FB Pixel no scriptTemasek leads Black Lake investment in China's thriving manufacturing software sector | KrASIA

Temasek leads Black Lake investment in China’s thriving manufacturing software sector

Written by Song Jingli Published on   3 mins read

Black Lake counts Xiaomi, Sinopec, Tesla, and L’Oréal among its clients.

Shanghai-based Software-as-a-Service (SaaS) vendor Black Lake has closed a RMB 77.4 million (USD 500 million) Series C round led by Temasek and joined by Huaxing Growth Capital, Lightspeed China Partners, GSR Ventures, Bertelsmann Asia Investments (BAI Capital), GGV Capital, and ZhenFund, according to a post on the startup’s official WeChat account on Monday.

The fundraising comes at a time when Chinese manufacturing companies are increasingly digitizing their businesses and investors are betting on startups that are facilitating this process. Shanghai H-Visions Technology, known as Huicheng in China and serving companies including distillery Yanghe, dairy firm Yili, and SAIC Motor with its “Hipermatic” collaboration tool, closed a RMB 100 million Series C round in March last year. Beijing-based Cisinfo, which provides a slew of production efficiency software, raised RMB 25 million in its Series A in 2019.

Black Lake, founded in 2016, launched a cloud-based SaaS platform in October 2018, collecting data from workers, manufacturing machines, control systems, robots, and existing corporate software to guide production, increase collaboration efficiency, and cut costs. The tool, which lets external developers add new functions, already served more than 500,000 workers in more than 2,000 companies in the manufacturing sector located in China and Southeast Asia. Xiaomi, Sinopec, Tesla, and L’Oréal are using the software.

Black Lake expects to leverage on lead investor Temasek to penetrate more Southeast Asian countries, especially Vietnam and Malaysia, to where some of China’s manufacturers have shifted their production, founder Zhou Xiangyu told 36Kr. It takes only about a week for the firm to train a client’s employees and another four to six weeks to get the tool operational. Costs are only about one-tenth of a traditional Manufacturing Execution System (MES) software from SAP, Siemens, and Rockwell.

Back in 2018, founder Zhou told media that he believed there was almost nobody matching Black Lake, admitting that the company is still competing with traditional MES and ERP software such as Kingdee and Yonyou.

“MES software has a large market and has been expanding fast in the past several years in China,” said Qi Wei, investor director of Beijing Huayu Inno Investment. “MES vendors need to focus more on a vertical sector to have deep understanding and experience to meet the companies’ needs.”

More than just software

For investor BAI Capital, Black Lake is more than a software provider. “We witnessed that under the leadership of Yuxiang and his team, the firm has evolved to a Platform-as-a-Service plus SaaS system, connecting data in industrial execution, middle-layer collaboration, and top-level management and now serving as a portal for various other industrial software,”  managing director William Zhao told KrASIA.

Aside from the current round, BAI led Black Lake’s Series A in 2018, when the startup had only three clients, as well as its Series B in 2019, becoming the largest institutional shareholder. “As early as 2016, when SaaS products were popular, BAI started to study software tailored to industrial supply chain management,” added Zhao. “We firmly believe that disruptive products and models with Chinese characteristics will appear in this huge market.”

Last year, Alibaba unveiled its own platform Xunxi enabling on-demand manufacturing in the clothing sector. The internet giant plans to roll out its system to other factories as well.


Auto loading next article...