Trading in Samsung Elec to be halted for three days before stock split – Korea Exchange

SEOUL (Reuters) – South Korea’s stock exchange said on Monday that trading in Samsung Electronics Co Ltd’s shares will be halted for three days before the stock is split.

The logo of Samsung is seen on a building during the Mobile World Congress in Barcelona, Spain February 25, 2018. REUTERS/Yves Herman

Samsung Electronics, Asia’s fourth most valuable stock as of Monday, announced a 50:1 stock split in January, in a move that will make it easier for retail shareholders to hold Samsung shares.

The Korea Exchange said the exact dates of the trading halt will be announced by Samsung Electronics. Samsung previously said in a regulatory filing that the newly split shares are expected to be listed on May 16.

The exchange said in a statement that the trade halt, meant for procedures like data processing and submission of old shares, is shorter than the recent average of about 15 trading days to minimize the impact to investors’ liquidity.

Samsung Electronics accounted for around 20 percent of the main Kospi index’s market capitalization as of Monday.

Reporting by Joyce Lee and Dahee Kim; Editing by Subhranshu Sahu

Have traditional banks weathered the fintech challenge?

The banking industry has seen an intense period of regulatory change and individual bank restructuring since the financial turmoil known as the credit crunch in 2008 – but little has changed in the minds of customers.

If you ask consumers on the street to name five banks, the usual suspects will flow off the tongue. But Monzo, Starling, Atom and Fidor – some of the leading financial technology (fintech) challenger banks – are unlikely to be on many people’s lists.

It is hard to believe that so little has changed in the market share of the traditional high street banks when you consider the rage directed at them a decade ago, when they contributed to the UK’s worst recession since the 1930s.

But now it appears the high street players have survived the worst, some of them with a bit of help from UK taxpayers, and the indications are now that the banks could be about to enter a phase of growth. And rather than threatening their growth, it appears the fintech revolution will actually fuel them.

In fact, recent research from EY suggests that, after years of investing in regulatory compliance, traditional banks are now ready to put more into growth. An EY survey found that investing in digital transformation was the second-highest priority in the industry this year, with 84% of executives citing it. This was only exceeded, unsurprisingly, by cyber security, named by 89% of executives as a priority for 2018.

Banks are also planning to dig deep into their pockets to support digital. In the EY survey, 59% of the banks questioned said they expect their technology investment budgets to rise by more than 10% in 2018. It’s not too difficult to conclude where the money will go.

It also seems that the banks’ reputations were not damaged beyond repair by the financial crisis. It turns out customers actually quite rate their banks. A study of 1,000 people by marketing agency True and research company Strive found that 86% of those aged between 18 and 55 gave their current bank a score of seven out of 10 or more for satisfaction. And 59% agreed there is little to be gained by switching banks.

So it appears the banks that found themselves in a dark place just a few years ago have emerged ready to harness the fintech revolution that has been going on all around them.

Banks have always remained close to new technology and invested in it, but have largely allowed third-party fintech companies to evolve – and now there is a strong fintech ecosystem for banks to dip into.

But where does this leave the challenger banks? Were the doubters right when they said they were unlikely to make much impact, or is there still some way to go?

Where next for fintech startups?

There appear to be three paths ahead for fintechs. The first and probably most anticipated, as with most startups, is that they will get up and running, build a reputation and customer base, and then get acquired. The second path is they will build a niche service and focus on that to build a profitable business. The final and most ambitious journey would be for a fintech business to take on the traditional banks as an end-to-end digital bank.

One fintech provider challenging the traditional banks is Fidor, a German challenger bank that was set up in 2009 and gained a UK banking licence in 2015.

Fidor has taken the first path mentioned above, and in July 2016 was acquired by French banking group BPCE, which has 35 million customers, more than 100,000 employees and about 8,000 branches in France.

Matthias Kroener, CEO and co-founder of Fidor, which now operates as a separate unit of BPCE, says it is no surprise to him that consumers are not rushing to switch banks.

