5Y News｜Deepexi Completes $40 Million Series A4 Round

Recently, all-scenario data intelligence service provider DEEPEXI raised $40 million in its Series A4 round, led by SPDB International, with Hillhouse, IDG Capital, 5Y Capital, BAI (Bertelsmann Asia Investments), Monad Ventures, China Merchants Venture Capital, and Shanghai AI Industry Investment Fund participating. Lighthouse Capital served as the exclusive financial advisor for this round.

5Y Capital led DEEPEXI's Series A round in 2019 and has continued to participate in its subsequent A+ and A4 rounds.

Previously, Liu Kai, partner at 5Y Capital, and Zhao Jiehui, chairman and CEO of DEEPEXI, had an online conversation. Having spent more than a decade immersed in the cultures of Huawei and Alibaba, Zhao has developed a profound understanding of organizational development. Today, we're republishing selected portions of that dialogue, hoping it offers some inspiration:

Q & A

Liu Kai

Partner, 5Y Capital

Zhao Jiehui

Chairman and CEO, DEEPEXI

Q1

Liu Kai: Company culture is one of your governing principles, and it must connect to your own values and experiences. How did you develop such clearly defined cultural values, and how did you make this framework so central inside the company?

Zhao Jiehui: I was fortunate to spend over a decade at two truly great companies — Huawei and Alibaba.

When I first left Huawei, someone asked me about what I'd done there, why I'd done it, what it meant. Without thinking, I said, "Because it benefited the people." Nothing more to it — we just wanted to be people who did good for others. Coming out of Alibaba, you see how people hold fiercely to what they believe in, with a kind of conviction.

What this reflects, at root, is the powerful underlying operating system both companies built — their human resources systems.

HR systems comprise two major dimensions:

1. Mission, vision, culture, and values;

2. Interest distribution mechanisms.

Don't reduce HR to merely technical functions like recruiting and compensation.

Any great team, any team that goes far and goes well, has organizational development as its foundational logic. Take our Party — in different periods it has emphasized Party building, along with corresponding interest distribution mechanisms for each era.

There's a recent book called The Pivot, by Shi Zhan. It's a philosophical take on three thousand years of Chinese history, and it makes an excellent point about solving the development problem of a massive team like the Chinese nation: first, you must address its universal problems; second, its particular problems.

What's the universal problem? It's the idealism that drives everyone in your team, what they work and strive for. They devote their time and youth here — what meaning does this have? It's not just about earning a salary. This touches on mission, vision, culture, and values.

If you only talk about universal meaning, getting people fired up about purpose, but don't address the particular meaning driven by their desires, then their motivation won't be sustainable.

So you need to solve both the universal and the particular. When these two are well integrated, the whole enterprise can move forward more steadily.

Q2

Liu Kai: What struck me deeply is that every meeting you have involves reflection, critique, including organizational adjustments.

Zhao Jiehui: Yes — building mission, vision, culture, and values is absolutely not empty talk here.

First, we have a very complete system for mission, vision, culture, and values.

Second, our company's highest HR decision-making body has eight people. Every two weeks we meet to review the company's atmosphere, what recent incidents didn't align with our cultural values, and how to handle them. Regardless of how senior the person, how strong their business capability, how good their performance —轻则诫勉谈话,重则开除 [light cases get warning talks, heavy cases get terminated].

Then, every three months we hold a partners' self-critique session, using our cultural values as a mirror. After self-critique, it's posted on our internal forum where your subordinates and others can comment.

Also, every four months we hold an Organization Department meeting — the Organization Department being our people managers, now over 60 people. There we collectively discuss recent thinking on organizational development, and evolve and pass on the company's cultural values.

Q3

Liu Kai: Company governance is like governing a state. Some advocate wu wei [non-action], the Huang-Lao way — many Chinese companies like Sina and Baidu, once they reach a certain scale, become this way. The other type is like Huawei and Alibaba, fighting heaven, fighting earth, fighting people, creating contradictions internally even where none exist. You also practice this way, constantly breaking existing interest structures. Why?

Zhao Jiehui: If an organization remains immersed in an existing interest structure, it will inevitably solidify and struggle to break through. This is why our organizational iteration and upgrade happens so quickly.

At the last Organization Department meeting, I spoke about three elements of cadre team building. The first is "vision." As a cadre, what's most core is having broad vision — you need to see better, more advanced things, and learn from them. Someone who's seen an eagle can never settle for a crow again.

