China’s QingCloud raises $160m, prepares for onshore IPO

New investors coming into the round include China Merchants Securities International and its affiliate China Merchants Zhiyuan Capital, Yonghui Capital, River Head Capital, CICC Jiatai Fund, and China Oceanwide Holdings. Existing investors Bluerun Ventures and Lightspeed China Partners also re-upped.

The company is in the process of removing its variable interest entity (VIE) structure – typically used to allow offshore investors to take equity stakes in companies that operate in sectors in which foreign participation is restricted – in preparation for an onshore listing.

QingCloud was founded in 2012 and launched its cloud computing services a year later with a view to providing infrastructure-as-a-service (IaaS) to Chinese enterprises. The company currently has 24 data centers nationwide – of which 10 are self-operated and 14 are joint ventures – serving more than 70,000 customers, including Bank of China, China Merchants Bank, and Taikang Insurance.

BlueRun previously provided $2 million in a Series A round for QingCloud in late 2012 and participated in its $20 million Series B, led by Lightspeed China, in 2014. Last year, the company raised a $100 million Series C round led by BlueRun, with participation from two unnamed Chinese investors.

Most of the new funding will be used to improve QingCloud's products and services, as well as to develop more integrated cloud computing solutions through partnerships with other service providers, according to a statement.

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.

Recent investments in the space include a $220 million pre-IPO round raised by Wuxi Huayun Data Technology Service, and a $34 million funding round, led by Tencent Holdings, for Transwarp Technology. Meanwhile, earlier this year, EasyStack and UCloud raised $50 million and $140 million, respectively.

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• Topics
• Greater China
• Technology
• Expansion
• Support services
• China
• TMT
• Venture
• BlueRun Ventures
• Lightspeed Venture Partners
• CICC