Chinese computer rental start-up gets $32m Series C

Existing investors Shunwei Capital, Matrix Partners China, Angel Plus and Koala Fund – a VC investment unit of Legend Holdings-backed payment platform Lakala – also contributed capital. Edianzu has now raised around $70 million and the latest round is said to value the business at more than $200 million.

The company was founded in 2015 by Pengcheng Li, a second-hand computer dealer, and Bin Zhang, who previously covered enterprise service solutions for IBM. It offers IT equipment ranging from notebook computers to projectors as well as support services.

By the end of its first year in operation, Edianzu was renting out more than 20,000 units to 2,000 customers, primarily small and medium-sized enterprises (SMEs). It now works with 20,000 customers – including 1,000 listed companies and various privately funded unicorns – and accumulated rental equipment stands at 250,000 units. The company claims to have an 80% market share.

Edianzu has service teams in Beijing, Shanghai, Shenzhen, Guangzhou, Hangzhou, Wuhan, Chengdu, and Nanjing. Last year, it launched a four-hour turnaround repair service, which is expected to roll-out nationwide.

Chinese corporates spend around RMB160 billion ($25 billion) on computer equipment each year, while IT procurement by SMEs is approximately RMB280 billion, according to Edianzu. Nevertheless, rental penetration is far lower than the US figure of 59%. More companies are expected to adopt an outsourcing model, either to ensure they have the infrastructure to maintain rapid business expansion or because they want to reduce capital expenditure.

“Outsourcing non-core business functions is the trend of the times and customer demand is pushing the rental penetration rate upward,” Kaisi Chang, a managing director at Source Code, said in a statement. He added that Edianzu’s zero-deposit leasing model not only allows companies to use capital more efficiently, but also cuts back on IT management costs while improving user experience.

Angel Plus provided seed funding to the company in June 2015, with Shunwei and Matrix leading a $4.55 million round several months later, according to AVCJ Research. The following year those two investors – plus Koala and 1898 Capital – provided $10 million in funding and then Angel Plus, Shunwei, Koala and Matrix contributed a further $18 million in October 2017.

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• Topics
• Greater China
• Technology
• Support services
• Expansion
• China
• Source Code Capital
• Matrix Partners
• Shunwei Capital Partners