Despite the so-called “capital winter” in China, enterprise tech startups received more funding from VCs than any other businesses in 2019, quite an achievement for a sector without a history of rapid growth and which had just started to take off around 2015.
Last year, the B2B sector ranked first in the number of deals struck and funding volume, accounting for 18.65% and 16.48%, respectively. Before 2015, China's biggest tech companies were mostly consumer-focused. Only a few targeted the enterprise market, and even so, mostly only in software services.
When asked about the reasons for this, Xiong Xiaoge, Founding Partner of IDG Capital replied: “Most Chinese companies were consumers of information technology and not IT developers, and VC firms looked at only consumer-oriented businesses.”
IDG had invested in Kingdee and other enterprise software providers some time ago, but later found that China's enterprise services market lagged far behind its internet consumer market. “An internet company could make more profit than