Telstra Ventures invests in Chinese API provider Cloopen

Telstra's venture capital arm Telstra Ventures has announced investing an undisclosed amount in Cloopen, a Chinese communications application programming interface (API) provider.

The Beijing-based platform-as-a-service (PaaS) company enables developers to integrate messaging, video calling, and voice calling into their applications, along with security functions, with 150,000 developers including Tencent and Alibaba already using the platform for app development.

According to Telstra Ventures managing director Matthew Koertge, the investment is a result of the burgeoning use of APIs within OTT applications in China, with opportunities to collaborate with the Telstra Software Group.

"With the complex nature of the telecommunications infrastructure in China and different local policies and business practices in each province, Cloopen meets the need among application developers for simplified communications capabilities," Koertge said.

"As a platform-as-a-service provider, Cloopen can easily integrate a set of communications APIs into applications that provide services such as car-hailing or meal delivery, which are booming in China, to enable functions like application-to-people voice and messaging, two-factor verification, and video conferencing. It can ease the complexity for application developers to work with multiple telecom operators to equip applications with these communications capabilities."

Cloopen CEO Changxun Sun said the company is hoping to make use of Telstra's Asia-Pacific and Australian networks for its own expansion across the region.

"Having experienced a rapid growth in customer numbers and revenue in 2015, Cloopen is committed to continuous expansion within China," the chief executive said.

"We are also looking to leverage Telstra's network to grow our customer base in Australia and across Asia Pacific. The cloud communication platform market is estimated to more than triple to $4.5 billion by 2021, and there are no doubt plenty of opportunities for us to work with Telstra to drive software innovation to a broader client base."

Telstra has the most extensive network in Australia, and in May announced it would be increasing its Asian network assets by building a fibre overland route between Taiwan and Hong Kong, a fibre ring network in South Korea, and a submarine cable connecting its networks in Asia to India and the Middle East, as well as securing capacity on a new cable system connecting Asia with the United States.

The measures were announced as part of Telstra's ongoing investment in the 36,000km cable network system connecting China, Japan, Singapore, South Korea, Taiwan, Hong Kong, and the Philippines, which the telco acquired as part of purchasing Pacnet for $697 million in December 2014.

Telstra has been investing in the Asian region for the past few years; in January, Telstra acquired Kloud, which provides professional and managed cloud services to enterprises for more than 80 corporate and government customers across the Asia-Pacific region, and invested in Chinese cloud services company Qiniu.

Telstra Ventures also made a multimillion-dollar investment in Taiwanese video big data and analytics company Gorilla Technology Group in March 2015, saying the company could provide beneficial video analytic software solutions for the government, security, broadcast, and retail sectors.

However, Telstra then pulled AU$2.1 billion out of China with the sale of online company Autohome last month, and also retired Pacnet's branding in April 2015 and sold off the company's Singaporean and Thai ISP assets for AU$4.4 million to a Singaporean cloud and datacentre company in November.

In addition, Telstra backed out of a $1 billion wireless joint venture in the Philippines with Filipino giant San Miguel Corporation in March.

Telstra CEO Andrew Penn said at the time that despite these withdrawals from the region, Telstra will continue eyeing opportunities for Asian expansion.

"We continue to pursue growth opportunities in Asia, consistent with our strategy," Penn said.

"Following our April 2015 acquisition of Pacnet, Telstra is now one of the largest connectivity providers in Asia.

"Our investment decisions will be guided by our capital management framework. Investments remain an important part of our future to ensure sustainable growth in earnings and shareholder returns over time."