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Home / Companies / News /  China’s ByteDance exits Dailyhunt parent VerSe

MUMBAI : ByteDance has become the latest Chinese investor to exit an Indian startup, selling its entire stake in VerSe Innovation Pvt. Ltd, which operates news aggregator Dailyhunt.

According to two people familiar with the development, last month, the Chinese company sold its stake to Canadian investors during VerSe’s $805 million fundraising, which valued the company at $5 billion.

The shares were bought by Canada Pension Plan Investment Board (CPPIB) and Ontario Teachers‘ Pension Plan Board (OTPP), the people cited above said on condition of anonymity.

In April 2020, India tightened rules on foreign direct investment, mandating prior government approval for investments from bordering countries in an attempt to prevent opportunistic takeovers of Indian companies.

The press note was silent on existing investments; however, the India-China border clashes that broke out in June, and the ensuing crackdown on hundreds of Chinese apps, including ByteDance’s TikTok, made many Chinese investors wary.

“We at VerSe Innovation confirm that ByteDance has fully exited our cap table. We are probably amongst the few unicorns in the country with 0% Chinese shareholding on our cap table," a spokesperson for VerSe Innovation said.

ByteDance and OTPP did not respond to requests for comments. CPPIB declined to comment.

ByteDance first invested in VerSe in 2016 and followed it up with multiple investments in subsequent years. Prior to its exit, it had a 9.8% stake in VerSe.

VerSe reported consolidated net sales of 666.1 crore ($85.9 million) on a loss of 807.9 crore in FY21. Its FY22 financials could not be ascertained, but the company said in April that its revenue for FY22 stood at $125 million.

Dailyhunt was launched as Newshunt by former Nokia executives Umesh Kulkarni and Chandrashekhar Sohoni in 2009 and sold to VerSe in 2012.

In 2020, the company entered the unicorn club after raising over $100 million from investors such as Falcon Edge Capital-managed Alpha Wave, Google and Microsoft. Its other investors include Matrix Partners India, Sequoia Capital, Falcon Edge Capital, Goldman Sachs and Sofina Group.

ByteDance’s exit from VerSe comes at a time India’s stance on Chinese investments is not fully clear.

On 11 January, Bloomberg reported that the government is considering easing restrictions on Chinese investors.

On Tuesday, The Economic Times reported that ByteDance was planning a partnership for data centres in India with the Hiranandani Group.

In the wake of the rising heat on Chinese investments in India, ByteDance laid off over 2,000 Indian employees in 2021.

Mint reported on 19 May that Chinese billionaire Jack Ma had exited Paytm Mall for 42 crore.

Tencent stays invested in several Indian startups including Cars24, Swiggy and ShareChat.

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