September 9, 2015
Despite China’s recent economic challenges, investors and entrepreneurs only have to look to recent trends for some reassurance that the Chinese startup industry is among the world’s hottest. Even just last week, Google announced its plans to re-enter the Chinese market.
The Wall Street Journal reported in August that the country’s tech industry received $6 billion in investments from venture capitalists in 2014, citing figures from AVCJ Research, which was more than double the funding seen in 2013. Not only is money flowing around more freely, but the number of deals being conducted among Chinese startups is also increasing – with nearly 300 in 2014, up from less than 200 in 2012. At the end of August, on-demand ride-sharing giant, Uber, announced a $1 billion raise to expand efforts in the Chinese market.
Despite the country’s recent economic hiccups, there are countless Chinese startups that are thriving and serving needs that previously had been unmet or in ways that hadn’t previously been thought of. These innovators aren’t hard to find in China, but some of the hottest Chinese startups to be watching right now include:
GrubHub and Seamless may be household names in the United States, but China’s food-delivery apps are left something to be desired, so Ele.me – “hungry, yet?” in Chinese – set out to take over the market. The Shanghai-based service, which recently announced $630 in series F funding, serves 250 cities, delivering food from 200,000 restaurants to 20 million users. About $9.5 million in transactions are recorded every day by 40 million customers, 98 percent of which use Ele.me’s mobile app to order food. The company now has a valuation of $3 billion, making it the third most-funded startup in China.
Most people are familiar with the headaches associated with getting a loan from a financial institution, and that’s exactly why Pandai is generating buzz in China. The company facilitates private loans between individuals while protecting all parties from the liability associated with lending someone money. Private finance is big business in China, where entrepreneurs often prefer to skirt official lending in favor of other routes that are often quicker and more lax. The company’s startup boom boosts the prevalence of private financing, and vice versa.
Mobile advertising platform Appcoach has been making waves in China’s advertising technology industry, and it recently announced $10 million in series A financing to expand its reach internationally. The funding will allow new clients in the United States, Europe, India and Latin America to more easily and effectively reach customers in the Asian market. The company’s advertising technology – which applies to video, display and native units – has helped launch 450 apps in 150 countries.
To better serve China’s massive aging population – the number of people aged 65 or older is projected to reach 223 million people by 2030 – the country’s healthcare industry is undergoing a digital makeover. Many feel the industry is in need of an overhaul due to poor hospital infrastructure and a lack of doctors to meet the population’s needs. 80 percent of China’s drug sales take place in hospitals now, but in the future they will shift to drug stores, and Yao Xin aims to educate and incentivize drugstore assistants to properly and safely distribute drugs. Many of these assistants are poorly paid, thus may not be fully dedicated to properly distributing medications. To improve their performance, Yao Xin uses virtual patients suffering various woes, and those who properly diagnose and treat patients receive bonuses that can be as high as four months of pay.
While the country may be on semi shaky ground right now, innovative Chinese startups like these should be proof that the country is fertile ground for startups and funding. With investors’ confidence in the country’s businesses, there’s no telling what we’ll see next.
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