Every month we handpick 30 financing cases that reveal the hottest trends in China’s startup and tech industry.
Last month, AI and deep learning oriented facial recognition technologies attracted a lot of attention from investors, while ride-hailing cases came back to the top this month, followed by bike-sharing and cloud services. Though the market of the sharing economy is reaching its saturation point due to the boosts from enterprises’ innovations and investors’ capital, startups that hold advantages in specific industries are expanding their service ranges. Based on the integration of advanced technology and resources, they are strengthening their dominant position and expanding it to cover a wider range.
Top 3 investment cases
Among the 30 cases we reported on this month, Didi Chuxing, Helliboke, and Kingsoft Cloud secured the highest funding. China’s ride-hailing giant, Didi Chuxing, secured USD four billion for financing in order to strengthen its leading position in the ride-hailing industry. Didi opened a research and development lab with 100 staff members in Silicon Valley in March this year. The lab focuses on autonomous driving technologies and AI-oriented security. Besides expanding its business to autonomous driving, the company is also expanding its services globally by investing in companies that take on Uber across the world. Moreover, with the help of capital raised from the latest financing round, it will further invest in the development of electric vehicles, as well as build charging networks in China to support its EV transportation system.
Hellobike is a bike-sharing startup backed by Alibaba’s financial subsidiary, Ant Financial, which mainly places its bikes in second- and third-tier cities, and achieves the upper-hand in these cities, rather than competing with ofo and some bike-sharing startups for a market share in China’s first-tier cities. This month, Hellobike grabbed its first and second financing round, totaling USD 500 million since its merger with its rival, Youon. It will continue to strengthen its competitive advantage in smaller cities.
According to NetEase, there are only 300 million people in China who own a driver’s license. Compared with China’s population, it is a huge opportunity for the vehicle related sharing economy. Among those people with driver’s licenses, only half of them own vehicles themselves, which is indicative of a huge gap between the transportation demands and the number of cars. Currently, ride-hailing and car sharing seem to be the best choices for people with transportation demands who cannot drive themselves. Additionally, in a questionnaire survey done by iiMedia Research, 77% of the respondents said they are willing to try car-sharing services. Because of this, and under the consideration of bad traffic and the preference for green commuting, ride-hailing and bike-sharing were the highlights of the investment trends this month.
Moreover, cloud services are being adopted by more and more industries, as they are connecting their existing business with AI, big data, and other advanced technology. Cloud services are becoming the infrastructure for their business. Kingsoft cloud is a cloud service provider backed by Kingsoft, a Chinese software company that focuses on development for the internet and Microsoft Windows systems. It secures USD 300 million for its Series D financing round in this month to integrate AI technology into its cloud services for a better customer experience.
China’s ride-hailing giant Didi Chuxing raises USD 4B for financing
Didi Chuxing is China’s top ride-hailing startup that has spread ride-hailing services around the world. After purchasing its rival Uber’s Chinese operations last year, Didi has been working on pushing its business globally. In March, Didi opened a research and development lab in Silicon Valley to focus on autonomous driving technologies and AI-oriented security. The lab now has about 100 staff members.
Bike-sharing startup Hellobike receives USD 350M for Series D from AntFinancial & others
Hellobike was founded in 2016 in Shanghai. Its bike-sharing services cover hundreds of cities in China, such as Hangzhou, Suzhou, Nanjing, and Xiamen. Unlike ofo and some other bike-sharing startups that compete for a market share in China’s first-tier cities, Hellobike prefers placing its bikes in second- and third-tier cities, and achieving the upperhand in these cities. The company claims to have started its campaign in fourth-tier cities in China, and improve its user experience by unlocking its bikes with smartphones, as well as focusing on the riding experience.
Cloud service provider Kingsoft Cloud receives USD 300M for Series D
Kingsoft Cloud is a cloud service provider that mainly provides online cloud storage and cloud distribution services for businesses and developers. Its commercial version is based on the fast disk Jinshan cloud services architecture, business-oriented cloud storage products, storage, and so on. Its cloud services and products support large-scale concurrent users’ access to ensure the security of user data.
3 investors to watch
Hundreds of investors joined in the aforementioned investment cases. Eyeing the hottest sectors were major investors like Northern Light Venture Capital, Tsing Capital, and Vision+ Capital.
Northern Light Venture Capital
Northern Light Venture Capital is a China-focused venture capital firm targeting early stage opportunities of innovation and disruptive technology. It mainly engages in the TMT, advanced technology, and health care sectors, including interactive entertainment, marketplaces, intelligent solutions, industry verticals, and enterprise solutions from TMT, AI and robotics, energy technology, new materials, cleantech, automated equipment, components and subsystems from advance technology, as well as medical devices, E-health, medical services, and biological, genomic and in-vitro therapeutics from the healthcare industry.
This month, Northern Light Venture Capital participated in speech and language therapy startup Orient Speech Therapy’s Series B, which totalled USD 25 million. The startup provides professional and individualized training programs to children with autism, down syndrome, hearing disorders, and other disorders. This investment process follows Northern Light Venture Capital’s preference for the health care sector, and enables Orient Speech Therapy to expand its market share to serve more customers.
Founded in 2000, Tsing Capital is China’s first fund management company dedicated to multi-disciplinary sustainable technology investments in China and globally. Tsing Capital has deep domain expertise across environmental, clean and efficient energy, new material, and intelligent technologies, all across broad industries with an emphasis on advanced manufacturing, sustainable mobility, sustainable agriculture, and future cities.
Tsing Capital was founded by Don Ye, recognized as an “elder statesman” of Chinese Cleantech venture-capital investing, and led by executives with extensive entrepreneurial, operational, and cross-border expertise globally.
Tsing Capital co-invested in an AI startup, Vion Technology, which specializes in the research and development of core algorithms and products of artificial intelligence. Vion Technology’s latest Series B financing round amounted to USD 20 million.
Vision+ Capital focuses on startups at early stage, and join their Series A and Series B financing round. In this stage, startups are growing from ideas to particular services and products, which acquires support from operation, team management, as well as financial and other resources. Vision+ Capital mainly supports startups in these areas in order to propel innovation.
Founded in 2015, Vision+ Capital’s team is comprised of Internet startup and venture capital professionals, to support startups with practical experience. It pays attention to several sectors, including Internet innovation, consumption upgrades, digital medical, and intelligent technology. It invests in RMB and USD.
Vision+ Capital’s efforts mainly lie in new retail sectors this month, since it participated in new retail startup, Zailouxia, which provides customers with snack food, fresh food, commodities for daily use, and other retail services in communities. Zailouxia’s further development matches Vision+ Capital’s expections for consumption upgrades.
This month, the sharing economy and cloud services led the investment trends in China.
Transportation demands from customers have not been satisfied, especially for customers from smaller cities. Besides, unicorns in the ride-hailing industry, like Didi Chuxing and others, are integrating supporting resources to strengthen their leading position in the industry, even expanding their leading advantage to capture users in other fields. Didi Chuxing is broadening its attention to autonomous driving and AI technology, by depending on its successful ride-hailing services, which contribute large amounts of data from a huge user base. We will wait to see if it can actually make a difference in these fields with its unique advantages.
Most enterprises are digitaling their services and products based on the development of Internet technology, as well as to meet customers’ preferences for digitalization. Cloud services will mark their first step forward, since all of the digital services and products will be Internet based. In order to provide customers with upgraded services, they have to follow the latest development trends in technology. Besides, cloud services will include big data analysis and AI-oriented algorithms, among other support systems. It will be a huge chance for startups with technology and innovation on this field.
List of companies that attracted investments in December: