China VC Weekly: Xiaoice, Lingerie and More
In last week’s VC news, Microsoft’s China-based spin-off gets a new injection granting it unicorn status, local lingerie industry leader Neiwai raises a whopping $100 million in the latest round, Alibaba and SAIC motors back smart vehicle software startup Banma, attracting $464 million in investment from a cohort of new and old backers, all that while the Tencent-backed Indian streaming giant Gaana raises $40 million in debt financing.
Microsoft’s chatbot spin-off Xiaoice gets a $1 billion valuation
China-based AI chatbot developer Xiaoice increased its valuation to $1 billion via the latest funding round led by Hillhouse Capital Management, a major boost for the provider of voice and text services used for digital assistants, consumer electronics and cars.
The company split off from Microsoft Corporation last year and quickly raised more than 500 million yuan ($77 million) in its Series A round, Chief Executive Officer Li Di said in an interview Wednesday.
Other participants in the latest round included GGV Capital, IDG Capital, NetEase Inc. and Northern Light Venture Capital.
Xiaoice, which has been marketed as the world’s most popular social chatbot, announced that the funds will be used for product development and expanding its app businesses in China and Japan.
Among other big enterprises, smart assistants of Huawei Technologies and Xiaomi devices both use the company’s technology, as do several Chinese automakers.
The company reportedly had more than 100 million yuan in sales for the fiscal year of 2020 and it plans to double its revenue in the year ahead. Xiaoice intends to go public at some point down the road, according to Li.
Launched by a team led by Li Di at Microsoft in 2014, Xiaoice claims more than 660 million users. Users can have conversations with the chatbot on social media, and it has evolved through the years to even write poetry, sing and compose.
SEE ALSO: OPPO Phone Users Can Now Summon Microsoft’s AI Assistant Xiaoice
China’s lingerie industry trailblazer Neiwai bags $100 million in Series D round
One of China’s leading lingerie brands, Neiwai, recently completed a $100 million Series D financing round led by an undisclosed global investment group, according to a report published on 36Kr.
The brand said the funds will be used for R&D, brand building and sales channel expansion in both domestic and international markets.
In recent years, China’s highly fragmented underwear market – worth over $61 billion – has been disrupted by emerging digital-first brands, among which Neiwai is the frontrunner.
Neiwai reportedly releases roughly 400 to 500 items each season. In addition to e-commerce channels, the brand has opened more than 120 offline stores in 32 first- and second-tier cities across the country.
The Shanghai-based company, founded in 2012, started out with bralette as their main product, and is now expanding into lingerie, loungewear and sportswear. The brand has won the hearts of consumers with its feminist narrative and portrayal of diverse bodies in its marketing, still a rarity in China.
Smart vehicle software startup Banma raises over $464 million in latest round
A Chinese startup that develops smart connected cars software products, Banma Information Technology, has received a 3 billion yuan ($464 million) investment from its major shareholders including Alibaba, SAIC Motor, CMG-SDIC Capital Management and Yunfeng Capital, a venture capital fund co-founded by Jack Ma.
The cash injection will fuel Banma’s efforts to increase its investment in R&D for operating systems for connected vehicles, said co-chief executive Zhang Chunhui.
The fundraising comes at a time when the country’s internet and tech giants including Baidu, Tencent and Huawei have all rushed into the lucrative smart car market by providing traditional automakers with their own software systems.
Banma did not disclose its valuation after the new investment. In September 2018, the company raised more than $247 million in its first funding round, which it said gave it a valuation of over $1 billion.
Based in Shanghai, Banma was established in 2015 as a joint venture between Alibaba and SAIC Motor, one of China’s largest automakers, a sign of the e-commerce giant’s ambition to expand its influence in the auto industry by helping to build connected cars.
Tencent—backed Indian streaming services leader Gaana rakes in $40 million in debt financing
Indian streaming service Gaana has raised $40 million in debt funding from tech giant Tencent. It is reported that Tencent also owns 20% of Universal Music Group. Gaana, which is also backed by The Times Internet, the digital arm of Indian media conglomerate the Times Group, passed a resolution to increase its commercial borrowing ceiling in order to receive more funds from Tencent Cloud Europe, according to a report on Entracker.
Gaana already raised money from Tencent in the past, $41 million in debt financing in September 2021 as well as $115 million through an equity sale to Tencent in February 2018.
Gaana leads the Indian music streaming market with 185 million monthly users, as of August 2020.