Chinese data analytics provider Kyligence is expediting plans to expand its global footprint, following a surge in its revenues in 2020 and a $70 million Series D financing in April.
The company first plans to expand its presence in the US followed by an entry into Europe, and the Asia-Pacific region, its co-founder and CEO Luke Han told DealStreetAsia in an exclusive interview.
The five-year-old company — backed by Redpoint China Ventures, Shunwei Capital, and Eight Roads Ventures, among other prominent investors — had forayed into the US in 2017, and is currently dual-headquartered in Shanghai and San Jose.
Kyligence serves enterprises through its online analytical processing (OLAP) technology and AI-augmented data analytics platforms. “SaaS-based subscription is our business model, which means that we charge by the volume of data used. Our annual revenue last year clocked a 200% year-on-year growth, while net profit increased over 130%,” said Han.
Kyligence currently targets three sectors — finance, manufacturing, and retail — and hopes to add banking as well to this list. It has served over 100 global clients including UBS, Microsoft, P&G, Xactly, Huawei, OPPO, Shanghai GM, SPD Bank, China Mobile, and China UnionPay.
Its Series D financing in April was led by Shanghai Pudong Development Bank’s offshore investment bank SPDB International, with participation from CICC Capital’s sub-fund, American family office ASG, Shunwei, Redpoint China Ventures, and Eight Roads, among others.
“The proceeds can fuel our business ecosystem in the near future, and there is no other fundraising plan yet,” said Han.
In 2019, Kyligence had bagged $25 million in a Series C round from Coatue Management, Shunwei Capital, Redpoint China Ventures, and Eight Roads Ventures. A year earlier, Shunwei, Redpoint, and Eight Roads had joined hands with Cisco and CBC Capital seeding $15 million in Kyligence’s Series B round.
Edited excerpts of the interview with Han:
Kyligence plans to invest part of its recent $70 million Series D funding for global expansion. Could you share more details?
We forayed into the US in 2017, and we clocked an exceptional business performance in 2020 amid the COVID-19 pandemic. Thus, we are poised to further bankroll our expansion and double our current talent pool to 40 this year. We will also enter Europe and the Asia-Pacific region in the coming two to three years.
Has the deteriorating Sino-US trade relationship impacted Kyligence’s presence in the US market?
We don’t involve in any politics. The US is one of the world’s largest corporate service markets, thereby benefiting us both in terms of new technology and business. Competitive technology solutions are promising for our clients.
Could you take us through Kyligence’s investors?
We have long been backed by stellar investors. Redpoint China Ventures was our first investor and they also made follow-on investments in our four rounds of financing. They have specialised in corporate service investments in the US. When Kyligence entered the US market, right from an early stage, Redpoint helped us set up office and sales networks, as well as shared their market insights.
Why is Kyligence betting on AI-augmented data analytics?
First and foremost, Kyligence attempts to help unleash the strength of a company’s labour force to produce more valuable work by leveraging AI. Secondly, it expects to build intelligent IT infrastructure for smarter operations and management. Thirdly, it is in pursuit of achieving market insights based on intelligent data analysis for industries.
Several smart data services developers have emerged in China. How different is Kyligence?
Our main focus is our augmented online analytical processing (OLAP) technology for analysing data instantly, at a petabyte scale.
It manifests in four ways. One, our state-of-the-art technology, especially the dynamic cloud native, delivers advanced IT infrastructure and frameworks that are as competitive as Snowflake [the American cloud computing-based data warehousing company]. Secondly, the well-established methodology of product marketing and management ensures smooth commercialisations. The third one is our proprietary Apache Kylin, a compelling open source OLAP engine for big data, which is a great asset to Kyligence.
Compared to peers who haven’t initiated an open-source community, Kyligence can support better solutions through a fair amount of open-source users.
Last but not least, a pipeline of stellar clients like Ping An Bank and China UnionPay vindicate that Kyligence is an industry major.
And how about the challenges you face?
We have to ramp up efforts to improve and extend our products, rather than resting on technology. Also, there will be problems arising from cultural conflicts and different business environments when we go global. That’s a hard nut to crack.
You said the current levels of the industry’s development in the US and China are beneficial to Kyligence, why?
Thanks to the sophisticated awareness of cloud native and other IT infrastructure in the US, we launched our own cloud native service there. The on-demand requests by local clients help Kyligence revamp its solutions, besides bringing better services to the China market where the sector falls behind comparatively.
In China, the massive amounts of data that is generated result in an intricate maze of data processing. This supports our ultra-high performance. Similarly, it convinces our US clients that we are competent.
Will more players join this niche cloud-based data analytics sector?
Frankly speaking, we haven’t seen many convincing peers or rivals.
What’s your prediction for the industry in the coming two or three years?
We foresee rising interest in cloud native and integrated automatic operating platforms, besides cost-effective management for cloud services. We will stick to sprucing up our market share in the US and China.