Chinese IT infrastructure player SmartX raises $28m
SmartX, a Chinese enterprise cloud services provider, has closed an extended tranche of its Series B round as well as a Series C round, raising RMB200 million ($28 million) in total.
Vertex Ventures China led the Series B extension, with Matrix Partners China among the existing investors that re-upped. Tianjin Venture Capital and Hua Capital co-led the Series C, with participation from F&G Ventures, according to a statement.
SmartX is a key player in China’s hyper-converged infrastructure (HCI) market. HCI replaces legacy tiered IT infrastructure with a combination of data center hardware and intelligence software. The objective is to deliver an integrated solution that is flexible and scalable, meanwhile reducing overall costs.
Founded in 2013, SmartX focuses on the self-developed distributed storage solutions. It serves IT-dependent sectors such as financial services, healthcare, manufacturing, retail, and real estate. Customers include China Bank of Communications, Taikang Insurance Group, Guotai Junan Securities, electric appliance manufacturer Haier, property developer Evergrande, and South Korean TV network SBS.
According to a report released by IDC, SmartX ranks among the top three HCI providers in China’s financial services sector. The company claims annual growth of 100% in recent years. Revenue increased more than 60% year-on-year during the first half of 2020, despite the coronavirus pandemic.
Research firm Gartner divides China's HCI market into three groups: traditional data center vendors such as Dell EMC and Huawei; cloud providers like QingCloud that offer privatized deployment solutions; and vendors that pursue relatively niche strategies and claim a high level of differentiation. SmartX falls into the latter category, much like US-listed Nutanix.
Gartner predicts the global HCI industry will deliver annual average growth of 23% through 2023. This compares to 50% in recent years.
According to AVCJ Research's records, SmartX received nearly RMB100 million in Series B funding led by Matrix in 2017. F&G Ventures, Gaorong Capital and Lenovo Capital & Incubator Group also participated. Lenovo Capital provided the company's angel round in 2013, while Gaorong and F&G co-led the Series B in 2015.
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