Didi gets hit by Chinese government, and Pelo raises $150M

Hello and welcome back to Equity, TechCrunch’s venture-capital-focused podcast where we unpack the numbers behind the headlines. This is Equity Tuesday, our weekly kickoff that tracks the latest private market news, talks about the coming week, digs into some recent funding rounds and mulls over a larger theme or narrative from the private markets. You can follow the show on Twitter here and myself here. What a busy weekend we missed while mostly hearing distant explosions and hugging our dogs close. Here's a sampling of what we tried to recap on the show: Didi vs. China: The Chinese government's crackdown on Didi continued over the weekend, after announcing a cybersecurity review of the company on Friday. That decision blocked new user signups. Now Didi has had its app removed from pertinent app marketplaces. That's going to hit revenue. Shares of the company are sharply lower in pre-marketing trading here in the United States. The company went public last week. Twitter vs. India: India's attempts to cow Twitter into not enacting its own content moderation policies continues. Now India has taken away legal protections from the well-known American company. It's not great news for India's growing technology sector, or the investors backing the upstarts. Funding rounds: Lots of companies raised money, including Byrd, with $19 million in a Series B, Pleo with a huge $150 million unicorn round, and Obviously AI, which just extended its Seed round. It's going to be a busy week! Chat tomorrow. Credits: Equity is produced by Theresa Loconsolo with editing by Kell. Bryce Durbin is our Illustrator. We'd also like to thank the audience development team and Henry Pickavet, who manages TechCrunch audio products. Learn more about your ad choices. Visit megaphone.fm/adchoices

• 0:09Speaker 00

  Good morning and welcome to Equity Monday for Tuesday, July 6. This is our weekly primer where we catch up on the news and as always, explore the numbers behind the headlines. We're coming to you on a Tuesday because America was largely on holiday yesterday, and that does mean, yes, we have a lot to get through today. Kicking off, Asian stocks were mixed, European stocks were down a fraction, and American shares are modestly lower in pre-market trading. And in the last 24 hours, the crypto markets have largely been quiet. With that, let's talk about the last couple of days.

• 0:42Speaker 00

  The biggest story for us to catch up on from the weekend is Didi. The Chinese ride hailing company went public in the US last week, albeit at a price that had us scratching our heads. When compared to Uber, frankly, Didi felt cheap. Well, we may now know why the market was not willing to pay as much for Didi's revenue as it was for Uber's own. Didi's woes with Chinese regulators got a lot worse over the weekend. Recall that Didi was hit with a cybersecurity review at the end of last week. That decision halted the company's ability to onboard new users, and that was bad. Then, over the weekend, Didi got into even hotter soup with its domestic regulators. Here's TechCrunch.

• 1:18Speaker 01

  China has ordered app store operators to remove the app of Didi from their stores, the latest as tension escalates between the nation's largest ride hailing giant and local regulators. The move comes after the Chinese internet watchdog announced a probe into Didi over national security concerns earlier this week. Didi raised at least 4 billion this week after the New York Stock Exchange debuted in one of the largest US IPOs.

• 1:45Speaker 00

  The company's app has been taken down, TechCrunch confirmed. Per a Didi statement, the company, quote, "expects that the app takedown may have an adverse impact on its revenue in China." Yeah, no [bleep]. Here's the thing. On Friday, our take was that it was pretty lame for the company to get hit by strong regulatory action right after its IPO. But since then, it's become slightly clear that the company may have actually been aware that it was in for a rough time with its government and that it went public anyway. Now DeeDee's decision to have a super quick period of time between sharing its IPO filing and actually pricing that IPO and going public feels a little bit suspect. Was the company trying to get public before it got into a scrap with its government? And in a final layer of stupidity, there's online chatter that the company may be in trouble with its regulators for going public too close to the 100th anniversary of China's Communist

• 2:30Speaker 00

  Party, to which all we can really say is sigh.

• 2:37Speaker 00

  This morning, well, listen, we need to talk about Twitter. Sure, Twitter isn't a startup, but its current regulatory woes could show what's ahead for startups in India, a key market for upstart tech companies. We've talked on the show before about the growing scrap between India and Twitter, with the country trying to bully the tech company into not enacting its regular content moderation policies. The ruling party in the country doesn't like them. Nigeria is also peeved at Twitter, as you may recall. But reporting from TechCrunch this morning cast the whole scenario in an even harsher light. Here's TechCrunch.

• 3:06Speaker 01

  Twitter no longer enjoys the liability protection against user-generated content in India, the government said in a court filing this week as tension escalates between the two over the South Asian nation's new IT rules. In a court filing on Monday, New Delhi said Twitter has lost its immunity in India after the American social network failed to comply with the new local IT rules, which were unveiled in February and went into effect in late May.

• 3:33Speaker 00

  That is pretty epic, frankly, and it shows that authoritarian regimes and tech companies simply do not mix. Recall that former American President Donald Trump also tried to bully social media companies, a tactic that has been kept up by leaders of states like Florida. And in breaking news, as I record this for you early in the morning, Weibo and a "state investor" are planning to take the service off and compare to Twitter private, per Reuters. The deal, according to the reporting group, "would value the Twitter-like firm at at least 20 billion and facilitate major shareholder Alibaba Group Holdings' exit." Recall that Alibaba itself got in trouble with Chinese regulators ahead of the IPO of its sister company Ant Group. That IPO was killed, and since then, the most famous person in the Alibaba world, Jack Ma, has been pretty much quiet. Not great.

• 4:19Speaker 00

  Okay, tired of all the bad news? Well, here's some good news from a roundup of recent funding rounds that I think are pretty, pretty cool. First up is Byrd, that's B-Y-R-D. Per TechCrunch, the company, quote, "builds software to manage warehouses and logistics operations and also runs a service to help online merchants store, pick and deliver their orders." It just raised a $17 million Series B to keep scaling its business, and we reported that the round will help expand an Amazon-style fulfillment and logistics system to more e-commerce merchants in Europe. Everyone loves that fast shipping, y'all. And Pleo is in the news today. The company just raised $150 million at a $1.7 billion valuation. The Copenhagen-based startup builds corporate spend management software, and it's announcing

• 5:03Speaker 00

  a new round because it's seen very strong traction. Currently, 17,000 small and mid-sized companies use the service, and naturally, Pleo's round comes after the corporate spend. Startups in the US raised a boatload of cash and saw huge growth in recent quarters. And also, one company similar to Pleo in the US, Divvy, even had a multibillion-dollar exit earlier this year. And to close us off, obviously, AI, a, quote, "no-code AI ML platform that enables people without technical backgrounds to build and train machine learning models," according to its own reporting, extended its seed round from $3.6 million to $4.7 million. That's all the time we have. Do not forget that TechCrunch Early Stage kicks off on July 8th. It's gonna rock. I think I have a small role in that.

• 5:46Speaker 00

  You can follow the show on Twitter at @EquityPod or myself, where I tweet under the handle @Alex. Happy four-day work week to everyone who had yesterday off. If you didn't, I'm very, very sorry. We'll talk to you soon. Goodbye.