Every month we handpick 40 financing cases that reveal the hottest trends in China’s startup and tech industry.
Property rental led the investment trend last month. Recently, the investment highlights have switched to AI and deep learning oriented facial recognition technologies, as well as big data based car trading services. Based on the convenience and high efficiency of the Internet, trading and entertainment online are popular with more and more smartphone users, though security has become a major problem for these individual and enterprise participators. Additionally, car trading services also won investors’ attention this month, mainly due to the convenience of car trading through Internet-based technologies and services.
Top 3 investment cases
Among the 40 cases we reported on this month, Face++, Dasouche, and Chehaoduo secured the highest financing funding. As China’s leading facial recognition startup, Face++ mainly offers artificial intelligence products and industry solutions to enterprise customers based on its deep learning algorithm, Brain++ engine, and IOT technology. The company completed a USD 460 million Series C financing round this month. Chehaoduo is the parent company of two car trading brands: used car trading platform, Guazi.com and new car e-commerce platform, Maodou, are seeking opportunities in the new retail and car leasing business. Meanwhile, Dasouche is an Alibaba backed car trading service provider that operates an O2O (Online to Offline) car trading platform based on their offline and online resources in the car trading industry.
As more and more trading, entertainment, and other activities go online, security becomes a priority. Though we have complex passwords and fingerprinting for these trading scenes, they will not be the terminal solution for all of the cases in work and in life. Facial recognition has continued to be an area that attracts capital and academic organizations’ eyes, but now with the help of AI and deep learning technologies, it is poised for a breakthrough, and is gradually being adopted in more and more real scenes. It has its unique advantages compared with other security solutions. This month, we witnessed the leading facial recognition startup Face++ secure a USD 460 million financing round to further invest in the R&D of new artificial intelligence products and solutions, as well as link to more real scenes.
Moreover, car trading is also an eye-catching sector this month. Two companies secured large financing funding to facilitate their businesses. Due to the improvement of supporting facilities, such as online payment, logistics, financial support, etc., online car trading can be completed much easier. Not only purchasing new cars, but also selling and purchasing second-hand cars are possibilities. This also reduces customers’ extra concerns regarding consumption on cars.
Facial recognition firm Face++ receives USD 460M for Series C
Face++ is a facial recognition firm that offers artificial intelligence products and industry solutions to enterprise customers based on its deep learning algorithm, Brain++ engine, and IOT technology. Its enterprise customers are mainly from five industries, including financial security, city security, mobile phone AR, business networking, and industrial robots. Though AI technologies require massive amounts of data to learn and form algorithms, Face++ benefits from training its algorithms on China’s vast pool of cheap data by cooperating with public security departments and other partners.
Car trading service provider Dasouche receives USD 335M for Series E led by Alibaba
Dasouche is a car trading service provider that operates an O2O (Online to Offline) car trading platform based on Dasouche’s offline resource in the car trading industry, and online resource backed by Alibaba. It aims to improve car trading’s efficiency via the Internet and big data technology. Currently, Dasouche’s car trading businesses are connected to Tmall and Alipay.
Car trading group Chehaoduo receives USD 180M for Series B+
Chehaoduo is the parent company of two car trading platforms that offer used and new car trading services, car appraisals, vehicle financial services, and insurance. The two large car trading brands are used car trading platform, Guazi.com, and new car e-commerce platform, Maodou.
3 investors to watch
Approximately one hundred investors joined in the aforementioned investment cases. Eyeing the hottest sectors were major investors like Capital Today, Clearvue Partners and Cash Capital.
Capital Today
Capital Today manages dedicated China country funds amounting to USD 1.5 billion. Founded by Kathy Xu in 2005, Capital Today mainly provides growth capital to small and medium-sized Chinese companies and helps them build a sustainable business and brands in China.
Capital has focused on the consumer, retail, and internet sectors. Its portfolios include JD.com, Youku Tudou.com, Ganji.com, Dianping.com, Three Squirrels online snack food brand, Yifeng Pharmacy Chain, Cosmo Lady Underwear Chain, Nuts Snack Food Chain, BiFeng Tang Quick Service Restaurant, Tsui Wah Restaurant Chain, etc.
Capital today participated in car trading group Chehaoduo’s Series B+ financing round to support its plan in new retail technology and new car leasing businesses. Additionally, Capital Today invested in house sharing platform Xiaozhu’s Series E to enhance the security of house-sharing and build a sustainable platform ecosystem.
Clearvue Partners
ClearVue Partners is a private equity firm focused on investing in the consumer sector of China by building consumer ecosystems, informed by data, and powered by technology. The firm invests in the consumer mega trend themes of modernization and new retail, lifestyle, health and wellness, and the digital consumer. It targets growth stage investments in fast-growing and promising local companies, and enables market entry for leading international consumer brands into China, developing top-tier brands and businesses.
The firm led tutor matching app Qingqing Jiajiao’s Series D financing round this month to improve its education system and invest in the research and development of teaching technology.
Cash Capital
Founded in 2011, Cash Capital is a venture capital firm focused on early-stage investments in TMT and Healthcare sectors. The typical ticket size of Cash Capital ranges from USD 2-10 million.
Cash Capital is the only venture capital platform under the Chinese Academy of Science Holdings that manages assets on behalf of the Chinese Academy of Sciences, the world’s largest scientific research institution.
Cash Capital currently manages two RMB VC funds, one RMB PE fund, one USD VC fund and other government special funds, with billions of yuan AUM. Cash Capital has built up close cooperation with established limited partners including CAS Holdings, China Life Insurance Co., China Communications Construction Company, Aeon Life Insurance Company, PKU Founder Life Insurance Company, and other famous sovereign wealth funds and public listed companies.
This month, Cash Capital supported study abroad service platform Smartstudy’s Series B+ financing round to invest in its products, content, services, and technology, as well as accelerate branding.
Top Trend
This month, AI-based facial recognition and car trading led the investment trends in China.
Online security has been a large challenge for many companies, as well as for individual consumers. Though fingerprints and complex passwords are widely applied to secure online information, they are not enough to deal with all the working and entertainment cases, not to mention the future scenes we will encounter. Since the iPhone X is equipped with Face ID to secure users’ smartphones with facial recognition, it has led the trend in the online security industry to develop facial recognition related services and products. Compared with fingerprint and passwords, as well as other biometrics, facial recognition has unique advantages, such as the potential to be applied in various real-world scenes, resistance to hackers, and so on. Facial recognition related technologies had a breakthrough recently due to an improvement in supporting technology from AI, deep learning, machine learning, etc.
Car trading also successfully became a hot sector in November. We have witnessed and experienced so many working and life cases being switched from offline to online, such as shopping and insurance, among others. With the optimization of online and offline infrastructures, car trading is able to be completed online. Additionally, it is easy to earn exposure and attract traffic online to seek potential car buyers, and the after-sale services can be guaranteed as easily as if the car were purchased offline. Because the quality of life has dramatically increased, cars are in-demand for almost all people around the world, and we can expect to see growth in the online car trading industry.
List of companies that attracted investments in November:
(Top photo from 699pic.com)