China AI player 4Paradigm closes $230m Series C

The extension - which brought the entire Series C to $230 million - introduced several new strategic investors to the company's cap table, including Cisco, CITIC Bank, and Lenovo. Green Pine Capital Partners and Co-Stone Capital came in as financial investors.

According to AVCJ research, the initial tranche of the Series closed in 2018 at a valuation of $1.2 billion and featured China Reform Tus Fund, Poly Capital, Three Gorges Capital, Agricultural Bank of China, and Bank of Communications. Sequoia Capital China was among the existing investors that re-upped. It remains the largest external shareholder.

Founded in 2014 by Huawei Technologies veterans, 4Paradigm - also known as Fourth Paradigm - has helped numerous state-owned banks in China embrace AI solutions. Some of these banks became shareholders as well as paying customers.

The company provides a suite of software tools to help banks run complex algorithms that underpin fraud detection and customer identification systems. Highly-trained in-house engineers are not required. It also started producing hardware – a chip customized to process the company's algorithms - and offering it to clients as a package alongside side software.

4Paradigm is expanding its business scope from finance to retail, healthcare, manufacturing, internet services, media, government, and energy. Clients include PetroChina, Yum China, Yonghui Superstores, People's Daily and Ruijin Hospital. With 8,000 customers and tens of thousands of landing scenarios, the company is the market leader for machine learning platforms in China, according to IDCMarketScape.

B2B technology service providers in China fall into two categories: technology-centric and scenario-based, although there can be some degree of overlap. 4Paradigm is an example of the former, as is MiningLamp Technology, a big data specialist that raised a $300 million Series E earlier this month led by Temasek Holdings and Tencent Holdings.

Scenario-based start-ups focus on areas such as customer relationship management (CRM) and expense management. In the past six months, Xiaoshouyi and Udesk - CRM specialists that provide big data and AI-enabled software services - have raised sizeable rounds. On the expense management side, Fenbeitong and Huilianyi recently closed funding rounds.

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• Topics
• Greater China
• Expansion
• Technology
• China
• TMT
• Green Pine Capital Partners
• Sequoia Capital