Tencent leads $34m round for VC-backed cloud player
Tencent Holding has led a RMB235 million ($34 million) funding round for Transwarp Technology, a Chinese big data technology developer backed by a string of venture capital investors.
Founded in 2011, Transwarp provides enterprise cloud-computing technology solutions to clients in the financial services, transportation and logistics, energy and utilities, telecom, aviation and education sectors, as well as to government agencies. Its systems are based on Apache Hadoop, an open-source software framework for distributed storage and processing of big data sets.
The company’s big data platform will be integrated with Tencent Cloud with a view to creating a larger platform through which to meet the evolving cloud computing and big data management and analysis needs of corporate China. Yuanhao Sun, Transwarp’s founder, said the new funding would go towards expanding the product and technical teams, R&D efforts, and improving client support services.
The company’s RMB155 million Series B round came in March of last year and featured domestic investors including Shanghai Real Power Emerging Industry Funds – an investment unit of Shanghai International Group – Shenzhen Capital Group, Shenzhen Stone VC, and state-backed China Small and Medium Enterprises Fund. The likes of Qiming Venture Partners and F&G Venture also re-upped.
While the likes of Baidu, Alibaba and Tencent are expected to dominate China’s cloud computing space, much as Amazon and Google have in the US, venture capital investors are flocking to independent players. These large companies are best known for public platforms that are off limits to many financial services and government clients, so start-ups can find an angle in offering more customized services.
The ultimate target market is small and medium-sized enterprises (SMEs) that are expected to become significant consumers of outsourced data services. However, for companies using open-source software, there is pressure to demonstrate that a differentiated product – through readily available technical support, for example – will be provided on top of the readily available infrastructure.
Recent investments in the space include a $50 million Series C round for EasyStack led by CASH Capital, the VC arm of Chinese Academy of Sciences Holdings, and a RMB960 million commitment from Oriza Holdings and CICC Alpha to UCloud. EasyStack was founded by a team that spun out from IMB China’s research and development center, while UCloud was set up by former Tencent executives.
Transwarp is not Tencent’s only direct investment in cloud computing. Last year it led a RMB200 million Series C round for Yonghong Technology.
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