Chinese business software provider Black Lake has closed a RMB 150 million (around $22 million) Series B led by GSR Ventures and Bertelsmann Asia Investments (BAI), the company said on Monday.
The Shanghai-based company has been selling software-as-a-service (SaaS) applications, such as data analysis tools for the manufacturing industry, since 2016. Black Lake says its cloud-based Manufacturing Execution System (MES) can be installed in two months without the need for new or revamped product lines. Production cycle and penalty rates are reduced by 35% on average, said the company.
Around 20 clients who signed contracts before April 2018 have all renewed their contracts, a company spokesman told TechNode on Monday. Clients have included state-owned enterprise China Resources Group, global beer brewer Anheuser-Busch InBev, and McDonald’s, the company said.
Beijing-based private equity firm GSR Ventures was an early backer of ride-hailing giant Didi and food delivery service Ele.me. Along with GSR, several prominent global investors, including GGV Capital and Zhen Fund, returned with follow-on investments.
GGV Capital Principal Joshua Wu said in a statement sent to TechNode, “We believe Yuxiang and his team will play a more significant role in the digital upgrade of the Chinese manufacturing industry, and that is the reason we continued funding,” (our translation).
Black Lake said it earned RMB 40 million of revenue in 2018. Clients with annual production value of RMB 100 million, for example, pay subscriptions each year totaling RMB 150,000 to RMB 250,000, according to the company. Black Lake founder and CEO Zhou Yuxiang is a former investment manager from a Canadian sovereign wealth fund and a Dartmouth graduate.
China is sparing no effort to retain the country’s industrial leadership position by transforming its manufacturing powerhouse into smart factories with the help of cloud services and intelligent tools. In a document released by the state council in 2017, Beijing will push at least 300,000 manufacturers to adopt industrial internet services for production management, quality control, material tracking and more by 2020.
Factories in the cloud, where manufacturing services are hosted and analyzed in data centers to drive workflow process efficiency, is also a main government focus in 2019, said Wang Xinzhe, chief economist at the Ministry of Industry and Information Technology (MIIT) in a press event last month. The government is pushing for around 1 million factory owners to transfer data to the cloud rather than on local servers by 2025, according to the state council, as part of a broader initiative of building smarter, more secure and stable factories.