5Y News | 5Y Capital Portfolio Company StartDT (奇点云) Closes RMB 80 Million B2 Round

Just four months after announcing its Series B1 round, StartDT (奇点云) kicked off 2021 with more good news: it has recently closed an 80 million yuan Series B2 round, led exclusively by ByteDance, with existing investor IDG Capital following on.

To date, StartDT has raised a total of 200 million yuan across its Series B rounds. Lead investors include Volcanics Venture, DT Capital, and ByteDance, while existing investors 5Y Capital (formerly Morningside Venture Capital), IDG Capital, and Yuanyi Capital joined as followers.

Previously, 5Y Capital had led StartDT's Pre-A and Series A rounds.

Xingzai

Founder, StartDT

Q1

What was your original motivation for starting this company?

Xingzai: First, I'm very bullish on the future of data intelligence. I believe it benefits our customers and society as a whole, and will be essential for staying ahead. Back when I was at Alibaba Cloud, I kept thinking about how to better empower more enterprises and society with big data and AI — to make big data technology more accessible, so more companies and more people could enjoy the dividends of data intelligence. This is what I often call "inclusive big data."

Second, when starting a company, you have to look at the赛道 itself. I believe this赛道 — broadly data intelligence, and more specifically data middle platforms — has tremendous potential. If we mark the beginning of the IT era from 1972, when SAP was founded, we're approaching 50 years. And even just looking at the IT market, there's still substantial room for growth.

Standing in 2020 and looking forward, IT has developed for 50 years but still has ample space to grow. Looking ahead, three preconditions determine the arrival of the DT era: first, consumers interact with businesses through increasingly multiple touchpoints, which inevitably leaves digital assets scattered across endpoints; second, IT system construction has matured, with massive digital assets already沉淀ed in these systems; third, IT systems are becoming more specialized and segmented, which inevitably leads to fragmentation. In summary, enterprises' digital assets today are severely fragmented, urgently needing DT to achieve integration — to store, connect, and use them. So the DT赛道 also has at least 50 years of development ahead. The grand curtain of DT has just opened. For DT, "everything has just begun."

And finally, I have genuine strengths and accumulated expertise in this domain. With over 20 years of experience in data, I'm well-suited for this industry, capable of doing it well, and can contribute to this赛道. Being able to empower customers while also achieving personal fulfillment — that's a win-win entrepreneurial choice.

Q2

In the data middle platform space, what contrarian thinking do you bring, and what's the biggest market misconception about you?

Xingzai: Our biggest "contrarian" stance is probably that we stand at the intersection of technology and business.

I'm technically trained myself, having done engineering for many years. From Alibaba Cloud to now, we've always had a strong engineering culture.

But I don't believe we should be a purely technology company, because data middle platforms are fundamentally not a pure technology play. It's not simply a technical tool — it's a business concept meant to create business value for customers. Technology only realizes value when it empowers business.

There were already precedents for this in the IT era. SAP initially built general-purpose products, hoping to offer customers standardized "out-of-the-box solutions." But as they landed more mega-clients, they realized their products were too distant from industry realities. They began learning from these clients and accumulating industry knowledge. One American client once sent a team of nearly 20 people to live in Germany (where SAP is headquartered) for a year to co-create with SAP. After entering China, SAP applied the same approach, co-creating China's first ERP system for retail supermarkets with Beijing-based chain Wumart Group.

Precisely because of this "contrarian" stance, we're focused on industries — on industry scenarios and business needs — building products that stay close to customer demands, rather than falling into technical self-indulgence and building something that may look technically elegant, seemingly universal across industries, but that customers simply can't use effectively.

This connects to what I've called "using a cannon to kill mosquitoes." When I was at Alibaba Cloud working on Data Plus (now Alibaba's data middle platform DataWorks), our capabilities had been thoroughly honed internally at Alibaba and were technically powerful enough to support Alibaba's data scale. But porting that capability to other external clients might be overkill. If most enterprises only need 100 servers, telling them you can support 5,000 is "using a cannon to kill mosquitoes" — adding unnecessary burden for the client. Our requirements shouldn't be imagined; they should be what customers actually need.