“For this reason, we decided to come first as a clear secondary partner, then change gear into developing primary banking relationships,” he says. “For this, you must truly offer advantages and you must have the financial power to communicate that.”

As the boss of a company that was acquired by a traditional bank, Kroener admits he is biased when he says fintech startups will benefit from being taken over by experienced banks. “You need to have people on your investor side who understand the risk nature of your business,” he adds.

Kroener says trying to build a full-service bank outside a traditional organisation is tough because the traditional banks have a huge advantage. “The incumbent banks are not as stupid as we fintechs always tell the market,” he adds.

Sooner or later, challenger banks face the same hurdles as the incumbents, says Kroener. “You hire the same staff as the incumbents, maybe even coming directly from them, and, sooner or later, you might end up being just a normal bank.”

A senior IT professional in the banking sector says it is true that the traditional banks have had the measure of the fintechs on the rise. “I’ve seen what the banks have been doing as they picked up on the potential threat some years ago,” he says.

The IT professional says this will inevitably lead to the big banks getting involved, either directly through acquisition or indirectly through partnerships and investment. “The banks are keeping a look-out for emerging fintechs and then invest in, or become a customer or partner with, the most promising firms,” he says. “In this way, they hope to benefit from new tech without having to create it themselves, while also preventing some fintechs from becoming competitors.”

Acquisition might be attractive to some fintechs, depending on their ambitions, he adds. “Selling out can be a nice exit for the founders, who can then go off and do something else. Their offering would then be limited to what the buying bank can do, rather than be used by many banks, so acquisition could restrict a promising idea rather than allow it to be used more widely.”

The IT professional thinks becoming a full-service bank is the least likely outcome for fintechs. “There will be a few firms that take this route, but it is very difficult to be a bank these days, both technically and economically,” he says. “A decent tech firm should outperform a bank, so I’m not sure it’s that attractive as a business idea. You can probably do better selling stuff into the banking industry rather than actually becoming a bank.”

Focusing on a niche

Becoming a niche service provider is perhaps the most likely outcome for fintechs, he says – but acquisition is then highly likely. “I think a fintech niche supplier is more likely to be bought out by one of the bigger tech firms, rather than a bank,” he adds.

But he believes big tech companies could make inroads into the traditional banks’ market share. “If big tech firms like Apple, Google, Microsoft, Paypal, Amazon and others wish to get into specific financial services, I think they have the power to beat the banks,” he says. “But increasing regulation and de-globalisation of financial services may put them off.”

Celent analyst Gareth Lodge also sees focusing on a niche as the most likely outcome for fintechs. “I think the reality is likely to be focus on a niche,” he says. “It’s hard to see how they could ever move from being niche to a top 10, for a variety of reasons.”

One reason for this is that the big banks follow the challenger banks and fintechs, learn from what they are doing, and replicate it, says Lodge. “It would be very naive to think that the big banks aren’t trying to innovate as well,” he says. “They have the resources to do so, it’s just that sometimes it’s harder for them to do so. The consequence then is that the edge that many challenger banks believe they have perhaps isn’t as big a differentiator as many think.”

Lodge says it would be interesting to know how many customers of the challenger banks have closed their previous accounts. Many customers use a challenger bank as a second account or are just trying it out.

A worthwhile challenge?

Chris Skinner, chairman of the Financial Services Club, doesn’t think the challengers will really challenge at all. “They are too similar to banks and they will end up either as niche, boutique players or be acquired by the big guys, just as Fidor has been already,” he says.

But there are some challengers that stand out, says Skinner. “These include Tandem, with the Qatari connection giving it deep pockets, and Monzo, which also seems to have a lot of support from its customer base,” he says. “Even then, I don’t see any of these guys doing better than Metro Bank, which has had billions of pounds in backing but is still struggling to challenge the big five.”

Metro Bank was the first new UK bank in more than 100 years when it was launched in 2010.

