Database service provider PingCap secured a new investment led by Sequoia Capital, GIC, and Future Capital. This injection gives the company a valuation of more than USD 3 billion. Existing shareholders also participated in the deal, which builds on a USD 270 million Series D round that closed in November 2020.
Founded in 2015, PingCAP is an open-source, cloud-native database provider offering enterprise customers scalable data storage and analytics solutions. Data storage and analysis are central to modern technology businesses, and the rapid development of mobile internet and AI have pushed capacity demands beyond the capabilities of existing IT infrastructure.
PingCAP’s main product is its relational database, TiDB, a cloud-based storage and analysis solution that gives companies flexibility when scaling their IT infrastructure. TiDB’s use of cloud computing relieves the storage demands on local servers using a distributed network.
PingCAP’s business model allows companies to subscribe to its database services, which is more efficient than committing significant capital to build private IT infrastructure.
Investment in the global cloud has been climbing, with at least 20 investments funneled into cloud-native technologies in 2019 and 2020. Many deals involve Chinese tech giants like Alibaba, Tencent, and ByteDance.
PingCAP’s value is rooted in its open-source technology. “PingCAP has formed an open-source ecosystem of great value, winning word of mouth endorsement from programmers in the developer community,” one technology investor told 36Kr. TiDB currently has more than 28,000 likes on GitHub, and had nearly 1,200 contributing developers as of October 2020. Open-source companies can reach even greater valuations than SaaS providers, with nearly double the price-to-sales ratio, according to Chen Yu, a partner at Yunqi Partners, one of PingCAP’s existing shareholders that also participated in the latest deal.
KrASIA Connection features translated and adapted content published by 36Kr. This article was originally written by Wu Ruirui for 36Kr.