Daily Tech Snippet: Tuesday January 13

• Indian startup action#1: Mobile internet firm One97 Communications raises $575M from Alibaba, valued at $2B: On97, seeking funds to boost its flagship m-com and virtual wallet property Paytm, is raising $575 million from the world’s largest e-com firm Alibaba and the group’s separate payment unit Alipay. This is in addition to $60 million more from existing lead investor SAIF Partners, sources close to the development told Techcircle.in. The deal would value One97 at around $1.5 billion pre-money or just over $2 billion, post-money. This would make it the second most valued internet related firm in India, behind Flipkart. For Alibaba, this would be the first significant strategic move in the country and its biggest bet since last September when it saw through its mega $25 billion public float on NYSE, the world’s largest ever. Founded in 2000, One97 Communications is a leading mobile-internet company in India that offers digital goods & services to its mobile consumers under the Paytm brand. It also provides mobile advertising, marketing and payments for merchants. In addition, it has a partnership with existing lead investor SAIF Partners where it invests in early stage mobile internet startups through One97 Mobility Fund. Meanwhile, One97 has also applied for a ‘payments banking’ licence and part of the funds raised would be used to double its reach in India with investments in technology and customer acquisition.

• Indian startup action #2: Zomato enters US with purchase of Urbanspoon for around $40-50M, aims at Yelp: Zomato.com has struck its sixth overseas acquisition in as many months and its biggest yet by acquiring Urbanspoon, a restaurant information and table booking property, the company’s co-founder and chief Deepinder Goyal said in a blog post. The transaction value stands undisclosed but is pegged at around $40-50 million. Goyal said in his blog post that the firm spent most of its last round of funding on this acquisition. In November, Zomato had raised $60 million in a fresh round of funding at a pre-money valuation of $600 million from existing investors Info Edge (India) and Sequoia while adding Vy Capital as a new investor. Urbanspoon, which was part of NASDAQ-listed umbrella firm for various internet ventures IAC, has a presence in six countries including US, Canada, Ireland, UK, Australia and New Zealand. It was a self funded venture before IAC snapped the firm in 2009. It has 80 million+ visit a month as against 35 million+ of Zomato; presence in over 500 cities as against 150 million+ for Zomato with over 1 million restaurant listings, over 1.4 million reviewers and around nine times the number of ratings compared to Zomato. The acquisition would make the first big move by an Indian internet venture in the US. Zomato’s approach of hiring people to curate and constantly update restaurant listings and menus will present a challenge to Yelp and Foursquare, which rely more on user-generated reviews. This involves a lot of legwork but pays off for Zomato as users are less likely to encounter an outdated menu or a restaurant that has no resemblance to its review.

• JD.com makes an eCommerce platform play as Chinese eCommerce goes niche: "JD.com is trying to position itself as the go-to e-commerce platform, and this could be an important category expansion for them," said John Choi, a Hong Kong-based Internet analyst at Daiwa Capital Markets. China's JD.com Inc has ratcheted up competition with Alibaba Group Holding Ltd through a $1.55 billion deal with an online car sales portal, as the e-commerce giants gun for high-value markets like cars, tourism and homes. Following over a year of fervent investment activity in China's tech sector, niche e-commerce markets are now in vogue as targets, analysts say. Taking stakes in specialists like Bitauto Holdings Ltd offers an avenue into big-ticket purchases which fall outside major e-commerce companies' traditional focus of day-to-day goods. Such tie-ups also lend smaller firms some of their bigger peers' clout, directing potential customers their way from websites like those of JD.com and Alibaba. JD.com's deal late last week was the company's biggest ever, with its share of the investment in Bitauto valued at $1.35 billion. Chinese social networking and video game giant Tencent Holdings Ltd, which owns 17.6 percent of JD.com, will also take a 3.3 percent stake in Bitauto. Beijing-based JD.com will take 25 percent of Bitauto, giving China's second-biggest e-commerce player a foothold in auto sales. Bitauto will in turn benefit from JD.com's much larger audience and brand recognition, as the online retailer drives traffic to the car sales specialist. Other specialist areas attracting players like JD.com, Alibaba, Tencent and Baidu Inc include tourism and pharmaceuticals. Last month, JD.com and investment firm Hony Capital led a $148 million round of funding in travel company Tuniu Corp. Alibaba invested 2.81 billion yuan ($454 million) in a hospitality technology provider in September to help the e-commerce firm develop its own travel business. Last week, JD.com Chief Executive Richard Liu in a press release on the Bitauto deal signaled that investments in specialist commerce companies would continue for some time.

• Apple Watch isn't even out yet, but retailers are already installing beacons for location targeting: Apple already seems fairly well positioned to own the smartwatch industry, even though its watch won't go on sale until later this spring. But that's not stopping marketers from already experimenting with it. Today, Marsh Supermarkets will reveal that it has installed beacons in all of its 75 stores. Once Apple Watch hits the market, the brand plans to send beacon-triggered reminders straight to shoppers' wrists. For example, the smartwatch app may pull up a shopping list once someone is inside a store. "If you look at that situation when you're running through a store, how much more convenient is it to have a hands-free option to see what you're making for dinner or understand what the deals are when you're in-store?" said Todd Dipaola, CEO of inMarket, the platform that's powering the in-store activation. Shoppers who use Marsh's mobile app or one of the apps in inMarket's network (including LisEase, Key Ring and Epicurious) may now get pinged with offers or recipe suggestions in store. Per comScore, inMarket reaches 33 million active monthly users. Apple Watch is expected to work with the same apps that brands have built for smartphones. "We've built the integration ahead of the debut so on day one—as the Apple Watch comes out—these apps can be ready for prime time," Dipaola said. Marsh will also link the mobile offers to its loyalty program to track coupon redemption and sales data. That data will then be used to serve up more relevant ads to the smartphone user in the future, the retailer said. For example, Marsh can measure the time between when someone first saw an ad to when they checked out.

