Fidelity’s VC arm betting on China's big data revolution

A partner at Fidelity's Eight Roads, an early Alibaba investor, explains why it participated in a series-B round of funding for Shanghai-based Kyligence.

As China tries to double-down on leading-edge technologies with its 'Made in China 2025' blueprint, Fidelity International too wants in on the action.

Through its proprietary investment arm Eight Roads Ventures, the Boston-based US asset manager last week led a $15 million series-B round of funding for Shanghai-based startup Kyligence.

And according to Joe Chang, a partner at Eight Roads specialising in enterprise IT, it forms part of Fidelity's regional ambitions in big data.   

“Much of the innovation [in big data area] will be led from China, where the scale of data and challenges are hitting first,” Chang told FinanceAsia via email. “We are betting heavily in this area in China.”

In addition to Eight Roads, several existing investors also contributed to the company's latest funding round, including Redpoint Ventures, Cisco, China Broadband Capital and Shunwei Capital,  Kyligence said last week in a statement.

The tech firm, which aims to accelerate business-critical decision-making through the provision of cutting-edge data cognitive analytics, has raised a total of $25 million since its establishment in early 2016.

Chang outlined how his venture capital firm, which backed Alibaba's series-A funding back in 1999, planned to help Kyligence in its quest. 

“We look forward to supporting the company in both leveraging the Fidelity technology platform to provide Kyligence more feedbacks from large enterprises and financial institutions and help the startup refine its products and services, as well as in subsequent financings as it continues to grow and expand,” Chang said.

He also mentioned the potential integration between D-Uni, one of Eight Roads’ existing portfolio companies, and Kyligence. The former is another Chinese startup with a data-transfer product that provides users with greater data agility.

More broadly, the venture capitalist says “big data is exploding globally” and expects “a ton of disruptions”.

Kyligence's key merit, according to Chang, is that the company could deal with emerging challenges that legacy systems – outdated computer systems – cannot address.

One of these challenges is that data-generation processes have significantly outpaced existing analytical approaches, which depend heavily on manually prepared data and human analyst skills, Kyligence said in its statement last week.

Hence, the startup is developing an artificial intelligence-augmented analytics platform, which uses machine-learning technology to build data models automatically by studying the behaviour of analysts to potentially free them from routine tasks and make data analysis more efficient.

With the fresh funding, Kyligence plans to strengthen its research and development capability and to expand its client base, which currently comprises several local giants including China Mobile, China Unicom, China UnionPay, China Pacific Insurance, Huawei and OPPO.

For Eight Roads, Kyligence is a “next-generation data warehouse” that goes beyond online analytical processing, enabling customers to manage, access and analyse a huge amount of data quickly and easily.  

“We feel their value will become clear as data scales into volumes unmanageable by legacy systems,” Chang said.

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