Business / Companies

Startup Fxiaoke raises funds as it takes on Alibaba in B2B

By Ma Si ( Updated: 2016-03-09 10:13

Internet startup is raising new round of funding from investors, as the company competes with Alibaba Group Holding Ltd in the emerging business-to-business sector.

This new round of financing comes shortly after it raised $100 million in July, highlighting the intensified competition in the corporate-focused mobile application sector.

The five-year-old startup declined to disclose the investment value for this round, but Luo Xu, CEO of the "software as a service" company, said on Monday "It is a big amount."

Software as a service, or SaaS, is a licensing and distribution model in which software is licensed on a subscription basis and is centrally hosted.

Fxiaoke said the new investment is led by CITIC Private Equity Funds Management Co Ltd, the investment arm of State-owned CITIC Group.

All of its previous investors, including IDG capital, Hillhouse Capital Management Ltd, are all stepping up their bet in this round, the company said.

According to Luo, the injected cash will be used to turn its mobile marketing management app into a one-stop platform, which will enable Chinese companies to deal with all office tasks on smartphones.

By the end of February, more than 300,000 enterprises were using the company's mobile apps and 70 percent of them were willing to pay money to enjoy premium services

"We have changed the company's business strategy and models several times because we are adjusting to the changing market," Luo said.

Hugo Shong, the founding general partner of IDG Capital Partners, supported the company's adjustments.

"IDG has invested in over 400 companies. When 95 of them went public, most of their business models had nothing to do with what they first started, because the markets as well as competitors are changing rapidly."

Shong also said he is glad to see Internet giants like Alibaba Group Holding Ltd and Tencent Holdings Ltd are entering into the corporate app sector.

Alibaba launched DingTalk, an enterprise messaging platform, in 2014, to tap into small and medium-sized enterprises' growing desire for mobiles apps that can facilitate their work.

"They are great companies but their immense size is also posing difficulties," Shong said, "Unlike the consumer app sector where winner take all tickets, the business-to-business sector offer more opportunities to startups which target niches and verticals."

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