5Y News | Portfolio Company DataStart (奇点云) Closes Over 200 Million RMB in Series C1 Funding

On November 19, StartDT Day was held in Hangzhou, where StartDT (奇点云) announced the completion of over RMB 200 million in Series C1 funding led by Taikang Life Insurance (executed by Taikang Asset), with follow-on investments from existing shareholders ByteDance, DT Capital Partners, and Xiyun Capital. Unity Capital served as the exclusive financial advisor for this round. The proceeds will be used to increase R&D investment in autonomous and controllable technologies, continue recruiting top talent, iteratively enhance scalable product and service capabilities, deepen market coverage, strengthen ecosystem building, and co-create cloud-based data intelligence new commerce with customers and partners.

Previously, 5Y Capital had led its Pre-A and Series A rounds.

"End-to-end intelligent data middle platforms have become foundational infrastructure for more and more industries, playing a critical role in improving enterprise operations and refined operational efficiency," said Yuan Ye, Partner at 5Y Capital. "We deeply identify with StartDT's customer-first values, are optimistic about its cross-industry service delivery capabilities, and have witnessed the gradual completion of its product matrix. We look forward to seeing more leading enterprise deployments and the realization of more tangible value together with StartDT in the future."

Founded in December 2016 with the mission to "Make Business More Intelligent," StartDT focuses on empowering commerce through big data and artificial intelligence technologies, and is a pioneer of AI-driven data middle platforms in China. It is reported that compared to its Series B, StartDT's revenue and valuation have both grown by over 200%.

IDC consulting reports show that data has now become a core element of enterprise business innovation. In 2023, China's big data platform software market size will exceed RMB 22.5 billion. iResearch consulting studies indicate that China's digital middle platform market will reach RMB 17.94 billion in 2022, and will grow into a hundred-billion-level market in the future.

This growth trend is borne out at this industry-leading independent third-party data middle platform service provider.

Since its founding, StartDT has doubled its revenue every year. As of November 2021, StartDT has cumulatively served over 600 core customers, with customer repurchase rates improving year over year. Data middle platform project delivery has maintained a "100% success" track record, earning strong word-of-mouth.

"This is an excellent track. The opportunities of the era, customer needs, competitor investment, and big tech moves are all making this market more dynamic," said Xing Zai, Founder and CEO of StartDT. "But our commitment to the data middle platform path comes more from StartDT's observation and understanding of Chinese enterprises in the DT era — 'business-data integration' is an essential need for enterprise services in the DT era. And this is precisely what we can provide as an independent third party."

The concept of "business-data integration" (业数一体化) derives from "business-finance integration" (业财一体化) in the IT era, when financial management was the core of enterprise operations management. But in traditional financial management, business and financial data were disconnected — finance often only received data after the fact, unable to respond to business changes in a timely manner, let alone predict, serve, or lead. The concept of "business-finance integration" was thus developed to establish a business-event-driven integrated financial information processing flow, merging business and finance — essentially "viewing business informatization through financial standards."

StartDT's understanding of "business-data integration" is to establish a business-scenario-driven integrated data processing flow, merging business and data so that data can accurately record and reflect business reality — "viewing business informatization and intelligence through data standards."

In the DT era, cloud computing industry chains have been comprehensively optimized, massive data has exploded in growth, increasingly fierce market competition has raised the bar for lean enterprise operations, and ever-rising data storage costs are pushing enterprises to "demand performance from data." Meanwhile, the black swan of COVID-19 has triggered greater enterprise attention to future uncertainty. Data no longer merely serves to record, retrospect, and analyze after the fact — it is also expected to "predict the future" and "agilely respond to uncertainty."

Undoubtedly, data assets, like people, capital, and materials, have become critical strategic assets for enterprises. Enterprise operations management urgently needs to improve data utilization capabilities to timely respond to the agile and elastic needs of business. "Business-data integration" has thus become an essential need for enterprises in the DT era — only when data management is integrated into business and system design can enterprises accurately, in real-time, and effectively grasp operational priorities and expand market opportunities.

"StartDT's vision is to accelerate customers' transformation toward data intelligence. By 2030, we aim to help 10,000 customers achieve best practices in data intelligence, and help 1 million customers build digital transformation capabilities." 2021 marks StartDT's fifth anniversary, and also five years of focused commitment to data middle platforms. On the path of data intelligence, StartDT will continue to forge ahead.

"Customer success" is the first principle of StartDT's values, and also the founding初心 of its founder. But when put into practice, digital transformation service providers inevitably face a balancing dilemma: generalized, standardized platforms enable faster, more stable delivery and simpler revenue; yet data middle platforms have strong business attributes, and products must match business scenarios to respond to customer needs and truly put data to use. How to choose?

Doing platforms alone, detached from scenarios, makes it difficult to help enterprises realize business value; doing applications alone is like scattered troops without systematic structure, unable to build scalable data capabilities for enterprises.

StartDT chose a "platform + applications" approach: using the platform as the foundation, making the platform layer thick and strong, with underlying capabilities for data governance, development, analysis, computing, and operations; on top of the platform, growing various industry applications, analytics tools, and other applications, gradually covering different scenarios across all industries.

Meanwhile, accompanying customer usage, application iteration gradually forms a virtuous cycle — from customers (needs) to customers (usage), continuously validating data value, forming network effects, and rapidly increasing value.

Figure: StartDT's "platform + applications" model creates network effects

In recent years, continued customer repurchases have directly confirmed the effectiveness of the "platform + applications" model. Applications innovate rapidly based on the platform; the platform continuously iterates by supporting applications.