Meanwhile, the rise of Santander proves that digital banks need deep pockets to challenge the traditional players, says Skinner. “In fact, the only reason Santander has achieved its position is by acquiring three building societies and then spending over £1bn a year to bribe people to switch,” he adds. “Do any of these new guys have a billion to throw away on acquiring customers? I don’t think so.”

So it seems the advantage the fintech banks have is technology rather than finances, and the senior IT professional in the banking sector says they should probably stick to the technology focus.

“Being a bank is not as attractive as it once was, so my guess is that the fintechs will be best suited to inventing things that the banks either invest in, become a customer of, or perhaps in some cases buy out if it is suitable for one bank to own it rather than use across the industry,” he says.

“A lot of banking products are just commodity and utility offerings, so all you can do is focus on making them cheaper to run, be more reliable and faster. I don’t think we’ll be seeing ‘luxury faster payments’ selling at a premium over ‘normal faster payments’. People just want to move money around – they don’t need bells and whistles added to that.”

A Passenger Sued Southwest Airlines for Exactly $74,999 and It's Totally Brilliant. Here's Why

You may have heard: A Southwest Airlines passenger is suing Southwest for landing at the wrong airport.

It’s the kind of case we talked about back in law school, and I was intrigued enough to dig up the court complaint down in Missouri. I’ve included it at the bottom of this story. 

But I think the most important line in the entire filing is one most people have missed:

“Plaintiff is requesting damages in the amount of $74,999.99 and nothing more.”

It’s an odd strange number, right? It turns out there’s a smart strategic reason behind the decision to use it–heck, I’d call it brilliant. Below, we’ll go through this strange case, why the plaintiff is suing for exactly one penny under $75 grand, and what all of this means for you as a business leader.

(I’ve asked both the plaintiff’s lawyer and Southwest Airlines for comment. Neither responded.)

The wrong airport

Quick, important fact: There are two airports servicing tiny Branson, Missouri: Branson Airport, which at the time had regular Southwest Airlines service, and the smaller Taney County airport, with a runway barely half the length of Branson’s.

Somehow, the captain and first officer of Southwest Flight 4013 from Chicago mixed up the airports–which are only seven miles apart–and landed at the wrong one.

Nobody was physically injured–but careers were ended and things could have been much worse. Passengers allegedly had to wait for two hours after landing before being allowed off, while the plane was filled with smoke.

“We landed very abruptly with the pilot applying the brakes very hard. We smelled burnt rubber from the stop,” another passenger (not the plaintiff in this lawsuit, as far as I know) told Forbes at the time, adding: “[T]he mood is somber now that we realized we were 40 feet from the edge of a cliff.”

The passenger who sued Southwest, Troy Haines, lived in the area and had flown into Branson Airport many times, and says he realized well before the plane landed–even if the pilots didn’t–that they were at the wrong airport, “with a much smaller runway.”

He was “immediately struck with fear and anxiety over potentially crashing,” according to his lawsuit, and he later “suffered severe mental anguish, fear and anxiety, including a panic attack which caused him to be removed from another airline prior to take-off.”

That in turn led him to stop flying, which meant taking a job that didn’t require travel–“at a substantially diminished salary.”

Why $74,999.99?

Whether you think the lawsuit sounds reasonable or not, the big question is simply: why not just round things up a penny and ask for $75,000.

The reason stems from the fact that there are two U.S. court systems: the federal system and the state systems. And, even if a plaintiff files a suit in state court, the defendant can sometimes move (“remove it” in the legal language) it to federal court. 

Most often, the defendant does this by showing that the plaintiff and defendants are from different states–but also that the amount at stake is more than $75,000. Suing for exactly one penny less than that blocks Southwest from removing the case to the federal court.

“It’s clear [the plaintiff in this case] wants to be in state court and is therefore staying under the monetary threshold for removal to federal court,” said Paul Geller, an experienced civil litigator and a partner at New York-based Robbins Geller Rudman & Dowd, who is not involved in this case.

