Business / Companies

Startup Fxiaoke announces $70m fundraising

By OuyangShijia ( Updated: 2016-07-22 16:07

Internet startup raised $70 million from investors in its latest round of funding, defying the so-called "capital winter" in China's startup landscape.

The company announced on Wednesday that it has completed series E and E+ financing, led by Beijing Hualian Group's Changshanxing Capital and private equity Liyue funds.

LuoXu,CEO of Fxiaoke, said: "We are committed to solving sales problems in vertical industries. The new cash will be used to invest in other startups that focuses on improving sales efficiency of a particular industry."

Other investors include CITIC Private Equity Funds Management Co Ltd., one of the leading alternative asset management companies in China.

China's fluctuating stock market and economic slowdown have made investors more cautious about financing startups. From the second half of 2015, waves of funding are hampered in the market due to the increased saturation.

"In the future, Chinese enterprises will switch from their traditional management model to the cloud-based Software as a Service model. Using sales as a selling point, Fxiaoke attains a good strategic positioning," said Zhang, investor from CITIC Private Equity Funds Management.

Software as a Service, or SaaS, is a software distribution model in which a third-party provider hosts applications and makes them available to customers over the Internet, which is also a category of cloud computing.

Founded in 2011, the SaaS company now has around 100 thousand online enterprise users, Early in 2013, the company received $3 million series A financing from IDG Capital Partners, a China-focused incarnation of San Francisco VC company IDG Ventures.

So far, it has completed six rounds financing with the total amount of fundraising nearly $230 million.

Aiming to become China's Inc, a US leading cloud computing company, Fxiaoke faces fierce competition in the mobile application market for SaaS, against other tech firms including China's e-commerce giant Alibaba Group Holding Ltd.

LuoXu said the whole capital market had already reached the freezing point. There will be a large number of To B (does he mean B-to-B?) enterprises dying this year and economy will contract in the next two to three years.

From the Internet to the prints, Fxiaoke is known for investing lots of money in advertising in recent years. In August, it will cost 30-million-yuan advertising fee in China's second-tier cities.

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