Chinese tech giant Tencent and leading venture capital firm Sequoia China led a $25 million funding round in WakeData, a big data startup based in the southern coastal city of Zhuhai offering digital serivces for enterprises, underscoring the demand to digitize businesses in the Covid-19 era.
“Tencent’s investment in WakeData comes at a time where digital transformation has undoubtedly become the focus of many organizations and is accelerated by the Covid-19 pandemic,” says Chris Marshall, an associate vice president specializing in big data, analytics and artificial intelligence at market research firm IDC. “With various lockdowns put in place to stop the spread of the coronavirus, organizations are forced to focus on digital transformation as they realize the need to move towards digital-first engagement platforms.”
Tencent’s investment could include access to its social media apps, Marshall adds. “WakeData will be able to benefit from Tencent by leveraging their social media network in China and their e-commerce platforms,” he says.
Existing investors IDG Capital and Redpoint China Ventures also participated in the funding round. WakeData had raised $10 million last year in a funding round in led by Redpoint and Sequoia China. IDG also participated in that funding round.
WakeData, which also has offices in Shenzhen, Beijing and Guangzhou, was cofounded by CEO Li Kechen in 2018. The startup provides digital store management and big data services. Its clients include Chinese property developer Country Garden, which is controlled by China’s richest woman Yang Huiyan, and retailer A.S. Watson Group, owned by Hong Kong billionaire Li Ka-shing’s CK Hutchison.
Enterprise digitization and the use of computerized consumer data became global investment priorities in much of the world last year as the pandemic shifted consumers online for work and shopping so they could avoid risk of infection. Big data and analytics software spending stands around $7 billion in the Asia Pacific and is expected to grow at 16.1% from 2019 to 2024, according to IDC Spending Guide data.
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“In many parts of the world, retailers were caught short in 2020,” says Ben Stanton, a research manager with market analysis firm Canalys. “Bottlenecks emerged as retailers did not have the freight capacity, warehousing, staffing, or digital assets to handle such a wave of demand in online channels.”
Data-driven shopping will become a new norm, Stanton forecasts. “The investment strategy in the past 12 months has been to alleviate bottlenecks [and] also position for a post-Covid world, under the base assumption that online demand will now remain at high levels, and will not slide back to pre-Covid levels.”