“While I don’t necessarily ascribe to it, there is a general overlay in litigation that plaintiffs want to be in state court, and defendants try to find any way to get to federal court (through removal, where permissible),” Geller continued.

“Flight Options Plummet at Branson Airport”

Geller went on to call the idea that state courts are always more plaintiff-friendly “an urban myth.” And I think he might be right, in many cases.

But here, several things make filing (and staying) in state court utterly brilliant, in my opinion. If you’re a business owner, or you can ever imagine being a party to a civil lawsuit, you’ll want to pay attention.

First, there’s the fact that five months after this incident–June 4, 2014–Southwest stopped flying into Branson. 

You can imagine why this might make sense, business-wise: Taney County, where Brnson is located, only has about 51,000 year-round residents, although it is a tourist destination. Still, when Southwest left (along with Frontier soon after, the only other big airline that had served the area), the airport was hit hard.

In fact, the last time news broke that Branson might be attracting a major carrier, it was all part of an elaborate April Fool’s joke on the part of Sir Richard Branson (same last name as the city), the CEO and founder of now-defunct Virgin America.

I don’t know the exact economic impact of the airport’s demise. But I’m sure it caused damage, as outlined in one newspaper article: Flight options plummet at Missouri’s new Branson Airport. And I’m also confident that seeing your hometown dismissed as too insignificant for commercial flights has to sting.

All of which might make the plaintiff want more Branson-area jurors, while Southwest might want to everything it could to try this case as far away as possible.

50 miles–and a lifetime away

The closest federal court to Branson is 50 miles north, in Springfield.

That means that if Southwest Airlines could remove this case to federal court, they’d be able take it right out of the immediate county where this all happened–a community that Southwest decided a few years ago isn’t significant enough for its business.

And this isn’t just about the location of the courtroom; to my mind it’s about the makeup of the jury pool. Find jurors closer to Springfield, Missouri, and they might not feel one way or another about Southwest.

But pull together a jury in Branson, and a reasonable lawyer might imagine you’d wind up with a some who maybe knew someone who lost a job after Southwest and Frontier pulled out, or who don’t like that the big airlines think their hometown is just a punchline.

In other words, maybe you assume that a Branson jury would be predisposed to find for a plaintiff who lived in your town, and who isn’t asking for all the money in the world–and would find against the giant corporation with the out-of-state headquarters that allegedly did him wrong.

So you’d want to keep things in state court, in Branson. And because the plaintiff asked for one penny less than is required for a removal to federal court, Southwest seems stuck.

Brilliant, to my mind. Or else maybe this is all just about making it harder for Southwest’s lawyers and witnesses to travel to the trial in Branson.

Because as we’ve seen, Southwest doesn’t fly there anymore.

China eyes 'black tech' to boost security as parliament meets

BEIJING (Reuters) – At a highway check point on the outskirts of Beijing, local police are this week testing out a new security tool: smart glasses that can pick up facial features and car registration plates, and match them in real-time with a database of suspects.

A security camera overlooks Tiananmen Square in front of a portrait of the late Chinese Chairman Mao Zedong in Beijing, China March 6, 2018. Picture taken March 6, 2018. REUTERS/Thomas Peter

The AI-powered glasses, made by LLVision, scan the faces of vehicle occupants and the plates, flagging with a red box and warning sign to the wearer when any match up with a centralized “blacklist”.

The test – which coincides with the annual meeting of China’s parliament in central Beijing – underscores a major push by China’s leaders to leverage technology to boost security in the country.

That drive has led to growing concerns that China is developing a sophisticated surveillance state that will lead to intensifying crackdowns on dissent.

“(China’s) leadership once felt a degree of trepidation over the advancement of the internet and communication technologies,” said David Bandurski, co-director of the China Media Project, a media studies research project at the University of Hong Kong.

“It now sees them as absolutely indispensable tools of social and political control.”

