.
According to a Mint report, ByteDance sold its entire stake to new investors Canada Pension Plan Investment Board (CPPIB) and Ontario Teachers’ Pension Plan Board (OTPPB).
The move comes on the back of a crackdown on Chinese apps by the Indian government since June 2020. Of late, Indians have been wary of startups and apps that are China-backed or have a Chinese origin.
Starting June 2020, the Indian government has so far banned 277 apps China-originated apps operating in the country. The ban on these apps came through a string of incidents including the rising geopolitical tensions between India and China, geopolitical threats due to Ukraine and Russian war and the data protection discussions within the country.
Chinese Backers Exiting Indian Startups
The government, in 2020, also rolled out a new foreign direct investment (FDI) policy. It announced a set of screening processes for all investments coming in from China and other neighbouring countries to avoid ‘opportunistic acquisitions or takeovers’ by these investors.
Thus, similar to ByteDance pulling out from VerSe, many Chinese investors have either sold full or part of their stakes in Indian startups. Notably, Paytm Mall (not Paytm Payments Bank) recently saw the exit of its early investors Alibaba and Ant Group – both of China origin.
In early-2021, Chinese investors Xiaomi Corp, Shunwei Capital and Kunlun exited fintech KreditBee.
While Ant Group still holds a stake in Zomato, during the IPO, the former let go of a controlling stake in the foodtech giant.
The government is also investigating the Indian units of Chinese companies including ZTE Corp and Vivo for alleged financial impropriety.
The story will be updated with VerSe Innovation’s official statement.