As a team leader, you must constantly discover higher-level new contradictions in your team, so the team can be propelled forward by these higher-level contradictions.

If an executive hasn't made any optimization or adjustment to their organization within three months, I consider them unqualified. A startup running full speed ahead can't have no room for optimization — unless you're simply not learning, can't see better things, and are lost in your comfort zone every day. For such executives, my optimization approach is: at minimum, you can hire someone better than yourself and replace yourself.

Q4

Liu Kai: Constantly breaking and rebuilding lets the organization grow rapidly. But I'm curious — where does the deeper drive for this constant internal struggle come from?

Zhao Jiehui: I grew up in Huawei's culture for over a decade, and I deeply felt it has a spirit gene that people take pride in: profound opposition to opportunism.

Once you fall into opportunism, your entire vision becomes imprisoned. While you're busy obsessing over petty things, infatuated with your little crow's nest, the eagle has already rebuilt the ceiling in the sky. So you should break through your视野 [horizon/vision] and keep advancing. So if you ask what the drive is, it's that our spirit gene has always strongly opposed opportunists.

Q5

Liu Kai: In these two years of entrepreneurship, have you stepped into any major pitfalls?

Zhao Jiehui: We've definitely encountered major pitfalls, but didn't fall in — or fell slightly but got out quickly. That's why we're still alive. Looking back from my current level of understanding, I think we avoided those pitfalls because we did three things right.

First, all 11 founding members, in the very first month of the company's founding, had very systematic discussions about the company's mission, vision, and cultural values, and have persisted in them ever since. So from the beginning, the entire HR system revolved around cadre team building aligned with consistent mission, vision, and cultural values, plus interest-sharing mechanism building. This created a very good underlying operating model for the company.

Actually, when we first started discussing this, aside from a few co-founders from Huawei and Alibaba, most key members struggled to understand what I was doing. For example, some would ask me: this person is very capable, why would you fire them? Others would say: we need to prioritize business. Those were the two most common challenges I faced then. But even with all this confusion, we still did all of it. I told them a principle: when you look at two platoons, one with terrible内务 [internal order/ housekeeping] and one with neat内务, which do you think has stronger combat effectiveness?

I value the platoon with neat内务 more — I believe its combat effectiveness is sustainable. A disciplined team with conviction and vision will, in the long run, defeat the undisciplined mob of arrogant soldiers.

Second, we chose a path of independent development — whether in capital, product, technology, or customer acquisition, we built everything ourselves. This path is difficult, but returning to our original aspiration, we truly want to be a respected company. So our products must have unique value, and our technology system must be independently complete. We don't reject cooperation with others, but we absolutely don't depend on anyone. This is crucial — only with independent development can you have true innovation.

Third, we established a tone for the company — constantly broaden our vision, don't be opportunists, do the fundamental things of true digital transformation rather than following hype. So you see, when the "middle platform" craze was at its peak, we said "more than middle platform." The fundamentals of digitalization are vast. We need to build fundamental capabilities around connectivity represented by 5G and IoT, unstructured data parsing represented by AI, data intelligence technology centered on data processing capability, and cloud-native application frameworks — doing well on customer scenarios and value. This way, whether you encounter front-end, middle, or back-end concepts, you can excel. This is the most essential thing.

DEEPEXI, as an emerging force rapidly rising in the enterprise digital transformation market, focuses on all-scenario data intelligence services for enterprise digital transformation. The company's 2048 Business Group makes deep investments in foundational technology capabilities around data intelligence, cloud-native, and AIoT, forming a cloud-native multi-model real-time data warehouse product system centered on Fastdata, a cloud-native technology product system centered on Openkube, and an AIoT technology product system centered on Xmesh and Xmind. The company's Deepexi Business Group uses the DeepEXI@ product series to enable enterprise digital scenario implementation based on data intelligence technology, having supported digital transformation for over 70 leading customers across commercial, industrial, government, and financial sectors.

Currently, DEEPEXI is headquartered in Beijing, with wholly-owned subsidiaries in Shanghai, Guangzhou, Shenzhen, Hangzhou, and Chengdu. Benchmark customers include leading enterprise and government clients such as OPPO, Gree, Showyu, Pagoda, Greenland, State Grid Corporation of China, and Sinotrans.

5Y Capital (formerly Morningside Venture Capital) currently manages approximately $3 billion in dual-currency USD and RMB funds. We believe: if the you that others see as crazy starts to be believed in, the world becomes a better place.

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