Wu Fei, chief executive of LLVision, said people should not be worried about privacy concerns because China’s authorities were using the equipment for “noble causes”, catching suspects and fugitives from the law.

“We trust the government,” he told Reuters at the company’s headquarters in Beijing.

Reuters was able to verify that the glasses were being used in tests by the police to help identify suspect individuals and vehicles in the Beijing area in recent days.

China, under President Xi Jinping, is making a major push to use artificial intelligence, facial recognition and big data technology to track and control behavior that goes against the interests of the ruling Communist Party online and in the wider world.

Xi is expected to cement his power base this weekend as a reform to remove term limits is pushed through. That would in effect allow him to stay in his post indefinitely.

A promotion video shows an actor wearing LLVision facial recognition smart glasses during a demonstration at the company’s office in Beijing, China February 28, 2018. Picture taken February 28, 2018. REUTERS/Thomas Peter

Delegates and visitors entering the Great Hall of the People, the venue for the parliament, the National People’s Congress, have to go through facial scanners. The same happened to those attending the related advisory body, the Chinese People’s Political Consultative Conference.

“This year, security at the two sessions has some freshly-baked ‘black tech’ coming online,” wrote the state-run Science and Technology Daily newspaper, using a comic-book term in China for futuristic surveillance gadgets.

The paper said cameras at the event had been upgraded to capture, analyze and compare suspicious faces in around two seconds, powered by a system called “Skynet” – which has a national database of blacklisted individuals.

“The plot of sci-fi film ‘Minority Report’ is now basically becoming a part of daily life,” the newspaper added, referring to the Tom Cruise movie set in a futuristic society where crimes are solved and punished before they even happen.

LLVision CEO Wu Fei speaks during an interview at the company’s office in Beijing, China February 28, 2018. Picture taken February 28, 2018. REUTERS/Thomas Peter

ROBOTS AND DRONES

China has been deploying a growing arsenal of security technology, fuelling the growth of a domestic industry and worrying civil rights defenders about the growing intrusion on individual privacy.

A key concern is that blacklists could include a wide range of people stretching from lawyers and artists to political dissidents, charity workers, journalists and rights activists.

The new technologies range from police robots for crowd control, to drones to monitor border areas, and artificially intelligent systems to track and censor behavior online. There are also scanners to forcibly read mobile phone data and even police dogs with virtual reality cameras.

A recent Human Rights Watch report said China was also expanding a biometric voice database to boost voice recognition capabilities.

Surveillance measures long-used in restive areas such as Xinjiang in the northwest are also being rolled out more widely around the country, with a planned drive to centralize and standardize powerful but fragmented systems over the next year.

At the meeting of the NPC, most delegates said the increasing use of technology to improve state security was a positive, and that the benefits far outweighed privacy concerns.

“This is a good thing, it means our technology is really leading the world,” said Lu Yaping, a delegate from Jiangsu province in eastern China. “I don’t have any concerns about safety.”

Reporting by Pei Li and Cate Cadell in BEIJING; Additional reporting by Thomas Sun; Writing by Adam Jourdan; Editing by Martin Howell

Twitter Wants to Verify All Users as a Way to Prove Identity

Human, or bot? Twitter may soon have everyone on the social platform prove their identity by opening the verification process to all users.

Twitter’s CEO Jack Dorsey said Friday that the company intends to find a way to allow all users to verify.

“And to do it in a way that is scalable, [so] we’re not in the way and people can verify more facts about themselves and we don’t have to be the judge or imply any bias on our part,” he said during a Periscope livestream.

Twitter introduced its blue checkmark to signify verified users in 2009. Initially, the distinction was bestowed mainly on celebrities, athletes and public figures to curb impersonators. Then the badge was rolled out to journalists and other users. To obtain a verified checkmark, users have to apply with a reason for why they need one.

But by making verification more accessible to all, Twitter intends to shift the focus of the designation away from any presumption of endorsement, and emphasize proof of identity. If verification becomes a ubiquitous way to prove real users, then the unverified and possibly bot-run accounts could become more obvious.

