On August 14, 2019, we hosted “Gobi Tech Open Day” in partnership with 36Kr at the Four Seasons in Beijing, where pioneers in the tech field and our Partners got together to discuss the future of tech and investment strategies in China.
Established in 2002, Gobi Partners is one of the first homegrown venture capital firms in China. Over the last decade, while most investors have focused on the B2C sector, Gobi Partners China have been investing in B2B enterprises which has only come to the forefront of the tech investment landscape in recent years. Between 2016 and 2018, the capital raised within the B2B domain has grown four times, and further growth is expected.
With the B2C market cooling down, the B2B and cloud sectors are positioned for accelerated growth, specifically in enterprise solutions, PropTech, Industrial Internet, and robots — including virtual ones where manual and repetitive tasks will be replaced by robotic process automation (RPA). Opportunities abound for both startups and talent as businesses turn to digital transformation to keep up with the market. At the same time, the introduction of open source platforms like DingTalk and WeChat Work have offered developers endless opportunities, making for a steadily growing ecosystem. The cloud sector has already demonstrated impressive growth over the last couple of years and continues to show promising potential, with AliCloud’s annual revenue catching up to 15% of AWS’ from a mere 5% over a span of five years.
Meanwhile, the impending industrial revolution and launch of 5G paves the way for the industrial internet sector to take off. There is foreseeable growth not just in terms of platform technology development, but in application and market penetration rates too: by 2025, 97% of enterprises are forecasted to be reliant on AI, enterprise cloud penetration rate is expected to reach 85%, and enterprise data utilization rate is projected to exceed 86%. By 2030, the amount of data generated from the industrial sector is expected to catch up with, if not exceed, the B2C sector’s volume. This growing trend stems from enterprises’ increasing demands and expectations for solution providers to offer better and more diversified services, leading us into a new wave of innovation and market growth.
Michael Zhu, Managing Partner at Gobi Partners China, noted that in the last 20 years, Chinese investors have mostly focused on the B2C domain where players that have acquired a high volume of users dominated the market. However, in the realm of enterprise and industrial internet, there is an evidently higher entry barrier, indicating that technology and sustainable business models are more important than ever.
Stay posted as we discuss AI and sector applications, Industry 4.0, opportunities in enterprise solutions and more in following posts.