China cybersecurity player Meichuang raises $21m
Hangzhou-based cybersecurity company Meichuang has raised a RMB150 million ($21 million) round led by CBC Capital and Sharewin Investment.
Cybernaut Investment Group and Yuwell, a Shenzhen-listed medical devices maker that has received investment from Sequoia Capital, also participated, as did existing investor Oriental Fortune Capital.
Founded in 2005, Meichuang operates a zero-trust data security service for more than 3,000 enterprises and institutions covering sectors such as government, finance, medical, energy, transportation and education.
Meichuang initially focused on database operation and maintenance, entering the cybersecurity space in 2007. The company now has 600 employees, of which 70% are technical staff. About 20-30% of annual revenue goes toward R&D.
Co-founder Jianxia Wen divides customer demand into two categories, including compliance and data protection. The main customers in compliance are government and central enterprises, while financial and medical institutions often seek data protection for daily operations.
Medical institutions, in particular, are recognized as having inelastic demand because their data contain patients’ private information such as name, age, contact details, and bank account information. Meichuang serves this category with anti-ransomware products that prevent hackers from deleting or encrypting data, in addition to data masking products for protecting medical image files.
Shufan Lian, a director at CBC, described cybersecurity as a sector with exponential growth potential, especially as trends toward infrastructure digitization see more business and personal privacy data go online and onto clouds. China’s Ministry of Industry & Information Technology estimates the domestic cybersecurity industry will be worth more than RMB200 billion by 2025.
Data security has consequently emerged as a prominent technology investment theme. Earlier this year, DataCloak, a Shenzhen-based start-up that also uses a zero-trust system, raised $13 million in Series A funding led by Jeneration Capital.
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