So our company is a "hybrid" team that values the integration of business and technology.

Q3

Since starting the company, what commonsense principles have become increasingly important to you?

Xingzai: First, "customer first" and "empowering customers."

This principle matters for every company, but why I say it's become increasingly important since founding StartDT is that technical people easily fall into a trap — "technical self-indulgence." From a scientific research perspective, you do need to keep pushing boundaries and achieving more advanced technology. But from a business service perspective, you need to first see things from the customer's perspective, explore what customers truly need, rather than selling products just to sell them.

When what you're selling is something the customer genuinely needs, that's true "customer first."

Another concept that's become increasingly important, which I call "flavor first." This "flavor" refers to philosophy, values, mission, vision, and understanding of the industry and赛道.

At Alibaba, I was also a "corporate employee." I loved talented, capable people and enjoyed exchanging ideas with them.

After starting my own company, talent and capability still matter, of course, but look at the word "人事" (people and affairs) — people come first, affairs second. The more senior the role, the more important it is whether their "flavor" aligns with ours. I used to spend more time on "affairs" — drawing diagrams, making PPTs. But since starting up, I've spent more and more time on people, consciously talking more with team members. When building a company, you need to see whether you have a group of like-minded people charging toward the same goal.

StartDT's requirement for partners is this: when we clearly see a big pit ahead, all partners must jump in together, overcome the difficulty together, and climb out together.

Actually, "flavor first" doesn't just apply to employees and partners. We also prefer customers, investors, and partners whose "flavor" aligns with ours.

Whether in fundraising or in partnerships and customer relationships, it's easy to fall into a trap: when the other party is very large, as a startup you can't help but feel this is a rare opportunity, getting excited and thrilled. But we're selective. Without the same direction forward, it's hard to build and maintain good relationships down the line.

Third, both technology and business matter. As I mentioned earlier, I'm an old-school technologist who thought technology was paramount. I used to believe "good wine needs no bush" — build the technology well and sales will follow naturally.

But since starting up, I've realized that's not the case — sales, marketing, and channel capabilities all matter. In today's market, if you build a great product but can't sell it and get customers using it, it's useless.

Business people who understand technology, and technology people who understand business — that fusion is unbeatable.

Finally, integrity in business. I've always believed that operating with integrity lasts longer. This isn't something that's "increasingly important" — it's a code of conduct, a bottom line for doing business, something that's always important. It includes doing business solidly, being factual with customers, and delivering on 100% of commitments — StartDT has maintained a record of "zero delivery failures" since founding four years ago. It also means respecting all employees and not exaggerating to investors, partners, or anyone who crosses paths with StartDT.

Q4

What's been your biggest gain over the past year?

Xingzai: In 2020, StartDT "broke through the cocoon and became a butterfly" — that's our biggest gain.

Like many companies, we faced tremendous pressure during the pandemic. We primarily serve泛retail industry clients, but when the pandemic hit hard, we couldn't even resume work, let alone the offline stores of our泛retail clients. With customer businesses impacted, our cash flow was also strained.

But after surviving our "darkest hour," our team had been forged and磨合ed, our business became more focused, and our direction forward became clearer. Meanwhile, during the "anti-pandemic" period, big data and AI's ability to respond to black swan events gained broader recognition. Enterprises, government, and society became more urgent in their need for data intelligence, creating more opportunities for us. In the first half of this year, we achieved positive cash flow for the first time, and by end of 2020 had been profitable for four consecutive quarters — rare in the data middle platform industry.

Most importantly, our company is exceptionally united with strong centripetal force.

Recently, we summarized the StartDT values tested over four years by StartDT people — the "StartDT WAY": empower customers, always be entrepreneurial, professional and reliable, candid and kind.

