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5 startups to watch in China in 2016
It sometimes feels like China’s tech scene is dominated by giant companies. Tencent, Baidu, Xiaomi and the like are behemoth, multi-billion dollar enterprises. It’s easy to forget that five years ago Xiaomi was secretly prepping to launch its first phone. In that spirit, we examined five companies that caught our eye in 2015 – and which might turn some heads in 2016.
Dianrong: because China’s small-business lending sector was a complete mess
Peer-to-peer lending services exploded in China in 2015 – and no company embodied this trend better than Dianrong. Launched in 2012, the Shanghai-based company focuses on personal and small business loans, sectors that are traditionally handled poorly by China’s bureaucratic and risk-averse state-owned banks.
Dianrong had a stellar 2015, raising US$207-million in August. It reportedly hit a monthly lending volume of RMB 120 billion (US$19-billion) this October – four times what it was processing at the same time last year.
Despite its sizable growth and successful fundraising, there is reason to think that Dianrong is just getting started. The company is planning its next funding push for March 2016 with the ambitious goal of US$500-million.
Dianrong is hardly the only P2P lender in China – it is joined by competitors like Yooli, FirstP2P, Yinker, and Baocaiwang, all of which had funding rounds of US$20-million and higher during the course of the year. But as this year’s fintech boom rolls into next year, it will be Dianrong leading the pack.
Gogoro: because Taiwan missed the memo on electric scooters
We’ll count Taiwan’s Gogoro scooter company as belonging to the greater China area for the purposes of this list, because the company is too interesting to ignore.
It wouldn’t be quite correct to call Gogoro a moped startup. It’s more like a hybrid between an electrical infrastructure firm and a scooter company. That’s because Gogoro is one of the first companies to try and take on Taiwan’s obsession with gas-powered scooters, and it’s doing so by building its own island-wide network of battery charging stations.
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The Gogoro moped – read our review here – went on sale in Taipei this summer, the culmination of the startup’s bike and battery building spree since it was formed in 2011. Its launch was followed by a November series B fundraising round of US$130-million and, just a few weeks later, news that the company would be making its first moves outside of Taiwan.
Asia’s ebike enthusiasts will have to wait a bit longer, though. The company’s first international foray will be in Amsterdam, with plans to roll out in the first half of 2016. Gogoro says other European cities are in the pipeline for later next year.
We’ll be keeping an eye on how the company brings both its bikes and its proprietary charging stations to Europe. This is one startup that’s definitely worth keeping an eye on – lest, with its bikes’ top speed of 95kph, it zips right by.
OnePlus: because Xiaomi might get beat at its own game
It’s no understatement to say that Xiaomi revolutionized the Chinese smartphone industry. The homegrown company was able to turn the market on its head by selling flagship-level phones at bargain prices, while channeling Apple’s style. But more recently, Xiaomi’s minimalist product line has been cast to the wayside: it now features a huge array of phones and products, from big phablet phones to water purifiers and exercise wearables.
Some of Xiaomi’s original philosophy is still alive in the Shenzhen-based OnePlus. The phone company has just two phones currently on offer, the OnePlus 2 (the flagship) and OnePlus X (the budget alternative). Both devices are impressive, high-quality phones, and feature innovative quirks that aren’t seen in the competition.
OnePlus is a company that sets its sights high – it slightly obnoxiously calls its devices “flagship killers” – at prices well below the international competition.
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The 2016 Chinese cellphone market is still anyone’s game. Xiaomi is due to release its Mi5 flagship in the first half of the year, and the market is lively with competition from the likes of Huawei, Meizu, and others. Over the past year, OnePlus has surprised us with its interesting, innovative, and affordable offerings – and hopefully the surprises continue into 2016.
(A sidenote: OnePlus considers itself a startup, and does lots of startup-y things, but it is wholly owned by Chinese cellphone brand Oppo.)
Tujia: because Airbnb hasn’t cracked China yet
Unlike many other international services, Airbnb is not blocked in China – but it isn’t dominating the market, either. There is still space for startups like Tujia, which bills itself as a more curated alternative to the competition.
Tujia works with real-estate developers looking to rent out their unsold properties, and also invests time and money into rental inspections and cleanings. With upwards of 300,000 listings throughout the country the company has not gone unnoticed by Chinese travelers.
It hasn’t slipped past investors, either. In August, Tujia raised its biggest-ever round of VC funding, coming in at US$300-million.
The company plans to use its newly-raised millions to invest in expanding Tujia’s reach abroad. With Chinese holiday goers in mind, it is throwing a lot of resources towards developing a presence in Taiwan and in Thailand. 2016 will show how well Tujia’s model scales beyond its home market – and maybe beyond the Asia-Pacific region.
Edaixi: because China’s O2O market isn’t quite saturated yet
China’s on-demand market is an insane, overflowing mess. There are O2O startups for getting your car fixed, your food delivered, your back massaged, and pretty much anything else you need want.
But just because most Chinese ‘Uber for X, Y, Z’ startups are a bit trite doesn’t mean there aren’t some potential good ideas in the bunch. And this August, laundry-on-demand startup Edaixi proved that China’s O2O market still has the ability to surprise us.
Promising to pick up, wash, dry, and deliver your laundry in just 72 hours – and with prices as low as RMB 9 (US$1.50) for single items – Edaixi spotted a gap in China’s market and nailed it. Many Chinese apartments don’t have drying machines: even in wealthy cities like Shanghai, it is common to see laundry hanging from apartment windows or within balconies. Edaixi’s service works from its website, its native app, and its integrated WeChat app, making it available to Chinese users wherever they are.
The startup secured US$100-million in series B funding this August, following a US$20-million series A round last year. Edaixi is currently available in more than a dozen Chinese cities, and will be pressing slacks and tumble-drying socks in even more locales come 2016.
This article by Erik Crouch originally appeared on Tech in Asia, a Burn Media publishing partner.