• Before Xiaomi's latest fund-raise, Facebook, Xiaomi had talked, but their deal fell through on political concerns: Mark Zuckerberg and Xiaomi Inc CEO Lei Jun discussed a potential investment by Facebook in China's top smartphone maker ahead of its $1.1 billion fundraising last month, but a deal never materialized, several people with knowledge of the matter told Reuters. The discussions, at a private dinner when Zuckerberg visited Beijing in October, were never formalized, three of those people said, as the two CEOs weighed the political and commercial implications of Facebook - which has been banned in China since 2009 - buying into the Chinese tech star now valued at $45 billion. One individual with direct knowledge of Xiaomi's fundraising said the mooted Facebook investment was "not huge," but the talks underscore how ties between U.S. and Chinese companies have deepened as China's tech industry matures. Xiaomi's Lei was partly put off by the potential for political fallout at home of selling a stake to Facebook while the U.S. social network is still banned in China, two of the people said, adding Xiaomi also feared a tie-up with Facebook could threaten its relationship with Google Inc, a crucial business partner. Xiaomi's phones are built on Google's Android operating system. Xiaomi ultimately announced last month it raised $1.1 billion from investors including Hong Kong-based tech fund All Stars Investment; DST Global, a private equity firm that has invested in Facebook and Alibaba Group; Singapore sovereign wealth fund GIC; Chinese fund Hopu Management; and Alibaba founder Jack Ma's Yunfeng Capital. The fundraising valued Beijing-based Xiaomi at $45 billion just three years after it sold its first smartphone. The company had revenue of close to $12 billion in 2014.

• Code containers - popularized by Docker - win following at Google, Goldman, IBM, Microsoft: A tech start-up called DotCloud was on its last legs in 2012. Now called Docker, its software has been downloaded 70 million times. Docker is at the forefront of a new way to create software, called containers. These software containers are frequently compared with shipping containers. And as their popularity grows, building big computer networks could become remarkably simpler. Like the big metal containers that can move from ship to ship to truck without being opened, software containers ship applications across different “cloud computing” systems and make it easy to tinker with one part, like the products for sale on a mobile application, without worrying about the effect on another part, like the big database at the heart of the corporate network. “It absolutely makes it easier to write applications,” said Eric Brewer, Google’s vice president for computer infrastructure. Google developed the first type of container, for internal use, about eight years ago, which helped it build its Internet services quickly. Docker took the Google innovation and made it easy for people to use across computers. “It’s a huge efficiency gain in how you write code,” said Mr. Golub, who started his career teaching business courses in Uzbekistan. “You don’t have to rewrite everything, then fix all the breaks when it goes into production. You just work on what you change.” Goldman Sachs uses Docker to build and deploy the software it runs internally. “Our underlying software was getting so spread out” that it was difficult to manage, said Don Duet, a global co-head of technology at Goldman. “Docker is a central place where you can put everything.” A 26-year technology veteran, he compares software containers in importance to Java, a programming language created in the 1990s that led to rapid growth of the commercial Internet. At least for now, Docker’s small size and independence may be assets, since it is able to play with the giants without seeming like a threat. Microsoft in October announced it would work with Docker to put its Windows operating system in containers (Docker already works with several types of Linux, the operating system commonly used in the servers of many big clouds). IBM is working with Docker to increase the international deployment of containers. And Google and Amazon have both endorsed Docker at their events for software developers.

• Education start-ups might finally have their moment in the sun: The education technology business is chock-full of fledgling companies whose innovative ideas have not yet proved effective — or profitable. But that is not slowing investors, who are pouring money into ventures as diverse as free classroom-management apps for teachers and foreign language lessons for adult learners. Venture and equity financing for ed tech companies soared to nearly $1.87 billion last year, up 55 percent from the year before, according to a new report from CB Insights, a venture capital database. The figures are the highest since CB Insights began covering the industry in 2009. Notable financing deals include Pluralsight, a company that provides online training to technology professionals, which raised $135 million; Remind, a free messaging service for teachers to communicate with students and parents, which raised $40 million from venture capital firms including Kleiner Perkins Caufield & Byers; and Edmodo, an online social network customized for classroom use that is free to individual teachers, which raised $30 million. Education is one of the last industries to be touched by Internet technology, and we’re seeing a lot of catch-up going on,” said Betsy Corcoran, the chief executive of EdSurge, an industry news service and research company. “We’re starting to see more classical investors — the Kleiner Perkinses, the Andreessen Horowitzes, the Sequoias — pay more attention to the marketplace than before.” The smaller sums going into ed tech illustrate the challenges facing start-ups as they try to persuade public school systems to adopt their novel products. Companies often must navigate local school districts with limited budgets and slow procurement processes. To bypass the bureaucracy, many start-ups are marketing free learning apps and websites directly to teachers in the hopes that their schools might eventually buy enhanced services. Still, it is too early to tell whether that direct-to-consumer “freemium” strategy, as it is often called, will pan out for education software. “There are still a lot of questions around some companies’ business models in the sector,” said Matthew Wong, a research analyst at CB Insights. “One of the questions, because the product is free, is: ‘How are you going to monetize those users?’ ” One example is Remind, a popular messaging app that teachers use to send homework reminders to students and share classroom news with parents. Sports team coaches also use the system to send weather updates and schedule changes to their athletes. Word of mouth has propelled Remind from an unknown brand to a nationwide phenomenon.