“Users think of it as credibility, [that] Twitter stands behind this person and what they’re saying is great and authentic, which is not what we meant,” David Gasca, Twitter’s director of product, said, according to the Verge.

Twitter’s verification process has previously been the subject of controversy after the company reportedly verified white supremacist organizers of the Charlottesville rally.

Twitter has not revealed any details on how its extended verification process might work.

Great Wall seeks to double vehicle sales by 2025, plans electric car push

BEIJING (Reuters) – China’s Great Wall Motor Co Ltd aims to more than double its annual sales to 2 million vehicles by 2025, with roughly a third of those expected to be all-electric battery cars.

FILE PHOTO: A Great Wall Motors Haval HB-02 concept vehicle is presented during the Auto China 2016 auto show in Beijing, China, April 29, 2016. REUTERS/Damir Sagolj/File Photo

The Baoding-based automaker also plans to invest 20 billion yuan ($3.2 billion) on electric vehicle research and development by 2020, Great Wall Motor President Wang Fengying told a session of the National People’s Congress in Beijing.

Wang’s remarks come as China’s industrial policymakers try to engineer a dramatic shift away from conventional gasoline cars with subsidies and strict production quotas for electric and plug-in electric hybrid vehicles.

The company “will push forward with a renewable innovation strategy and will aim to assume leading positions” in electric battery vehicle technology as well as hydrogen electric fuel-cell know-how, she said.

Great Wall Motor sold 950,315 vehicles last year, down 1.9 percent from 2016, according to Automotive Foresight, a Shanghai-based consultancy.

Great Wall Motor and Germany’s BMW aim to jointly produce electric Mini vehicles in China, signing a letter of intent last month.

A successful conclusion to the talks would give Great Wall Motor its first foreign manufacturing partner and result in the first Mini assembly site outside Europe for BMW.

Wang also said on Thursday that the company planned to launch three new heavily electrified car models this year and two more next year.

Reporting by Norihiko Shirouzu; Editing by Edwina Gibbs

He Started His Company for $10,000. He Sold It for $600 Million Five Years Later

Peter Rahal started RxBar, a protein-­bar company known for its sleek, minimalist packaging, in 2012. Five years later, he and co-founder Jared Smith sold their startup to Kellogg for $600 million. –As told to Danielle Sacks

Why did you start a food business?

My father’s family is in the juice-concentrate business and my mother’s is in juice manufacturing. Both sides are Lebanese, and my parents were set up at my uncle’s funeral. I tried to get a job in the family business, but for internal political reasons, it wasn’t a good time. In 2012, I read that it cost only $10,000 to start a nutrition-bar com­pany–any dumb­ass can make a bar. The category was so competitive in places like Whole Foods, but CrossFits were getting popular, so we sold it to gyms and directly online. Jared and I each put in $5,000 and thought it could be a $10 million busi­ness. Last year, net revenue hit $131 million.

How did you find the right buyer?

We considered interest from 10 companies and met with four. We knew what we didn’t want. We have an allergic reaction to private equity: They’re not operators. They’d want to maximize profit and go public. We also didn’t want to sell a portion of the company and then have to sell part of it again. We wanted to do a 100 percent sale, because the process takes a shitload of time. We first met with Kellogg in March, and it didn’t close until October.

RxBars.

CREDIT: Lyndon French

Why did you decide to sell?

We never planned on exiting. Then, around January 2017, potential buyers started asking us to meet. That stimulated a conversation between Jared and me about what we wanted RxBar to be when it grew up. Ultimately, there are two paths to take: being a family business and keeping it private for generations; or going public or rolling into a great organization. I had experience in nepotism–family businesses are complicated. They’re subjective. We wanted to be objective and maximize the potential of the brand. So we chose the path of finding a partner that was culturally similar and had the muscle to accelerate our growth.

You’re still running RxBar, but now within this huge corporation. How do you make sure you don’t get swallowed up?

