India is making it harder for Chinese investors to invest money in its companies after the rising tensions at the India-China border. With India closing doors to Chinese venture capital firms, they are now shifting focus towards Indonesia.
The report adds that funds like Shunwei Capital from the founders of Xiaomi and BAce Capital backed by the Ant Group are now pivoting from India to Indonesia. Shunwei Capital, which runs funds worth $3 billion, is planning to close more deals in Indonesia and said that it is not making new investments in India for now.
Instead of making new investments in India, the fund says that it will focus on managing its existing portfolio of companies. On the other hand, the FT report adds that BAce Capital is also making the move but will not be much active as the market is less developed.
Chinese investors have powered India’s tech boom, investing heavily in some of the leading startups, including fin-tech platform Paytm, food delivery service provider Zomato, and the ed-tech giant Byju’s.
However, earlier this year, the Indian government revealed new rules targeted towards Chinese investors over concerns of opportunistic takeovers, which has now led to investors cutting off funding.
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Apart from that, the Indian government has been banning Chinese applications in the country for months now, citing national security issues but without offering any proof of such claims. So far, India has banned more than 170 Chinese apps, including Aliexpres, PUBG Mobile, CamScanner, etc.
With investors facing several issues with the regulations in India, other startups in Southeast Asia will get benefits. Indonesia is ranked fourth in the world in terms of population and the country already has a few billion-dollar companies.
At a time when new startups and trying to raise millions of dollars for growth, several prominent companies and investors are now shifting focus towards Indonesia, including the likes of Google and Facebook. Just to put that into perspective, a report revealed that investments in Southeast Asia in H1 2020 grew by 55 percent compared to last year.
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