Last week (Oct 15 to 21), a total of 105 investments and acquisitions took place in China. One of the most noticeable changes was that Software as a service (SaaS) retained the top investment spot after losing the position briefly to the healthcare sector last week. The 19 investments in SaaS accounted for 18% of the entire funds raised during the period. (Details in Chart-1).
As usual, funding that remained in early stages, particularly Series A, outnumbered strategic investments and acquisitions (36 Series A, 13 strategic investments, and 18 acquisitions). (Details in Chart-2).
Chinese giants, including Alibaba (阿里巴巴), Tencent (腾讯), JD.com (京东), and Xiaomi (小米), eyed both domestic and overseas opportunities. They actively participated in last week’s fundraising with different preferences. Let’s track some of the most important investments:
Alibaba: Invests in Zomato, 1919, and JMGO
On October 15, Indian restaurant discovery and food delivery platform Zomato, secured investment worth USD 210 million from Alipay Singapore, the Singapore branch of Alibaba’s financial affiliate Ant Financial (蚂蚁金服). The investment would peg Zomato's valuation at around USD 2 billion. According to the company, the funds would be spend for its market leadership battle against Swiggy, its primary rival in India.
On October 18, Alibaba invested CNY 2 billion (USD 288.6 million) as Series C funds in Chengdu-based onlineliquor retailer 1919 Wines & Spirits Platform Technology (壹玖壹玖酒类平台科技股份有限公司), valuing the alcohol sale company around CNY 7 billion (USD 1 billion). Chinese news platform Caixin (财新) reported that 1919 issued over 39 million new shares to Alibaba, which made it the second-largest stakeholder of the alcohol specialist with a nearly 30% stake. The fresh capital raised in the round will be allocated to expand 1919’s to open 2,000 retail stores across China in the coming year, the company disclosed in its filing last week. In return, Alibaba would tap into 1919’s integrated services through the investment, ranging from retail distribution network to liquor products storage.
On October 19, JMGO (坚果投影) the smart projector manufacturer unit of Shenzhen Holatek Technology (深圳市火乐科技发展有限公司), closed a CNY 600 million (USD 86.53 million) Series D round financing led by Alibaba. Other investors included Chinese private equity ventures Junsan Capital, Sunz Fund, Stone Capital, GF Xinde Investment, Beijing D.Z Capital, and 36Kr Fund. The proceeds will be used to develop and expand laser television content and enhancing the efficiency of its distribution channel, the company reported.
Tencent eyes Linklogis and Momenta
On October 15, Shenzhen-based supply chain fintech firm Linklogis (联易融) closed its Series C round worth more than USD 220 million. The round was led by Singaporean sovereign wealth fund Government Investment Corporation (GIC). Tencent, GLP, Skyworth, China Oceanwide, Welight, Bertelsmann Asia Investment, Citic Capital and Loyal Valley Capital also participated in the process. Details of the funding were not revealed.
It was not the first time Tencent invested in Linklogis. The Shenzhen-based venture received approximately CNY 100 million (USD 14.4 million) in its Series A round from the tech giant in 2016 and another CNY 200 million (USD 28.8 million) in its Series B round in 2017. Linklogis had also teamed up with Tencent’s fintech team to launch financial blockchain platform TrustSQL in April 2017, providing blockchain cloud services and enterprise-class blockchain infrastructure, Chinese news aggregator CBN reported.
On October 18, Momenta, a Beijing-based autonomous driving startup, completed an over USD 200 million funding round, which put the company at a valuation estimated worth USD 1 billion. Tencent, China Merchants Capital, Shanghai Guoxin Investment, Yuanhe Capital, and CCB International were major investors in the round. Founder and CEO of Momenta Xudong Cao said that the proceeds would be used to further promote the implementation of Momenta’s autonomous driving technology. The company now comments itself as “the most valuable autonomous driving startup in China”.
JD.com participates in FangCloud investment
On October 15, FangCloud Technology (亿方云), a cloud storage service provider in China, secured USD 10 million Series B round from JD Cloud (京东云) and JD Finance (京东数科), both subsidiaries of tech major JD.com. CEO of FangCloud Chen Yuan said that the two sides would launch in-depth cooperation programmes in technology innovation, cloud service integration, and market expansion after the funding round.
Xiaomi: Lumi United completes undisclosed financing round
On October 17, Lumi United Technology (绿米联创), the Xiaomi-backed developer of smart home appliances and IoT (Internet of Things) solutions, confirmed raising an undisclosed amount in the latest financing round from strategic investors SEB Alliance and Yunmu Capital (云沐资本). Details on how the company intends to use the funds were not available.
Following is the detailed information on the investment above.
Comparison in Brief
Chinese investment market seems to have recovered from “festive lazy” and continued to thrive last week. The total number of investments soared to 105, compared to the figure of 71 between October 8 and 14. Among these, Series A funding was up from 15 to 25, and acquisitions jumped to 18 from 10.
It was interesting that although healthcare slid from number 1 to 5, the total of investments in the sector (10) remained the same as during October 8 and 14.