This year’s list of top funding rounds in China features quite a few familiar names. It’s fair that more established companies would get the largest funding rounds but there seems to be excessive attention to such companies, whereby a small portion of leading startups end up getting more money while the majority remain in a funding shortage, as explained by Li Jingwang, CEO of Chinese tech startup database IT Juzi. So much so that tech behemoths like Didi, ofo, and Mobike managed to raise two or more billion-level rounds in the span of one year in a more risk-averse funding environment.
Sector-wise, the sharing economy, artificial intelligence, and video were some of the hottest verticals in China. Check five of China’s largest tech firm investments for this year.
iQiyi, the YouTube-style service backed by Baidu raised $1.53 billion from the sale of convertible notes to investors. Investors in the round include Hillhouse Capital, Boyu Capital, Run Liang Tai Fund, IDG Capital, Everbright-IDG Industrial Fund, and Sequoia Capital. Baidu also invested $300 million into the service. One company representative told TechCrunch that the monster round would likely be spent on acquiring content.
Ofo—$450 million + $700 million vs Mobike— Billion dollar-level funding
For Chinese bike rental firms, funding size should not be measured by single rounds but by the total amount raised over a certain period of time. So we put ofo and Mobike, two leaders in the sector, together due to the nature of the fundings, and also the similarity of their business.
Ofo’s arch-foe Mobike is no less capable of sweeping up capital, although the firm didn’t specify its funding sizes for each round. Over the past year, Mobike has announced four financing rounds: nine-digit dollar fund in January and February, $600 million E round in July and an undisclosed amount in November. Wall Street Journal reported that the firm’s $600 million round was raised at $3 billion valuation.
Koubei, an Alibaba affiliate company focused on enabling local commerce, closed a $1.1 billion financing round in January this year from investors include Silver Lake, CDH Investments, Yunfeng Capital and Primavera Capital. It is interesting to note that the current round marks the first money from external investors.
Koubei is a joint venture founded in 2015 by Alibaba and its mobile payment affiliate Ant Financial to tap into China’s rising O2O initiative. Both put RMB 3 billion (worth around $480 million at the time) into Koubei when it was created. The idea behind it is to generate business for local retailers by bringing them online, while also offering new commerce opportunities for consumers.
The service fights fierce competition from domestic competitors like Meituan-Dianping, Ele.me, etc.
A relatively young startup, Toutiao has grown quickly in the past few years, widely considered as a competent candidate to replace the countries tech incumbents of BAT. Flush with cash, the firm is making investments of its own, such as Flipgram, Musical.ly, and more.