SoftBank's Vision Fund eyes Perplexity at $9 Billion; China's Battle for AI Researchers
October Week 3: Oct 15 - Oct 21
Welcome, Asia Startup enthusiasts
Have you tried Perplexity yet? The tool that the “Silicon Valley Elites” (maybe I'm one of them?…😭) refer to as the "Google killer"? It's an AI-powered search engine developed by a team of former OpenAI employees, and in a matter of months, it's gone from a $500 million valuation to what's looking to be a $9 billion valuation. But, this time, it looks like SoftBank’s Vision Fund could be leading the round.
Meanwhile, in China, there’s a battle waging for AI Model supremacy, with a prize of serving the country’s 1.4 billion people. And one of the leaders is Baichuan - recently raising $300 million in fresh funding from Alibaba, Tencent, and Xiaomi.
In today’s edition:
Japan’s SoftBank Vision Fund eyes Perplexity at a $9 Billion Valuation
China's Xiaomi, Alibaba, and Tencent invest $300 million in Baichuan AI
Digital Twin Startup from the Philippines gets $4M from A16Z and Peak XV
10 New Startup Jobs & 6 New Startup Internships
More Asia Startup News
💰 Japan’s SoftBank Vision Fund eyes Perplexity at a $9 Billion Valuation
The scoop: According to the Silicon Valley Publication, “The Information”: SoftBank’s Vision Fund is reportedly considering investing in Perplexity at a $9 billion valuation. Perplexity has been on a hot streak as of this year - already raising two other funding rounds in 2024, the first coming at a valuation of $500 million from IVP, and then 5 months later at a valuation of $3 billion from Bessemer Venture Partners.
Fun facts:
Early investors include Jeff Bezos (Ex-Amazon CEO), Yann LeCun (Head of Meta AI), Nat Friedman (Ex-Github CEO), & Tobi Lutke (Shopify CEO).
The company uses retrieval-augmented search (RAG) on models from OpenAI, Anthropic, Meta, and Mistral, instead of building foundation models from scratch.
The startup’s current monthly revenue is $3 million.
& their number of monthly active users (“MAUs” for my data nerds) is 10 million.
Why it matters: The SoftBank Vision Fund, just a couple of weeks ago, invested $500 million into OpenAI as part of a $150 billion valuation funding round. This investment is particularly noteworthy because OpenAI has a product called SearchGPT in closed beta, which is a direct competitor to Perplexity.
It’s also important to highlight that the Vision Fund has previously invested a small amount in Perplexity, reportedly putting in $10 million during the last funding round. However, this $10 million investment is considered a very small check relative to the fund’s $65 billion in investable capital that has been raised to date.
🔥 China's Xiaomi, Alibaba, and Tencent invest $300 million in Baichuan AI
The scoop: The Chinese AI startup Baichuan raised $300 million in funding, backed by tech giants like Alibaba, Tencent, and Xiaomi. The company is best known as a full-stack AI startup building foundational models for text, image, and video generation.
Fun facts:
Their in-house LLM referred to as “Baichuan 4” currently ranks #1 on SuperCLUE, an LLM benchmark test that specializes in evaluating Chinese models
The team has also built a full-stack Conversational Healthcare AI app, using a fine-tuned version of Baichuan 4 that is currently in a large, private beta
The company is additionally developing an AI "super app" akin to Tencent's WeChat, integrating various functionalities such as messaging, payments, and e-commerce into its platform.
Why it matters: The Chinese AI ecosystem is flourishing - & Baichuan is just one piece of China's "6-Headed Monster," which includes AI startups valued at over $1 billion such as MiniMax, Moonshot, 01.AI, DeepSeek, & Zhipu. These startups are both backed by the tech giants and compete directly with them, as demonstrated by Alibaba with their Qwen family of models, Tencent with Hunyuan, & Baidu with Ernie.
The bigger story in China’s AI ecosystem mirrors a phenomenon occurring in the USA, where many of the most talented engineers at these frontier AI Labs (usually OpenAI) are now leaving to start their own startups. This causes a significant "brain drain" on the organization, as the incentives to "do their own thing" are so lucrative that it's nearly impossible to say no to the candyland awaiting on the other side.
It's the same in China - many of the best and brightest from ByteDance & Alibaba's AI labs have left to create new startups, and then eventually many of the early employees of those startups leave to start their own ventures. As Simba said in The Lion King, "It's the circle of life." But maybe, it’s best explained in non-Disney terms: A startup's advantage isn't just money - it's assembling a team filled with the top 1% of engineers. However, these world-class engineers are being spread thinner than peanut butter across dozens of these AI startups.
🧠 Digital Twin Startup from the Philippines gets $4M from A16Z and Peak XV
The scoop: Clout Kitchen is Asia's cool kid on the block. Coming in with fresh funding from A16Z Games & Peak XV's Surge Accelerator. The startup creates interactive gaming buddies. For example, if you're playing Fortnite, you could potentially have a digital twin of Elon Musk or Mr. Beast watching your screen & playing along with you in real-time - giving you tips, strategic guidance, and being a virtual BFF.
The team:
The CEO, Justin Gorriceta-Banusing previously founded AcadArena, the #1 campus gaming platform in Southeast Asia and Latin America. He also created the CONQuest Festival, which has become the largest creator event in Southeast Asia, attracting over 80,000 attendees per year.
The CBO, Marcel Feldkamp, is a former professional League of Legends player who competed in the 2013 World Championship. He also founded a talent agency for gamers that later merged with United Talent Agency (worth over $100 million).
Bull case: Clout Kitchen's initial product, Backseat AI, is an in-game companion for League of Legends players. To help you visualize the experience, imagine a small circular area in the bottom right of your computer screen containing a talking, virtual avatar. And the avatar is present throughout your entire gameplay session. The product has only been out for a couple of months now and has already gained over 45,000 sign-ups. While it shares some similarities with Character AI or Replika-type products, which are mainly chat experiences, Backseat AI's video-first experience could be something special.
Bear case: Gaining usage and attention from gamers is crucial for Clout Kitchen now, but monetization will be a major hurdle in the future. While virtual goods spending hit $171.82 billion in 2023, it's unclear how much would go to AI gaming companions. The largest markets for gaming revenues include the United States ($46.7 billion), China ($44.6 billion), and Japan ($18.4 billion).
There could be opportunities for revenue-sharing plays working in tandem with the game developers, but it will be challenging for a startup. Ultimately, Clout Kitchen faces significant obstacles in turning its user base into a profitable business model.
Pony AI, one of China’s top autonomous driving startups (similar to Cruise & Waymo), has filed for a U.S. IPO to raise $300 million. The company currently operates 250 robotaxis and 190 robotrucks, primary based out of Guangzhou, China.
Robot Era, a Chinese humanoid robot startup, raised $42 million in a pre-Series A funding round to bring these mechanical AI companions to market, aimed at sectors like healthcare, education, and elderly care (very similar to Figure or Tesla’s Optimus).
Taiwan's National University created the world’s smallest quantum computer using a single photon, running at room temperature. Why should you care? Well, this will help scientists create new drugs by simulating the most complex of molecules, which in turn, will speed up treatments for diseases like Breast Cancer & Alzheimer's.
Upgrad secured $60 million from Temasek, at a $2.25 billion valuation. Think of the company similar to Coursera but focused on the Indian market, and offering skill development programs for over 2 million of India’s working professionals every month.
ByteDance has made significant improvements to its web scraping tool "Bytespider". And it’s now capable of scraping internet data 25 times faster than OpenAI’s GPTbot and 3,000 times faster than Anthropic’s ClaudeBot. Some call it the secret sauce behind ByteDance’s AI efforts, but the tool raises ethical concerns as it ignores the vast majority of website scraping rules & avoids internet rules set by the US & EU.
Singtel is joining the GPU as a service party with the launch of an AI cloud service. It competes in the same category as Microsoft’s Azure, Amazon’s AWS, & Google’s GCP (but the offering is a little more related to American startups like BaseTen, Modal, and Together which offer on-demand AI compute for training & inference).
Full-Time Opportunities
🇸🇬 • 🌐 OpenAI, Singapore - Security Engineer
🇸🇬 • 📚 Locofy, Singapore - Product Manager
🇸🇬 • 📊 Shopee, Singapore - Product Manager
🇸🇬 • 🚀 Gemini Crypto, Singapore - Software Engineer
🇸🇬 • 🤖 Palantir, Singapore - Software Engineer
🇸🇬 • 🔬 Snapchat, Singapore - Software Engineer
🇯🇵 • 🧠 Notion, Japan - Customer Success
🇯🇵 • 💼 WorkOS, Japan - Product Designer
🇰🇷 • 🧪 Epic Games, Korea - Software Engineer
🇰🇷 • 📈 Upstage AI, Korea - Software Engineer
Internship Opportunities
🇸🇬 • 💻 Hypotenuse AI, Singapore - Product Manager Intern
🇸🇬 • 📣 Shein, Singapore - Public Relations Intern
🇯🇵 • 🚀 Mercari, Japan - Data Analyst Intern
🇯🇵 • 📊 AWS, Japan - Engineering Architecture Intern
🇰🇷 • 🤖 Sendbird, Korea - Growth Strategy Intern
🇭🇰 • 📈 Jane Street, Hong Kong - Product Manager Intern
