The leading Chinese Industrial Internet of Things service provider RootCloud has closed a Series C funding round for 800 million yuan ($122 million), according to a statement released Thursday by Roots Internet Technology Co., Ltd.
This latest fundraising was led by IDG Capital and joined by a slew of new investors, including Tencent Holdings, Haitong Investment Group, KY Private Equity Fund, Tianya Capital and China Cinda Asset Management's joint fund Jian Xin Jin Xuan Investment.
Lighthouse Capital acted as the exclusive financial consultant and facilitated the transaction.
The Big Leap
RootCloud's Series B round of funding was $77 million in June, led by the private equity firm Hejun Capital, followed by ZWC ventures, MatrixPartners China, Galaxy Holding Group and others.
Offering cloud computing software and hardware solutions for manufacturers, financial institutions, after-sales service providers and government regulatory agencies, RootCloud has supported companies including Sany Heavy Industry Group, China State Shipbuilding Corp., Ltd., Great Wall Motor, and Deppon Logistics with their digital transformations.
RootCloud was originally founded as an internal unit within Sany Heavy Industry Group, which is China's largest engineering machinery manufacturer with 11 years of experience in IoT and industrial applications. Established in 2016, it absorbed $225 million investment from the parent company and became a separate company.
Ranging from foundries to diesel engine manufacturing, the RootCloud platform connects nearly 560,000 industrial devices on its platform and serves over 50 countries and regions. Its overseas IIoT platform was launched in 2018, serving clients such as German manufacturer Putzmeister and Japanese control equipment manufacturer Omron.
"By combining Tencent's cloud computing capability, RootCloud is able to connect 300,000 units of equipment around the world onto its platform and collect nearly 10,000 streams of operation data," said Pony Ma, the chairperson of Tencent Holdings. "This remote management on big-scale machines largely releases the pressure of spare parts in stock."
Headquartered in Beijing, RootCloud has branches in Suzhou, Xi'an, Guangzhou, Shanghai and Changsha.
Fertile Ground For IIoT
As the world's largest manufacturing provider, China has legions of factories with billions of machines. This provides an abundant base for IIoT development.
Implementing IoT in manufacturing will create a market value at up to $736 billionby 2030, according to the predictions of consulting firm Accenture.
The challenges that Chinese companies face in taking on a leading role in the global IIoT sector, said analysts, is to the huge task of connecting the massive data to an IoT cloud and transitioning to advanced computer-controlled production and automation.
China's government, in recent years, has been encouraging the upgrade of the country's manufacturing base.
"Made in China 2025", China government's strategic plan outlined in 2015, aims to boost the country's manufacturing innovation and domestically foster the shift from being a low-end manufacturer to becoming a high-end-producer of goods.
The additional governmental strategy, called the "Internet Plus Action Plan." was unveiled in 2015 to integrate the internet with traditional industries and create a new engine for economic growth.
By combining artificial intelligence, cloud computing and advanced analytics to automate manufacturing processes via internet connectivity, the IIoT technology theoretically can increase productivity, also enabling factories to anticipate faults, manage infrastructure and mitigate risk.
Mainland China is expected to reach 4.1 billion IIoT connections by 2025, representing a third of the global market, according to a report by GSMA Intelligence.
