Investors are becoming more and more interested in Chinese Software-as-a-Service (SaaS) companies.
Bertelsmann Asia Investments, an Asia-focused fund under the German media giant, and GSR Ventures have led an Rmb150 million ($22.3 million) Series B investment in software service platform Black Lake. GGV Capital and Zhen Fund also joined the fundraising.
It is the second largest Series B fundraising this year in the SaaS sector, according to data from research firm IT Juzi. SaaS-related investment is especially popular with investors at the moment. Two of Black Lake’s investors, GGV Capital and GSR Ventures, previously participated in the $26.8 million funding of Moka, the biggest Series B fundraising in the SaaS sector so far this year.
The total investment in the SaaS sector has increased over the past three years to $2.2 billion.
Founded in 2016, Black Lake provides real-time data for factories to monitor their efficiency. Most of its clients are manufacturing companies. Black Lake helps factories to digitise the data generated in their production process and to put them together in a manufacturing intelligence system. The system can then analyse the data and help the company make the right decision.
Black Lake completed a $1 million Angel round in 2016 from IDG Capital, China Growth Capital and Zhen Fund. It finished its Series A funding of $8.4 million in May last year, from investors like GSR Ventures, GGV, Bertelsmann Asia, China Growth Capital, and Zhen Fund.
“We would like to bring new vitality to manufacturing companies,” said Zhou Yuxiang, chief executive of Black Lake. “And there is a conflict between traditional manufacturing and the urgent need for data digitalisation.”
Chinese manufacturing is going through a transition period. Last year, manufacturing attracted almost a fifth of the total foreign direct investment in non-financial firms, up 40% on 2017. For investors, it is really an attractive and promising sector.
Black Lake intends to seize the momentum, using proceeds to promote its data analysing model for manufacturing companies.