The number one way to protect RxBar is for us to earn it. If we over­deliver, we’ve earned that. But if we underdeliver and go south, then we’ll need to change. If you have a kid in school who’s doing well, with friends and playing sports, you wouldn’t change schools. But if the kid starts hanging out with a bad crowd and smoking pot, you’re going to change his school. We need to be a good student.

Citigroup, Zurich Insurance consortium to develop cyber security norms: FT

(Reuters) – A consortium led by Citigroup Inc (C.N), Zurich Insurance Group AG (ZURN.S) and Depository Trust & Clearing Corp (DTCC) will develop a set of cyber security standards that fintech companies can sign up to, the Financial Times reported on Tuesday.

FILE PHOTO – The Citigroup Inc (Citi) logo is seen at the SIBOS banking and financial conference in Toronto, Ontario, Canada October 19, 2017. REUTERS/Chris Helgren

The group was formed as a result of a meeting held by the World Economic Forum last year to promote cooperation between the public and private sectors, the FT said. on.ft.com/2FqDLzX

Founding members of the grouping, which include Hewlett Packard Enterprise Co (HPE.N) and U.S.-based online lender Kabbage, and participants say they aim to produce a set of standards within the next six to 12 months, according to FT.

Citi, Zurich Insurance and DTCC were not immediately available for comment outside regular business hours.

Last month, the U.S. Securities and Exchange Commission called for “clearer” cyber risk disclosure and asked companies to adopt specific policies restricting executive trading in shares while a hack was being investigated.

Reporting by Mekhla Raina in Bengaluru; Editing by Gopakumar Warrier

Facebook hires former BuzzFeed, Pinterest executives for video content

(Reuters) – Facebook Inc hired the former head of BuzzFeed Studios to lead its global video content and a former Pinterest executive as in charge of its video content platform Facebook Watch, they said in separate social media posts on Monday.

A Facebook sign is displayed at the Conservative Political Action Conference (CPAC) at National Harbor, Maryland, U.S., February 23, 2018. REUTERS/Joshua Roberts

The appointments come after the social media giant expanded video offerings in August last year to compete in the television market.

BuzzFeed Studios former head Matthew Henick will lead Facebook’s global video content strategy and planning, he said in a Facebook post on Monday.

Mike Bidgoli, who worked at image-based searching and sharing website Pinterest for nearly two years, will lead the Facebook Watch product team, he said in a blog post on Medium. bit.ly/2HbdJ15

Facebook Watch was made available initially to a limited group in the United States on the company’s mobile app, website and television apps, the company said in August last year.

The programming ranges from professional women’s basketball to a safari show and a parenting program.

The Menlo Park, California-based company faces a crowded video content market, where traditional television networks compete with newer players such as Netflix Inc, Amazon.com Inc’s Prime Video and Alphabet Inc’s YouTube alongside Twitter Inc and Snap Inc.

Facebook had signed deals last year with millennial-focused news and entertainment creators Vox Media, BuzzFeed, ATTN, Group Nine Media and others to make shows for its video service as part of its efforts to buy and license original content.

Reporting by Philip George in Bengaluru; Editing by Amrutha Gayathri

Chinese Startups See Latin America as a Land of Opportunity

Two years ago, Tang Xin had never set foot in Mexico and didn’t know a word of Spanish. While his grasp of the language hasn’t improved much since then, he has built one of the country’s hottest apps.

Noticias Aguila, which translates as News Eagle, now has 20 million users and became the No. 1 news app in Google Play’s Mexico store late last year, according to App Annie. That has come as Tang and his development team remain based in Shenzhen, the Chinese technology hub just across the border from Hong Kong.

Tang, who worked for Tencent Holdings (tctzf) before striking out on his own, is among an emerging group of Chinese developers and investors betting the next technology gold rush will come from Latin America and its 600 million-plus people. Fueled by deep-pocketed mainland venture capitalists and success at home, the 40-year-old and his peers are exporting a formula honed in China of pursuing rapid expansion over profitability.