It is reported that StartDT's net revenue retention (NRR) in 2020 reached 235%. "For example, a new customer in 2019 spent RMB 100 on StartDT services, and in 2020 spent RMB 235 continuing to purchase StartDT services. This represents customers' full trust and recognition of us," Xing Zai explained. "For reference, Snowflake's NRR at IPO was 158%."

When discussing the implementation of the "platform + applications" model, Xing Zai noted, "Doing platforms doesn't mean 'spreading everything thin.' We chose to enter through general retail, going deep and thoroughly penetrating one industry before expanding to more industries."

The industry-deepening strategy has won StartDT strong reputation. By the end of 2020, StartDT had provided digital transformation services to over half of the leading customers in consumer and retail industries, including Fortune 500 companies and internationally renowned luxury enterprises, co-creating multiple benchmark cases with customers.

Since 2021, StartDT's customer wall has become increasingly diverse. Beyond its steady dominance in consumer and retail, StartDT has also gained favor among manufacturing, financial services, and government customers.

To provide more comprehensive data intelligence services to enterprises across sectors, StartDT this year released DataHubble, an enterprise-grade one-stop data portal; a data intelligence product suite covering six business domains; and iteratively upgraded DataNuza, a consumer operations platform, and DataMaleon, a data visualization platform — further completing its "end-to-end" service chain to help enterprises successfully practice digital transformation and business innovation.

Figure: StartDT's "end-to-end" product and service matrix

In StartDT's view, customers are the muse inspiring iteration of its platform and applications; customer needs are the driving force pushing it to refine stronger platforms, more complete applications, and higher productization levels.

In May this year, StartDT released its "cross-platform, cloud-native, autonomous and controllable" technology strategy, fully implemented in its cloud-native data middle platform product DataSimba. It stems from StartDT's insight into technology trends and its response to customer needs:

"Cross-platform": As an objectively neutral third party, StartDT's DataSimba supports multi-cloud and multi-engine, giving customers more freedom and从容 in cloud resource and data engine choices; meanwhile, cross-cloud multi-domain data governance has been applied multiple times in customer scenarios such as group data control and multinational enterprise service出海.

"Cloud-native": Helps customers substantially improve underlying performance — on Microsoft cloud, DataSimba once had a performance competition with Databricks, known for optimized performance, and the result was essentially a draw.

"Autonomous and controllable" originally arose from requests from several financial services customers: "The CDH we're using now — high future功能付费 is one aspect, but if the US announces that Chinese companies aren't allowed to use it, our operations could be at risk. Can this be solved?" In an uncertain international political and economic environment, ensuring sustainable supply in technology and business became a must-have for StartDT. Considering that financial enterprises typically don't like "putting all eggs in one basket," DataSimba made adaptations for compatibility with multiple engine vendors, allowing customers to freely choose, combine, and switch.

"The 'middle' in data middle platform is not just the middle of中间, but also the middle of中立," Xing Zai said. The independent third-party technology strategy can help customers achieve a reliable, controllable, and trustworthy data usage environment.

Going further, StartDT released DataKun, an autonomous and controllable data storage and computing engine, embracing the domestication trend and helping enterprises avoid data security risks and political-economic environmental impacts. StartDT Partner and VP of Technology Dilei revealed that DataKun has officially launched recently, and before going public, had already partnered with multiple enterprises for实战 deployment.

Under the policy guidance of "core technology independent innovation," StartDT is also gradually completing full-industry-chain information technology application innovation (信创) product compatibility certifications, from IT infrastructure and foundational software to application software. It has now completed product compatibility certifications with dozens of domestic chip, operating system, and database vendors, and is conducting adaptation testing with more excellent vendors to further promote the construction of a信创 application ecosystem.

StartDT adopts the SAFe methodology (Scaled Agile Framework) to manage platform products — Microsoft's Windows team, Amazon's AWS team, and Apple's system platform teams all use this approach, which has formed a mature production line; meanwhile, it distills industry experience into core modules, giving data intelligence applications and general data tools characteristics of flexible combination, rapid deployment, and support for customer self-configuration.

"One person walks fast; a group walks far." Accompanying rapid business growth, the StartDT team has also been continuously expanding and upgrading, bringing in technical experts, industry experts, and other elite talents, cultivating core talents urgently needed by enterprises in the DT era such as data architects and business architects, to efficiently respond to customer needs. On the day of the funding announcement, StartDT's new headquarters in Hangzhou also officially held its housewarming ceremony — it is understood that the new workstations are almost fully occupied.

Meanwhile, StartDT has accelerated the layout of its national service footprint: currently, StartDT has branches in over 20 cities nationwide, further localizing and生态化 its product services, and co-creating, co-building, and co-winning with nearly 100 partners nationwide. Leading the data intelligence wave, still looking to China, StartDT Co-founder and COO Liu Ying introduced that StartDT will also complete construction of the StartDT International Service Center in 2022, providing digital transformation services to global customers. It currently has composite service capabilities in multiple languages including English, Japanese, and Korean, and has served over 50 international customers, meeting their bilingual service needs.

"Our journey is to the sea of stars." The Series C1 funding has given high marks to StartDT's growth over the past five years, and this is only the beginning. A new starting point, a new singularity. StartDT will live up to its mission to "Make Business More Intelligent," persist in win-win cooperation with customers and partners, embrace the era of data intelligence, and co-create cloud-based data intelligence new commerce.

5Y Capital (formerly Morningside Venture Capital) currently manages approximately RMB 32 billion in dual-currency USD and RMB funds. 5Y Capital seeks out, supports, and inspires lonely entrepreneurs, providing them with support from spirit to all operational matters. We believe that if the you whom others see as crazy begins to be believed in, the world will become a different place.

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