Tencent, China’s largest technology company, 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 that provides digital services to companies, highlighting the growing demand for business digitization in the Covid-19 period.
“Tencent’s investment in WakeData comes at a time when digital transformation has undeniably become a top priority for many companies, a trend that has been exacerbated by the Covid-19 pandemic,” says Chris Marshall, an associate vice president at market research firm IDC who specializes in big data, analytics, and artificial intelligence. “As a result of the numerous lockdowns implemented to halt the spread of the coronavirus, companies are being compelled to concentrate on digital transformation as they recognize the imperative of moving toward digital-first communication platforms.”
According to Marshall, Tencent’s investment can include access to its social media applications. “Through the use of Tencent’s social media network and e-commerce sites, WakeData would be able to benefit from Tencent,” he says.
The funding round was also attended by existing investors IDG Capital and Redpoint China Ventures. WakeData previously raised $10 million in a round led by Redpoint and Sequoia China last year. IDG was also a part of the round of financing.
WakeData was cofounded in 2018 by CEO Li Kechen. It also has offices in Shenzhen, Beijing, and Guangzhou. The startup specializes in managing digital stores and big data. Its clients include Chinese property developer Country Garden, which is operated by Yang Huiyan, China’s richest woman, and retailer A.S. Watson Group, which is owned by Hong Kong billionaire Li Ka-CK shing’s Hutchison.
Enterprise digitization and the use of computerized customer data became global investment priorities in most of the world last year as pandemic-affected consumers moved their jobs and shopping online to prevent infection. According to IDC Spending Guide data, Asia Pacific spend on big data and analytics software is about $7 billion and is expected to rise at a 16.1 percent annual rate from 2019 to 2024.
“Retailers were caught off guard in several parts of the world in 2020,” Ben Stanton, a research manager at market research company Canalys, says. “Bottlenecks developed as a result of retailers lacking the freight space, warehousing, staffing, and digital assets necessary to accommodate such a surge in demand across online channels.”
Stanton predicts that data-driven commerce will become the new trend. “Over the last 12 months, our investment strategy has been to alleviate bottlenecks [and] also to position for a post-Covid environment, on the expectation that online demand will now stay strong and will not revert to pre-Covid levels.”