Chinese venture capital investment in Latin America jumped to $1 billion since the start of 2017, compared with about $30 million in 2015, according to data collected by Preqin.

“China used to copy from overseas, but now we see more opportunities by helping replicate business models that’ve taken off and exporting them,” said Tang, who now spends a quarter of his time in Mexico. “Competition is so fierce in China that smaller companies feel it makes sense to look for opportunities elsewhere.”

Chinese startups pushing into the region include Hangzhou-based Tian Ge Interactive Holdings, which wants to build an internet finance platform in Mexico. Phonemaker Transsion Holdings is preparing to set up operations in Colombia. China Mobile Games & Entertainment Group plans to distribute mobile games in Mexico. Ofo, the Beijing-based bicycle sharing service, is preparing to make its first Latin America foray by entering Mexico, said Chris Taylor, who runs its U.S. operations.

The push by the tech sector piggybacks on years of state-driven Chinese investments in infrastructure in Latin America, with a pool of 2,000 companies pouring more than $200 billion in the region as of January.

When the startups arrive in Latin America they don’t exactly have the place to themselves. MercadoLibre and Despegar.com, both of which are based in Buenos Aires, have become major players in e-commerce and online travel respectively.

For more on Chinese startups, watch Fortune’s video:

Like China’s infrastructure investments in the region, there’s the possibility of pushback from locals. The road to Latin America has also been littered with cautionary tales of crippled projects. China’s automakers have struggled to establish themselves in countries such as Brazil even after building local plants.

“It’s risky and these companies will need to localize their products,” said Tang Jun, a deputy director at the Institute of Latin American Studies at Zhejiang International Studies University. “There will be political environment risk, as many parts of Latin America often go through quick cycles and turbulence.”

That hasn’t stifled investment interest. Alibaba Group Holding and Tencent are scouring for projects, while Didi’s acquisition of Brazil 99 showed deals can get done quickly, unlike the political opposition Chinese companies face in the U.S.

The trend has captured the attention of investors like Santiago-based Nathan Lustig who joined forces with a Beijing-based partner. Together they want to bridge Chinese investors with projects focusing on Latin America. Lustig’s goal is to scoop them up cheaper and earlier.

“We think Chinese acquisitions will be an important exit strategy for startup investors in Latin America,” said Lustig, managing partner of Magma Partners. “This will be a major theme over the next five years.”

Noticias Aguila’s Tang, whose company is formally known as Shenzhen Inveno Innovation Technology Co., doesn’t just want to sell out. His goal is to become the biggest internet company in the region. The company got its start by scraping news sites, mostly independent outlets and social media because it didn’t have the rights to larger publications. It hired locals to help with translation and build partnerships while the team back in Shenzhen developed algorithms to aggregate and sort the news for users.

It took the company about two months to be able to aggregate as least 100,000 articles a day. The next step was signing up media partnerships and now it has distribution deals with seven of the 10 largest publications in Mexico, including El Universal and Publimetro.

Unlike traditional publications that decide what users get to read based on editor recommendations — Tang’s company aggregates, labels and matches content to user preferences. It’s an approach that has found success in China, with the owner of Jinri Toutiao valued at $11 billion, according to CB Insights.

“It all comes down to how accurate you label items,” Tang said by phone from Shenzhen. “The more accurate and detailed the label, the more accurate you can target and push the content that the users want.”

In keeping with the Chinese model of spending to win over users, irrespective of profits, Tang has bought at least $2 million of advertising on Facebook to reach potential customers, even though the U.S. social networking giant is a competitor with its news feed. The app sat at No. 2 among news apps in Mexico in February, a notch down since November, according to App Annie. That’s part of the reason why this year Tang plans to quintuple spending on promotions and work with phone carriers and makers to pre-install its app.

“Organic growth is picking up but we rely on promotions mostly, because we need to expand fast,” Tang said. “That is key.”