Gaorong backs China enterprise software player QuadTalent

The company was established in August of last year by Wanli Min, a digital transformation specialist who previously served as chief machine intelligence scientist at Alibaba Cloud. Last year, he also founded North Summit Capital, a technology-focused private equity firm that pursues investment opportunities in data and value-intensive traditional industries.

Although QuadTalent is less than a year old, its founding team claims to have participated in the delivery of more than 100 digital transformation projects across eight industries since 2015. The company positions itself as a solution-as-a-service provider – as opposed to generic B2B software-as-a-service (SaaS) companies – that offers the full package from consulting and implementation through deployment and delivery.

Chinese technology giants like Alibaba Group, Tencent Holdings and Huawei Technologies all offer middle platform solutions based on outsourced cloud-based systems. This platform-as-a-service (PaaS) concept has also attracted a host of start-ups, with the likes of MiningLamp Technology and 4Paradigm raising substantial sums. The latter achieved a valuation of $2 billion in its most recent funding round.

Integrating artificial intelligence (AI), big data processing and cloud services, they want to help companies in industries such as agriculture, manufacturing, retail, logistics and healthcare digitize operations. Leveraging the machine-learning capabilities of third-party platforms, these businesses can collect and manage data more effectively, leading to process efficiencies and deeper customer insights.

However, the generic SaaS versus customized PaaS argument can be deceptive. While start-ups want to progress from solving basic analytical problems through SaaS products to providing complete middle platform solutions, most of them are still working on a project basis. Investors warn that China’s SaaS and PaaS players still work on a project basis – and these projects typically are small in size, low in margin, and payment on delivery, which can lead to unreliable cash flows.

"Science and technology is a pivotal driving force of productivity growth and society advancement. We believe QuadTalent's is well set-up to deliver on the promise – its founding team possesses industry-leading experience and indisputable technology advantages,” Bin Yue, a co-founder and managing partner at Gaorong, said in a statement.

The venture capital firm is currently deploying its fourth US dollar-denominated fund, which closed at $500 million in late 2018. It comprises a core vehicle of $450 million for institutional investors and a $50 million sidecar made up of contributions from management and entrepreneurs in the firm’s network.

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• Topics
• Greater China
• Early-stage
• Technology
• China
• enterprise software
• Gaorong Capital