I often say that StartDT people are StartDT's most important product. I believe such a team can accomplish things, and accomplish great things.

Q5

Why did you choose 5Y Capital's investment?

Xingzai: 5Y Capital's investment strength is beyond doubt, but another factor that led us to accept their investment was "flavor alignment" — same as the "flavor first" I mentioned earlier. 5Y Capital and we share compatible "flavor."

5Y Capital is long-term oriented, always thinking about long-term effects rather than pursuing short-term gains. Qin Liu is an investor with great vision who sees far ahead. StartDT's mission of empowering enterprises through digital-intelligent transformation similarly requires long-termism. Building a company's data capabilities takes three years, with continuous refinement, innovation, and upgrading needed going forward — this also requires "long-termism." Partnering with an investment institution that equally adheres to "long-termism" gives us more confidence to do things well.

5Y Capital is also candid and direct. When 5Y people communicate with us, they never beat around the bush. Sometimes they can sharply hit pain points, even making you feel stung. But when you think about it carefully, what they said is actually right — it alerts us to optimize and improve.

To add one more thing, the investment lead on our project is Yuan Ye. He's very通透, clear, and perceptive — able to see the essence of many problems and help you grasp what's fundamentally important.

Finally, 5Y Capital has its own faith in technology, and so does StartDT. We believe technology can change China and change the world. We believe in the benign, leapfrog changes that data intelligence can bring to society.

Overall, long-termism, candor and directness, and faith in technology — these are where we and 5Y Capital share "flavor alignment."

David Wu

Investment Manager, 5Y Capital

Q1

Since engaging with StartDT, what has most impressed you about the team?

David Wu: Two things stand out most deeply: their faith in technology and their values in company operations.

Their faith in technology shows not only in continuously updating and iterating their technical products, but also in the team's proactive investment in technology trend forecasting and pre-research. I remember when 5Y first invested in StartDT, we agreed that they should become evangelists for the data intelligence industry — spreading their firm technology faith outward to drive progress across the entire industry.

StartDT is a company that had corporate culture and values from its early days. On one hand, this stems from the founding team's consistent adherence to "customer first" and "empowering customers." On the other hand, it results from their emphasis on communicating cultural values internally and externally. As Xingzai mentioned "flavor first," this characteristic helps StartDT build an exceptionally competitive, stable team, and lets customers immediately see StartDT's differentiation when making choices.

If there's one more thing, it's the team's坚守 of its original aspiration. This drives them to continuously iterate, overcome numerous difficulties, and show remarkable resilience.

StartDT founder Zhang Jinyin (nickname: Xingzai) stated that this round of funding will be used to increase R&D investment in cloud-native technology, and to continue deepening market coverage, building win-win partnerships with more collaborators, jointly serving more customers, co-creating new intelligent commerce on the cloud, and advancing toward the future of data intelligence.

Founded in December 2016 with the mission of "making business more intelligent," StartDT focuses on empowering business with big data and artificial intelligence technology, and is a pioneer of "AI-driven data middle platforms" in China.

Since its founding, StartDT has been committed to promoting advanced data technology, data concepts, and AI algorithms, enabling more companies to build future-oriented data infrastructure capabilities, fully enjoy the advantages brought by data and algorithms in the digital world, continuously enhance business vitality, and constantly pioneer and innovate.

By end of 2020, StartDT had served 500+ customers, cumulatively providing digital-intelligent transformation services to nearly 50% of泛retail industry头部 clients, including Fortune Global 500 companies and internationally renowned luxury enterprises, while also making strides in finance, telecommunications, government, and public service organizations. The company maintains its record of "zero delivery failures," helping customers cross the "singularity" on the cloud and achieve cost reduction and efficiency improvement.

5Y Capital (formerly Morningside Venture Capital) currently manages approximately three billion USD across dual-currency USD and RMB funds. We believe that if the crazy you in others' eyes begins to be believed in, the world will be a better place.

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